Starting next year, large buildings in New York will need to meet new carbon emissions standards. With buildings making up two-thirds of the state's greenhouse gas emissions, the law (LL97), which will require buildings to report electricity usage and other factors that will be used to calculate carbon output, is a step in the right direction. And New York's law, although among the most ambitious in the country, is not alone; several states are moving toward carbon emissions regulations for buildings. And, in addition, the private sector, including financial investors, is looking more critically at carbon emissions.

But there is a glaring gap in most of these policies: They calculate carbon by looking simply at how much electricity a building uses on an annual basis, and they fail to distinguish between electricity that was produced from renewable sources, which results in nearly zero carbon emissions, and electricity produced from carbon-intensive fossil fuels. This means that a building in California receiving a good part of its electricity from a utility company that produces electricity from solar generation scores the same as a building in another state where the utility company makes all of its electricity from coal and other fossil fuels.

This is obviously misleading and inaccurate. It could also take a large economic toll, as some of the biggest buildings in New York could face fines of more than $2 million a year for high carbon levels calculated simply by the amount of electricity they use.

More crucially, this lack of nuance in how carbon emissions are calculated also discourages the on-premise energy storage market, which is key to the transformation to clean energy, or power made from renewable sources like wind and solar, rather than carbon-intensive fossil fuels.

Large buildings are responsible for nearly 40% of the world's carbon emissions due mainly to electricity use for heating and cooling. Yet, they play a very small role (less than 1% actually) in the growing energy storage sector.

In states where electricity is made from solar sources, buildings could, during the day when this carbon-free solar energy is plentiful, charge up battery or thermal-based storage systems located in the unused spaces on their roofs or in their basements or elsewhere. Even though charging these systems does require electricity, as long as they are charged during the day when that electricity is coming from solar-based generation, these buildings are not contributing to the emission of additional carbon, even though they are using additional electricity.

In fact, charging these systems during the day, then switching over to them in the evening or night when the electricity flowing from the grid is based on fossil fuels, actually reduces a building's overall carbon output. This is because rather than use carbon-intensive fossil fuel-based electricity, which is what even the states with large proportions of solar energy rely on after sunset, the building is relying, at least partially, on stored energy made from clean, solar-based electricity.

Even without a change in policy, buildings can save money by implementing these storage solutions, mainly because the standard, off-peak price of electricity from the utility company is cheaper than the peak-time price, when fossil-fuel-based peaker plants kick in to make up for the lack of sunshine and high power demands.

But if carbon reporting in its current form doesn't change to a 24/7-based calculation, such storage systems will ironically be a disadvantage to buildings because they do require slightly more electricity use overall. Treating every kilowatt hour the same, no matter its source of power generation is like a doctor measuring someone's overall cholesterol level, rather than distinguishing between the HDL, which is known as "bad" artery-clogging cholesterol, and "good," LDL, which helps the body maintain health. Looking at overall cholesterol — just like looking at overall electricity use — tells us nothing. We need to start distinguishing between clean and carbon-intensive kilowatt hours in order to understand a building's true carbon footprint.

Taking the carbon intensity of each kilowatt hour is entirely possible. The data exists within utility companies and is, in fact, now available from the Energy Information Association (EIA) and organizations such as Watttime.

More importantly, this distinction between the carbon intensity of kilowatt hours will go a long way to encourage the adoption of on-site storage solutions, which buildings can use to maximize their reliance on electricity made from cleaner sources.

While utilities are developing and implementing more storage solutions for solar power — opening up the future possibility that clean energy will be available through the grid around the clock — this day is a long way off. In addition to high costs and technological gaps in large-scale storage, topography and space considerations also limit the amount of affordable storage that can be located near power plants. So we are in for many more years of mixed power, with grids switching over to fossil-fuel-based peaker plants to make up for shortfalls in renewable energy. These peaker plants are also often old and inefficient, creating more pollution per kilowatt than fossil-fuel-based plants that work around the clock.

That is why on-prem storage in large buildings and facilities can play a big role in making sure more good, clean kilowatts are used in place of bad, carbon-intensive kilowatts. Not only do buildings often have space for storage systems, but when storage is located near where the energy will be used, this opens the door beyond batteries to thermal solutions as well, including energy stored in the form of water and ice. Such thermal energy storage solutions are particularly valuable to large buildings like offices, malls, hospitals and hotels because they are safer than batteries.

Energy storage systems give buildings the superpower to make choices about how they use electricity and make sure they consume as much carbon-free power as possible and avoid using electricity made from fossil fuels at peaker power plants. This is the most effective tool buildings have to slash their carbon output from electricity use — and avoid millions of dollars in fines.

But at a policy level, distinguishing between good and bad kilowatts in carbon reporting along with increased tax incentives for buildings that install storage systems is probably the most significant way we will really reduce the huge carbon footprint of buildings.

(Boaz Ur is the chief business development officer of Nostromo Energy)

Buildings, Skyscrapers, Manhattan, New York City
Representation. Pexels/Pixabay
Read more