Explanations for the Great Disconnect

Workers in an Open Office Interviews with building owners, tenants, data analytic providers, engineers, architects, sustainability consultants, and other professionals uncovered a variety of barriers that prevented landlords and tenants from reducing more energy use within their respective control as occupancy levels plummeted resulting from the pandemic. The real failure underlying the Great Disconnect, however, is neither a failure of landlords nor a failure of tenants. Instead, it is their failure to collaborate.

Landlord / Base Building-Side Barriers to Low-Occupancy Energy Savings

1. Meeting Lease HVAC Requirements

New York City landlords were unanimous in identifying the main reason why they kept heating and cooling nearly empty tenant spaces: to keep the rent flowing. Since virtually all office leases require the landlord to maintain the leased premises at temperatures and relative humidity within a defined range, failure to do so could have provided grounds for a tenant to terminate their lease and stop paying rent. Without these rent payments, commercial landlords would find themselves without the ability to make their mortgage payments, pay their employees and vendors, and satisfy obligations to their investors. In a context of tremendous economic uncertainty and with commercial landlords in survival mode, they did not approach their tenants to discuss cutting back on the HVAC service to reduce whole building energy use. From a sustainability perspective, these standard lease clauses operated as a perverse incentive, resulting in heating and cooling of many millions of square feet of empty office space.

2. Preventing Damage to Circulating Water Systems

Even if landlords did not feel constrained by lease requirements, they still would not have been able to simply shut down their base building HVAC systems. Building systems that rely on circulating water such as chiller- or condenser water-based air conditioning systems and circulating hot water heating systems face a multitude of challenges when subjected to prolonged disuse. Once circulating water systems are allowed to degrade from prolonged disuse, there is also a risk of failure when they are turned back on, which necessitates expensive repairs or replacements. Put another way, even nearly empty buildings are not mothballed buildings.

3. Preventing Damage to Building and Tenant Spaces from Humidity

A separate, but related, reason why energy-consuming base building HVAC systems cannot simply be turned off for extended periods in nearly empty buildings is the potential for damage from humidity build up. Air conditioning systems do not simply cool the air; they dehumidify it. Absent dehumidification, condensation can occur, which in turn can lead to mold growth inside the building envelope or on interior building surfaces.

4. Compliance with ASHRAE COVID-19 Guidelines

As it became clear that COVID was an air-borne disease, ASHRAE issued guidelines in May 2020 to ensure the health and safety of occupants in commercial buildings. While well-intentioned, these guidelines tended to prioritize indoor air quality at the expense of energy efficiency, and nearly all landlords interviewed cited these guidelines as a reason why base building energy use did not drop further at their buildings. Two recommendations in particular offset any base-building energy reductions: First, to increase the intake of outside air, and second, to install higher-rated air filters. Both approaches significantly increase energy use of HVAC systems, the former by necessitating more cooling or heating of outside air and the latter by necessitating higher fan speeds to move air through denser filters.

5. Too Few Base Building HVAC Zones and/or Controls

Next to lease requirements and ASHRAE COVID guidelines, the reason most often cited by landlords and consultants for poor pandemic energy performance is the lack of sufficiently granular base building HVAC zoning and controls. This problem is particularly common in older (pre-1980’s) buildings. For example, if a 1MM square foot building has only 3 base building HVAC zones, and each zone is 3% occupied, even if that 3% is confined to certain floors within the zone, HVAC must be supplied to the entire 1 MM square feet. The widespread problem of too few base building HVAC zones has never led to a re-exploration of whether centralized base building HVAC systems, common in Class A buildings, are always preferable to floor-by-floor DX units.

6. Building Mechanical Systems are Inefficient for Low Loads

Building systems are not designed to run in buildings that are partly empty; in low-occupancy conditions they operate well below their peak efficiencies. During a webinar hosted by Urban Green Council, Shannon Kaplan of AKF explained that if a building has 3 chillers and is mostly vacant, running all 3 chillers at low efficiency is a waste of energy. It would be better to turn off 2 chillers and operate the remaining chiller at peak efficiency. While this may be better from an energy savings perspective, it is hard to implement, as the change requires reprogramming sequences and set points and parsing through a daunting amount of interactive and cascading effects that will subsequently occur.

