In our Podcast series “Sh*t You Wish Your Building Did!”, Memoori explores the intersection between technology and commercial real estate through interesting conversations.

In Episode #23 of our Podcast, we sat down with Rob Murchison from Intelligent Buildings & Craig Stevenson from Auros Group for a free-ranging discussion about the Power of Retrofit and Existing Buildings!

Rob & Craig shared their advice about how & where building owners should start with retrofit projects. We also discussed how realistic Net Zero is for Older buildings and whether the Commercial Real Estate industry will reach its Net Zero Carbon targets by 2050.

Don’t forget you can now Subscribe to ALL our Podcasts on Soundcloud, iTunes, YouTube and now Spotify!

Transcript of 'The Power of Existing Buildings!'

Jim: Welcome everybody to the podcast and of course welcome Craig and Rob really pleased you two could come and join me for this uh for this show uh so let's just kick it off let's start with a little bit of introduction maybe Craig you could explain first um your company and where you come from

Craig: Absolutely so first of all Jim thanks for hosting us today we're real excited to be here and uh and talk shop about building performance so my name is Craig Stevenson and I'm the president of the Auros group um we founded the group to really uh operate at the intersection of building science and data science and we believe to operate our buildings over the life cycle of the buildings we need to use both building science and data science to achieve those goals and that's really where our business is focused great

Rob: hey Jim I'm Rob Murchison principal at Intelligent Buildings and our vision is to intelligently impact the world's built environment and um in the past two decades while we've been and on that journey to do that you know that this the decarbonization has become a real topic and um what we hope uh to inspire uh commercial building owners to to do in this this conversation today is that there is a path to decarbonization it doesn't have to be that painful um if you if you start with uh connecting your buildings um in a way so you can start to gather data and have fact-based decisions so look forward to having this conversation.

Jim: yeah exactly um and I think you frame that really well and I think what really um like got me interested in having this discussion with you guys was I know the book um Craig that you uh that you wrote not certain a little while back but like great one about um the power of existing buildings and um I think you know a lot of us in the industry know the existing buildings are going to form a massive part of um of the future of decarbonisation in the built environment so I mean with that in mind I think my first question to you guys is you know where do building owners existing building owners start with retrofit and Craig I know you want to tackle that first.

Craig: Sure um so thank you for mentioning the book um the book was a bit of inspiration uh when we started to get into the decarbonization space we realized really really quickly that we're not gonna build our way out of our problem with new construction which is too expensive it's never going to happen and similarly we're not going to renewable our way out of uh of climate change right Renewables are going to play a key role in how we get there but they have a role to play and we cannot ignore um efficiency and that's really got to be the first step so when we get involved in any project building owner that wants to talk about either meeting a specific goal whether it be voluntary or regulatory the first things we need to really do is align around what those goals are that's the most critical step because that that that energizes everything from selection of your project team to how you go about reaching those goals.

So for us the very first step has to be setting the goals for how we're going to achieve this and if you think of about that for half a second there's a Common Thread through the process and the Common Thread is always metrics and that's why I think that we have a relationship with Rob and intelligent buildings because these guys are talking about smart buildings and it's like well wait a second if I have a smart building that's giving me feedback loops. I want those feedback loops to connect to the goals that I'm setting which are going to connect to the design standards that we're going to achieve in design and then ultimately how that building is going to operate so that's the Common Thread that cuts through everything and that's why I think talking to the data science community or firms like intelligent buildings that understand how to set up our meters and sensors and democratize our data is so important for building scientists like us

Jim: Yeah exactly you can't manage what you don't measure right so we need that data Rob what are your thoughts on where building owners can start with retrofit?

