“I am hopeful. I feel like we're coming together around this issue in a way that I've never experienced in the past. This is something that's within our power to do something about."
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Episode 66 is a conversation with Cara Carmichael, Principal at Rocky Mountain Institute, a.k.a., RMI.
We talked about net-zero buildings or zero-carbon buildings, as today's preferred lingo goes. We dove deep into each of the major pieces of making buildings zero-carbon and talked about where we are today versus where we need to be, which led to a great discussion on trends and innovation needed for each.
This left me energized and hopeful, and I hope it does the same for you. We have a lot of work to do together my friends.
Please enjoy Nexus Podcast Episode 66.
Mentions and Links
- The Rocky Mountain Institute (0:35)
- Amory Lovins (2:44)
- Pathways to Zero (4:29)
- Carbon Neutral Buildings Roadmap (5:26)
- IPCC Sixth Assessment Report (8:52)
- National Energy Codes Conference (16:48)
- Energiesprong (26:53)
You can find Cara Carmichael on LinkedIn.
- The three reasons we need to decarbonize buildings (7:09)
- How the net-zero definition has changed over time (9:39)
- Part one of the roadmap: benchmarking and disclosure (12:38)
- Part two of the roadmap: MEPS and/or building energy codes (16:35)
- Part 3 of the roadmap: retrofitting 4% of our buildings per year to zero-carbon ready (24:12)
- Part 4 of the roadmap: Electrification (28:48)
- Part 5 of the roadmap: Building Grid Interaction (32:43)
- Part 6 of the roadmap: Solar and storage behind the meter (37:47)
Note: transcript was created using an imperfect machine learning tool and lightly edited by a human (so you can get the gist). Please forgive errors!
[00:00:03] James Dice: hello friends, welcome to the nexus podcast. I'm your host James dice each week. I fire questions that the leaders of the smart buildings industry to try to figure out where we're headed and how we can get there faster without all the marketing fluff. I'm pushing my learning to the limit. And I'm so glad to have you here following along.
[00:00:31] James Dice: Episode 66 is a conversation with Cara Carmichael, Principal at Rocky Mountain Institute, AKA, RMI. We talked about net-zero buildings or zero-carbon buildings, as today's preferred lingo goes.
We dove deep into each of the major pieces of making buildings zero-carbon and talked about where we are today versus where we need to be, which led to a great discussion on trends and innovation needed for each.
This left me energized and hopeful, and I hope it does the same for you. We have a lot of work to do together my friends.
Please enjoy Nexus Podcast Episode 66. All right. Hello, Cara. Welcome to the nexus podcast. I'm so glad to have you. Can you introduce yourself?
[00:01:12] Cara Carmichael: Yeah. Thanks James. For inviting me to join. I'm excited to be here today. I am a principal with RMIS buildings program, and so we're working on decarbonizing the building sector to align with a 1.5 degree climate target misstated by the IPCC.
[00:01:30] James Dice: Cool. And for those that don't know, RMI is Rocky mountain Institute. I'm pretty sure most people will know that, but this one that makes sure a and you're in you're in Boulder. Is
[00:01:40] Cara Carmichael: that where you're at? Boulder, Colorado.
[00:01:43] James Dice: Cool. So Colorado podcast today um, So, can you tell me a bit more about your background?
How'd you get to RMI what'd you do before that?
[00:01:51] Cara Carmichael: Yeah, so I've been with our, my, for 16 years, so it's kind of hard to imagine what I did before RMI, but my, my training is in architecture and then I have a engineering degree, energy systems, engineering degree, and I think What I love about working at RLI is we're kind of continually on the edge of innovation.
So it's, you know, over my, my career, my two decades in the buildings industry it's really not ever been the same thing because we're always pushing the envelope from net zero energy buildings, you know, 10 years ago to now fully decarbonized buildings and the strategies and measures and business case behind how to get it.
[00:02:32] James Dice: Cool. I definitely want to ask you about that progression. Cause when I, whenever I first got into energy efficiency, so this would have been right when I got to college in 2010, one of my main motivators was Amory Lovins content. I mean he put out books and other, other written pieces, but like, yeah, our mine has been at the forefront for a really long time.
Definitely motivating people like me. That's really cool.
[00:02:58] Cara Carmichael: Yeah, Amory continues to motivate people like me as well. I mean, he's such a visionary and so inspiring and seeing the way he can take super technical concepts and just put them in a way that resonates with everyone. I mean, cold beer and warm showers.
That's what people really want. Not like KV to use and kilowatt hours, like, that's, that's the language we need to be speaking.
[00:03:23] James Dice: Absolutely. Um, And how big is our mind now? What's the team like
[00:03:28] Cara Carmichael: we're jet, we've just crusted 400 people. So in my time we've gone from about 50 people to. Now 400 and we're continuing to grow rapidly.
I think we have 35 open posts at the moment. If anybody's interested. It's it's a super, I mean, as you can imagine, there's so much, there's so much energy in the energy industry right now. Yeah. And so much pressure, you know, to reduce the impacts of climate change. You know, so we're, we're in the decisive decade and we have.
10 years to really write the ship. Well, nine not eight and counting. Yeah.
