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Green leasing: a collaborative tool for a sustainable built environment

Posted on November 30, 2022April 2, 2024 by Bella Pace

Today, employees choose their next employer based on sustainability: 32% of employees agreed they would only work for a company that prioritizes sustainability. Of that total, 42% of millennials and 30% of Gen-X agreed.

To attract these climate-minded employees, more and more companies are setting sustainability goals for their operations, both internally and externally. Deloitte’s 2022 CxO Sustainability Report found that 82% of executives plan to achieve net zero carbon emissions by 2030.

The location and daily operations of office buildings emit a large amount of harmful greenhouse gas emissions. Organizations choose their office spaces with sustainability in mind to combat these negative environmental effects. One way to do so is to enact a green lease.

Green leases include clauses specifically related to sustainability, such as requirements for smart, energy-efficient lighting, heating and cooling, or using renewable energy sources to reduce emissions.

The need to drive energy efficiencies is direr: the latest United Nations climate conference, COP27, called for sustained investments in energy efficiency worldwide to reduce energy demand, avoid CO2 emissions and dampen energy cost volatility.

How green leasing works

The explosion of green leasing around the world is driven by the large amount of emissions that the built environment releases into the atmosphere.

Green leasing is a collaborative way to meet both the demands of sustainably minded tenants and the financial needs of building owners. Although commercial green leases have taken many forms, they are all agreements between building owners and tenants that commit to reducing energy waste, improving system efficiency, and boosting transparency between the two parties.

Given that operational building emissions (i.e., daily energy use) account for more than a quarter — yes, a quarter! — of total global emissions, green leasing is a viable tool for tenants of all industries to impact the climate positively.

While owners control the energy infrastructure of a building, tenants determine the overall energy usage. Thus, a poorly designed building with inefficient heating and cooling can dish out inordinate amounts of carbon emissions.

When evaluating a building space, it’s recommended that tenant/broker teams look for a few items from the building owner:

Energy use details, carbon reduction goals, social impact programs, and other efficiency ratings like WELL or LEED.
Whole-building performance metrics, energy use intensity, and whole-building capital improvement plans during the evaluation process.

WELL and LEED certifications have become critical markers for building occupants’ well-being and healthy, efficient, carbon, and cost-saving green buildings.

Additionally, many commercial real estate, laboratory, and healthcare spaces are turning to district energy to provide greener and more efficient energy to power their critical operations. District energy systems typically reduce primary energy demand in heating and cooling by 50% and can achieve operational efficiency of up to 90%.

How does district energy accomplish this? By centralizing and aggregating the production of heat, hot and chilled water to multiple buildings, district energy cuts down on the amount of fuel that would otherwise be required by individual buildings using onsite generation and the resulting carbon emissions.

The potential impact of green leases

Because green leases require building owners to take actionable steps to improve their operations, these agreements can lower both utility costs and energy use.

Through an analysis of current energy efficiency measures facilitated by the signing of green leases, it is estimated that green leases have the potential to reduce energy consumption in office buildings by 11 to 22 percent.

This reduction in energy consumption has the potential to provide the U.S. commercial office market with $1.7 billion to $3.3 billion in annual cost savings.

With the built environment currently generating nearly 50% of annual global CO2 emissions, these efficiency measures can make a big difference in the fight against climate change in cities worldwide.

Green lease growth in the U.S. and beyond

Although relatively new to the United States, green leases are taking off globally. A whopping 34% of all building occupiers have signed qualifying green lease clauses, according to JLL Global Research’s 2021 report, Decarbonizing the Built Environment.

In Europe, France is leading the charge: green leases have become commonplace as part of a mandatory reduction in national emissions. French landlords are now required to include specific benchmarks around the conservation of energy consumption in commercial office leases.

It’s no surprise that market demand for green leasing is growing in the United States. Roughly five billion square feet of building space is now covered by green leases in the U.S., a number that’s expected to grow at a fast clip, according to the Institute for Market Transformation.

Aside from financial and efficiency needs in the U.S., cities like Philadelphia, Boston, and Los Angeles are enforcing ambitious decarbonization goals aimed at reducing building emissions.

In Boston, for example, the Building Emissions Reduction and Disclosure Ordinance (BERDO 2.0) has set requirements for large buildings to reduce their energy and water use, stretch codes mandated, so buildings will achieve higher energy savings, and increase investments in green and renewable energy technologies.

Commercial building owners need an energy partner they can trust to meet the requirements of carbon reduction acts like BERDO 2.0. As the owner and operator of the district energy systems in twelve states in the U.S., Vicinity is uniquely poised to help our customers decarbonize their building operations quickly and affordably.

Vicinity is the first in the U.S. to electrify its operations and offer renewable thermal energy by installing electric boilers, industrial-scale heat pumps, and thermal storage at our central facilities starting in Boston and Cambridge, with other locations to follow.

A way forward with green leasing

Green leasing allows all tenants to advocate for more efficient energy systems and sustainable buildings that mutually benefit them, their landlords, and the global community.

At Vicinity, we support these green lease leaders and believe that cutting-edge solutions like carbon-free eSteam™ are powerful tools to drive rapid decarbonization efforts in cities across the country.

