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Fangzhu Zhang & Philip Cooke, Centre for Advanced Studies, Cardiff University,
UK, email: zhangf4@cardiff.ac.uk.
1. Introduction:
Today, buildings worldwide account for up to 40% of total end-use energy. The US,
OECD/ Europe and Russia consume most of their energy in the building sector (about
40%) (Figure 1) (IEA, 2008). There is over 50% saving potential in the building
sector and thus it is considered as a potential sector to meet the challenges of global
energy and climate change. Due to energy-intensive industrial production in China,
the building sector only accounts for 19% of energy demand. But the share in China
will grow swiftly with its economic development and urbanisation. The building
sector is a driver of the world economy. For example, it contributed 9% of GDP in
China and the EU. According to a report by McGraw-Hill Construction, the green
building market in both the residential and non-residential sectors was predicted to
increase from $36 bn in 2009 to $60 bn in 2010 and in a range of $96-$140 bn by
2013. There is a significant opportunity for those entering this market (McGraw-Hill
Construction, 2008).
Figure 2. CO2 emissions from building sector under high growth scenario (including
the use of electricity). (Source: Levine et al., 2007).
Much effort has sought to apply renewable materials and renewable energy resources
in buildings in order to use energy efficiently and to reduce the carbon footprint.
Reducing energy use at lower costs in buildings will offer greater potential to meet
CO2 reduction targets than any other sectors. The energy used for heating and cooling
can be reduced through ventilation, heat sinks, the use of solar panel and improved
insulation. Electricity can be reduced through improved LED lighting or increased use
of natural lighting and the use of energy-efficient appliances. Integrated building
design and the modification of building shapes, orientation and materials can also
reduce energy use (UNEP, 2008). It was reported that good practice regarding green
buildings can reduce greenhouse gas emissions by as much as 70-80% (WBCSD,
2009). The main issues for green building include raising global energy awareness,
changing consumer behaviour, setting building energy codes and evolving energyefficiency design and technologies.
2. Building industry
2.1 Urbanisation
With economic development, total global energy consumption is dramatically
increasing over decades. Total energy use in buildings depends on population size and
density, and energy efficiency. Rising standards of living result in more energy
services required for heating, cooling, lighting and communicating. Aging populations
and changing life styles lead to more single-person households. Urbanisation,
especially in developing countries, demands higher-rise buildings in urban areas.
Energy use in high-rise buildings is more efficient than that in conventional buildings,
especially than detached houses in the developed countries. But the impact of global
urbanisation on energy consumption could be reversed if the emerging prosperity
encourages people to leave city centres and live in a countryside life style, commut
daily to the city centre, clearly results in increases of energy use not only in the
buildings but also transport. The global urban population is expected to grow from
47% of the total in 2000 to 70% in 2050. Figure 3 shows the rising urban population
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trend in developing countries like China, India and Brazil. The urban populations of
China and India are continuing to grow rapidly to 2050, reaching 1 billion in China
and 0.9 billion in India, respectively. By 2050, it is predicted that about 73% of the
Chinese population will be urban, increasing from 40% in 2005 (WBCSD, 2009).
Brazils urbanisation rate is beginning to reach saturation level and it is a much more
urban country than others. The construction boom, especially in China, is increasing
building energy demand dramatically with economic development and living standard
improvement.
Figure 3. The rising urban population in developing countries (China, India, Brazil)
(WBCSD, 2009).
2.2. Building types: Commercial and residential buildings
In the property market, there are two types of buildings: commercial and residential
buildings. The total existing building floors in 2003 was highest in China, as shown in
Figure 4a. China has a higher percentage of residential space and much less floor
space per capita than other countries like the US (Figure 4b) (WBSCD, 2007). Energy
use for building in the US is significantly higher than in the other countries and is
continuing increasing to Year 2030 (Figure 5). Energy consumption in China will
grow rapidly to approach European levels by 2030. During this period, commercial
building energy use in China will increase more than double. Energy consumption in
Japan will remain the same level as now and only increase moderately in Western
Europe. The consumption of Brazil is growing too, but not as fast as India or China.
a
b
Figure 4: Existing building floor spaces (a) and average floor space per person (b)
(Source: WBCSD, 2007)
Figure 5. Building energy projection by regions in 2003 and 2030 (Source: IEA,
2008).