[00:04:09] James Dice: Yeah. Eight and counting. Well you and I worked a little bit together at NREL so NREL and RMI do a lot of work together. And I really don't know your, like your full role though. So like, what's your, what's your role at our mind?
What do you, what do you do.
[00:04:24] Cara Carmichael: Yeah, it's a good question. I would say every day is, is a little bit different, but I lead our Pathways to Zero initiative, which is really looking at you know, viable pathways to decarbonize our building stuff. So my, what that, what that translates in in my day to day is really two things.
One is looking at the impact that grid interactive efficient buildings can have not only to our building stock and the V the costs to building owners and occupants, but also. You know, in the last couple of years, we've really turned our vision to the grid. How can buildings as the largest user of electricity in the energy sector and the largest, therefore the largest single emitter of carbon globally.
How do we balance those needs? And those impacts with the electricity. So thinking about grid, interactive, efficient buildings. And then my other hat really is thinking about state level roadmaps, decarbonization, roadmaps, and yeah, so a lot of that work right now is coming out of New York and they're carbon neutral buildings roadmap, which is.
What are the most aggressive in the country right now? It's really exciting.
[00:05:32] James Dice: Cool. All right. I want to hear a little bit more about that in a minute, but first I read on your Twitter profile that you love hockey. Do you play hockey?
[00:05:40] Cara Carmichael: I do. I do. I've I'm an ice hockey player.
[00:05:43] James Dice: Cool. I
[00:05:46] Cara Carmichael: played in Europe ever since middle school and was lucky enough.
I mean, women's ice hockey is it was back then. It was just kind of starting up in the U S so we were, we were kind of one of the handful of teams and we were able to go to nationals a couple of years in both high school and college and little team from Colorado. You know, we got thumped by those in Minnesota, Canada, and Connecticut, like, so I would say.
It's a passion. It's not I'm not NHL.
[00:06:14] James Dice: Yeah, I, I grew up playing soccer and so I still play soccer and it's the same thing. It's a, men's over 30 Sunday league. Definitely nowhere near the English premier league.
Cool. That's that's that's fun. Hockey is like the, the one sport. So I grew up playing all kinds of sports. Hockey is the one sport that I like. If I'm watching it, I have to like ask questions the whole time. Yeah. What's going on. So, all right. Let's, let's dig into, decarbonization of buildings.
So I want to frame this in terms of like, like you said, we have a limited number of years to act. I want to frame this in terms of like where we are today versus like what we have, have to get to. I thought it'd be a fun way to kind of frame the conversation, but first I think we should set a little context for those that are listening to this that's probably the rare listener here, but like, why do we need to decarbonize?
Our buildings, maybe we start there.
[00:07:14] Cara Carmichael: Yeah. Well, there's, there's I guess two reasons, well, three reasons that I can think. Health economics and the environment. So I'd say from a health standpoint, we're realizing that there's a lot of obvious health implications due to the warming of the climate and, you know, outdoor air quality issues contributed in large part by our buildings, but also our indoor air quality is suffering.
And a lot of that is due to natural gas being burned in our homes. Primarily to some degree in our offices, but less, less than our commercial buildings, but in our homes emerging research from Stanford is showing that the indoor air quality is way worse than the outdoor air quality. And it's contributing to childhood asthma in rates higher than anticipated before.
And there's a huge. Business case actually linked to that, to decarbonizing our buildings, getting combustion out of the spaces we live and breathe in, and that's gonna make us healthy, healthier as a population. Um, From an economic standpoint, I think we've always known efficiency is a great cost saver and it's, you know, by and large, the most economic improvements you can do in a building.
So we need to kind of continue on that thread. Adding more intelligence and electrification and leveraging the distributed energy resources, solar and storage that are becoming more ubiquitous. And then from a climate standpoint, if we don't be carbonized our buildings, we're going to see kind of this spiraling effect.
That's, you know, the recent so the intergovernment IP inter-government panel on climate change. IPCC just released their sixth assessment report a couple of weeks ago. And the research is there, like we're, people are responsible for global warming it's unequivocally human cause is what they found.
And so that's, it's human caused and it's it's. It's unprecedented kind of the increase that we're seeing. So this is not kind of a typical climate, you know, warming and cooling flexing scenario. This is unprecedented acceleration. So it's really important that we get our buildings under control.
[00:09:26] James Dice: Couldn't agree more. So you mentioned RMI being sort of at the forefront for the last several decades. I have a sense that like the definition of a net zero building has been shifting as well. Like where were we at when you first started working on this and then like, how has that definition changed over time?
[00:09:46] Cara Carmichael: Yeah, it really has. It has evolved a little bit. I think the fundamental building blocks of all remained the same, you know, efficiency first, you know, then reduce your loads, do efficiency, you know, then add renewables. And I think now, instead of looking at kind of net zero energy was the goal. Now we're kind of dropping the net cause we need just zero.
And we're dropping the energy and replacing with carbon, recognizing that even a net zero energy building could still emit a whole lot of carbon, depending on when it's pulling energy from the grid, this, you know, and net zero energy building kind of nets out emissions over the course of the year.