What’s in store for the price of natural gas? Market update: winter 2022-2023

Posted on October 24, 2022April 2, 2024 by Rohan Sinha

Since June 2020, when COVID-19 shut down much of the U.S. economy, natural gas prices have been up a staggering 525%. Put differently, today’s gas prices have skyrocketed to levels unseen since 2008—and several factors could continue to drive prices even higher.

With the ongoing war in the Ukraine and uncertainty in Europe, an increase in liquefied natural gas (LNG) exports, and warmer-than-average summer temperatures in much of the U.S., natural gas inventories are below historical averages. This leaves the market with less of a buffer going into peak winter heating season demand, providing potential upside price risk. While we have recently seen some modest dips in gas prices, Vicinity is still seeing record highs in many of the cities we serve.

By the numbers: what we know and what we could expect

According to the U.S. Energy Information Administration, the Henry Hub natural gas spot price averaged $8.80 per million British thermal units (MMBtu) in August, up from $7.28/MMBtu in July. September’s Henry Hub spot price settlement was $7.99/MMBtu versus $5.024/MMBtu seen during the same period last year.

The October NYMEX Henry Hub contract settled at $6.868/MMBtu, and the expectation is that the Henry Hub price will average about $5.76/MMBtu in November through December of 2022 and then fall to an average of about $5.18/MMBtu in 2023 as U.S. natural gas production rises. So even though there seem to be some price increases in our future, the hope is that the new year could start to bring some stabilization. After record-setting demand for power generation this past summer, seasonal demand is set to reduce in the next few months.

How is Vicinity helping?

Because of the uncertain environment, Vicinity is taking action to cost-effectively procure fuel and reduce price volatility to limit our customers’ exposure to price spikes during the prime heating season this winter.

In addition to continuously monitoring the markets and leveraging our considerable backup distillate fuel supplies, we’ll be pre-purchasing fuel to help ensure efficiency and reliability. Our market experts believe this approach will serve our customers’ best interests and achieve more bill stability and budget visibility.

The global movement away from fossil fuels

Without a doubt, there are challenges ahead for all building owners that rely on natural gas – and not just in terms of cost. As reliance on fossil fuels continues to exacerbate climate-related impacts and global leaders implement legislation to aggressively reduce carbon emissions, it’s clear that natural gas is not a progressive or healthy solution for our collective future.

Of course, some critics raise concerns about renewable energy’s cost and affordability. Still, the fact remains that our current energy crisis has affected everyone financially and reinforces the obvious—that fossil fuels are the elephant in the room.

However, despite the global energy shortage, Vicinity is well equipped to navigate these challenging times—unlike buildings with boilers that rely solely on natural gas. With multiple power supplies, backup generation, and several water and fuel sources, district energy systems are reliable, robust, and sustainable and provide safeguards to ensure 24/7 energy delivery.

Like Vicinity, many leading district energy systems (including those in Vancouver and Copenhagen) are implementing innovative strategies, like renewable fuels, heat pumps, and electric boilers, to further reduce their use and reliance on fossil fuels.

Vicinity’s Chief Customer Officer Jackie Bliss said it best in her recent article with Commonwealth Magazine:

“There will always be reasons not to act swiftly in our transition to a greener, cleaner economy, but now is not the time to lose resolve. Rather, the recent fears about energy security mean we should immediately triple down on our investment in renewables. That means more offshore wind and solar if it accomplishes our shared goals of improved energy security while also combatting climate change, an existential threat to our planet and future generations.”

A closer look: the advantages of district energy

While the global energy shortage will impact everyone, there are substantial benefits to being part of a district energy system. Here are a few ways Vicinity’s status as a district energy provider will help serve our customers through this global challenge:

We can negotiate fixed prices and better rates due to our superior bargaining power as a participant in energy markets, compared to a single building purchasing gas for its boilers.
Vicinity monitors customer usage carefully to ensure enough supply to keep all our customers functioning at their normal levels, even during an extreme weather event or a shortage. This is a huge advantage over individual boilers, where building owners must try to anticipate their load and make sure to order enough on an individual basis.
Most Vicinity district systems are fuel-agnostic, meaning our generators (chillers, boilers, etc.) can utilize various fuels, including renewable and alternative fuels, instead of being at the mercy of gas companies.
Vicinity uses a diverse fuel mix, including renewable biogenic fuel, so we’re not reliant on natural gas.
Furthermore, with the electric grid’s growing adoption of more renewable sources, we’re working on electrifying our district systems – a move that will drastically reduce our use of natural gas and conventional fossil fuel.

Looking ahead

There’s no question that we have a substantial problem on our hands. But the truth is, the solution isn’t only obvious—it’s already here. With so much uncertainty in tomorrow’s landscape, we need to recognize that what once seemed to be the answer is simply failing to keep up with today’s realities.

Isn’t it time we pivot away from fossil fuels and create a greener, more sustainable future?

The benefits of renewable energy will far outweigh the consequences of fueling the current solution. And district energy is just one example of how we can benefit from existing infrastructure (which reduces cost and saves space) to create a lower carbon footprint and a more reliable and affordable way to power us into the future.

The responsibility is now on us, and we have the forward-thinking means to start achieving energy security and a cleaner tomorrow right now—before we pay the price.

A pivotal chance for Philadelphia’s climate future

Posted on September 22, 2022March 28, 2024 by Jeannie Morris

One year ago, the Schuylkill River had just normalized after rising to catastrophic levels following Hurricane Ida. The ensuing floods that swallowed up the Vine Street Expressway, ruined homes, and businesses, and took multiple lives, provided a potent reminder that Philadelphia, nestled between two rivers, is uniquely susceptible to the impacts of extreme weather resulting from climate change.

