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LEED Opportunities with District Energy

Sept. 7, 2011
Customers who tap into sustainable district energy systems can significantly boost their buildings’ LEED ratings.

District energy plants are designed to deliver thermal or electric utilities to multiple buildings on a campus or in a municipality. This approach has been used since the Industrial Revolution. Steam-generating plants and distribution networks were built to produce and deliver steam needed to drive the machinery of large factories and heat the homes of the factory workers. Often, these plants produced electric power first and generated steam as a useful waste product in a combined-heat-and-power (CHP) process. With the invention of air conditioning, district cooling appeared on the scene to meet the cooling needs of large educational and industrial campuses.

Today, large district energy facilities use a variety of fuels to provide cooling, heating, and electric utilities to colleges and universities, health-care campuses, manufacturing facilities, and municipalities in North America, Europe, Asia, and the Middle East.

District energy facilities allow thermal and electric utilities to be generated efficiently and reliably. These systems also allow for the consolidation of maintenance and operations. These reasons alone have justified the significant capital investment required. Today, however, there is a new movement that is changing how these investments are viewed: the sustainable building movement.

In 1993, the U.S. Green Building Council (USGBC), a non-governmental organization with the goal of driving sustainable practices in building design, construction, and operation, met for the first time. Five years later the council introduced its first building-rating system, the Leadership in Energy and Environmental Design (LEED) Building Rating Program. This program allows buildings to receive the “brand”’ of LEED and thus make a statement to their stakeholders about the owning organization’s green values. In a very short period of time, the LEED program has taken off in popularity. Today, more than 1.4 billion sq ft of building space has been certified by the LEED program, and certification is being sought for more than 6 billion sq ft. In addition, countries around the world have adopted variations of the LEED program for local use.

When the USGBC developed the first rating system, however, the impact of district energy was not addressed. For the most part, the rating system only concerned itself with what was occurring on the proposed building's construction site. The assumption was made that building owners had little ability to affect how utilities were generated off site. District energy was treated the same as traditional utilities such as power and gas. The USGBC quickly found that by failing to address district energy within its LEED guidelines created many questions for project designers. In addition, the opportunity to have a positive impact of progressing toward the organization’s sustainability goals was missed.

As a result, the USGBC in 2008 released its first guideline to address applying the LEED program to proposed buildings that would receive district energy, Required Treatment of District Thermal Energy in LEED-NC Version 1. USGBC in 2010 released an update to this guide titled, Treatment of District or Campus Thermal Energy in LEED V2 and LEED 2009 – Design & Construction Version 2 and also released the first version of a separate guide to address district energy under the USGBC’s rating system for existing buildings entitled, Treatment of District or Campus Thermal Energy in LEED for Existing Buildings: Operations and Maintenance Version 1.0. All of these guides are available for free on the USGBC's Website (

There are aspects of district energy systems that align very well with core goals of the USGBC. Understanding these aspects and implementing them in district energy systems creates scenarios in which connecting a proposed building to district energy increases the level of LEED certification that can be achieved. The opportunities—renewable energy, CHP, and thermal energy storage—often are expensive to install and impractical to maintain within a proposed building’s site. However, because of the scale of district energy, these challenges can be overcome when installing them within a district energy system. As such, district energy can be the ideal choice for buildings pursuing LEED certification. This article will review each of these opportunities and their impact on the LEED program.

Renewable Energy
Renewable energy has been around for centuries. Power from wind and water movement and solar thermal were used by ancient civilizations. Today, solar energy, wind, and biomass offer promises of reducing dependency on traditional nonrenewable energy sources, such as coal, oil, and natural gas. The need for renewable energy has never been greater, as the world simultaneously wrestles with climate change, increased demand for fossil fuels in developing countries, and the concept of "peak oil," defined by Wikipedia as "the point in time when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline."

The problem with traditional renewable energy sources is that they often are cost-prohibitive and difficult to use and maintain. Wind and solar are not in constant supply, and biomass feedstocks often come from immature markets with unreliable supply streams and large price swings—neither of which is conducive to attracting normal sources of private capital investment. The point at which these energy choices can stand on their own economics has been "just around the corner" for decades, but that proverbial corner has yet to be reached.

In concept, renewable energy certainly makes a lot of sense. If we can effectively harness the energy of the sun, wind, or tidal movement or harvest energy from waste streams, our current problems with energy security, supply, pollution, and global warming could—in theory—be solved. As a result, the U.S. government and many state governments encourage the development of renewable-energy markets in the form of tax incentives, grants, regulation, and so on. However, governments are not the only entities trying to encourage the development of renewable-energy markets. The USGBC hopes to accelerate the maturity of renewable-energy markets and technologies through its LEED program. The group will do so by awarding buildings a significant number of points toward the LEED- rating goals of buildings that use renewable energy.

LEED and Renewables
The USGBC recognizes that encouraging the use of renewables helps it achieve its goals. It also recognizes that in order to sufficiently encourage the use of renewables, significant incentives are required within the LEED rating system to overcome first cost, operating cost, and/or long payback periods. As a result, the USGBC gives points for renewable energy in two separate credit categories within the LEED rating system. It is possible, in fact, for qualifying projects to earn many points within each of these categories.