Rob: Well I I think as Craig said you have to start with a a goal um you know what we we like to draw an analogy if you will um when we talk about uh existing buildings to um to Lifestyles right of humans and it if you set out to have a a healthier lifestyle you sort of got a baseline where you are you gotta assess where you are or where you want to go and to Craig's point I mean setting those goals best based on the region of the world that you sit in in your organizational goals once you have that you have to sort of like I said earlier it's not that hard it can it can be daunting if you if you don't put a plan together but you can start by getting insights around your primary energy sources in the building and um as Craig will allude to through this broadcast that you have the ability then to use that data to make better decisions and I think that's the key Point here is this to go to the data and drive the decisions so that all your stakeholders it's a complex group of stakeholders when you come to existing buildings um Can align around the same goal.

Craig: I love that analogy Rob I mean it's like conservation with sacrifices so 1970s and you know for where we're at now in the world we can decarbonize a building and make our buildings reach our thermal Comfort criteria give us all the qualities of high performance relative to light and sound and everything else we want from our buildings we don't need to shut things off and sacrifice to reach our decarbonization goals so this idea of a building helpness right the building assessment to understand it it's not just about weight it's about BMI exercise nutrition everything that goes into human assessment the same thing we look at when we look at buildings assessments as we look and say it's not just a matter about consumption of energy it's more than that right it's about how the building operates we build buildings to use buildings they cannot they cannot not meet that purpose or we're just missing we're missing it all together so how do we build a building that gives us everything we want and we believe that the right process for that really starts with the envelope because it reduces loads it keeps the outside out the inside in it gets at everything we want to get at so fundamentally and foundationally that's where we start.

Jim: Okay and that's perfect because that was going to be my next question right about the natural order of sustainability and so you mentioned the building overload and you describe that as passive first right and then then so you start with that um maybe dig into that a little bit what about the building envelope and then and then what comes along.

Craig: so if we ask your audience what is the cheapest form of energy right we're probably going to get a couple different answers from that and for us it's always going to be one answer is always the same answer it's the energy we never use and that's where we have to start right if we just talk about using an alternative source of energy then we're really not attacking the efficiency problem which is where I believe all the value in the building is at and the only way you can get at that value is to reduce your loads well what's the only way to reduce our loads right I've got to create an envelope that has a climate specific thermal barrier an air barrier that's going to keep the outside out so there is building science out there right now that supports that the energy modeling supports that and there's building science like you know passive house Institute for example that represents um a building science approach to this where they are you know they're defining where that inflection point on that envelope is right so I'm out of Pittsburgh Pennsylvania and our code is right around an R18 for envelope and you know if I want to get to passive house levels of performance climate specific performances you're going to be around an R30 or 35 but then I can go to an R400 and it's not going to make a bit of difference right I want to know where that inflection point is worldwide any climate zone that's a definition that's a building science definition once I achieve that then all I have to do is everything else is I got to connect it right I've got to mitigate my thermal bridging and I got to make sure that my envelope is sound it's like this if I put hot coffee into here and I put a lid on it two days later I take the lid off and steam comes out why does steam come out because the energy has nowhere else to go that's that's as simple as I can say in terms of the energy in a building we don't want to pressurize our building through terrible air leaky envelopes and rebuy our Heating and Cooling all over again we want to buy it once keep it in the building and then reuse it as long as we don't sacrifice our ventilation for air quality and we don't sacrifice other building parameters for performance so this concept of the natural order sustainability we always say if you violate the natural or sustainability you're going to pay a premium well what is it it's passive first reduce our loads active seconds right size our equipment mostly decoupler equipment ventilation and heating and cooling become different sources now because I don't need a big box on my roof anymore and then Renewables last because I want my PV array to be this big and not this big.