If nothing else, a look back at the historic flooding should serve as a reminder of the need to advance prescriptive policies at the local level that curtail the negative effects of climate change, reduce greenhouse gas emissions, and protect Philadelphia’s health and infrastructure. The recent Supreme Court decision undermining the EPA’s ability to regulate emissions on a national level amplifies the need for cities like Philadelphia to take charge of their climate futures.

Thankfully, Philadelphia has a policy road map in place. In 2021, Mayor Jim Kenney and City Council made a “net zero” pledge to achieve carbon neutrality by 2050. It’s an ambitious goal that’s drawn support in other cities such as Boston, New York, and San Francisco. Coinciding with the pledge, the city also released a draft of its Climate Action Playbook — a blueprint of data-driven recommendations and expertise to suggest ways to reduce climate change’s impacts through an equitable and inclusive lens.

During Climate Week NYC 2022 and Global Clean Energy Action Forum in Pittsburgh, we want to spotlight Philadelphia and cities around the world that are at an inflection point for environmental progress. While municipalities need to look forward to innovations and policies, there are also existing programs and technologies that could be better harnessed by individuals and embraced by local governments to make a significant difference in achieving our climate goals.

For example, on a small scale, look at how electric cargo bikes are increasingly diminishing the environmental impact of urban deliveries. The British advocacy group Possible put out a study last year that found electric cargo bikes reduced emissions by 90 percent compared to diesel vans and by one-third compared to electric vans. Plus, the bikes were more efficient from a delivery standpoint, making more than 50 percent more deliveries than vans.

Although car emissions get a lot of publicity, building emissions are a bigger culprit. According to Climate Action Playbook, the buildings of Philadelphia emit a whopping 75 percent of the city’s total carbon footprint—triple the total emissions from all modes of transportation.

What cargo bikes are doing for deliveries, Vicinity is doing for building emissions. In April, we announced the launch of eSteam™. It’s a technology specifically designed to rapidly decarbonize this critical area of climate change. We will offer renewable thermal energy by installing electric boilers instead of the traditional gas-burning variety and industrial-scale heat pumps and thermal storage at our central facilities to provide sustainable and reliable service. Although eSteam™ will first be available in Boston and Cambridge, Philly will soon follow.

Investing in renewable energy sources will serve to increase energy stability and reliability in the face of recent climate and fossil fuel-related emergencies. At this week’s climate event in NYC, leaders noted that renewables would ensure resilience and security beyond driving economic growth.

We are committed to using innovative technology to upgrade how we create steam to serve downtown Philadelphia. We’ve already begun scoping and designing our systems for decarbonization. We are beyond excited with the overwhelmingly positive response to our plan among advocates, policymakers, and customers.

Simply put, Philadelphia is on track to become the largest decarbonized district energy system in the U.S.

At Vicinity Energy, we constantly look at what leaders are doing worldwide for inspiration and guidance on combatting climate change. Similar thermal energy systems surpass their climate goals in places like Copenhagen, and we need to do more in Philadelphia. Vicinity is innovating, implementing, and solving decarbonization challenges, “Getting It Done” with district energy.

As Climate Week NYC hails “Getting it Done,” Vicinity Energy is solving renewable energy challenges

Posted on September 21, 2022April 4, 2024 by Bella Pace

With the most prominent global climate event kicking off, Climate Week NYC 2022, the environmental community has genuine excitement and optimism. The optimism is spurred by the passage of the Inflation Reduction Act (IRA), recently signed into law by President Biden. Its climate change and energy innovation elements represent Congress’s most significant climate investment ever made. In Massachusetts, this is coupled with Governor Charlie Baker signing the “Act Driving Clean Energy and Offshore Wind” bill into law – which outlines the roadmap for how Massachusetts will meet its ambitious climate targets and clean energy goals for 2050 – potentially further solidifying New England’s status as a national leader.

While the IRA is projected to reduce the country’s carbon emissions by roughly 40% by 2030, Massachusetts businesses, government, and the climate communities continue to grapple with how to reach net zero emissions. It will be heartening to see Climate Week’s organizers bring together the world’s most influential leaders in climate action to explore the impact of buildings and infrastructure on climate. Still, event stakeholders need to capitalize on recent momentum while staying focused on what will have a tangible, real-world impact.

Today, buildings represent nearly 40% of greenhouse gas emissions and a third of global energy demand, so it’s critical that net zero buildings be powered by renewable energy. Given the outsized role that commercial buildings play in emitting carbon in major cities, carbon-free renewable energy technology can provide a one-stop- shop for institutions considering the right approach with enforceable emissions performance standards. As the first company of its kind in the U.S. to electrify its operations, we are committed to offering renewable thermal energy by installing electric boilers, industrial-scale heat pumps, and thermal storage at our central facilities starting in Boston and Cambridge, with additional locations to follow. Not only will this technology reduce a building’s carbon emissions, but customers will also be able to achieve their ESG goals while complying with regulations.

