How to Overhaul the Way Buildings Use Energy

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http://www.scientificamerican.com/article.cfm?id=how-to-overhaul-way-buildings-use-energy

PHILADELPHIA -- When the Allies needed a weapon terrible enough to end World War II, scientists devised the atomic bomb. When the Soviet Union hurled Sputnik into space, American scientists rallied to build the world's top space program.

When Jim Freihaut goes to work each day, he doesn't have to win a war or outfox a Communist foe.

All he has to do is crack a market, a market that has stubbornly resisted the notion of energy-efficient buildings for decades. That might be tough enough.

Freihaut and his team have a five-year charter -- one year already down -- and $122 million from the federal government to meet this challenge: Convince the Philadelphia construction industry to do deep energy retrofits on some 7,000 commercial buildings, by proving it makes good business sense.

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1. The way to do this is with performance based building specifications

In the independent power business, it's common for power plants to be built under a fully wrapped engineering, procurement and construction ("EPC&quot contract. With that type of contract, the owner does not design the plant and write a detailed specification telling the contractor what parts and equipment to use. Instead, the owner writes a more general specification describing the site conditions and detailing the required performance parameters (in the case of a power plant, output and heat rate are the most important) and the required completion date. The contractor is responsibile for designing and building the plant to achieve the required performance and scheduled completion date. He pays damages if he fails to meet either or both and frequently earns a bonus if he exceeds the required performance or beats the schedule.

The term "fully wrapped" means that one contractor is responsible for achieving the required performance and schedule under the contract and pays the owner damages if he fails. If his failure is due to problems with a particular equipment supplier or subcontractor, it's his problem - he has to sort out the problem with that sub or supplier, but he's still on the hook to the owner.

This approach could be applied to new construction by specifiying building heating and cooling capabilities, use of renewables, allowable heat loss or gain under specified weather conditions, etc. and having a single contractor responsible for achieving them.