So at times, giving energy back at times it's using more energy. And when it's using more energy, that can be during very carbon intensive times. So what we're finding is that we really need better alignment between our buildings and the generation that's happening on the grid. now the gold standard is just zero carbon buildings.
[00:10:45] James Dice: Yeah. So the way, the way I've been kind of describing this recently is like 87, 60, like matching. Every hour of the year with renewables matching and buildings consumption up every hour of the year. Is that okay? Um, So how long have you personally been working on this problem? I saw a paper by you or something in like 2013.
So you've been around in this conversation for a long time.
[00:11:10] Cara Carmichael: I have, I. I remember my first project back in, when I first started out as an intern during. And my undergrad undergrad degree program in architecture and I was building light shelves to show, to simulate daylight, you know, the impact of daylighting in a, in a naturally daylight building.
And I was like, this is also, you know, those models. So, then physical models kind of faded out and then we've, you know, learned how to do it and, you know, lumen designer and yeah. Programs I S B and so we can simulate daylight analysis. And so it's kind of, evolved from thinking about kind of project level solutions to that.
How can we scale project level solutions across the portfolio, and then now kind of what are the policy implications that those strategies could have if we're looking at kind of building stock writ large.
[00:12:06] James Dice: Very cool. All right.
[00:12:08] Cara Carmichael: Um,
[00:12:11] James Dice: Okay. I, wasn't going to push you 20 years. Yes. Um, Cool. Well, let's walk through these and then at the end, I wanna, I want to ask you if you're hopeful after 20 years, but I want to save that for a little while.
So for each of these categories, I have, I want to walk through. Again, where we're at today versus where we need to get to. And then use that as kind of a jumping off point for each one, in terms of like, what innovation do we need in order to get where we need to go. So let's start with what I would call, what I, what I learned is called maps, but I, I I've heard, I've seen them called building energy ordinances or benchmarking laws.
Like those, those types of things. That's the first category I want to walk through. So like, why is it important and like, where do we need to get to moving forward?
[00:12:58] Cara Carmichael: I would say that today, I think we're we're getting better at ordinances. We're getting better at disclosure. I would say it's still a small at least in terms of disclosure, it's a small. Fraction of buildings and cities that are actually doing this to a good degree. And I think that level of transparency is super important.
You know, New York city just implemented their kind of ABC D I don't know if it goes to AF I think it does, but they, yeah, so it publishes on the buildings by the entryways, like how that building is performing. And so I think that level. Accountability and the ordinances and then transparency in some of the disclosure has been good progress that we've seen over the last 10 years.
They it's been hard fought progress, and I don't think it's moving nearly quickly enough. So I think where we need to go, I think, as it needs to become much more ubiquitous. And I think we need to do it pretty quickly.
[00:13:57] James Dice: Yeah. And, and the way I understood, and it also is that like most of the time, these are city level, maybe this ties into some of the state, your work you're doing, but most of the time, this is your city level ordinances.
So maybe you're covering like St. Louis, where I grew up. It covers St. Louis city, which has a population of a little under 300,000. It does not cover the county, which population of 3 million. And so you start to hit you know, it's great that. You know, those of us in the U S GBC chapter five years ago got that passed.
But like, the conversation is bigger than what's actually covered by the ordinance. Is that something you're seeing. More pervasively.
[00:14:37] Cara Carmichael: Yeah, it is. It really is. And it's like the it's so hard because it comes down to really resourcing, like, is there sufficient resources at the city or the county level to enforce some of the ordinances and the codes and the policies.
And that's a really challenging it's a challenging and sensitive dynamic.
[00:14:56] James Dice: Totally another other piece of this, this con like this topic specifically that I've recently learned is that it. Complicated on the utility side as well. So I recently learned that most utilities don't have a concept of a building.
They have a concept of a customer with an address and a meter. Right. And so part of the resource question is like, how can we make it easier to do benchmarking? And I think that right now, it just takes way too much labor for someone to sort through like, How big is the building. What's the end use of the building, everything that goes into benchmarking, right.
It's just way too difficult today to do that. So I think that's one of the huge innovation opportunities for this category. Can you think of any others?
[00:15:40] Cara Carmichael: I think that's right. I would add I'm a little more hopeful there because I think we have a lot of good. Yep. We have a lot of good models today. Like there, it's not as widespread as it needs to be, but I think DC Washington DC has a great benchmarking program, New York city maybe even extending to the state, but they have a great website.
That's totally transparent. You can zoom in and out on your building. And color-coded, you know, city of Boulder, Colorado has a, you know, a similar, like a, a circle map. How big is your energy use intensity, you know, based on the address. So I think we have good maps.
[00:16:15] James Dice: Yeah, Denver has a dashboard as well. You can zoom in, look at individual buildings and I think it's color coded.
Yeah. I think I'm hopeful there as well. It just, it feels simple. If we look at the other categories we're about to walk through it does feel simple to do benchmarking, right? Yeah. Totally cool. All right. Let's talk about energy codes next. So where are we at today and where do we need to get to, to get to net zero by a certain date in the future?
[00:16:45] Cara Carmichael: Yeah. So, I don't know if you had a chance to attend. There is a national energy codes conference. Um, Couple of weeks ago, virtual. I know it's, it's something that everybody's clamoring to sign onto, right? Not like an NHL game or, you know, world cup soccer games right up there for attendance. It was really good.