With district energy, thermal energy is produced at a central facility and distributed to individual buildings via underground piping, eliminating the safety risks associated with onsite generation. District energy systems are agnostic to fuel type. This fuel flexibility enables the use of lower-carbon, local sources of energy, increasing the resiliency and security of the network and the health of our communities. Decarbonization upgrades to Vicinity’s centralized facilities immediately benefit the entire network. As more new renewable technologies and sources come online, district energy systems will easily integrate into existing distribution systems.

In 2024, Vicinity’s first electric asset will enter service. At that time, the company will procure electricity from renewable, carbon-free energy sources such as wind, solar, and hydro to generate our steam product. Unlike onsite generation – which intrinsically involves onsite combustion as part of the energy generation process – district energy is a much safer alternative.

President Biden’s pledge to reduce U.S. emissions from 2005 levels – by at least in half within the next several years – and achieve net-zero emissions by 2050 is ambitious. One key to understanding how Greater Boston institutions will reach these goals can be found in the upgraded and innovative use of district energy. As Climate Week NYC 2022 celebrates recent progress and debates the opportunity to transform traditionally hard-to-abate sectors, it will be necessary for thought leaders to recognize the radical shift that has recently occurred within our industry. Commercial building owners in Boston already see the difference.

We look forward to demonstrating this technology’s role in more significant decarbonization debates as we expand into additional markets in the near future.

District energy is charging Philly’s ever-growing life science market

Posted on August 25, 2022June 13, 2024 by Bella Pace

Life sciences are currently booming in the United States. An outpouring of new products and technology coupled with capital inflows from public and private investors are transforming the industry, allowing new implementations to take shape. As talent within the field continues to rise, new treatments for diseases such as cancer, HIV, and cystic fibrosis are finally within reach. There has also been a growing emphasis on the standard of care patients receive, demonstrated through the quality and performance management requirements gaining particular attention in life science professions. With this surge in technology, funding, talent, and performance, the demand for lab space across significant markets is stronger than ever.

A real estate shift is occurring

The COVID-19 pandemic ignited a shift in how traditional office spaces are used. Lockdowns proved that employees did not have to be in the office to complete projects and tasks, and productivity increased with remote tools such as Zoom and Microsoft Teams for collaboration. This new paradigm has diminished the need for office space in numerous industries.

The opposite is true for careers in medicine and biotechnology: the pandemic verified the crucial need for health care workers and researchers to have hands-on lab space for their life-saving findings and operations. The outcome of these two factors was a real estate scramble.

Because of this transition, city landlords are desperately converting their vacant office spaces into laboratories, making way for the world of life sciences to thrive.

How is this affecting Philadelphia?

In 2017, researchers at the University of Pennsylvania and Children’s Hospital of Philadelphia boosted Philly’s status in the medical industry by developing an FDA-approved treatment for a rare form of retinal blindness. That same year, the University of Pennsylvania’s CAR T cell therapy was approved by the FDA to treat a specific type of cancer found in children and young adults. This treatment has now won its third FDA approval in 2022.

Philadelphia has since maintained its glowing reputation as a hub for the life science market, as seen by the industry’s employment rate, which has grown by a staggering 116% since 2001. Medical and biotech organizations flock to Philadelphia not only for their growing pool of talent but also for their valuable real estate. Compared with other top life science markets such as Baltimore, San Francisco, and New York City, Philadelphia’s market displays significant cost advantages in building operations and maintenance.

These cost advantages can be attributed to Philly’s thriving district energy network, a crucial motivator for labs, hospitals, and other research and development establishments to expand into this region.

Meeting rigid requirements for laboratories

Laboratory operations require a lot more energy than those of a typical office building. In the U.S., labs can use anywhere from 30 to 100 kilowatt-hours of electricity and 75,000 to 800,000 Btu of natural gas per square foot every year. In a standard laboratory, most power is sourced for cooling, lighting, and space heating, with lighting and space heating accounting for approximately 74% of total energy use.

The ceilings of laboratories must also be appropriate for ductwork and equipment. There must be sufficient airflow for the safety of technicians as well as viable interior wall and ceiling space to meet upgraded mechanical and utility conditions. More importantly, laboratories require a large volume of high-quality, reliable thermal energy to support their fundamental operations. Specific ventilation, space temperature, and humidity measures are necessary to sterilize laboratory tools and equipment.

An error in any of these requirements can result in millions of dollars lost in research and development. This could cause a significant financial burden for biotech and pharmaceutical organizations as well as catastrophic setbacks in the advancement of medical discoveries.

Establishing lab space in Philly

As progressive climate action goals continue to develop throughout the U.S., low-carbon sustainable energy will soon become a non-negotiable requirement in cities like Philadelphia. Additionally, individual biotech companies typically have sustainability initiatives, making green energy increasingly vital to operations.

With the speed at which life science firms are growing and expanding, ground-up construction is not an option. Existing buildings must adapt to these requirements, which are becoming increasingly rigid, to meet rapidly approaching sustainability goals. District energy builds upon existing infrastructure, so buildings do not need to make expensive renovations to decarbonize their operations. This energy alternative has been proven to be both environmentally green and cost-effective.

Vicinity’s Philly district energy system

Vicinity Energy offers affordable green steam to Philadelphia’s renowned universities, medical research facilities, hospitals, and other commercial institutions. This steam system is one of the largest district energy systems in the U.S., covering over 100 million square feet of the city’s grounds.