Rob: And if I can just jump in there just Jim I think in drawing the analogy because I mean as as you can see I mean Craig knows his stuff and if there's a lot of there's a lot of um terminology and and and Concepts to get your head around here so you know as being more of the slow guy in the room here you know Craig and I have been working together for a while um I would I would say that that it going back to the analogy um if you're going to have a healthier lifestyle you can't um just eat all you want and and and exercise it away right you you have you have to be able to to um do things better uh physically um so call it the outside infrastructure the envelope that Craig's talking about and then you need to also look at how you uh mentally uh go about your your lifestyle and I think if someone um with an organization called intelligent buildings right um with been helping lots of portfolio owners for uh two decades get smarter um getting smarter involves both the technology stuff in the building and the physical stuff on the outside of the building and you're going to have to do both to decarbonize because I think Craig's taught me and you called me to this stat that only about what two percent one and a half one and a half percent of buildings are getting retrofitted every year and if we don't tackle this holistically in in a way on existing buildings we're never going to hit we got individual country goals but even the global goals that that the UN and so forth talks about.

Craig: Yeah there are well-known stats out there for sure um you know 80 percent of the buildings that we'll be standing in 2050 exist today buildings use 47 percent of the energy at least in the United States which is by far one of the biggest contributors to greenhouse gas emissions and and what I love about Rob is is his humility right so I am not the smartest guy in the room when it comes to the data science but I know what I want from a building and I need guys like Rob who are the smartest guys in room when it comes to the data science to work with me to say okay I can get you know I I love when I talk to an MEP and you want to talk about smart building infrastructure and they get excited next thing you know three million dollars later I've got a smart building but is it telling me what I wanted to tell me right and you work with a guy like Robin Rob's well wait a second I don't need to tell you what's coming out of every Outlet in the building if we're setting whole building performance targets for climate change then how do I answer that question and that's where we can work with Rob and say okay here's our goal help me create a use case on how I get the technology in a building to give me a feedback loop on that use case that's why building science and data science have to come together so while I have some experience in the building science side of this and I know enough to be really dangerous on the data science side of this I need the data science Community to understand what we're doing so we can set our goals and we can get the feedback loops we need from our buildings

Jim: yeah no I mean it's um it's great and I think um you know putting it like in and I know this you cover this in the book as well but this natural order I think um it's very simple um simply laid out and I think that's important because you know I think some people miss that first step you know they missed that that passive step there they kind of in our world we're all you're you're in our world the smart kind of building world like that gets sometimes get lost I think people focus on the technology as opposed to like thinking about it in broader context.

Craig: so Jim it's solves way more problems I think than just being a simple step forward think about it from a volatility perspective if I've got a building built to code based standards and it has a performance rating that's up here and I build a building to these energy levels that we're talking about down to here the volatility is removed from the equation right we're talking about we're talking about a trend line that looks like this as opposed to one that looks like this so when you start getting into the data science using fault detection and Diagnostics to manage energy operations you're talking about in these buildings that we're we're building at these levels of performance your volatility goes away right we don't need to go over to our thermostat and go doink doink doink I'm too hotter too cold change it we're dealing with low flow low load environments right the the temperature creep in these buildings and it's well documented is literally if I turn the power off in a passive house building and that and I wait two weeks the temperature will change two degrees over two weeks so you're talking about a resilient building as well which gets out again the envelope first approach gets at So Much More Than Just Energy gets that thermal Comfort it gets that resiliency and gets at everything else so really is the foundation of how we get at these climate change goals.

Rob: I was gonna say and I just sort of sort of make this real and Craig you hold me hold me to these numbers um but if you're if you're talking about an existing building when when we when we get to uh the goal setting right ultimately we're gonna have to get that that building eui down into the low 20s on BTUs thousands of BTUs per square foot um if you don't go about the this a passive first approach you you can get an initial hit but then you're going to hit a brick proverbial brick wall in a building right you're gonna you're gonna hit the you're gonna hit a brick wall because you haven't reduced the you haven't reduced the load so I I think um an incremental approach of just looking at one portion of of the the data science or or the the renewable energy the on-site or off-site renewable energy or just looking at the building envelope looking at those siled approaches isn't going to get us there and uh by by getting data from the beginning and then using that to inform a holistic view of and prioritizing it through um and Craig you can talk a little bit about that simulation um it you can prioritize all your Investments and you can then put a whole plan together over the next decade but you can't just say I'm gonna do this so I'm gonna do this don't do this we won't get there and you waste a lot of money.