The first way to achieve LEED points with renewables is under Energy & Atmosphere Credit 1 by reducing the total annual energy cost of a building. This credit awards up to 19 points to projects that can demonstrate a percentage of energy savings, measured in terms of a building's total annual energy costs compared with the minimum energy requirements outlined in Appendix G of the ANSI/ASHRAE/IESNA Standard 90.1, Energy Standard for Buildings Except Low-Rise Residential Buildings.

The LEED rating system, however, assumes that the input fuel costs of all renewables is zero. This certainly is true for solar and wind, but rarely is the case for waste products such as wood chips, oat hulls, poultry waste, and so on. As a result, the assumed "free" cost of renewables increases the amount of points that can be achieved under Credit 1.

Second, under LEED Energy & Atmosphere Credit 2, projects can achieve up to seven points by using renewable energy. To do so, they must consume what the USGBC considers to be renewable (more on that later), and the amount used must reach certain thresholds as defined by the percentage of total annual building energy use. Those percentages, along with their associated assigned points, are shown in Table 1.

The relatively high thresholds make capturing points under Credit 2 with on-site renewables very difficult. For example, the amount of photovoltaics required to achieve just one point would completely cover the exterior of most buildings. In addition, the operational and fuel-handling challenges of burning biomass within a single project building are substantial. On the other hand, the size and scale of district energy often provides good opportunities for burning renewables.

Originally, the USGBC did not include provisions that would allow renewables consumed in district energy systems to be applied to customer buildings. This mandate was changed in the first district-energy guide published for new construction and has been improved in the second version of that guide. As such, district energy often is the best and sometimes the only option for obtaining credit for renewables in the LEED rating system.

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What Qualifies as Renewable
The USGBC is fairly clear about what is and what is not renewable. Photovoltaic systems, wind energy, solar thermal, geothermal heating and electric, low-impact hydroelectric power, and wave and tidal power systems are all considered renewable under LEED guidelines. In addition, biofuel systems using untreated wood waste (including mill residues, agricultural crops or waste, animal waste, and other organic waste) and landfill gas also are considered renewable.

In contrast, solid municipal waste; forestry biomass waste other than mill residue; wood coated with paints, plastics, or Formica; and treated wood are not considered renewable, and their use will not result in points under Credit 2. Moreover, architectural features, passive solar systems, daylighting strategies, and ground-source heat pumps are not considered renewable-energy systems.

Several interesting questions arise from this list. The first is, "Why aren't ground-source heat pumps considered renewable?" The USGBC's assessment is that ground-source heat pumps are an energy efficiency measure, and as such, points are awarded for them under Credit 1 already. The "fuel" for ground-source heat pumps still is electricity, a nonrenewable fuel. This type of system simply uses less of it.

The argument that ground-source heat pumps are renewable because the energy for heating a building comes from the ground and that heat in the ground ultimately comes from the sun's rays could be made. Using that same logic, one could argue that a traditional heat pump is renewable because it pulls heat from the atmosphere, which also is heated by the sun. With that line of thinking, the argument could be made that everything is renewable.

Another interesting question is why solid municipal waste is not considered renewable. There are benefits to the global environment of converting locally produced solid municipal waste into usable energy. Done properly, it can reduce the amount of solid municipal waste sent to landfills significantly. Produced locally, it also reduces the negative environmental impact of needing to be transported or procured from unfriendly parts of the globe. However, the USGBC may have concerns with the emissions from burning solid municipal waste. Also, the organization may feel that encouraging the combustion of solid municipal waste could lead to the generation of greater amounts of it, which would be contrary to the USGBC's overall goals.

It may be that the USGBC is not discouraging the use of solid municipal waste at all by not considering it renewable. Although its use cannot provide points under Credit 2, there is an opportunity to more than make up for those lost points under Credit 1. If solid municipal waste were listed as renewable, its cost would be assumed to be zero. Because it is not listed, modelers must use its actual cost in their energy models. The actual cost of solid municipal waste as a fuel is a negative number, because waste facilities normally are paid to accept it. As a result, using solid municipal waste can "supercharge" the number of LEED points that can be achieved.

There is a final perplexing question: "Why is wood waste from mill residue classified as renewable?" Wood waste that is not generated by a mill is not considered renewable. Therefore, it is necessary for operators to know the source of their wood supply if they want to give renewable credit to buildings connected to their system.

In some ways, this makes sense. The USGBC does not want to encourage the clear-cutting of forests to produce energy, which is a practice being debated in many states that have mandated power utilities to reach a minimum target for renewable-energy use in their fuel portfolios. However, there is a place within the LEED rating system where this creates an unintended consequence. Some district energy systems, such as District Energy St. Paul's downtown system, use a mixture of wood that includes waste wood from mills, which qualifies as renewable, and waste wood from the forests (referred to as "slash piles"), which does not. This waste product, if not converted to energy, will be left to degrade on the forest floor, yet does not meet the USGBC's technical definition of renewable.