And I Mark Chambers from the white house council of environmental quality he spoke and I, I honestly, I didn't expect to walk into the codes conference and come out like super inspired and motivated and I did. Alright. So if you catch that, if you have a chance to watch that recording, I thought it was just spot on and really smart.
And it talked about the need for this country to step up, step up our codes and similar to the ordinances like codes. They're enforced at the local level at city or county. And so it's not something, you know, that's where jurisdiction lies so they can pick how. Aggressive or not, they want codes to be, or not.
There's still several parts of the country that don't have many, you know, don't have any codes. But I think what's really exciting to me is building performance standards as kind of an emerging lower threshold for what our buildings need to perform. And it's it's performance-based and so it gives building owners the flexibility on how to execute and how to meet the required.
[00:18:11] James Dice: Okay. And would this be like an overlap between energy ordinances, benchmarking ordinances and codes, or how, how has it sort of administered?
[00:18:22] Cara Carmichael: Yeah, they're, they're mutually supportive between kind of benchmarking and, and building performance standards. We're seeing the metrics vary a little bit.
Usually the metrics between the benchmarking and the performance standards are aligned. So like if you're like for instance, New York city reports on, well, actually that's not true in New York city they're reporting, I think on energy use intensity and their benchmarking, but they have a local line 97, which reports on greenhouse gas emissions.
So it's CO2 CO2 emissions of buildings, but there are maybe half a dozen. Building performance standards across the country right now, either at a state or city level. And they some use energy star, some use energy, use intensity, some use greenhouse gas emissions. There's no kind of one size fits all right
[00:19:14] James Dice: now.
And I do want to rope in our European and Australia and. Listeners here, there are similar standards being developed in major cities. I know London is a one where I just saw the other day that people are like, wow. If an office building, is that an F right? Right. It's going to be on leaseable.
That's that's written into their code locally, so, really cool stuff happening in other geographies as well. Yeah. So what are your thoughts though? Like, it seems like we have to get, so we have codes. Okay. And the way I understand it, when I used to divide design HVAC systems, is that. You know, local municipality decides to it adopt a certain version of ASHRAE 90.1 or some sort of international code.
Right. And what we need to get to is like a net zero co like either, either the performance is net zero or the Like a 90.1 would specify what would result in a net zero. So we need to get every location in the world to have that code as mandatory by, oh, we don't know what date, but What are your thoughts on how we make that happen, I guess? Yeah.
[00:20:24] Cara Carmichael: Or, you know, when you put it that way, it's definitely not not something to, you know, pass by at it's, it's, it's a big challenge. I think there are movements, you know, recognizing that the current, international energy code is not. Zero carbon ready even.
There are movement um, by new buildings Institute, by and others ASHRAE is putting out a code to start to put forth an alternative that is zero carbon and 1.5 degree aligned. So I think that's forthcoming. there were some big changes in And the international, the IAC Last year as to how they, how they set up and approve.
So I think we're all still waiting to see how that will shake out a little bit. But I think as good of a code as we can design, if, unless it's kind of adopted by different jurisdictions, then you know, it's challenging to make an impact there. Hopefully we can, you know, advance adoption. Techniques outreach education resources at the county level to help build enforcement, you know, workforce training, et cetera, so that we can get more folks to adopt advanced.
[00:21:37] James Dice: You mentioned net zero. Ready. This is going to tie into what we're about to talk about. Can you define what, what that means?
[00:21:44] Cara Carmichael: Yeah. So zero carbon ready? Carbon
[00:21:48] James Dice: ready? Okay.
[00:21:49] Cara Carmichael: Yeah. So, At RMI we see, and, and elsewhere there really are four key pillars to decarbonization and that's all electric buildings super efficient buildings.
They need to have a demand, flexibility, and they need to leverage solar and storage. So distributed energy resources, and that's for an existing building specifically. So, those are kind of the four key ingredients to decarbonize your building. It's like going on a diet and that's the recipe.
[00:22:18] James Dice: Got it.
Before we jump into those four, I'd like, I'd like to jump into them each individually. A lot of times building on energy codes are talked about and context of new buildings. So can you talk about. How do, like, what makes me nervous is when I think about embodied carbon, can you talk about like where we're at today versus where we have to get to in that arena?
[00:22:39] Cara Carmichael: Yeah. So embodied carbon and embodied carbon is the amount of emissions that's associated with the materials in a building. And it's particularly focused on new construction, but like the extraction, manufacturing, transportation. Of those materials to build a new building and that counts for 11% of global carbon emissions.
So it's not something that we can ignore. It's complicated because it's raw in industry. It's not just buildings, buildings. It's like we need to factor other sectors, industry and transportation. And it's also. Hard to track, you know, where, what what furnace is your, is your steel kind of maiden in that because different furnaces have different types of embodied carbon, you know, different emissions rates.
Totally. But we're getting better at it through EPDs environmental product disclosure forms. And we're learning more about our curtail it.
