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Written By

Jesse Saldivar
GM Cities and Hubs Decarbonization, Americas, Shell Energy

Alaina Ladner
Senior Vice President, Sustainability Practice Lead, West Region, JLL

Marc Starkey
Business Development Executive, Schneider Electric

Brittany Syz
Director–Regional Public Affairs at SDG&E, San Diego Gas & Electric

This article is part of: Centre for Urban Transformation

  • Buildings are responsible for nearly 40% of global CO2 emissions; 80% of these will still be standing by 2050.
  • Deep energy retrofits and existing building electrification are critical to curbing carbon emissions.
  • The World Economic Forum collaborated with the City of San Diego on a series of intensive workshops to identify four near-term solutions to decarbonize existing buildings by 2035.

One of the most significant hurdles to meeting cities’ carbon reduction goals is the expansive number of existing buildings that were constructed without sustainability in mind. Our existing buildings represent approximately 40% of global energy-related CO2 emissions, most of which will still be standing more than 20 years from now.

Decarbonizing existing buildings is also an inherently complex challenge. Buildings come in a wide array of ages, condition, type, and value and often lack envelope efficiency and updated mechanical systems. Solutions depend on reducing fossil fuel consumption as well as innovative financing and partnership models, while policy and regulatory barriers are slow to change.

It is no surprise that many cities find themselves struggling to map out an action plan to decarbonize their building stock. Though there is a pathway forward to developing strategies that can be applied at scale.

North American city makes strides to decarbonize buildings

San Diego, California, has committed to reducing 90% of natural gas from buildings by 2035, including existing homes. To help reach this goal, the World Economic Forum collaborated with the San Diego mayor’s office to host a series of workshops known as a City Sprint to identify scalable solutions in support of the city’s goals to reduce emissions from existing buildings.

Led by the Centre for Urban Transformation, nearly 50 stakeholders spanning public, private and nonprofit sectors, came together to identify and design possible solutions and mobilize action. The solution areas that emerged from this group of experts – who have a wide array of experience in the energy, construction and operations— are designed to meet the city’s broader goals related to equity, air quality, public health, workforce and economy, and resiliency. The four solutions areas that emerged are currently being activated by private industry stakeholders, civil society, and the City of San Diego.

Community microgrids

One solution to help deliver cleaner, more reliable power is the use of microgrids – the local production, storage, and consumption of energy by buildings using renewable energy and battery technology. Microgrids strengthen energy resiliency by providing the capability to operate in islanded mode, i.e., with or without being connected to traditional utility systems. As such, in the event of an outage, the microgrids disconnect and continue operating autonomously delivering power from solar panels, battery energy storage (BES), and any existing backup generators. This makes microgrids a valuable solution for municipalities or commercial and industrial entities located in regions prone to outages due to, for example, wildfires. And as power prices are expected to increase over time, microgrids can save millions of dollars over time.

As one example, through a collaborative effort between San Diego and Shell Energy, eight solar microgrid projects are being installed at various municipal buildings around the city, including fire stations, police stations, and community centres, the efforts of which are anticipated to save the city $6 million from reduced electricity costs. The City Sprint sought to understand the opportunity to scale the use of microgrids for greater energy resilience and carbon reduction whilst building on successful models.

Building performance standards

A growing number of cities and states are enacting building performance standards that provide a combination of carrots and sticks to increase energy efficiencies and reduce carbon emissions. When effectively implemented, these new standards will significantly move the needle on reducing carbon emissions from real estate. In the US, the Biden-Harris administration passed the first federal building performance standard in January 2022, joining 33 state and city governments in the nation’s first Building Performance Standards (BPS) Coalition.

Robust standards define the expected performance of a building, including guidelines, goals, and benchmarks coupled with disclosure requirements. Requiring building owners and operators to share energy usage information enables cities to manage what can be measured, including water, waste, and air quality.

As a result of the City Sprint workshops, JLL and the City of San Diego are co-leading an effort to collaboratively draft a local BPS Ordinance that is expected to go through a public process and be introduced early next year. This step forward will help San Diego achieve its ambitious goal to achieve net-zero greenhouse gas emissions by 2035. A recent study shows the potential for emissions reductions from current BPS is the equivalent of emissions from the states of New Hampshire and Delaware combined every year.

Community retrofits

The San Diego City Sprint found that pilot demonstrations and phased retrofits can be an effective way of addressing city-wide electrification efforts. A community retrofit approach reduces the fragmentation of retrofitting building by building, whereas retrofitting becomes a collective infrastructure project that creates synergies and economies of scale with surrounding projects. Investments can be prioritized to communities of concern or highest emitting areas, engaging citizens on matters of transition.

Typical utility-run electrification programmes usually involve technology-based rebates to residential customers, while non-utility retrofit programmes may offer more comprehensive program models that include whole-home retrofits, financing, and workforce training programmes.

Benefits of an electrification retrofit include reduced CO2 emissions, reduced maintenance costs, lower utility bills, healthier interiors, and greater resilience against disruptions.

As a result of the City Sprint, Schneider Electric is leading an effort to launch an electrification pilot in San Diego, building on other successful use cases, like the Oakland EcoBlock. This approach to retrofitting a neighbourhood block not only makes the area more resilient to power outages, it has improved indoor air quality, and gives property owners control over their energy production.

Companion programmes for workforce development

The City Sprint experts made clear that an inclusive energy transition cannot happen without a diverse and highly skilled workforce, which is critical to not only building a net-zero economy, but also an opportunity to create workforce diversity. Building a green economy workforce requires public, private, nonprofit and academic sectors working together to ensure the energy transition is not just skilled but also inclusive.

For example, SDG&E, the primary utility for the City of San Diego, has in collaboration with local leaders made it a top priority to invest in education and training, with a special emphasis on attracting underrepresented groups to pursue energy and STEM-related careers.

Utilities can partner with local schools, community colleges, labour unions, contractors, and community-based organizations on initiatives to help develop a robust talent pipeline through specialized training programmes, apprenticeships, and scholarships. The City Sprint identified the need to continue to centre workforce in our energy decisions and carbon reduction policies.

Contributing author: Sarah Franklin, Lead, Net Zero Carbon Cities.

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