Yeager: There are already a number of LEED certified buildings in Iowa including Dubuque's National Mississippi River Museum and Aquarium and also Davenport's Federal Courthouse revitalization. There are campus projects in Pella, Ames and Grinnell as well as a number of high profile new buildings around the state including the University of Iowa's new Hygienic Laboratory. You can like to a list of LEED registered buildings on the Iowa Journal Web site at iptv.org. The principles of LEED construction are rapidly becoming part of the public and corporate policy. Business and government are asking the questions we'll pose tonight. What are the cost and benefits of green construction? What options are available in Iowa? And can these types of buildings be constructed on a regular basis? Bob Haug is Executive Director of the Iowa Association of Municipal Utilities. Curt Klaassen is with the Iowa Energy Center. Gentlemen, welcome.
Yeager: We just saw the piece about the building in Ankeny. Tell me about that building and when it was -- you both have knowledge of that building and when they build it what is the cost? How much extra did it cost and how much was saved in building this new building?
Haug: Well, our building has been analyzed I think as much as any building in the region thanks to Curt's organization. So, we've got some pretty accurate data on it. The incremental cost compared to an average office building was about $26,000. That is on a $1.5 million budget. So, I think it's about 2.8% of the building cost and the payback for those measures that have given us the energy efficiency that we were looking for had a payback of between three and four years. So, it's a very quick payback.
Yeager: So, that is the same case with this building. You're citing the average but that is what happened in Ankeny?
Yeager: What was the big change? Did you get a chance to look inside? What have been successful parts of what they have done inside that building?
Klaassen: Well, they've done a number of different things. They have combined a lot of different design concepts using a high performance building flow, day lighting is excessively used in the building, almost all areas of the building are lit with natural light rather than artificial electric light. They used a heat recovery unit. And one of the big features was a geothermal heat pump system. All these working together is what allowed them to get significantly lower energy use.
Yeager: Give me the quick rundown of exactly what geothermal is and how it works and why it saves so much energy.
Klaassen: Well, one of the things it does is it uses electricity as the energy source and you're pumping the heat from the ground and into the building in the wintertime or conversely from the building into the ground in the summertime. And to pump the heat doesn't take as much energy as it does to create heat by using natural gas or burning a fossil fuel. So, you're using one unit of energy to pump the heat, you're pumping three units from the ground and you're delivering four. So, you've got a co-efficient performance or an efficiency, you might say, of 400%.
Yeager: Is this something that a lot of places are going to? I believe schools in a survey that you conducted, 15% are already going to this. What have been some of the reasons schools have gone to this? And are other buildings looking at using this type of savings?
Klaassen: There's quite a number of buildings in Iowa that are considering geothermal. We completed a survey in schools where roughly about one-third of the school districts in Iowa responded. And out of those school districts about 15% of the buildings had geothermal systems in or were being constructed with geothermal systems. So, that is a pretty significant amount. Schools are particularly drawn to the system because of its energy efficiency, they like to save the money. A lot of schools are retrofitting and they want to air condition their buildings. So, it's a way almost to get free air conditioning, if you will. So, that's an important factor for them. And they're also attracted to the long-term economic benefits of it because they've got a little longer time horizon than a lot of commercial entities.
Yeager: Bob, you were going to say something?
Haug: Yes, our staff was involved in helping the Atlantic school system determine what kind of heating and cooling system they would use and while there was some resistance at first to that technology what they found is that they have a year round building now whereas with the conventional heating system for a good part of the summer months at least the building is less usable. And it's really been -- I think Atlantic would agree that it was a great investment.
Yeager: Do you know why Atlantic or why some of these places go and do these types of projects? Not just geothermal, but what is their motivation to do it? It is a big cost investment on the front but what is their motivation to get there?
Haug: I think a lot of it is just a knowledge that energy costs are rising and it's a way of controlling costs in the long run. It's just smart business as well.
Yeager: Curt, I think you have a thought on this one.
Klaassen: Yeah, there's a lot of other motivators. Energy efficiency is certainly one. But when we look at the cost of ownership of like an office building over a 20 year period 94% of that cost is actually the people cost. It's about 3% that is construction, about 3% that is utilities and maintenance. So, when we think about people costs we need to think about productivity. There has been quite a bit of research that's been done to look at how people's productivity increases in buildings that are green, sustainable and high performing. And some of the data that they come back with is in schools there could be a 20% improvement in standardized tests by the students. There's higher retail sales in offices. Productivity increases from 2% to 16%. So, these are all motivators along with energy. Energy can be almost a sideline when you start looking at that 94% people cost.
Yeager: Is that because I dream of it being sunny outside but now I'm actually sitting in the sun where I'm working?
Klaassen: Exactly, that is part of it. You have a higher quality indoor environment. You have better ventilation rates, better control of temperatures, better control of lighting, it reduces illness, sick building syndrome, reduces liability even by reducing the possibility of mold and things like that. So, a lot of things together.
Yeager: Do we see any governmental benefits or encouragement to do these tax breaks or tax credits that either an individual homeowner can use whether installing a storm door -- that's what we're going to have in our house this year -- but are school or businesses getting any type of tax credit? Is there anything out there for them?
Haug: I don't know about tax credits.