[00:23:37] James Dice: Hey guys, just another quick note from our sponsor nexus labs. And then we'll get back to the show. This episode is brought to you by nexus foundations, our introductory course on the smart buildings industry. If you're new to the industry, this course is for you. If you're an industry vet, but want to understand how technology is changing things.
This course is also for you. The alumni are raving about the content, which they say pulls it all together, and they also love getting to meet the other students on the weekly zoom calls and in the private chat room, you can find out more about the email@example.com lab. Start online. All right, back to the interview.
All right, let's talk about the four pillars. So the first one is you said super efficient. Well, I don't know if that was the first one you said, but that's the first one I'm going to bring up.
We basically, the way I understand it need to retrofit, like almost every building in the next, like 30 years or 29, 28 and a half, wherever we're at. How do we get there to that retrofit and goal.
[00:24:32] Cara Carmichael: So, In the U S as a microcosm of the rest of the world, there are a hundred million buildings, and we retrofit about a million buildings a year.
So we have like a hundred percent retrofit rate what to decarbonize. We need to afford X increase. We need to be retrofitting like 4% of our buildings stock per year or existing building stock. And we need to get all of the new construct, all of the new buildings also to this, you know, super efficient, all electric, you know, flexible.
Model, we pretty much need a four X increase of today's efforts, a four X increase in workforce, a four X increase in operations in design engineering, kind of vendors, financing all of the above.
[00:25:22] James Dice: Totally. Yeah, there, it really is that full ecosystem of all the different people that come together to perform a retrofit.
How do you think we get there?
[00:25:30] Cara Carmichael: That's a good question. I think it's gonna require. A lot of hard work and a lot of ingenuity from a lot of different industries. I mean, I think you know, people have asked me, well, is it, you know, do we just need to expand our workforce? And it's kind of a yes and no type of a solution.
Like we can't, there's no one as Emory likes to say, it's not kind of, there's no silver, silver bullet solution. We need kind of the silver bullet. Where we're amplifying everything kind of on, on a same scale that said, I will say we also need to get smarter about how we do things. I mean, our construction, our, our.
You know, single family construction, custom construction model has remained the same for the last 50 years, but the level of efficiency from kind of the labor force on site hasn't changed. And so I think we're seeing some really exciting movement about. You know, for prefabrication and modularizing components and industrialized solutions.
And at the forefront of that is department of energy's advanced building construction collaborator for Jeremiah is a part of, but it's really looking at how can we, how can we expedite retrofit solutions at scale? And it's in part based on a model from the Netherlands called Energiesprong I don't know if you've heard of that.
That was pretty cool. It's it's a panelized solution. It's kind of a a retrofit kit. And right now they're targeting kind of under seven story buildings and they can come in with this prefabricated kit and they tilt up a new facade on the building. So they rewrap the exterior. They put solar on the roof.
They have a mechanical pod, which is like a all your mechanical equipment in just uh, isolated standalone units. So they're, they're kind of just leverage the internal systems that are there kind of the existing duct work to plug it into this new external heat pump. And then it can all be done in two weeks.
Just the whole setup. Cause it's a lot of the fabrication has done off site. They do have some, like it's minimal intervention. The homes can stay occupied. They go in and retrofit some of your kitchen appliances so that, you know, take out the guest stove. And then over in the Netherlands, we're not there yet here in the U S but they haven't fully financed.
So it's paid through by savings.
[00:27:57] James Dice: And yeah, it, it, it still seems like, so I'm shopping for a house right now. Like a lot of people in Colorado are a popular thing to do.
of course I've been looking into net zero homes and just like, it's just very clear to me just doing a shopping, doing shopping in a very progressive air energy related area. Right. It's very clear to me how far we have to go in terms of the like availability of that type of thing for consumers as well.
Yeah. So homes all the way to obviously commercial buildings is what most of this audience deals with, but like there's still so much room for, to grow to get to that 4%. As well. Um, I'm happy to hear that we're at 1%, which is cause it seems doable to get to four because of, I think just consumer demand, continuing to grow.
So, and obviously the codes changing helps. All right. So let's talk about electrification. Can you for, for people that don't know why we need to electrify, can you talk about. W w why does a building need to go full electric to meet the 1.5?
[00:29:01] Cara Carmichael: Yep. Well, there's kind of, the prerequisite is like, let's, let's make our buildings healthier for us as occupants.
And that requires, you know, Breathing, the gases that we burn. then the second piece is natural gas is uh, you can't offset it. You know, it's not like electricity where you can produce, there's kind of a net effect with the grid. You can't, you can't offset natural gas emissions. There's also huge methane contributions.
The IPC report highlighted at methane is the number two contributor. Climate change behind CO2. So lots of methane leakage in the gas, the natural gas distribution system attributed to climate
[00:29:42] James Dice: change. All right. So where are we at today versus where we were, do we need to get, do we need to get to full electrification of everything or was there a difference destination?
[00:29:52] Cara Carmichael: Yeah, it's kind of a loaded question and one that we're wrestling with on a couple of levels now the end state. Yes. It's full electrification. That how we get there is a little more complicated because there's There's a lot of gas infrastructure already in place throughout most of the U S there's a new gas customer coming online every minute still.
one thing that's tricky for the gas utility is if you know, half, you know, if 99% of their customers at the end of one line, pull off an electrify and they still have one customer at the end of the line. They still need to provide gas to that one customer. And so then there's some utility price.