Craig: well that's exactly right Rob I mean you know when you sit back and you look at it we're the only industry in the Free World that will invest 150 million dollars into an asset and not have a clue how it's supposed to perform right because we build the code base criteria that's nuts you look at every other industry in the Free World they're modeling at six decimals before they make a single investment to anything they're doing so what we what we the the problem we have with where we've been right history has taught us where we're at today is that we use incrementalism to try to address the problem of climate change right let's go into our building replace all our LEDs okay that didn't work let's replace our variable frequency drives we call it poking and hoping right we poker and I hope our way to somewhere that we don't know where we're going yet every other industry in the Free World is modeling their way to that so what we talk about in our book is you know what we've been taught in the past of how we go about building efficiency is we start a code and we start working our way down and we get to say a 30 Improvement we're like wow we feel really good and we're good but we're nowhere near our climate change goals we have to flip that Paradigm upside down and say what is the most efficient building I can build and why am I not building to that building right because there has to be life cycle cost reasons and things like that or first cost reasons but we started there and then we start working up way up until we hit a we hit a um a financial model that works for our client and you do it that way in terms of what Rob was saying this euis energy use intensity so site you know we measure buildings with different metrics one of them is a site energy use intensity which takes all the energy that comes into a building converts it to BTU and we measure that by kbtu per square per year and the question there becomes if I build a building to code and I look at my site eui if it's a commercial building in say North America it might be around an 80 or 90 kbtu per square foot per year if you build it to pass fast levels of performance you're at a 14. that's a 75% Improvement in energy consumption right there alone what we want to do is we want to always look at the whole building performance now there is phasing that's reasonable because in an existing building we have to respect life cycle we have to respect our natural triggers no one's going to rip off brand new windows in a building it's just not reasonable no one's going to work about technology in a building that's not at its life cycle so we have to in an existing building it's creating that whole building plan which you can only do with the model because buildings are far too complex to do it with rule of thumb and then we have to look at our triggers and we have to say to ourselves can I give myself a phasing plan over a period of time that I can reach that whole building performance goal and the answer is yes we do it all the time but you can't build the code you know that's the definition of insanity I go through a renovation on a floor of one of my buildings I replace it with code based construction and I expect this building to somehow transform I mean that's not logical so what we do is we create a whole building plan plan meeting the passivas interfit status if it's a passive if it's an existing building and then as we go through and we look at our triggers we're always using that context of how to meet that goal that's the only way to do it and then to give owners trust and be risk it for them I need Rob so that we can take our information from the simulation environment and put it next to the trended environment now I can see in real time did I get what I paid for yeah.

Rob: And Craig got this I think you you touched on the the site the site energy which made me think we need to do a little um I'll call it myth busting right we talk a little bit about uh carbon neutrality and Net Zero and then we talk about Net Zero and uh site energy usage is just one definition of of uh Net Zero and it's and it's gameable so I I think for the audience Craig if you could sort of just go down those four different types of Net Zero yeah so that the audience knows that

Craig: yeah it's a great idea and we can measure all of them from the technology in a building Rob as you well know because we're doing it with you right now is that you know the way in which we measure our key performance indicators and buildings our metrics is site energy use intensity Source energy use intensity total costs and greenhouse gas emissions and the way it's been done in the past is those can be gained right I can bring in natural gas instead of electric and it's going to be cheaper and I reach my total cost goals but did I really decarbonize my goals if we're setting our goals in gym this is one of the reasons why at the beginning of the podcast we talked about what what's your goal what are you trying to reach if you don't Define that then you have a misalignment in the project team you have a misalignment a measurement verification team and you're going to have some confusion in your team if you're meeting carbon related goals then you better be using carbon as your key performance metric and how you define your design and then ultimately how you put in your measurement verification systems because it's the only it's the only one of the metrics that almost can't be gamed but the other ones site Source cost pretty much most of those can be gamified to reach those goals without actually reaching the real goal that you want to reach and that's decarbonization of buildings without sacrificing performance

