{"id":1004510677,"date":"2021-02-18T14:05:13","date_gmt":"2021-02-18T22:05:13","guid":{"rendered":"http:\/\/internal.cpexecutive.com\/?p=1004510677"},"modified":"2022-08-03T02:36:20","modified_gmt":"2022-08-03T10:36:20","slug":"power-shift-the-2021-outlook-for-commercial-buildings","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/power-shift-the-2021-outlook-for-commercial-buildings\/","title":{"rendered":"Power Shift: The 2021 Outlook for Commercial Buildings"},"content":{"rendered":"

The pandemic has already produced big changes in energy consumption by commercial buildings, and more shifts are on the way. For property owners and managers, that may be the biggest takeaway from the Annual Energy Outlook 2021, the U.S. Energy Information Administration\u2019s annual forecast of energy production and use.<\/p>\n

Few findings from this year\u2019s forecast are more meaningful than COVID-19\u2019s impact on consumption of delivered energy by commercial buildings, which declined 8 percent year-over-year in 2020 and is not expected to rebound in full until 2025, according to Meera Fickling, commercial demand modeler at EIA. Last year\u2019s decrease represented the largest single-year drop for energy consumption in the buildings sector since 2012.<\/p>\n

Furthermore, renewable energy incentives and declining technology costs will make renewables competitive with natural gas while also providing new capacity as use of nuclear power and coal declines. As for renewable power generation, the outlook estimates that the sector will grow more rapidly than electricity demand as a whole over the next 30 years.<\/p>\n

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Delivered energy by end-use sector. Source: U.S. Energy Information Agency<\/p><\/div>\n

Countervailing Factors<\/span><\/p>\n

Energy use in commercial buildings is projected to grow from 2020 to 2050\u2014but by mid-century, properties will be using considerably less energy per square foot. \u201cTwo countervailing factors influence these separate trends,\u201d Fickling told Commercial Property Executive<\/em>.<\/p>\n

\u201cIncreasing appliance efficiency, lighter building codes and greater adoption of sensors and controls decrease service demand intensity for key end uses such as space heating, space cooling, lighting and cooking. Meanwhile, service demand increases for computers, office equipment and miscellaneous electricity loads, (growing) electricity consumption,\u201d she added.<\/p>\n

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READ ALSO:<\/strong> Energy Demand During Pandemic Times and Beyond<\/a><\/p>\n

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Onsite electricity generation, utility efficiency rebates, population shifts to warmer climes and rising natural gas<\/a> prices will also contribute to declines in service demand intensity.<\/p>\n

The outlook\u2019s projection models incorporate changing factors, notably the increased adoption of sensor and control innovations. That technology can lower demand for space heating, space cooling, ventilation and lighting, Fickling said.<\/p>\n

Advocates of sustainable energy in building operations welcomed\u00a0 key projections in the forecast. Margaret Lo, director of business engagement for the Institute for Market Transformation (IMT) is particularly buoyed by the surge in renewable energy generation<\/a>. Wind and solar power prices have fallen so low that the sources are often more affordable than coal- or gas-fired electricity.<\/p>\n

EIA\u2019s Commercial Buildings Energy Consumption Survey also shows that larger buildings are under construction in significant numbers around the country; those properties are more likely than their smaller counterparts to track and manage their energy use and submit data to Energy Star Portfolio Manager. But while the outlook points to declines in emissions from the commercial sector, \u201cWe need much deeper reductions \u2026 for a sustainable planet,\u201d Lo said.<\/p>\n

The 2021 forecast finds that the pandemic propelled a drop in energy use, but less than expected, Lo said. Occupancy has declined as much as 90 percent, yet has produced only a 23 percent decline in consumption, the result of lease limitations and control challenges.<\/p>\n

\u201cWe see this as an opportunity to rebuild better and improve building performance,\u201d Lo noted. \u201cOwners and managers can utilize green leases<\/a>, also known as performance-based leases, that reduce these challenges and allow for greater communication and collaboration among owners, managers and tenants.\u201d<\/p>\n

Renewables gain steam<\/strong><\/h2>\n

EIA\u2019s annual forecast provides a history and projection of electric generation capacity additions and retirements, noted Mike Bammel, managing director and national head of the renewable energy valuation team at JLL. \u201cMuch of the renewable energy additions are driven by states\u2019 implementation of a Renewable Portfolio Standard,\u201d he added.<\/p>\n