You know, there's some leveling that happens at kind of the public utility commission level um, for infrastructure costs being passed on to you know, users. So I think the path forward, is kind of too. Partial a partial electrification and then being really strategic about what areas we electrify first.
So we're not going in and fixing infrastructure that then we'll just abandon in the near term, but we need to decarb it. Then we need to electrify homes in areas where the gas system is really old and leaky. Anyways,
[00:31:08] James Dice: totally. A piece of this that I find interesting. Is due for some scale, is that even like, if we look at just like, and commercial buildings, space heating and water heating, right.
People say the answer is heat pumps, but if you look at the number of available heat pumps, just like on the marketplace that like the production of heat pumps needs to scale up something, like, I think it was like six fold or something like that, to be able to meet that retrofit demand. Right. So.
People are like rushing to buy stock and heat pump companies right now. But like that's, that's, it, it just kind of gets back to like, this is the entire supply chain that has to kind of change how we do things. We can't sell natural gas, water heaters anymore, like, so we have to figure out what's right.
Like replacement product. Am I right in the way that I'm thinking about that?
[00:31:59] Cara Carmichael: Um, You're exactly right. I mean, we need to think about what, what equipment and appliances are available and what we should be offering. So, you know, states like New York are considering appliance standards and phasing out. One iteration of that is you can't buy it.
Yeah. Furnace gas furnaces or gas, water heaters at a certain date in the future, you know, so kind of ramping down on those, that equipment.
[00:32:26] James Dice: Totally. I mean, there is precedence for that, right? If you think about like fluorescent to blighting getting, getting phased out that happened in the last 10 years or so it seems like we can continue to do that for other technologies.
Yeah. All right, let's talk about grid interaction next. So you and I are speaking on a panel next next week about this topic, which is fun. We'll put that in the show notes as well. Why do we need the building? Maybe we can just restate it. Why don't we need the building and the grid to,
[00:32:54] Cara Carmichael: yep. So, When we use energy matters a lot, and that's a big differentiator from just zero energy buildings, which is net zero buildings, which has kind of averaged over the year.
So, there's on the grid side, there's more and more variable, renewable energy being put into play, you know, solar and wind at the grid scale, which is fantastic. It's also intermittent. So it works when the sun is shining and the wind is blowing. And so in order to avoid building additional generation resources, be it, you know, a whole lot of wind or in different locations or more storage or, you know, hydro other carbon neutral resources we're looking at options.
Flexible. Can we create that word today? Like, so fire building stock so that we can actually shift when buildings are using energy to when the sun is shining and the wind is blowing and we can do that in a way that doesn't harm the occupants, you know, or it doesn't impact, the fundamental purpose behind our buildings.
[00:33:57] James Dice: I know we're going to talk about this a lot. Next week. I have my own opinions that I'll save for that conversation. But what innovation do you think needs to happen in order to allow that? Cause like most building owners aren't waking up, you know, on a Tuesday morning today and going, man, I really want my building to interact with the grid today. Any obstacles to like making that happen?
[00:34:21] Cara Carmichael: Yeah. I really want to meet any building owners that by the way, do wake up on Tuesday morning,
[00:34:26] James Dice: I actually said that in a, in a podcast in the past and someone responded like immediately on LinkedIn and was like, I'm a building owner that wants my building to interact with.
[00:34:36] Cara Carmichael: Yes. Yes. We need more of you. We need more of them. They
[00:34:41] James Dice: all, all of them listen to nexus which if there's a hundred million buildings out there we, we gotta, we gotta scale nexus up to, to start to make that happen.
[00:34:51] Cara Carmichael: Yeah, let's do it.
So what do we need to do to scale, to scale that, right. We need better building controls. I think that's a really important piece. I think we've done a lot of analysis on demand, flexibility, potential, and there's, a lot of it is software leveraging the capabilities that we have in buildings today in terms of pre-cooling preheating, let's stage your equipment.
So not all of the chillers are running full bore at a time, but we can, you know, phase different zones to come on at different times intelligence and our Evie charging. I mean, we have. Huge load that's coming. And a lot of that load is going to run through building level meters. And by the way, you know, rack up demand charges.
Right? So can we be more thoughtful about the controls that we have in managed Eby charging? When we electrify our buildings, that's more load that we're putting on the grid. Can we, can we shift that?
[00:35:46] James Dice: Totally. Well, that was part of the appending. And then I'll save it for next week, but everyone knows that I have been demanding more out of the controls industry for a long time now.
And this is one of those areas. I agree. Like we have to, we have to innovate in this area that the current status quo of like what's on offer and the controls industry right now will not get us where we need to. Right. And what's the current status of this? Cause I know you're plugged in with like the connected communities, project and other like projects with GSA.
What, what's the current status of, of the innovation in that? Okay.
[00:36:21] Cara Carmichael: Yeah, I think we're getting there. I in all honesty, I think it's been very academic to date. And so we have a lot of technical potential studies. Armani has done a bunch. We used it a bunch general. Oh, we know, you know, and BI, so we're all like, I think we have.