Vicinity has already made multimillion-dollar investments to improve Philly’s critical energy infrastructure, enabling this district energy network to reduce carbon emissions by nearly 300,000 tons annually.

District energy is considerably more affordable than other onsite alternatives, such as building in hefty electric boilers, which are expensive to install and maintain, take up excess space, and detract from valuable real estate. Vicinity’s interconnected steam facilities provide built-in redundancy, backup generation, and multiple water and fuel sources to ensure these crucial life science organizations can stay up and running 24/7.

The result

As Philly’s district energy system expands, hospitals and laboratories can devote more time, money, and physical space to their life-saving operations. District energy users also enjoy peace of mind knowing that their building supports renewable energy distribution as Vicinity strives towards a cleaner and greener future for Philadelphia.

The $369 billion gamechanger for clean energy

Posted on August 8, 2022July 23, 2024 by Jeannie Morris

In the same week as a record-breaking Mega Millions jackpot, the US Senate reached a groundbreaking $369 billion climate agreement, days after it appeared a deal was all but dead, The Inflation Reduction Act, which is expected to pass the House later this week, is a milestone victory for the green sector, making a record-shattering investment into emissions-free energy production. It promises to cut carbon emissions by 40 percent nationwide and massively overhaul how Americans get their electricity, heating, and cooling. Although it’s not the multi-trillion-dollar climate plan that President Joe Biden originally envisioned, $369 billion on a bad day isn’t bad.

As anticipated, if passed by both chambers, the Inflation Reduction Act will, as the name suggests, reduce inflation and produce tangible gains for a US economy in desperate need of a boost. Critically, it will also reset the climate change agenda and help to make decarbonization a household issue for a generation of Americans.

You can call it watered down if you’d like. Still, the Inflation Reduction Act is a major political win for both pragmatism and popular opinion, as David Wallace-Wells wrote in the New York Times: “This bill is a compromise, obviously and outwardly. It is also a historic achievement for the climate left and a tribute to its moral fervor and political realism.”

For companies like Vicinity Energy, these historic investments in renewable energy are in lockstep with the decarbonization investments we are already making in the cities served by our district energy systems. Vicinity’s agile, fuel-agnostic systems can easily switch to carbon-free energy sources and lower carbon emissions by converting renewable power into steam. Customers on the system receive a thermal energy product without emitting CO2, making district energy a game changer for the climate and our communities.

So, where is the $369 billion going? The Inflation Reduction Act incentivizes developers to build new emissions-free electricity sources, such as geothermal heating, wind turbines, and solar panels, by offering billions of dollars in tax credits over ten years. The deal struck by Congress also provides substantial incentives to low- and middle-income households to transition to electric heat, fueled by renewables, in their homes. Overall, the legislation stands to rapidly speed up the country’s transition away from fossil fuels and bring the United States closer to the emissions targets set in the Paris Climate Accord.

Among the policies and investments being made with the single-largest investment into the green sector in history are:

$4.28 billion – dedicated to creating a High-Efficiency Electric Home Rebate Program that will provide $8,000 for homeowners to install heat pumps, among other rebates.
$60 billion – providing incentives to ramp up domestic manufacturing for clean energy products like solar panels, wind turbines, and batteries.
$60 billion – targeting a series of environmental justice programs, such as community block grants for neighborhoods that have been disproportionately impacted by the public health harms of pollution and climate change.
New federal penalties for companies that produce methane leakage
An end to the Trump-era moratorium on offshore wind in the Gulf

You can read the full text of the bill here.

Reimagining the energy industry: an inflection point for decarbonization efforts

Posted on August 4, 2022April 2, 2024 by Matt O'Malley

As a coastal city, Boston is particularly vulnerable to the negative and real impact of climate change. Over the next several decades, according to a new report from the University of Massachusetts Boston, this region will almost certainly see hotter days, increasingly intense storms, and rising sea levels. Current guidance coming out of local and state government – such as Boston’s updated Building Emissions Reduction and Disclosure Ordinance (BERDO 2.0), which sets requirements for large buildings to reduce their energy and water use data, stretch codes which are mandated so buildings will achieve higher energy savings, and growing investments in green and renewable energy technologies – are prescriptive policies that will help lower greenhouse gas emissions and hopefully slow climate change’s tide.

Still, with the recent Supreme Court decision curtailing the EPA’s authority to regulate greenhouse gas emissions, achieving a 50 percent drop in emissions by 2030 or a net zero future with the remaining tools from a federal regulation standpoint will be increasingly challenging. This ruling affirms the local business community’s role in achieving net zero, particularly in Greater Boston. In a way, it is an opportunity for creative solutions to drive what needs to be done.

Coming from the government world, I am excited to be part of the solution. And with 2022 now at its midpoint – an inflection point regarding how environmental progress will be achieved locally and nationally, I thought I would share an update on the state of play from our perspective.

Recently there’s been momentum in the environmental world regarding the usage of old technology with an innovative, fresh lens. For instance, cargo bikes are an efficient and environmentally friendly method for making last-mile deliveries. A study last year by Possible, a British advocacy group, found that electric cargo bikes cut carbon emissions by 90% compared with traditional diesel vans and by a third compared with electric vans, according to the report. Air pollution was also significantly reduced. The bikes also delivered approximately 60% faster than vans in urban centers, had a higher average speed, and dropped off ten items an hour, compared with six items for vans. Meanwhile, unlike plastic, glass bottles are a fully sustainable and recyclable resource that also provides fantastic environmental benefits like a longer life cycle and lower carbon footprint. It is also made of natural raw materials and has an enhanced ability to preserve food.