2.3 Energy use by end-use
Energy consumption in residential building was about 82 EJ in 2005 and the
associated CO2 emissions were 4.5 Gt CO2, including indirect emissions from
electricity use (IEA, 2008). Energy consumption includes space and water heating,
cooling, lighting and the use of appliances. As shown Figure 6, space heating is the
most important energy use in residential buildings, accounting for over 50% of total
end energy use. Although energy consumption by space heating has increased due to
urbanisation and increased floor space over the years, its share of total energy
consumption reduced from 58% in 1990 to 53% in 2005 because of higher energy
efficiency of space heating equipment and improved building insulation.
Figure 6. Household energy use by end-use, among the surveyed countries of IEA 19.
(Source: IEA, 2008)
Electricity used for household appliances grew from 1990 to 2005. It accounts for
21% of total residential building energy consumption in 2005 (IEA, 2008). With
economic development and change of life styles, more appliances are used, including
large appliances such as refrigerators, freezers, washing machines, dishwashers and
televisions, and a wide range of small appliances like PC, telephone and other home
electronics. In some countries, air conditioning is one of the key household appliances
now. In many IEA countries, regulation policies for appliance energy efficiency have
shown significant on improvement in appliance unit energy consumption. In contrast,
the share of water heating fell from 17% in 1990 to 16% in 2005. Lighting and
cooking remain at the same level, accounting for 5% of total energy consumption, not
much difference during the period.
Energy use differs widely by home size and building type. Average home size is
200m2 in the US and only 40 m2 in India (WBCSD, 2009). Average household energy
consumption varies due to culture, climate and wealth (Figure 7). Space heating is
dominant in Europe, while water heating is the main energy use in Japan. Lighting
and appliances, water heating and space heating share similar portions (28-33%) of
household energy use in China, while cooking is the main energy use in India,
especially in rural India, where many houses have no electricity access and biomass is
the main energy source for cooking. With the rising wealth in developing countries,
more energy will be used for electric appliances to meet the increasing living quality.
Figure 7. Global differences in home size and energy use (Source: WBCSD, 2009).
traditional bulbs. The global LED market is predicted to reach $14 billion in 2013, as
shown in Figure 9 (Nuttall, 2010). Major players include GE, Philips, Siemens and
Cree. The Silicon valley-based company, Bridgelux, has made technology
improvement to apply LEDs for home, street and retail lighting. It is estimated that
about 20% of world electricity is used to power lighting. It will reduce electricity
demand by 75% if use LED lighting (Nuttall, 2010). Cities like San Francisco and
New York installed LED street lamps and retails like Walmart and Starbucks are
replacing conventional bulbs with LED bulbs to cut energy consumption. A number
of countries are regulating incandescent light bulbs into obsolescence, with the EU to
the forefront.
energy, accounting for 37% of total energy use in buildings. Integrated building
design requires all participants including owners, architects, engineers and others
involve at the early phase of the building project. Building energy performance
depends not only on the performance of an individual technology but also on how
these perform as an integrated system. The building envelope is the starting point of
energy efficient buildings, interacting with HAVC system and lighting, while design
will bring together all elements influences on energy efficiency (WBSCD, 2007).
Figure 11. Integrated building design as best solution to reduce energy consumption
(Source: WBSCD, 2009).
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Figure12. LEED new construction project growth during the period 2000-2006.
(Source: Yudelson, 2008).
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Figure 13. The green cost premium of LEED buildings (Source: Kats, 2003)
Green buildings provide financial benefits that conventional buildings do not, as
indicated in Table 1. The benefits are in lower energy, water and waste costs, lower
CO2 emissions and increased productivity and health, saving about $50-$70 per
square foot in a LEED building (Kats, 2003). Government is playing a significant role
in promoting green building through regulations. For example, LEED gold
certificated buildings will gain priority in planning permission. Tax credit is another
incentive approach for the promotion of green building.