Mapped the space. We need to test it and we need to scale it. Yeah. That's where we're at now. And I think part of that comes back to like the controls industry. Like we need more kind of open transparency in our control networks so we can plug different systems together and interface our lighting with our mechanical systems and make that easier in commercial buildings.
Yeah, so we need, better controls. We need more transparency and we need, I think we need more turnkey solutions. You know, so a commercial building owner can call up one person and what eight different vendors to get something done in their building. We need to make it far more streamlined.
And I think it's possible, like, look at, look at the energy service company model, the ESCO model, like they aggregate a bunch of different. Services and deliver it. And they couple it with financing. It's a good model for the public sector and it's been well, you know, widely used and we need more of that and more private sector like models like Matt golden, who you had on recent recur.
They're doing great things.
[00:37:45] James Dice: Yeah, totally agree All right. Well, I think one of the pieces that would allow better grid interaction would be, like you said, solar and storage. That's the fourth pillar as well. So like where are we at with that? And where do we need to get.
[00:38:00] Cara Carmichael: Yeah. So, solar is here and it's spreading and it's great.
And they're like Tesla and Sunrun. They're doing great things to couple solar and storage, particularly at the residential scale. But I think we'll see more at the commercial scale. We'll hear soon. Okay. So I think solar, we need more kind of behind the meter solar storage is newer batteries in buildings.
And I think they're they provide a huge. Opportunity as the cost of batteries goes down and more and more utilities are adopting, you know, demand time-based rate structures. So commercial buildings often get hit, you know, above 50% of your utility bill in a commercial building could be demand charges.
Right? And so if we can find a way to leverage, cheap batteries to, you know, balance not only demand charges and carbon. Co optimize those two. I think there's huge potential for the battery industry.
[00:38:59] James Dice: Totally. And this is another area where I feel like turnkey solutions are important. We can't, especially as the buildings get smaller and smaller, I'm writing a white paper right now on, on buildings under 50,000 square feet.
And it, especially when you get into that arena of which there are like 5.5 million of them You, you start to not like you can't go to one of those business owners and say I'm going to sell you batteries. Right? You need to sell an outcome. Right. And the outcome is resiliency or, you know, cost savings.
And it's got all of this stuff packaged in the background. Cause right now there's, it's too fragmented. You can't, you can't ask somebody to really care about a battery, right?
[00:39:39] Cara Carmichael: Yeah, I completely agree. And I think we're seeing more, we're going to see more and more and we're seeing more and more already, like the, as a service.
Finance models or your time, or like pace models where there's no money up front and it can pass from tenant, you know, through different tenant turnovers. You know, I think this is a great model.
[00:40:01] James Dice: Yeah. This is an area where I feel like the, like the ESCO model as it's being applied to more and more private sector buildings, it has to shift.
So like in the past we had. Lighting as a service, right. That was kind of the first one. That's kind of like really scaled up. And that's really only one and use one type of system, but like the shift we need as the ESCO model is being applied, kind of like more like it is in the public sector, which is like, you're providing holistic.
Energy conservation measures and providing them in a package that the owner can just basically say, you know, I'll sign here on the dotted line, right? So like, as these, you know, solutions go to the private sector and to smaller and smaller buildings, they have to get packaged into more holistic packages.
Of course I like the four pillars.
[00:40:50] Cara Carmichael: Yeah.
We know, we know what we need to do scale that's the
[00:40:54] James Dice: challenge it's scale is the challenge and it's like, but it's also like all of these things are being done somewhere. And so it's like, they are doable. It's not like. You know, other areas of decarbonization where it's like, we have to actually like invent something here.
Like we have all the things it's just a matter of packaging and scale. So as we walk through all of them, Do you feel hopeful? This is a, probably a trapping question, but,
[00:41:22] Cara Carmichael: There's no, it's it's a great question. And it's, you know, it's real, there's climate fatigue for those of us who've been in the industry for so long and it's like, oh my gosh, it's getting more and more daunting and pressing.
I mean, I was in lake Powell last week with my family on vacation and. That the water level in lake Powell is like over a hundred feet lower than kind of the high watermark. And it's because of drought. It's because of, you know, higher numbers. And it's, it's getting real in a lot of parts of the country.
You know, the Northwest Texas, you are, you know, Florida. I mean, we're all experiencing more extremes and it's just, it's going to continue and it's gonna get, yeah. That part's scary and it's real. Yeah. But I am I'm, I am hopeful. I feel like we're coming together around this issue in a way that I've never experienced in the past, like acknowledgement that it's real and the effects, you know, that everybody is feeling, you know, and the kind of the recognition.
This is something that's within our power to do something about. And it's a global problem. Like no one country can solve it, but we each need to play a role. And sometimes it's hard to get lost in like, what difference can I make? Every person can make a difference. And that's kind of what I hold on to.
Like I have to do my part. You know, and so I, I, I think there are a lot of great brains on it right now. We need a lot more great action on it in terms of scaling up workforce and everything. And I think, I think we can get there. I want to give, like a concrete example is to kind of some of these theories that we've been talking about in the four pillars.
