The Potential of More Efficient Buildings

The recent global agreement on climate change places much needed emphasis on the key role that innovation in energy technologies can play in finding practical solutions. But the priorities identified by the White House, Bill Gates, and his partners in the Breakthrough Energy Coalition and most others focus on innovations in the production and storage of electricity. Such innovations are clearly essential, but most proposals have ignored the importance of innovations that can achieve large gains in the efficient use of electricity in buildings. This is particularly troubling because in the United States, 76% of electricity is used in buildings—and because it’s easily possible to cut this by a factor of two or more with affordable technologies.

A number of obstacles keep commercial investment in energy research well below levels that the nation needs. But the barriers facing commercial investment in building energy technologies are particularly great. Federal research investment is essential for filling the gap. Yet federal research spending on building technologies is less than 3% of research spending on new electric generation. Research priorities should be set by considering an integrated system of production, transmission, distribution, storage, and consumption. The goal is to improve the quality of delivered energy services, such as lighting and comfortable spaces reliably, and at the lowest possible economic and environmental cost. Framed in this way, the imbalance becomes clear: we are underinvesting in technologies that have enormous potential to deliver improved energy services and lower costs. As things stand now, we’re building an increasingly sophisticated electric generating system to power antiquated and inefficient building systems.

The opportunity is enormous, and we are not close to reaching the limit of what building technologies can achieve. A 2015 Department of Energy report found that most buildings use 10 times the amount of energy theoretically needed to deliver services, such as providing comfortable interior environments. It would be possible to cut that electricity consumption at least in half using technologies that can be developed over the next few decades, given the right incentives for research and invention. (For comparison, about 65% of electricity is generated by coal, natural gas, and oil).

The report found that about eight quads of energy would be saved from measures that are cost-effective today. (A quad is a standard measure of energy consumption. Total US energy consumption in 2015 was 97.5 quads.) The savings would approach ten quads if there were a surcharge reflecting the social cost of emissions of carbon dioxide—the primary gas driving atmospheric warming—assumed in current regulatory proceedings. An adequate investment in energy efficiency research could develop technologies that by 2020 would have the potential to save an additional four quads of energy. In some areas the biggest potential gains were achieved by finding innovative ways to lower costs.

The obvious question is why aren’t building owners and operators purchasing technologies that are clearly cost effective. There are many well-known problems in building efficiency markets: tenants often have no incentive to invest in energy efficiency because they don’t receive the cost savings, information on building energy efficiency is often difficult to find, and energy is a comparatively small part of the budgets of most commercial businesses. Since so many cost-effective building energy investments are being missed, it’s understandable that the lion’s share of government building energy programs focus on compensating for market failures. But it also necessary to invest in research to create the means for future improvements in building performance.

Along with weak markets for building energy efficiency and failure to include the costs of climate change and other environmental degradations in the price of fossil fuels, there is another major problem: a massive underinvestment in the technology of buildings, including building design, equipment design, and system operations. The construction sector historically comprises smaller-scale, fragmented firms that are undercapitalized and risk averse. Correspondingly, they have a tradition of conducting virtually no research, they are reluctant to innovate, and they rely almost entirely on product manufacturers for innovations, which do not reach many efficiency problems. The absence of a coherent national climate and energy plan for buildings exacerbates this structural resistance to innovation in building efficiency. The Environmental Protection Agency’s use of the new Clean Air Act regulations to achieve climate goals in power plants wisely gives states a powerful set of new incentives for boosting efficiency.

Regulations, such as national appliance standards, have taken the least-efficient products off the market, but only sustained research can lead to innovations that push the envelope on product efficiency, ease of adoption, and lower product costs. The Obama administration has made highly effective use of national appliance standards, especially through the Appliance and Equipment Standards Program, but there is no national building code, and many states have very weak and poorly enforced energy codes. Moreover, even standards that help take the least-efficient products off the market and cut costs of efficient products don’t provide an incentive to develop technologies that exceed the standards. But it’s essential to recognize that government research investment has been critical in driving innovative building technologies. Investments that led directly to low-e windows, advanced fluorescent and LED lights, and new refrigeration cycles, for example, have transformed building energy markets and paid for themselves many times over.

