By Robert Mader
Of Contractors's Staff
NEW YORK — Former President Bill Clinton in mid-May announced the creation of a global Energy Efficiency Building Retrofit Program, a project of the Clinton Climate Initiative. The program brings together four of the world's largest energy service companies, five of the world's largest banks and 16 of the world's largest cities in a landmark program designed to reduce energy consumption in existing buildings.
Companies and organizations in the industry immediately signed on to the effort, including the Mechanical Contractors Association of America. The initiative was announced May 17 at a press conference in New York attended by Clinton, New York Mayor Michael R. Bloomberg, London Mayor Ken Livingstone, MCAA President Dave Kruse and other dignitaries.
Global energy service firms will perform energy audits and some of the retrofits; the balance will probably be subcontracted out to mechanical contractors, Kruse said. Banks have committed billions of dollars in financing. And 16 cities have agreed to retrofit their municipal buildings, with the hope that private commercial building owners join the effort.
According to the Clinton Climate Initiative, urban areas are responsible for 75% of all energy use and greenhouse gas emissions in the world. Buildings account for nearly 40% of global greenhouse gas emissions, and in cities such as New York and London this figure is close to 70%. The Energy Efficiency Building Retrofit Program will provide both cities and their private building owners with access to the necessary funds to retrofit existing buildings with more energy efficient products, typically leading to energy savings between 20% and 50%. Program details include:
• Honeywell, Johnson Controls, Siemens and Trane will conduct energy audits, perform building retrofits and guarantee the energy savings of the retrofit projects.
• ABN AMRO, Citi, Deutsche Bank, JPMorgan Chase and UBS have committed to arrange $1 billion each to finance cities and private building owners to undertake these retrofits at no net cost, doubling the global market for energy retrofit in buildings.
• These banks will work alongside energy efficiency finance specialist Hannon Armstrong and CCI to develop effective mechanisms to deploy this capital globally. Cities and building owners will pay back the loans plus interest with the energy savings generated by the reduced energy costs thanks to the building retrofits.
• An initial group of 15 of the world's largest cities has agreed to participate in the retrofit program and offer their municipal buildings for the first round of energy retrofits: Bangkok, Berlin, Chicago, Houston, Johannesburg, Karachi, London, Melbourne, Mexico City, Mumbai, New York, Rome, Sao Paulo, Seoul, Tokyo and Toronto.
"It looks like a great opportunity for MCAA members," Kruse told CONTRACTOR. "Of course, the energy service companies, the ESCOs, are primarily involved and they're all good MCAA members. But looking at the square footage involved in these buildings, they can't handle it all. There will be trickle down to plumbing contractors to retrofit the plumbing systems, to service contractors and to mechanical contractors to work on upgrading the mechanical systems."
As part of the Energy Efficiency Building Retrofit Program, cities have agreed to develop a program to make their municipal buildings more energy efficient and provide incentives for private building owners to retrofit their buildings with energy saving technologies.
"Mayors are responsible for coming up with pragmatic solutions and implementing them effectively — and this program will allow us to do that," Bloomberg said. "We've laid out an ambitious agenda to reduce our carbon emissions, 80% of which come from buildings, while being economically competitive and continuing to grow."
This is the first of many programs that CCI is organizing with partner cities in the C40 Large Cities Climate Leadership Group, an association of large cities that have agreed to work together to reduce their greenhouse gas emissions.
Many cities don't have the capital budgets to perform this kind of retrofit work, Kruse said, and this program provides them with the resources since all the energy efficiency improvements will be financed from energy savings.
The initiative will provide years of work for service contractors, he pointed out, because these buildings will need to be recommissioned and maintained in order to preserve the energy savings long term.
"It was a great day for MCAA to be at the table," Kruse said, noting that the timing was particularly good, given the association's focus on green buildings.
MCAA will sponsor a Leadership in Energy and Environmental Design Accredited Professional prep course Aug. 27-28 in Denver, plus a LEED Existing Buildings prep course at the Mechanical Service Contractors Association conference Oct. 14-17 in Colorado Springs, Colo. An MCAA conference Sept. 24-26 in Milwaukee will be dubbed "Catching the Next Wave — Seizing Green Opportunities that Lie Ahead."
"This effort has a lot of traction," Kruse said. "This is not a flash in the pan. This is the way buildings will be built in the future and it's important to be in front of the curve."