Jim: okay so we're talking and thanks for that I think that's uh a good definition and we need to start that to ask this question really right is how realistic is decarbonization of buildings if with with us some of our older building stock what are your thoughts on that I mean are we uh we mentioned this two percent one percent replacement retrofit figure I mean

Rob: before we get into the technology conversation I I would say you know work working with Craig and lots of other you know big portfolios the challenge is not the technology the challenge is people understanding what the technology is capable of and Desiring to go in the same direction and have the same goal the the the the the show The Realistic and Craig can dive into the detail chair but the reality is if the right leadership is in place in an organization that understands all the key stakeholders that are going to have to march in the same direction to decarbonize their buildings I'm not saying it's it's easy but it's not the super hard thing that that that we're seeing out in the industry right now because of this incrementalism but go ahead Craig I just want to make sure it's people are the challenge

Craig: no thanks for teeing it up and I couldn't set it better myself I mean it's a learning curve problem that's it too when we've been doing this long enough now it's a learning it's a learning curve issue you know you look at places like Brussels Brussels has codified passive house and they have a great presentation I've seen it at the all the major conferences for building performance and they talk about they almost like misstep their way into it like they made their codes of passive house about six seven years ago and they just did it right because they knew it was a very high aspirational Target but they didn't know the ramifications so the first year they had some pushback and you know the community said you know um this is going to cost us money and all the normal arguments you get from you know change resistant people and then fast forward to today I mean the industry has changed to address it the community has learned and how to build to these levels of performance without a premium equipment low flow equipment Windows all of the toys we need to build high performance envelopes exist because of what they did and in the United States I mean when I was I've been doing passive house level work for 10 years now for large buildings right and even five years ago we're buying our windows from Europe because the United States didn't have cost affordable triple pane windows to meet these levels of performance that balance our fenestration today there's probably 20 manufacturers the United States I can Source my windows from so it's a learning curve as the community begins to learn how to do this The Architects and then mechanical engineers and Electrical Plumbing Engineers start to learn how to design these levels of performance you're going to start to see cost parity come into play because the learning curve is being achieved so we don't necessarily think that this is the premium because I always use the I always use the Savage that insulation is always cheaper than systems right when we want to talk sustainability we're always looking at our mechanical engineers saying put in better equipment well we want to make that equipment go away or make that equipment much much smaller right so there's a difference there but that doesn't mean we eliminate the mechanical engineer they have a great role to play in what we're doing but it's a learning curve respect the natural world or respect and natural order sustainability make sure your team is aligned on goals and then Jim we do not believe that there is a there is a premium to reaching these levels of performance especially in an existing building if you're respecting triggers then you're just you know it's it's system Replacements it's deferred maintenance it's natural Renovations it's any opportunity to touch a building and then I touch it the right way I just don't replace it in kind and hope for a better outcome.

Jim: Okay that's important you're saying to achieve this level of decarbonization you don't believe that it's uh you know you're paying a premium for that.

Craig: Absolutely not I don't and not only that because of the learning curve I believe at least in the United States through Ira funding and other incentivization programs that exist right now and there are a lot of them that exist right now to support this they're there to get us through the learning curve that's what this is all about.