7. Landlords Lack Third-Party Data Analytics Needed for Integration

Many office buildings lack the third-party data analytics needed to integrate real-time occupancy data with operation of their building management systems. Without integrated systems, building managers are inundated with reams of data that cannot easily be analyzed, so they need to make manual adjustments to building systems on the fly.

Tenant-Side Barriers to Low-Occupancy Energy Savings

1. Tenants Unprepared for Long-Term Vacancy

Tenants were not prepared to vacate their premises for months or even years when stay-at-home orders hit in March 2020. In the early phases of the pandemic, remote work was viewed as a short-term prospect, and the focus was on how quickly the economy could reopen. As the prospects for re-opening have been repeatedly delayed, tenant facility managers are not able to engage in long-term strategic planning for reducing energy consumption in their partly or mostly vacant offices.

2. IT Plug Loads to Support Remote Work

IT plug loads needed to support remote work are a key reason why only peaks were shaved off tenant electricity demand during the pandemic and, by extension, why whole-building energy use did not decline more despite very low occupancy in office buildings. Many corporations employ the practice of remote employees connecting to their company’s networks by first logging on remotely to their office computers, rather than have employees connect remotely to cloud-based servers through virtual private networks (VPNs). This practice means that while offices are devoid of people, they are eerily full of office computers and monitors in active use. As one Class A landlord stated: “some tenants turned their offices into distributed server farms.”

3. Lack of Granular Real-Time Electricity Consumption and Demand Data

Many tenants lack sufficiently granular, real-time data about energy consumption needed to devise an effective strategy to manage energy use. A striking illustration of this occurrence was provided by one of the tenants interviewed for this project. An internal study of a major financial services tenant that occupies 850,000 square feet over 20 floors in a Manhattan office building found the tenant experienced a significant spike in electricity consumption in June 2020 to levels exceeding consumption in June 2019 despite very low occupancy. While facility managers offered several possible explanations, with every submeter serving multiple floors at their premises, the tenant was unable to pin down a specific reason for the spike.

4. Failure to Strategically Cluster the Relatively Few Employees in the Office

Once employees started trickling back to offices in the summer of 2020, tenants failed to cluster the relatively few employees in the office and allowed tenants to spread out over multiple HVAC zones. This meant that an entire premise needed to be heated or cooled for just a few employees. While the clearest impact of non-clustering is on increased use of base-building HVAC systems, tenant energy use is also affected as spread-out employees require more lighting and active plug loads. In addition, all spaces where employees worked needed to be cleaned, resulting in after-hours lighting use for the cleaners and increased plug load use for cleaning equipment.

Collaboration: The Missing Ingredient for Pandemic Optimized Energy Use

Hatch Data, a third-party data analytics provider, observed in an October 2020 post that best-in-class buildings were able to reduce energy consumption by upward of 40% or more at the height of the lockdown period, and the discrepancy between the national average reduction of 24% and 40% underscores the sizeable opportunity to increase building operational efficiency by seizing the moment to make lasting changes in building operations.

Achieving this higher-level reduction requires collaboration between landlords and tenants and reasonable accommodations on the part of both landlords and tenants. So far, both have been in short supply. Not a single landlord interviewed for this project approached its tenants during the pandemic to discuss modifying the delivery of base-building services; although, one tenant approached its landlord, who agreed to modify base building HVAC settings for summer 2021 to reflect very low occupancy at the tenant’s premises. A few landlords did approach tenants to help them manage their own electricity use within their premises during the pandemic, and one tenant chose to disconnect lighting panels as a result of this interaction.

While these successful examples of collaboration were the exception, they illustrate the potential for greater energy savings opportunities, if collaboration can be institutionalized.