According to the National Conference of State Legislators, 29 states, Washington, D.C., and two territories have adopted RPS with varying goals. \u201cSolar is an attractive option for property owners, since the opportunity exists for onsite installation, roof-mount, ground-mount and carport systems, enhanced with EV charging stations and energy storage,\u201d Bammel told CPE<\/em>.<\/p>\n

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U.S. retiring and new generating capacity. Source: U.S. Energy Information Administration<\/p><\/div>\n

Renewables\u2019 growing prominence is reflected in EIA projections that distributed generation will account for five percent of commercial building electricity consumption by 2050, a substantial increase from two percent in 2020. \u201cMore than 90 percent of this generation will be derived from photovoltaic by 2050,\u201d Fickling said, noting that declining installed costs are the predominant driver of adoption of commercial solar photovoltaics in EIA\u2019s model.<\/p>\n

Photovoltaic costs are projected to decline most rapidly in the next nine years, despite the phase-down in the federal Energy Investment Tax Credit\u2014from 30 percent in 2019 to 10 percent in 2022\u2014and the four-year Section 201 tariff on PV cells and modules established in 2018. \u201cCommercial PV capacity growth is fastest in the near- to medium-term,\u201d Fickling said.<\/p>\n

As renewable energy costs decline and renewables grow more prominent, IMT expects greater demand from owners, managers and tenants\u2014as well as customers, investors, and local government\u2014to electrify energy end uses, cut fossil fuel consumption and reduce carbon emissions, Lo noted.<\/p>\n

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\u00a0<\/strong>READ ALSO:<\/strong> What\u2019s Ahead for Power\u2019s Big Picture<\/a><\/p>\n

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\u201cDecisions cannot be made today based on expectations for 30 years from now,\u201d Matt Cebula, director of energy services for AKAM Living Services, told CPE<\/em>. \u201cNew York City and many other major metropolitan high-use cities have set aggressive or unreachable carbon emission goals to be hit by 2050. If we\u2019re heading towards this end goal, electric use by 2050 will rise exponentially compared to where we were in 2020,\u201d he noted.<\/p>\n

Legislation like New York City\u2019s Local Law 97<\/a> will become more prevalent, added Sam Ramadori, president of BrainBox AI. But recent artificial intelligence, Internet of Things and cloud computing innovations are delivering solutions that don\u2019t involve the capital costs and complexities of deep retrofits. They have the potential to drive meaningful energy efficiency gains in the short-term, Ramadori said, for the \u201ccost reductions and efficiency gains the sector desperately needs in its journey to net-zero carbon buildings.\u201d<\/p>\n

The agency\u2019s energy outlook for 2021 should spark action at city, state and federal levels, resulting in incentives and mandates that open opportunities for commercial real estate operators, Jeff Perlman, co-founder & president of Bright Power, told CPE<\/em>.<\/p>\n

\u201cStay up to date on all of these developments: Energy pricing and trends; passed and proposed regulations; incentive programs to enable you to integrate high-performance or renewable energy technologies; and technologies that allow you to decrease your portfolio\u2019s carbon emissions,\u201d Perlman advised.<\/p>\n","protected":false},"excerpt":{"rendered":"

The U.S. Department of Energy’s annual snapshot of trends in commercial building consumption and how the mix of sources is changing. <\/p>\n","protected":false},"author":450,"featured_media":1004457421,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[23891,21742,21786,51037],"tags":[50470,51026,32796,50815],"class_list":["post-1004510677","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-national","category-latest","category-sustainability","category-trends","tag-bright-power","tag-institute-of-market-transformation","tag-jll","tag-u-s-energy-information-administration"],"acf":[],"yoast_head":"\nPower Shift: The 2021 Outlook for Commercial Buildings - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/power-shift-the-2021-outlook-for-commercial-buildings\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Power Shift: The 2021 Outlook for Commercial Buildings\" \/>\n<meta property=\"og:description\" content=\"The U.S. Department of Energy's annual snapshot of trends in commercial building consumption and how the mix of sources is changing.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/power-shift-the-2021-outlook-for-commercial-buildings\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2021-02-18T22:05:13+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-08-03T10:36:20+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2020\/06\/rachel-woock-XgIXi5Ya8RY-unsplash_1200x800.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"800\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Jeffrey Steele\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/power-shift-the-2021-outlook-for-commercial-buildings\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/power-shift-the-2021-outlook-for-commercial-buildings\/\",\"name\":\"Power Shift: The 2021 Outlook for Commercial Buildings - 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