A new LEED system for rating neighbourhood development is being developed by
USGBC to integrate the principle of smart growth, new urbanism and green building
into the first standard for neighbourhood design (WGBC, 2009). This may be of
particular interest to city and regional planners because of their focus on building
position, landscape and community sustainability. So far, there are many building
assessment systems in the world and no single system has emerged as the green
building industry standard in the world. Each assessment system has focused on
different aspects in practice such as health, technology or environment. They all
integrate environmental and sustainability issues into building industry.
Table 1: Financial benefits of green buildings (Source: Kats, 2003)
Category
Energy savings
Emission savings
Water savings
Operations and maintenance savings
Productivity and health benefits
Subtotal
Average extra cost of building green
Total 20-year net benefit
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Figure 14. Global planned green building project types (Source: McGraw Hill
Construction, 2008)
Total venture capital investment in green technology was estimated about $3.9 billion
in the US in 2009, including $1 billion funding from the American Recovery and
Reinvestment Act for clean energy projects. Among these investments, technologies
such as solar and biofuel have received the most funding. There is still a financial
investment gap for green building technology commercialisation. Venture capitalists
were not interested in green building when LEED was introduced in 2000, but there is
an increase a trend of investment interest in green buildings and energy efficiency
technologies. The study found that green office buildings with LEED certification
could receive a premium in rental rates and sales prices compared with conventional
office buildings (Eichholtz et al., 2009a). They also reported that the investment
community has embraced the concept of socially responsible investment (SRI) to
improve company green image reputation, along with economic profitability and
improved employee well-being (Eichholtz et al., 2009b).
The founder of the US Green Building Council (USGBC) set up the Regenerative
Ventures Company to support green building technology development. The venture
company is partnering with entrepreneurs and corporate management teams to
establish and achieve goals in the sustainable building arena. The working projects of
Regenerative Ventures are listed in Table 2. These projects focus on new building
technology and materials. For example, the Soladigm Company received over $20 M
investment from several venture investors to develop next-generation green
technologies utilising glass and optical coatings which will significantly reduce
energy use in buildings. Serious Materials is developing a new product called
EcoRock to replace gypsum drywall. EcoRock uses 80% less energy to produce
and is made using 80% of post-industrial recycled waste material from steel and
cement plants. The company also develops other products including soundproof
drywall QuietRock; Quiethome Windows. Integrity Block Company is
developing sustainable building materials which can replace standard concrete block.
Their product, compacted-earth block, is made from a proprietary soil mix which is a
by-product from mining or quarrying (WGBC, 2009).
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start with federal government building first and plan to increase federal building
energy efficiency by 40% within five years through retrofit. Meanwhile, they also
supply financial support for the retrofits of low-income homes (Osterkorn, 2008).
The USGBC Green Jobs Study by consultant company Booz Allen Hamilton shows
that green building and energy efficiency industries supported more than 2 million
jobs and generated more than $100 billion in gross domestic product and wages in the
US during 2000-2008 (Figure 15) (USGBC, 2009). With new regulation to cut energy
use and apply more renewable energy and the financial crisis between 2008-2009
promoting energy users to cut costs, there is an increase in job opportunities in the
green building industry. Energy auditors, renovation builders, green building trainers
and energy efficiency project managers have all seen an increase in job opportunities.
The number of green jobs is increasing, mainly from construction of new nonresidential commercial and healthcare building. Builders, plumbers, electricians and
service technicians all see the evidence of increasing opportunities in the job market.
It is predicted that renewable energy and energy efficiency industries will create at
least 16,000 jobs. They will be worth about $1,900 billion in 2030 (Table 3) (Bezdak,
2007). Green innovation is perceived as contributing to the solution for the US to
recover from the financial crisis of 2008-2009.
Figure 15. The economic impact of green construction in the US (Source: USGBC,
2009).
Table 3. US renewable energy and energy efficiency industries in 2030 (Source:
Bezdak, 2007)
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4.2.3 China
The building sector is Chinas 4th largest industry, contributing about 8.9% of GDP.