In the past, slash piles were included as renewable by the federal government, but this was changed behind closed doors as a part of the Energy Independence and Security Act of 2007. Steps are being taken now to clarify these definitions within the USGBC.

Renewables and the Future
Moving forward, the USGBC, the federal government, and state governments want to continue to incentivize the use of renewables. Although there are challenges associated with using renewables, many of these challenges are reduced when applied to district energy.

District Energy St. Paul, for example, recently commissioned the largest solar thermal system in the Midwest and the only one in the United States tied to a district energy system. This asset helps increase the percentage of renewable energy delivered to all of the company’s customers and, as a result, creates another incentive for a LEED project building to connect to the system. In addition, District Energy St. Paul is studying its existing biomass fuel supply, consisting of waste wood, to determine if it can increase the percentage of its wood supply that qualifies as renewable energy under LEED guidelines.

Combined Heat and Power
When electricity is generated at a traditional fossil-fuel-powered plant, system efficiencies of 33 to 35 percent are typical. When produced using a CHP process, total system efficiencies can exceed 80 percent. Why? In a traditional process, energy in the form of heat is rejected to the atmosphere or to a body of water as part of the condensing cycle and thus is wasted. In a CHP process, this same wasted energy is instead put to use to heat a building or its domestic hot water, provide heat for a manufacturing process, or even drive absorption or turbine-driven chillers for cooling. Why, then, do traditional electric generators not cogenerate? Normally they do not have a large enough use for this waste energy near their generating site, and it becomes impractical. District energy by its very nature has these loads close by and often chooses to cogenerate as part of the operational model.

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More than doubling the efficiency of electricity generation certainly is in line with USGBC goals. However, on-site building cogeneration systems rarely are practical. The USGBC does allow credit for CHP in a district energy system to apply to buildings that receive waste heat from the plant. In fact, the buildings that receive this waste heat get credit for the corresponding electricity generated even if that specific electricity is not sent directly to the building. This normally is the case as CHP systems deliver waste steam directly to customers, but the electricity generated often is sold to the utility company. Therefore, proposed buildings normally can receive additional energy efficiency points in the LEED program by receiving waste heat from district energy systems.

The University of Texas at Austin has one of the largest CHP systems of any campus in the country. In fact, the university generates all of the campus' power needs from this process. As a result, buildings that tie into the campuses district energy system have little difficulty reaching high levels of LEED certification.

Editor's Note: For more about the University of Texas at Austin's system, see Large-Campus District Cooling, by Kevin M. Kuretich, PE, and Ben Erpelding, PE, CEM, HPAC, May 2010, p. 26, or visit http://bit/ly/district.

Thermal-Energy Storage

Electric power cannot be stored easily; instead, it must be generated as it is needed. Therefore, the peak system electricity load sets the size of generation and transmission required to keep systems humming along. Also, as would be expected, electric utilities base-load their most efficient generation equipment and use the least efficient equipment for peaking purposes only. The combination of these issues are powerful incentives to drive down overall peak loads and are certainly in line with USGBC goals. Thermal-energy storage (TES) is the ability to shift cooling production, which requires significant electric energy, from peak times to off-peak times. As a result, TES is a powerful peak-lowering tool.

The first district-energy guideline issued by the USGBC encouraged the use of TES on a building's project site but not within a district energy plant. Version 2.0 of the guideline has resolved this contradiction by crediting TES within the district energy system. Because a district cooling system can employ large TES systems, this also is an effective application that is used often. For instance, the University of Virginia's Charlottesville campus includes a chilled-water storage tank capable of holding 16,200 ton-hr of chilled water, which can be released during peak load periods. This feature increases the LEED points a proposed building can obtain under the energy-efficiency category by connecting into the university’s chilled-water system.

Editor's note: Paul Valenta, LEED AP, will be presenting Thermal-Energy Storage: A Vital Component of Low-Carbon Future, at the Optimum Buildings Conference, part of HVACR Week, Sept. 21-23, in Indianapolis. For more information, visit

The scale of district energy systems provides opportunities to generate and deliver energy to buildings in a sustainable manner. Taking advantage of these opportunities can improve the ability of a district energy system's customers to reach LEED certification or achieve a higher level of certification for their building.

Did you find this article useful? Send comments and suggestions to Senior Editor Ron Rajecki at [email protected].

J. Tim Griffin, PE, CEM, LEED AP is a principal and partner with RMF Engineering, Inc. an international engineering consulting firm headquartered in Baltimore. He has a bachelor’s degree in mechanical engineering from North Carolina State University and a master’s degree in business administration from Colorado State University. He specializes in leading engineering teams to plan, design, and commission large energy infrastructure systems for higher-education, health-care, municipal, and industrial campuses. His efforts have centered on large chilled-water production, steam generation, and combined-heat-and-power facilities. Through the International District Energy Association (IDEA,, he has become the liaison between the U.S. Green Building Council and IDEA on district energy systems.