Rob: And if I add another thing in our in our learnings through through we're all in a learning curve here talking with intelligent buildings in the awards group um when you talk about a data-driven approach one of the interesting things that the awards group has has discovered is that we estimate our carbon today in buildings it's using Blended factors and so forth and one of the exciting things for your audience to to know that that as they try to achieve their goals Craig what do you told me 15% on average the the the when you look at the data is lower than what you've been estimating so there's some real there's a big window of Hope here for folks to get a jolt in the arm if you will that at using the data um we we are over compensating in a correction factor when we're estimating that that fourth version of Net Zero the the one about a mission

Craig: Yeah Rob that's correct and again I think it's just another product of of where we've been is why we're here when we wanted to measure our building performance we go and get all of our invoices well guess what that's 12 points of data a year which isn't a lot of value and what we're talking about is if we shift to an hourly accounting with meters and sensors with smart building infrastructure like Rob is talking about I can have 8760 points of data a year that's a big difference from 12. so I can calibrate my model better I can start talking about the value of storage and load shifting and demand response because I can't do that math for an ROI based on 12 points of data 12 points of data doesn't know when Peak and off peak occurs because it's 12 points of data right it's a monthly it's a monthly um a figure but when I can get to hourly accounting hourly accounting opens up the door to really start looking at real value of existing buildings transforming into high performance buildings and I think that that's key so Rob thanks for mentioning because I think the work you and I are doing right now and implementing hourly accounting for carbon automatically through smart building infrastructure it's the key to unlock the value of existing buildings and we we see value in existing buildings A lot of people see them and they they call them stranded assets or they see them as these things they never want to touch like oh my God this is terrible we look at a building with you're telling me in my language that building has every trigger I could possibly want to retrofit it and for us we're thinking that's the most valuable building that exists right there that's where we can extract a ton of value out of that yeah

Rob: and for your audience 8760 is what Craig hours of the number of hours in a year yes.

Jim: all right guys so I've got one final question to both of you what is the one thing you want people to take away from this conversation today?

Craig: so the one thing I'd like people to take away from this is to know that this work is being done it's being done cost effectively and we are now decarbonizing existing buildings and that is a key to reaching our climate change goals like I said we can't build our way out of this problem we can't renewable our way out of this problem we've got to deal with the existing building stock and we can deal with that existing building stock in a way that we can decarbonize so I would say you know instead of being a naysayer and say just because I've never done it doesn't mean I can't look at those buildings that are now being transformed and I think that's the key and if we figure out how to do that then the government the policy people the larger corporations have to figure out how to create the incentives to support it and create the right Oris that are going to support a financial investment in that because you talk about load shifting load shifting is so critical we couldn't talk about battery storage in buildings because it quote unquote doesn't pencil but wait a second if I load shift off of my Peak and and I'm now paying my electric bill on non-peak then that value of battery storage completely changes and that gets that has the effect of reducing our marginal carbon because I no longer need to contribute to Peak I can move and shift everything off so it changes everything so there are tons of strategies that we can employ I would always say respect the natural or sustainability respect passive over active respect efficiency over active systems and if you do that you're going to find your way to reach the goals that you want to set for yourself so there's definitely a process about doing this and it's being done now today so you know there's no there's no longer we no longer accept people saying you can't do that anymore we can show them buildings that are doing it all day long.

Rob: I would say that we draw the analogy back to Lifestyle and we'll call it the the the low carbon lifestyle for buildings right the low starving lifestyle for buildings uh similar to humans who you have to have physical health mental health and practice a lot of things to have uh longevity when you talk about buildings you you need to look at at the the building science which Craig has been talking a lot the data science which is analogous to to your to your mental health if you will and then the resiliency as you as you as you move forward and if you look at it holistically start with data that is available to you or could be made easily available to you the these primary energy sources it's Craig's about you you are headed down a path of with a high degree of success and the lowest um and highest velocity at the lowest cost but if you go down a path of incrementalism you're going to you're you're likely going to hit a lot of brick walls and uh and not get to your your goal which should be Net Zero carbon emissions the other three are gamable.

Jim: Yep I think that's a great place to finish thanks a lot guys we've got some um uh show notes so I'll make sure I put a link to that in uh when we put this when we put this on the on our website and also a link to your book as well Craig for sure you're welcome and uh yeah it just reminds me say thanks everyone for listening and of course thanks Rob thanks Craig really appreciate you taking the time thank you so much bye for now.