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SnapshotTaking District Energy To Urban Neighborhoods

By: Christina Grace

For: The Sallan Foundation

Date: February 2, 2012



1 © 2012 The Sallan Foundation, Inc. All rights reserved. http://www.sallan.org

Snapshot

From MUSH To The City of Tomorrow: Taking District Energy To Urban

Neighborhoods

Our urban environments need to simultaneously become more sustainable and meet greater

resource demands, but can we evolve from the city of today to the sustainable city of tomorrow

when, as the Urban Land Institute estimates, 80% of our existing building stock will still be in use

in 2030? The issue becomes even more pressing when factoring in that by 2050, 70–80% of the

world's population will be living in cities.

Living City Block (LCB) is grounded in the premise that the traditional urban block will be the

key to making cities sustainable from the inside out. In 2010, founder Llewelyn Wells, spun

Living City Block out of Rocky Mountain Institute to remove the barriers to fostering resilient

neighborhoods — inefficient use of resources, waste management, green infrastructure gaps, and

tears in a community's fabric.

LCB's solution is to aggregate commercial and residential building owners to work together on

neighborhood scale sustainability initiatives such as district energy, waste and stormwater

management, as well as alternative transportation. Now in its third year, LCB's pilot project in

Denver, Colorado's Lower Downtown (Lo Do) district has been working to show that building

owners who had not previously collaborated are willing to come together under a formal

agreement to create a more resource efficient community, increase the asset value of their

buildings, and decrease their energy costs.

LCB LoDo is moving forward on a project that will consolidate the demand for deep resource

retrofits across a set of buildings, retrofits that will be funded through one financing package and

paid for through subsequent energy savings. For this set, LCB is responsible for financing the

project that will ultimately deliver a comprehensive set of measures to decrease energy and water

use including but not limited to window upgrades, insulation, daylighting, lighting systems,

efficient chillers and boilers, fans, and water fixtures.

The community-building required to bring owners together into a legal entity, which in Denver is

called a "Building Owners Association," is no small feat. The business owners LCB works with




Snapshot


Neighborhoods

are small to mid-sized business and building owners that typically own and operate 45% of the

total square footage of the commercial buildings in the US. Although commercial buildings are

often thought of as big-box stores or high-rises in city centers, according to Architecture 2030, 90

percent of US commercial property owners own a building smaller than 25,000 square feet. These

tend to be occupied and operated by small businesses that are less likely, in the current market, to

leverage their buildings to take on efficiency projects and lack the staff to spearhead this type of

work.

In the Gowanus neighborhood of Brooklyn, LCB is collaborating with a set of building owners to

take the model further by demonstrating that district energy is viable at the neighborhood scale.

The 34-year old Gowanus Canal Community Development Corporation invited LCB to Brooklyn

in April of 2011 and acted as its partner in identifying a block ripe for the LCB model. At the

center of the project is the 85,000 square foot redevelopment of a set of traditional brick and

timber industrial buildings. The developer is deeply committed to sustainable design, resources

efficiency and community-building. While at this time the project specifics are still a work-in-

progress, and the ultimate decisions rest with 14 building owners, without the developer's

willingness to house district energy on his property, the project would not be possible.

One district energy option is to provide electricity and, by employing combined heat and power

(CHP), capture the "waste heat" created during the production of electricity for productive use,

including hot water, space heating, and space cooling. Although capable of using renewable fuels

such as biomass or landfill gas, CHP applications today predominately rely on natural gas.

According to a New York State Energy Research and Development Authority 2010 report, the

productive use of waste heat from such systems can result in overall energy efficiency of these

systems as high as 80%, providing significant environmental performance benefits.

New York City is a compelling market for community-scale energy. The region has sky-high

energy costs and utilities are grappling with aging, overextended infrastructure. New York State

and Con Edison already offer a number of incentive programs for energy efficiency measures and

renewable and clean energy to encourage alleviate pressure on the existing grid.




Snapshot


Neighborhoods

But, up until now, district energy systems have gained traction primarily in what is referred to as

the MUSH market — municipalities, universities, schools and hospitals — for obvious reasons

including high energy usage, balanced loads, a single campus or agency owner and access to

traditional funding mechanisms. As Living City Block develops a clear model for organizing a

very diverse set of building owners, we need to address policy hurdles, both regulatory and

zoning, for implementing district energy projects across the different urban building types.

A critical issue is how to overcome regulatory barriers to moving electricity, water and steam

across property lines and streets. For example, in a CHP scenario, the waste heat from a CHP

plant can be used to produce the circulating hot water for the entire district, replacing the central

boilers in each building. To heat a district though, requires the pipes connecting the heating

network to extend outside of a single building, crossing property lines both private and public.

The project will require a waiver from the New York State Public Services Commission.

There is an encouraging precedent in New York State. The Burrstone Energy Center in Utica,

NY, which provides electric and thermal energy to the Faxton St. Luke's Hospital, St. Luke's

Nursing Home and Utica College, received a waiver from the PSC. There are also potential

zoning challenges, building and fire codes to address when siting district energy, especially if

New York City authorities categorize a district energy system as a power plant.

Here's the crucial question for LCB and Gowanus, how do we get from Burrstone, which supports

a two-owner "MUSH" system to encouraging more complex neighborhood district energy

projects?

One way forward might be to consider taking New York City's existing Solar Empowerment

Zones further. Currently, there are three geographic areas that have been selected as Solar

Empowerment Zones where solar energy systems are likely to provide the greatest benefits to

potential customers and the existing electric distribution system. They are in communities where

the power grid is currently oversubscribed and can experience power failures during peak load

events such as heat waves. Through relationships with the Department of Buildings, NYSERDA,




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Neighborhoods

Con Edison and other players in the solar market, the program encourages the use of solar by

assisting with permitting, incentive applications, grid interconnection, and market analysis. It has

the potential to be a strong public private partnership.

A 2011 report from the Bar Association of the City of New York examines how, on a pilot basis,

City government could streamline the permitting process for installing multi-party district energy

systems as one way to use the Zoning Resolution to shape a more sustainable city. Similar to the

Solar Empowerment Zones, the city could focus on districts that are vulnerable to brown- and

black-outs. A City-State partnership to encourage district energy would be critical as the State

exercises regulatory authority over the franchising of utilities, the regulation of rates, and the

siting of generation and transmission infrastructure.

Clean Energy Districts or even better, more comprehensive Sustainability Districts, could be

developed to streamline the state regulatory review and city permitting processes. In the end, for

Living City Block, while district energy on its own is central to greener communities, the greater

opportunity is to take an integrated approach to energy, water, waste to foster communities that

are resource efficient, economically thriving, healthy places to live, work and play.

Christina Grace is leading Living City Block's Brooklyn Gowanus project. She began her career

in sustainability working toward a more sustainable and fair food system. Christina created the

New York Department of Agriculture & Markets' Urban Food Systems Program. She has been

instrumental in passing local and federal food policy, building programs to connect New York

farmers with NYC markets, launching successful urban farm businesses, and developing

community-based food projects. She is raising her two daughters in Brooklyn's Gowanus/Carroll

Gardens neighborhood.

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