The Chinese government has set the goal to reduce energy consumption in the 11th
five-year plan (2005-2010). It is targeted to reduce building energy consumption by
50%; to improve energy efficiency of government institutions by saving 10% energy
per unit construction area and per capita; and to reduce electricity consumption of
appliances by 29 billion kWh (Osterkorn, 2008). The Ministry of Housing and UrbanRural Development, the Ministry of Finance, and the National Development and
Reform Commission have passed some laws and regulations on building standards
over the past few years (Table 4). Six key areas are focused on to promote energy
efficiency. State and local government supply financial support for a range of
demonstration projects in some major cities (The Climate Group, 2008). EMC is an
active private company in China which has been involved to develop energy-efficient
green buildings.
Table 4. Government policies on green building and energy efficiency in China.
(Information resource from: The Climate Group, 2008).
Legal
environment
Demonstration
projects
Financial
mechanism
Plan:
Laws:
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With the explosion of the Chinese middle class, energy consumption by residential
building will grow at close to 5 percent annually, more than doubling by 2020
(McKinsey & Company, 2007). There are several barriers to improve energy
efficiency in buildings in China, including lack of rigorous enforcement of building
energy codes; lack of incentives to save energy due to fixed rate price of heat energy
and out-dated heating system design with coal-fired, heat-only boilers (WBCSD,
2009). As shown in Figure 16, building insulation comparison indicates that there is
big gap of insulation efficiency between Chinese city and global cities. At least one
third of buildings in China need an energy performance upgrade. This energy retrofits
in existing buildings could exceed US $380 billion at average of 200 Yuan (US$29)
per m2 (The Climate Group, 2008).
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are rented, the owners has no direct interest in green building investment to reduce
energy bills. Moreover, the ownerships of the buildings change several times during
the lifetime of green buildings. The initial owners investments on green building and
energy efficiency have limited financial returns from long-term energy cost saving.
The isolated roles and ineffective co-ordination between participants weak the
incentive for energy efficiency investment.
According to recent study by Baden et al. (2006), green buildings can achieve higher
rent value compared to standard buildings. Recently, green buildings have become
more attractive financially because of increased market demand for renewable energy
and energy efficiency credits. There are emerging energy service companies (ESCOs)
which engage in energy performance contracting. They take the arrangement of initial
investment of green buildings and life-cycle energy saving cost together, acting as
project developers. The energy service company installs and finances energy efficient
projects designed to provide energy at a contracted level and cost over a term, usually
7-10 years. Its compensation can be linked directly to the energy saving cost
(WBSCD, 2007). ESCO models have been supported by international organisations
such as the World Bank. However, ESCO developments in developing countries find
it often difficult to have sufficient collateral and track records to secure needed capital
(UNEP, 2008). Another solution is to establish energy-efficient investment funds
capitalising on the lower risk of mortgage lending on green buildings. These funds
could be attractive to socially responsible investment funds (WBSCD, 2009). The
energy efficient mortgage monetizes the energy savings of an energy efficient home
through the mortgage loan. For exiting homes, the upgraded products with energy
efficiency are financed though the mortgage loan using the monthly energy savings so
that no additional initial investment is required for existing building renovation.
4.3.3 Behaviour changes
New technology can help to raise awareness of energy waste and reduce it, especially
in commercial buildings. In developed countries, energy bill only represents a small
portion of the costs with high quality standard, thus are not aware energy waste in
residential buildings. The recent developed building management system (BMS) can
automate building energy consumption including lighting, heating and cooling. Other
technologies such as smart meters indicating individual energy consumption can also
alert users to potential energy savings. In Japan and the UK, utility companies usually
alert users to excessive consumption by providing comparative information about
energy use on bills and apply smart grid approaches to manage demand from different
users.
Significant behaviour changes and improved knowledge to create an energy-aware
culture are considered effective steps to improve energy efficiency in the building
industry. Figure 18 illustrates user behaviour having significant impacts on energy
consumption. A wasteful user consumes twice the energy of the conservation users. A
wide range of campaigns on energy saving have achieved a new mindset focusing on
public health and environment. Children in school are also encouraged to persuade
their parents to save energy. Leadership is essential to change a culture. It is important
for governments to show their leadership and commitment to energy saving via
providing important support for emerging green building technology.
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Skidmore, Owings & Merrill LLP (SOM) (2010) SOM-designed Pearl River Tower
topped out in China. News dated on 28/03/2010: http://www.som.com/
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