Where research can deliver savings

There are many promising directions for research. Lighting, which uses about 18% of all US electricity, provides a good example of what’s possible (for comparison, nuclear power produces about 20% of electricity). This use can be cut by an order of magnitude with the improvements in light-generating devices (LEDs, which may soon be 15 times as efficient as the old incandescent bulbs) and improved lighting designs (daylighting plus sophisticated sensors and controls). New lighting technology will also improve the quality of lighting, reducing glare and allowing greater control, including control of color.

Achieving such dramatic changes in the enormous and complex US energy system in the next 35 years is a heroic challenge that will mean, among other things, that efficient new technologies will need to be used in almost all buildings by 2050.

Research can also lead to dramatic improvements in many other areas of building energy use. The century-old technologies used for heating and air conditioning, for example, may change dramatically in coming years, forced, in part, by the need to find a refrigerant that doesn’t damage the ozone or lead to climate change. Some dramatic new technologies are available that promise to eliminate harmful refrigerants altogether. They include systems that pump heat by exploiting materials that absorb heat when magnetic fields change, solid state devices that effectively use semiconductors as a working fluid, systems that use fuel-cell membranes to create small amounts of pressurized hydrogen, and many others.

Estimates suggest that at least 3% of US electricity is used to dehumidify air—with demand increasing as more people move to humid regions. Most systems now cool air until the water vapor condenses and then reheat the air. New membranes are being explored that can pass water vapor but not the other gases in air, so that dehumidification efficiency is greatly improved. Even the humble clothes dryer may see a radical redesign with systems such as one that uses ultrasound to shake water out of clothes at room temperature.

Research can also lead to dramatic improvements in materials used in a building’s shell. Next generation windows, for example, can provide insulation as good as most insulated walls today, and future systems will be able to control the amount of light and heat passing through them.

Advances in information technology, coupled with low-cost sensors and controls can help building performance by simplifying the task of designing efficient buildings and by improving operation and maintenance. New building controls can ensure that occupants are provided comfortable, well-lit spaces where and when they’re needed. They can also detect problems and recommend repairs before systems actually fail. Advanced building control systems, connected with emerging “smart grid” technologies being installed by electric utilities, can ensure optimum efficiency of the entire electricity system.

Keeping climate change within manageable bounds will require the United States and other countries with advanced economies to reduce their greenhouse gas emissions by 80% by 2050. (Meeting this goal won’t let the world escape climate change, but would help ensure that global temperatures don’t rise more than 3.5°F, a painful but, it is hoped, manageable increase.) Achieving such dramatic changes in the enormous and complex US energy system in the next 35 years is a heroic challenge. It will mean, among other things, that efficient new technologies will need to be used in almost all buildings by 2050. Building equipment (heating, cooling, lighting, computers, and other systems) typically has a lifetime of 15 to 30 years. To avoid having to replace these current products before they complete their expected lifespans, new technologies must dominate the market by 2020 to 2035. But innovative technologies often take five to 10 years to become the dominant product. This means that innovations must start reaching the market in the next few years. Building roofs, walls, and windows usually last for many decades, and most of the buildings standing today will still be around in 2050. The full extent of the new technologies will be possible only in newer buildings, but there is significant room for innovation in technologies for diagnosing and fixing existing structures.

Building energy technologies are among the most important and intellectually exciting technology challenges facing the world today. They require ingenuity and invention from virtually every field in engineering and science, including social and behavioral science. However, these technologies can achieve their full potential only if incorporated into superb architectural designs. Affordable, efficient building systems are also an essential part of any strategy that envisions providing comfortable living spaces for a global population (many of whom will place a high value on air-conditioning) without creating a huge increase in greenhouse gas emissions. The world has always relied on the extraordinary US engine of invention and innovation, and US building-efficiency research could deliver global benefits.

But the importance of building technologies is not recognized in most of the rhetoric surrounding climate policy. The federal government spends more than 30 times as much on research for generating electricity as it does on research on the buildings that consume three-quarters of this electricity. Surely, even Washington can agree that is out of whack. A balanced research program would create large, well-funded programs in areas that dominate US electricity consumption, such as lighting, heat-pumps, windows, building system design, and smart-building operations. The deeply flawed market for building efficiency has resulted in a massive underinvestment in commercial research. This market failure cries out for a federal investment that’s in proportion to the need.

Henry Kelly is a senior scientist at the Michigan Institute for Data Science at the University of Michigan.

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Cite this Article

Kelly, Henry. “The Potential of More Efficient Buildings.” Issues in Science and Technology 32, no. 4 (Summer 2016).

Vol. XXXII, No. 4, Summer 2016