A Transformation from Smart Building to a New Platform for Decarbonization

Record-breaking hurricanes, wildfires, and flooding are all demonstrating the urgency of the climate crisis. There is a window of opportunity to dramatically reduce greenhouse gas (GHG) emissions while generating new economic and social value. The built environment offers this switch toward optimism for a view of a low carbon future. Today, commercial buildings account for nearly 40% of global GHG emissions, and a paradigm shift in how we operate and invest in buildings is emerging. 

Guidehouse Insights envisions a future in which an increasingly dynamic, flexible, and intelligent building stock achieves seamless interaction with an evolving grid infrastructure. A new ecosystem of clean, distributed, mobile, and intelligent market systems creates significant value. New synergies are expected to emerge among utilities, technology and service providers, and building owners as traditional market roles give way to a more fluid competitive ecosystem aligned with a future digital energy sector, defined as Energy Cloud 4.0.

Building-to-Grid

Buildings become platforms for new businesses and experiences in the Energy Cloud. Defined as Building-to-Grid (B2G), these digital resources represent some of the most dramatic opportunities for decarbonization. Market leading real estate owners and corporations are demonstrating the potential of B2G. Industrywide commitments to emissions reductions and showcase facilities underscore the potential for tackling climate change alongside realizing economic and business benefits. 

Decarbonization as an Advantage and Obligation

At the end of August, the Urban Land Institute (ULI) released its 10th anniversary Greenprint Performance Report. ULI has worked to align real estate valuation and sustainability and engages executives representing $750 billion in assets under management, 2.0 billion square feet, or almost 9,000 properties. This voluntary corporate initiative reflects the mindset of shareholders and executives worldwide. 

JLL, PROLOGIC, and CalPERS are several of the major industry players committing to sustainability across their portfolios and reporting their progress with ULI. Beth Richtman, managing investment director of sustainable investments for CalPERS articulated the convergence of sustainability, real estate, and financial returns, says “We are a fiduciary. Meeting our obligations to our beneficiaries by generating strong returns is our North Star. We focus on the sustainability of our real estate portfolio because we don’t want to leave money on the table or have an unnecessary environmental footprint.” ULI is just one of a host of voluntary industry networks demonstrating the vision of decarbonization as a competitive advantage and societal obligation.

First B2G Office Building

Recently, the first energy positive office building, known as Powerhouse Brattørkaia, opened its doors in Norway. Entra real estate, developer Skanska, and advocacy group ZERO partnered to bring the B2G facility to life. The project used multiple advancements in technology and design from the envelope to operations—solar panels, roof pitch and direction, ventilation, and location. The office building offers value to its city as well, with a vision of supplying the excess power generation potentially for electric vehicle charging. Powerhouse Brattørkaia is a real-world example of B2G representing a blue print for a low carbon future fueled by innovation in real estate.

For more about the future of B2G, keep an eye out for Guidehouse’s upcoming white paper.