And so we've been working on a project here in Colorado. It's called the Colorado residential energy retrofit district. And it's scaling decarbonization and building up, you know, not only the solutions, but the vendors enable to provide. And we're working with it's RMI and REL and the Colorado energy office and Excel.
And we're bringing on a whole bunch of implementation partners to test it on a neighborhood in Denver. Can we scale decarbonisation and, you know, at a, at a neighborhood scale, so, you know, 50 plus homes in the pilot, and then what are the impacts on the utility for Excel, Excel, energy that that can have on their distribution?
Like if, if we, if we can make all these homes super efficient and flexible and all electric. Will that enable them to, you know, not upgrade transformers, you know, can we, not upgrade transformers and can we have distributed energy and batteries enough so that they can, you know, they want to increase their transmission infrastructure.
So we're, we're kind of through some of these really exciting emerging pilots, I think there's definitely hope.
[00:44:19] James Dice: that gives me hope. I'll have to check out in my home, sir. What neighborhood that is, that'd be kind of fun park neighborhood. All right. Check that out. Yeah. Very cool. Yeah. And I I'm, I'm hopeful too. Maybe for a different reason, which is just that I feel like all of these commitments that are being made most of them at the corporate level.
Right. But as you're, we never got to your state work, but I feel like more and more states are setting commitments as well. And then obviously the local regulations, but, but my thought is like, we've never like, kind of, like you said, being in this industry for so long, we've never had as much acceptance as we do now.
And the second step after making a commitment is to say, how are we going to meet that commitment? And I think that's where a lot of companies are at right now, which is like, it's really not easy to fit, like make that strategy and then make that plan that comes out of that after the commitments made.
And so I feel like once we have. Some great case studies there. Like we decarbonized in this way and you can copy that. Like, like you're saying with this neighborhood, I feel like that will make stuff happen faster because right now I think a lot of corporations are kind of in this, like. Well, now we've got to figure out what the hell we're going to do and that's confusing.
Right. So it just seems doable. You knocked down these next couple obstacles and it starts to open up a lot more scale. Maybe we're crazy, but that's kind of how it feels. Yeah.
[00:45:48] Cara Carmichael: Yeah, I hope not. I mean, it's not the first time I've been called crazy, but yeah, right. No, I think it's true. And I think that, you know, the work that New York state has done in their carbon neutral buildings, roadmap which is public it's actually they just finished a public comment period, but there's there's kind of the framework.
On their website that I can send you to link, but I think it's a great exercise that touches on a lot of different bases, equity, and measures, and cost and benefit and policy. You know, it's a pretty comprehensive roadmap that I think could be applicable not only at the state level, but at the private corporation level.
[00:46:31] James Dice: Very cool. All right. Well, thanks so much. This has been so fun. Do you want to close with, with teachers?
[00:46:38] Cara Carmichael: Okay. I will do my best. Okay. So if I give you all three statements and then you decide, yeah. So statement one GSA has doubled energy savings in their retrofits using performance contracting statement.
Can you say that again? One more time? Sorry. The general services administration. So the landlord, well, the federal government, they have a program that has enabled them to achieve twice the amount of energy savings that they see in their retrofit. Using a performance contracting model, like to two X energy savings and typical retrofits as possible.
Okay, cool. Um,
[00:47:17] James Dice: Statement given payback for a given criteria. Correct. Got it. Okay, cool. I've got it.
[00:47:24] Cara Carmichael: Correct. Um, Statement to the system-wide value for grid interactive buildings is $500 million. Okay. Um, Statement number three building performance standards are being required in Colorado.
[00:47:43] James Dice: I think it's two because the number's higher. Is that right? Yes. How much is it?
[00:47:51] Cara Carmichael: What do you think.
[00:47:51] James Dice: I should know this. I just read the GEV roadmap last week. And the numbers in there, it was something with a three and it was something with a billion, but the digital. I'm having trouble.
[00:48:04] Cara Carmichael: Yeah, no. Good. I didn't mean to put you on the spot.
It's their estimate is between a hundred and 200 billion, a hundred and 200 billion in power system, cost savings from demand, flexibility, and efficiency.
[00:48:18] James Dice: Cool. And the number that, yeah, it's mind blowing that. The number that stuck out to me in that roadmap was 6% of the electricity emissions. That that's been sticking out to me.
It's just like, that's such a big chunk. And all we're talking about the controls again, so that's exciting.
[00:48:39] Cara Carmichael: Yeah. We did some analysis on the carbon value of demand, flexibility in New York state and found it was up to 40%. In kind of a Dick, it ranged between two to 3% today to up to 40 in in 15 years when the grid is largely clean.
[00:48:59] James Dice: Yeah. Huge. Well, that's a good lead into our panel next week. So thanks so much for coming on. It's been really fun and I'm really looking forward to chatting again.
[00:49:09] Cara Carmichael: Thanks James. It was fun. Chatting with you.
[00:49:15] James Dice: All right friends, thanks for listening to this episode of the Nexus Podcast. For more episodes like this and to get the weekly Nexus Newsletter, which by the way, readers have said is the best way to stay up to date on the future of the smart building industry, please subscribe at nexuslabs.online. You can find the show notes for this conversation there as well. Have a great day.