Klaassen: Yeah, there's a number of incentives. There are tax credits, tax credits are available for commercial up to about $1.80 per square foot for new construction that ranks at 50% less or better than normal buildings. So, you have tax credits. If you're using renewable energy there's a lot of tax credits and incentives there. The utility companies are really on the forefront with their rebates and incentives for energy efficient construction.
Yeager: You talk about some of the utilities across the state. What type of role or how are they getting involved in projects like these whether it's in Cedar Falls or Algona?
Haug: Well, in Waverly, for example, they just built a demonstration home that uses all the energy efficiency technologies that are readily available just as a demonstration to educate people, builders and homeowners about what is out there in terms of new technology. Most utilities offer rebates for efficient appliances and efficient building design. In Waverly and Cedar Falls and Independence, for example, the utilities are actually sizing the air conditioning equipment because that has a utility benefit as well. If the air conditioners are sized properly it's not only more efficient for the homeowner, it's more efficient for the utility because we're not building power plants to serve an artificially high peak load.
Yeager: Well, and you talk about that, that was a question we were going to talk about later. There is conversations about another plant in Iowa whether it's a coal plant, it could be one of two places. What is the thought process from your standpoint and your group about where we should go with that plant? It could be a coal burning plant. That doesn't seem environmentally friendly from what we're hearing from those groups. Any stance that your group is taking on those plants?
Haug: Loads continue to grow. People are plugging in large plasma televisions that can consume as much energy as a refrigerator. But we're using a lot more electronics and loads continue to grow. So, we're going to need new generation to meet those new loads. We can get a long ways through efficiency, through conservation programs. But we're convinced that we'll need some additional base load capacities as well.
Yeager: What are some of the options that we have? You talked about certain things on a new building in a way and a little bit of a retro building. The knowledge in just a few years seems to me like it has continued to grow and we have been able to conserve more and have been environmentally smarter. Are we going to continue to go on that path or are we at a peak right now where our conservation is at?
Klaassen: I think there's a lot of opportunities both in new buildings and retrofit for improved energy performance. Even the IMU building, as Bob mentioned, which is extremely energy efficient there's still some even low hanging fruit there to enhance that further. I think a lot of existing buildings if people would look around and have an evaluation done on their building they'd find a lot of opportunities for saving energy. So, it's not just limited to new building or new construction.
Yeager: So, we all could do our part. Do you think the technology -- there was an article in Time a couple of months ago about just various ways to harness some of that energy that is out there -- do we think that's the road we're going down, there's going to be just little things that we can all do? Or are we going to see very large breakthroughs?
Klaassen: Well, I think the best response to that is you're going to see a lot of small things that incrementally improve the efficiency of the building. And a good example is a refrigerator, a refrigerator today uses about 25% of the energy of one that was manufactured 25 years ago. So, it's not a matter was there a technological breakthrough but all the individual parts and pieces, the components were made more efficient. We're taking that same approach and applying it to buildings, making them better.
Yeager: What is driving the market, how we're headed right now? We talked about our pocketbook but is it just people are being smart or companies are being smart? What is driving this market?
Klaassen: I think one is the economics, the cost benefits of doing it. I think a second one is the concern for the environment, issues like global warming surface, those kinds of things. Another one of sustainable and green buildings is buying local and you hear more and more about that everything from food to products to construction materials, support your local environment and economy. Those kinds of things are a big driver.
Yeager: Recently in the newspaper, in fact, I still see the ad most every day is for green construction -- they claim to be a green construction company. Are there more construction companies out there that can build some of these things that you're talking about or do we need to have construction companies get up to speed so they can take care of what customers want?
Klaassen: Well, probably the biggest growth has been in the design professionals. The United States Green Building Council has developed a LEED program and their growth has been exponential. And part of what they offer is a certification program for design professionals. So, five years ago you found very few design professionals that were LEED certified. Today quite a number are. They've gone through the training, they've taken the courses, they understand the procedures and processes for a green building. So, that is something that you'll look for in your architects, your engineers and even your contractors will be using their name or their company's name and then an affiliate with the LEED program or an associated professional or something like that to designate that course of training that they have taken.
Haug: Paul, I think it's not just the incentives that you get from being able to claim LEED certification. I think if we're serious about addressing climate change it's going to take a push in addition to pull and we've got to raise the bar on the minimum standards for energy efficiency. The average office building in our climate zone uses 115,000 BTU's per square foot per year. If buildings were built to the energy efficiency standards they'd use a little more than half of that. We designed our building to use a fourth of the average and we're exceeding that with a couple of new measures, we'll be at about 18%. That kind of difference when you think that buildings use between 40% and 50% of all the primary energy in the United States we can’t afford to let that slip if we're serious about climate change.
Yeager: Do you think we'll see a policy shift in that direction? Or is it going to be companies are going to see, wow, 18% of what I did pay?
Haug: I think it's going to be both, both push and pull. We've got to have minimum standards so that we set the bar higher and incentives both from utilities, possibly from government tax policy and also just in terms of energy savings. As we start paying for the carbon emissions that result from the production of electricity, the cost of energy is going to increase substantially and it's going to make these measures pay even more quickly.
Yeager: And we'll have to keep following that in another broadcast. I appreciate you both, Bob Haug and Curt Klaassen, thank you gentlemen for coming in tonight.