By Katie Ullmann, Head of New York Business Development at Drift
There’s been a lot of concern about New York Mayor Bill de Blasio’s Green New Deal and the latest bill that mandates steep reductions in carbon emissions for buildings. While the public discourse is making this out to be expensive and cumbersome, in reality, building owners can achieve compliance in two cost-effective steps.
So what’s required? Bill 1253 (passed by the New York City Council on April 18, 2019, and publicly applauded by de Blasio, who plans to sign it soon) requires approximately 50,000 of the city’s largest buildings to significantly cut their greenhouse gas emissions by 2024 and then further by 2030 (see sections § 28-320.3.1 and § 28-320.3.2 for caps per building type). The bill’s purpose is to support New York City’s citywide goal of cutting greenhouse gas emissions 40% by 2030 and 80% by 2050. The Urban Green Council put together an excellent cheat sheet here; many details are still TBD.
Let’s quickly clear up some myths. One, there is not actually a ban on “classic glass and steel skyscrapers.” Buildings account for nearly 70% of carbon emissions in New York City, so, if we want to address climate change, we need to incentivize improvements to our city’s largest buildings. Glass and steel are not the point. Two, this bill will not “shut down the engine of NYC’s economy,” nor will it cost “cost property owners billions,” without billions more in returns. The likely result of this bill won’t be higher rents or energy-hungry tech companies having trouble getting a lease. Complying with these mandates will save money for both building owners and tenants over time, if done right.
The two steps to achieve NYC’s building emissions reduction targets:
1. Buy New York-based renewable energy.
About two-thirds of a building’s energy consumption is from electricity usage, so switching a building’s electricity source to renewables will get that building set for the 2024 targets. The bill enables a building owner to achieve full compliance via deductions if the building owner purchases renewable energy under the following requirements:
(i) the renewable energy resource that is the source of the renewable energy credits is considered by the New York independent system operator to be a capacity resource located in or directly deliverable into zone J load zone for the reporting calendar year;
(ii) the renewable energy credits are solely owned and retired by, or on behalf of, the building owner;
(iii) the renewable energy credits are from the same year as the reporting year;
(The complete text for Bill 1253 can be found here; see section § 28-320.6.1 on renewable energy deductions.)
This means that the building can likely achieve full compliance if the owner switches its utility or energy services company (ESCO) to a renewable ESCO that is sourcing electricity from renewable power generators in the New York independent system operator (New York State’s grid), is scheduling that electricity to enter NYC’s zone on the New York grid (“Zone J”), and is retiring the renewable energy credits for the building owner (i.e., not reselling them).
The best part is that renewable energy now comes at an affordable and fair price. Every time an owner switches a skyscraper to renewables, the owner incentivizes New York energy developers to build more renewable power generators. This increases the percentage of renewables on the grid and lowers the cost premium of choosing renewables – the impact we are all seeking.
2. Upgrade to a heat pump or other electric heating system.
With 100% renewable electricity, the building’s remaining emissions will be driven by burning fuels directly for space heat and hot water.
The solution is to upgrade a building’s heating system to a heat pump or another electric system, which will draw on the building’s renewable electricity supply, rather than fossil fuels. Heat pump systems are much more efficient than fossil fuel systems and will save building owners money over time. Many building owners will need to replace their heating system sometime before 2030 anyway.
Sewage heat recovery systems are a great retrofit solution for skyscrapers. They are over 500% efficient compared with natural gas and are expected to reduce a building’s carbon emissions and heating and cooling costs by over 30%. The American Geophysical Union is installing sewage heat pumps as part of a retrofit to its 62,000-square-foot headquarters in Washington, D.C. Geothermal heat pumps are a great option for major renovations and new developments. St. Patrick’s Cathedral in Manhattan upgraded to geothermal heat pumps as part of a renovation and cut its energy consumption by 30%. Cornell Tech’s campus on New York’s Roosevelt Island chose geothermal heat pumps for its ground-up development, leading to major carbon and cost savings. And over in Far Rockaway, Queens, a new affordable housing development will leverage heat pumps to provide low-cost heating and cooling to tenants.
De Blasio isn’t going rogue here. The vast majority of Americans are concerned about climate change. If building owners take these two steps for our city’s buildings, they’ll likely find that the benefits far outweigh the costs.
Katie Ullmann can be reached at email@example.com.