This is precisely what we are doing at Vicinity. In April, we announced the launch of eSteam™, an innovation designed to rapidly decarbonize the highest source of emissions in major cities and commercial buildings. Our company is the first in the U.S. to electrify our operations, offering renewable thermal energy by installing electric boilers, industrial-scale heat pumps, and thermal storage at our central facilities starting in Boston and Cambridge, with other locations to follow.

In cities like Boston and Cambridge, buildings account for nearly 70% of all greenhouse gas emissions. Think about how changing the fuel source can have a profound impact, whether on coal, oil, natural gas, or combined heat and power (CHP) plants. Now is the time to transition from natural gas to renewable, clean energy. That is precisely what this new electrified system will be able to accomplish: modernizing how district energy is approached.

If we are serious about decarbonization, we must be bold and reimagine our industry. That’s what is being done at Vicinity Energy, and we are looking to best practices from similar steam loops in other parts of the world. Copenhagen, Malmö, and Drammen use district energy to meet and surpass their respective climate goals. Our goal is to be the first in the U.S. to lead in this space. Vicinity is uniquely poised to serve as a national leader in building decarbonization. The time for action is now. Our customers want it, our cities ask for it, and our planet demands it.

We are proud of what we are accomplishing.

eSteam™: a new, greener solution to combat carbon emissions

Posted on July 12, 2022July 23, 2024 by Bella Pace

Many people are aware that pollution is a harmful downside to urbanization. What you may not know, however, is that 90% of our world’s population breathes polluted air every day, and 7 million people die from exposure to this contaminated air every year. This is a jarring statistic, and it sheds light on how carbon emissions serve as a silent killer in our world as the air we breathe can quickly and quietly turn lethal.

What is causing this?

Various factors contribute to pollution and climate change around the world. So, what are the biggest culprits, and how do they produce these carbon emissions? Building operations are responsible for 27% of global CO2 emissions each year, with another 20% coming from the construction and building materials required to create and maintain a building. These daily operational emissions generate lighting, heating, and cooling for a building, all essential elements of residential and commercial life. Additionally, many of these carbon emissions from buildings result from desperation to meet growing energy demands in conjunction with a lack of available clean energy options, as most of these establishments are several decades old.

What can be done?

One way to combat the increasing levels of carbon emissions within buildings is to integrate renewable energy systems into existing architecture through renovation and retrofits. It is equally important to ensure that new buildings’ systems are centered around using clean energy. Commonly known renewable energy sources include wind, solar, and hydroelectricity, and while these have proven to be effective in numerous circumstances, another, more cost-effective solution exists. eSteam™ generates power without emitting any CO2 and is the first-ever renewable thermal energy product in the United States!

Customers benefit from carbon-free eSteam™ generated with renewable electricity.

How eSteam™ works

Instead of fossil fuels, eSteam™, a new offering from Vicinity Energy, is fueled by electricity in a process known as electrification. Electric boilers, thermal storage, and industrial-scale heat pumps are installed at central facilities to generate steam. These devices employ renewable power from other carbon-neutral energy sources such as wind, solar, and hydro to produce energy used to power buildings in cities across the country.

Rather than start from scratch with sustainable infrastructure, eSteam™ leverages and builds upon existing infrastructure. This means that older buildings do not need significant investments to decarbonize their thermal energy load. eSteam™ uses Vicinity’s existing network of steam pipes, electric substations, and transmission lines to rapidly reduce carbon emissions. This electrification method is the most cost-effective and reliable way to accelerate the decarbonization of buildings and communities.

Benefits of eSteam™

With zero carbon emissions, users can meet their sustainability goals while simultaneously avoiding looming carbon taxes. Many cities throughout the U.S. have implemented or are considering implementing laws to lower buildings’ greenhouse gas emissions. These policies typically impose hefty fines for non-compliance. Because eSteam™ is carbon-free, users can have peace of mind knowing that their building will be greener while avoiding carbon fees and penalties.

eSteam™ offers total flexibility. Vicinity gives purchasers of eSteam™ the option to choose whichever renewable energy source they prefer to generate energy for their building. They can also select how much eSteam™ they wish to purchase annually. With these features, eSteam™ is customizable to various budgets and sustainability objectives.

eSteam™ is delivered through Vicinity’s district energy system, making it considerably more affordable than other onsite alternatives such as building in electric boilers. This access to wholesale power gives district energy an economic advantage over onsite equipment. It distinguishes eSteam™ as the most valuable and cost-effective method of improving a building’s carbon footprint.

Choosing eSteam™ to decarbonize your building eliminates the need to invest in costly capital projects. Therefore, you can avoid the financial burden of expensive renovations. This is because eSteam™ decarbonizes buildings by connecting to Vicinity’s district energy network, which is known for its maximum reliability and resiliency in a climate uncertain future.

eSteam™ users can gain potential points for LEED® and ENERGY STAR® certifications. These certifications are a great way to demonstrate your building’s commitment to sustainability.

Act now for the future

eSteam™ will be available nationwide shortly, and you can commit to making this change today. Making the switch to eSteam™ for a low-carbon future will not only aid in saving our planet from the adverse effects of carbon emissions, but it will also help decarbonize our communities so that fewer people find themselves sick or dying from breathing polluted air.

