Federal/Private Sector Pooling Together Nearly $4 Billion For Energy Upgrades To Buildings

The Obama administration has just set a plan to partner with private industry to provide energy upgrades for buildings nationwide.

Graphic courtesy of Columbia Law School.

Nearly $4 billion in combined federal and private financing will go toward the initiative over the next two years. The investment will include a $2 billion federal commitment to make energy upgrades in federal buildings.

The energy upgrades to federal buildings are expected to be made under the government’s Energy Savings Performance Contracts (ESPC) program. Under the program, new energy efficient equipment will be installed in those buildings at no up-front costs to the government, said the administration during the announcement of the plan.

The costs of the improvements will be paid over time with the energy savings on utility bills, added the administration.

The plan was announced at a White House press event by President Barack Obama, who was joined by former President Bill Clinton, as well as about 60 CEOs, mayors, university presidents, and labor leaders from around the country.

The private sector participation is part of the Better Buildings Challenge, which is part of the Better Buildings Initiative that was launched by the president in February 2011.

The purpose of the Better Buildings Initiative is to support job creation in the private sector through investments in upgrades in commercial and industrial buildings, with the goal of making U.S. buildings 20 percent more efficient over the next 10 years.

The members of the private sector present at this event have committed to contributing the remaining $2 billion of the $4 billion investment.

The private sector financing is expected go toward energy upgrades in facilities including hospitals, universities, community colleges, school buildings, industrial buildings, and municipal buildings.

Among those participating in this challenge is 3M, a company well known for the manufacturing of products including adhesives, laminates, electric materials, car care products, dental products, and medical products.

3M says that it has committed 78 of its plants to the challenge in an effort to reduce energy usage by an additional 25 percent by 2015. The company also boasts that it has already cut greenhouse gas emissions in its manufacturing plants worldwide by 72 percent from 1990 to 2010.

In other industries, Alcoa Inc. – the world’s third largest aluminum producer – has committed to improving its energy efficiency by 25 percent across its industrial plants by the year 2020. The company’s current portfolio for the challenge consists of 30 plants, which currently consume about 42 trillion BTUs of energy.

Alcoa plans to showcase a $21 million investment in the expansion of its Barberton, Ohio facility. This project will involve the construction of a new 35,000 square foot building that will be used to advance the company’s recycling and casting process, producing new wheels from re-melted and scrap aluminum.

On a broader community level, Blue Hill Partners – a green sector investment firm, providing capital, management support and guidance services – has partnered with the Pennsylvania Treasury Department to investment over $45 million in energy efficiency and sustainability projects in Pennsylvania colleges and universities through the Campus Energy Efficiency Fund.

On an even larger municipal scale, the City and County of Denver has made energy efficiency a core focus of its Greenprint Denver sustainability initiative. Through its partnership with the Better Buildings Challenge, the city has committed to reducing energy usage by 20 percent by 2020 across its building portfolio.

Denver will also showcase significant projects throughout the community, including a deep retrofit of the Alliance Center and the Living City Block. The city also plans to work to educate external partners through outreach programs.

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