A Low-carbon future is here: combined heat and power (CHP) systems vs. onsite generation

Posted on June 8, 2022June 13, 2024 by Bella Pace

It’s no secret that every institution plays a critical role in the fight against climate change. And while integrating renewable energy sources such as wind, solar, and hydro have become go-to options for many institutions, there is another, often overlooked solution: combined heat and power (CHP).

CHP, also referred to as cogeneration, has been quietly providing highly efficient electricity and process heat to vital industries, employers, urban centers, and campuses for decades, as noted by the U.S. Office of Energy Efficiency and Renewable Energy. Cogeneration is a proven, cost-effective tool for reducing emissions and furthering sustainability goals.

So, what does CHP entail, and how does it compare to onsite methods of heating and powering buildings?

CHP is an efficient process that combines the production of thermal energy (used for both heating and cooling) and electricity into one process. CHP systems can be configured differently, but they usually consist of a few key components: a heat engine, generator, heat recovery, and electrical interconnection, which are configured into an integrated whole.

Key facts about CHP systems:

CHP systems can be located at an individual facility, building, or campus. They can also be combined with district energy or utility resource.
CHP is typically employed where there is a need for electricity and thermal energy.
All CHP systems involve recovering otherwise-wasted thermal energy to produce useful thermal energy or electricity.
As a result, CHP systems require less fuel to produce the same energy output as conventional systems, emitting fewer greenhouse gases and air pollutants.

Although CHP is used in over 4,400 facilities across the U.S., many operations are still powered with conventional separate heat and power (SHP) systems. Unlike CHP, SHP systems are not integrated, meaning they obtain fuel from several sources, such as central fossil-fueled power plants and onsite natural gas heating systems.

To get the complete picture of how CHP compares to SHP, let’s dive into the facts across a few key areas of focus.

Energy efficiency

According to the United States Environmental Protection Agency, the average efficiency of fossil-fueled power plants in the United States is 36%. This means that 64% of the energy used to produce electricity at most power plants in the United States is wasted in the form of heat discharged into the atmosphere.
Overall, SHP is 50–55% fuel-efficient. Alternatively, CHP systems typically achieve total system efficiencies of 65-80%, by recovering and using the otherwise-wasted heat from on-site electricity production.

Diagram showing CHP as 45% more efficient than onsite generation. — How CHP systems compare to SHP systems

Cost savings

According to the U.S. Department of Energy and the EPA, installing 40 GW of new CHP capacity would save U.S. businesses and industries $10 billion each year in energy costs. These agencies estimate that such an investment would cost about $40 to $80 billion and could pay for itself within four to eight years.
CHP systems also reduce energy bills because of their high efficiency. Recurring costs are further reduced because the CHP output reduces the need for electricity purchases.

Sustainability

In their CHP Guide, the EPA explains that because CHP systems require less fuel to produce the same energy output as SHP systems, CHP can reduce emissions of greenhouse gases and air pollutants such as nitrogen oxides (NOx) and sulfur dioxide (SO2).
A CHP system can operate on various fuel types, such as natural gas, biogas, biomass, and more sustainable alternatives as they become widely available.
Currently, the emissions prevented by a single 5 MW CHP system are equivalent to the annual emissions of more than 5,400 passenger vehicles.

Graphic showing C02 emissions comparison of conventional generation vs. combined heat and power — This diagram from the EPA illustrates the CO2 emissions output from electricity and practical thermal energy generation for two systems: (1) a fossil-fuel-fired power plant and a natural gas-fired boiler and (2) a 1 MW reciprocating engine CHP system powered by natural gas.

Growth potential

There is enormous growth potential for the CHP market: Global Market Insights forecasts revenue generation within the market to increase from $20 billion in 2016 to over $45 billion by the end of 2024.
Investing in CHP systems can also help stimulate local, state, and regional economies through job creation and market development. Demand for raw materials and construction, installation, and maintenance services can create green jobs and develop markets for future sustainable technologies.
The potential capacity for CHP also cannot be understated: a U.S. Department of Energy study identified nearly 14 GW of additional technical potential for CHP across more than 5,000 U.S. colleges and universities alone.

Chart showing CHP capacity additions over time — Forecast of potential CHP capacity additions through 2026

Reliability and resiliency

CHP systems are more efficient and more resilient, and reliable than conventional methods, especially when configured as part of an advanced microgrid. These systems can be designed to operate independently from the electric grid to enhance facility reliability.
Through the onsite generation and improved reliability, facilities can continue operating in the event of a disaster or an interruption of grid-supplied electricity.

A low-carbon future is here

Major U.S. cities like Boston, Cambridge, and Philadelphia are already reaping the benefits of CHP. CHP is integrated with local district energy networks in these communities, delivering low-carbon thermal energy to buildings and campuses across the cities’ urban core.

By leveraging existing district energy infrastructure and CHP, these cities are leading the way in America’s adoption of this powerful technology and forging ahead towards a zero-carbon future.

District energy electrification: the new disruptor in a decarbonizing world

Posted on April 25, 2022June 12, 2024 by Sara DeMille

Today, buildings generate a substantial amount of the world’s annual carbon emissions – 40%, to be exact. And while historically it has been difficult and costly for buildings to comply with decarbonization efforts, district energy systems are rising to the challenge. District energy is the new disruptor in a decarbonizing world.

Agile, fuel-agnostic district energy systems can easily switch to lower-carbon, local energy sources at their central facilities. Because these systems deliver thermal energy to multiple buildings and millions of square feet at a time, any swap to lower-carbon fuel sources has a much wider-reaching green impact and costs building owners significantly less than building-by-building retrofits. Making changes or upgrades to conventional onsite boilers or chiller plants at each building is a much more time-consuming and expensive endeavor.

In this way, the electrification of district energy systems is a game changer for the climate, our communities, and our collective future. Such a game changer, in fact, that electrification is the backbone of Vicinity Energy’s commitment to reach net zero carbon emissions across all its operations by 2050.

Electrifying Boston, Cambridge and beyond

In the first initiative of its kind in the United States, Vicinity is already in the process of electrifying our district energy facilities in Boston and Cambridge. Modeled after best-practices in other leading European and Canadian cities, this approach includes the installation of electric boilers, industrial-scale heat pumps, and molten salt thermal battery storage at our central facilities.

Our ability to access power allows us to keep costs down, while also delivering superior reliability. By purchasing electricity from renewable, carbon-neutral energy sources like wind, solar, and hydro, we can provide a cleaner energy product. But we’re not stopping there: over time, we’ll apply our approach to the rest of our districts, with Philadelphia closely following Boston and Cambridge.

The investments Vicinity is making at our central facilities will immediately green the energy serving customers throughout Boston and Cambridge.

So, what will these new investments actually look like and how will this work? The roadmap to net zero includes several key components, as outlined in our latest white paper:

Producing renewable energy at transmission level rates and integrating them into our fuel mix
Electrifying energy generation by converting our operations to electric boilers and heat pumps
Installing molten salt thermal batteries, which will allow us to buy energy when it’s most affordable and store it for use during peak demand

Our phased plan for the electrification of our Boston and Cambridge facilities serves as a sustainable blueprint for our districts around the country, as well as other leading district energy companies like Con Edison in New York City who are looking to us for best-practices in creating their own path to decarbonization.

As Vicinity’s Chief Sustainability Officer Matt O’Malley so aptly stated in an interview: “We only have one choice—that’s to be bold on climate. Vicinity is doing it.”

Electrification success overseas

Vicinity’s plan is built upon best practices, proven technologies, and investments in sustainable infrastructure to reduce our overall environmental impact. And while our strategy is the first of its kind in the U.S., the electrification of district energy systems has proven successful in various European and Canadian cities throughout the years. We plan to build from these best practices and make a similar impact nationwide.

When Finland’s capital Helsinki sought a way to heat the city as sustainably as possible, they launched the international Helsinki Energy Challenge in February of 2020. Finland, like much of the European Union, has ambitious climate regulations in place that require the country to be carbon neutral by 2035, and place a ban on coal from energy production by 2029. With 90% of buildings in Helsinki connected to the city’s district heating system, the outcome of this contest would prove significant.

The solutions that took the prize? Converting to renewable energy sources and electrification.

In conjunction with the shift to renewables in Helsinki’s district heating networks, the contest’s winning solutions are designed to harness renewable electricity from heat pumps to drive the city’s transition to carbon neutrality.

Kaisa-Reeta Koskinen, Manager of the Carbon Neutral Helsinki project, commented on the urgency of the city’s transition: “We have to get rid of fossil fuels fully, and quite quickly. If at this point we start investing into fossil fuels, even if they are not as bad as coal, it is going to be a bad investment.”

Almost a decade earlier, a similar transition took place in the heating networks of Drammen, Norway, with notable success. In 2011, Star Renewable Energy installed the world’s largest 90°C natural heat pump in conjunction with the district energy system in Drammen. The heat pump extracts heat from the cold water in an adjacent fjord to heat homes and businesses across the city.

Since January 2011, the project has delivered over 15MW of heat for the Drammen community of 60,000 people. The city has realized an annual savings of around €2m a year, as well as 1.5m tonnes of carbon — the equivalent of taking more than 300,000 cars off the road each year.

It’s time for the U.S. to take inspiration from these success stories overseas and work harder to reduce our reliance on fossil fuels to heat, cool, and power buildings. The use of electric boilers and heat pumps in district energy systems has long been acknowledged as a proven solution for rapid and cost-effective building decarbonization in urban centers around the world.

Driving change with strategic private-public partnerships

It’s clear that strong policy, regulations and collaboration among organizations, as evidenced by the Helsinki Energy Challenge in Finland, encourage and spur innovative and sustainable solutions to decarbonize our cities. The success of district energy electrification in Drammen demonstrates the power of public-private partnerships (PPP) to achieve widespread decarbonization objectives.

Public-private partnership is essential to the development and evolution of decarbonization programs. The private sector’s knowledge of emerging technologies, in combination with progressive policymaking in the public sector, can accelerate the adoption of greener products and services.

European and Canadian cities such as Vancouver, Helsinki, Drammen and many more serve as testament to the success of leveraging district energy to meet aggressive emissions targets through electrification.

Through advances in policy and utilizing the unique assets we already have, Vicinity Energy’s electrification strategy is poised to lead the charge towards a clean energy future.

To learn more about our electrification strategy, get your free copy of our latest white paper today.