Preservation and Sustainability: The District Approach

In 2009, The National Trust for Historic Preservation launched its Preservation Green Lab. Based in Seattle and headed by developer and urban policy consultant Liz Dunn, the Lab’s mission is to work with cities to develop new policies that leverage the value of the existing building stock as a resource for achieving cities’ overall sustainability and climate action goals.

As Dunn says, her work is founded on a belief that “existing buildings can be made to perform very well environmentally (and many of them already do)  but they also contribute to social and economic uses that cities care about when they think broadly about sustainability — including affordability, walkability, opportunities for local businesses, and overall quality of life.”

According to the Lab, district energy is one of the most promising solutions for bringing valuable old buildings up to new standards. District energy systems generate thermal energy at a central plant and distribute it to a group of buildings via underground pipes carrying hot or cold water. These systems are widely used throughout Northern Europe and are common in the U.S. for large campus-based institutions like hospitals and universities that benefit from economies of scale. Pioneering projects, including cities like St. Paul, Minnesota, Portland Oregon and West Union, Iowa, have brought renewed interest to the time-tested system. I recently sat down with Dunn to learn more about the Lab’s vision for district energy, and its work to craft policies that will help put historic districts on a new path to sustainability.

Julia Levitt: Why is the National Trust for Historic Preservation so interested in energy policy?

Liz Dunn: Energy performance objectives are getting more and more aggressive. But while new buildings can be designed to accommodate newer energy technologies, existing buildings have some things about them that just can’t be changed. So how does an owner of one of those fabulous small, character neighborhood buildings radically improve energy performance?

We’re working on this issue from one angle with our outcome-based energy code pilot project in Seattle. But we’ve also learned that it can be hard to do anything very radical, especially in the way of renewable energy, within the property boundaries of smaller older buildings. More than 72 % of existing buildings in the US are smaller than 10,000 square feet. They’re not going to have the space to add new energy technologies on-site.

The solutions will be found by looking at groups of existing buildings in aggregate, rather than at individual structures. District energy is a strategy to reduce emissions collectively and share renewables among buildings in a group.

District energy has been around for years. Why is there such renewed interest now?

District energy systems effectively take the hot water heaters and gas boilers out of a bunch of buildings and replace them with a big one at the neighborhood level. The nice thing about that big central plant is this: As better equipment and better low-carbon fuels become available, you replace your fuel source and/or the technology in one step, and you’ve upgraded the whole neighborhood. Improving the efficiency of a whole group of buildings together, at every change in the cycle, is a smarter use of money and space, and it takes the responsibility out of the hands of the individual property owners.

Also, an indirect benefit to district energy is the aggregation of building owners. Once a group of individual owners is organized and participating in a district energy system, they can use group purchasing power for other sustainable energy sources. The group could negotiate rates for green power, or a bulk purchase of solar panels to install on their roofs. Owners could pay into a fund to do a community storm water capture system or bioswale projects.

These reasons and others are fueling an “Eco District” movement around the country, led by several organizations that share the vision for improving energy efficiency and the sustainability of local economies at a district level. Pioneering work is being done by organizations including the Portland Sustainability Institute (PoSI) in Portland, Ore., Living City Block in Denver, and others. The Green Lab’s mission is to communicate why this makes sense for our older buildings in urban village communities and in small towns. Aggregation is how those neighborhoods full of great old buildings — the ones that are attracting people back into cities — will get to top energy performance.

How do you work with cities to promote district energy?

We take a consulting role, and almost always work with a team of at least two other partners.  We find a technical partner for each policy project, and a pilot city willing to adopt the policy initiative. The idea is to document these pilot studies and disseminate the information to cities around the nation considering similar strategies.

In the case of district energy policy, our partner is the University of Oregon Center for Sustainable Business Practices and our city is West Union, Iowa. West Union is a very compact Midwestern town, with a population of just 2,600 and a significant number of mixed-use historic buildings downtown. Those cool old character buildings are not only typical of other small communities, but also not that different in size from those found in other urban communities within larger cities that should be looking at district energy.

We work directly with government officials in the pilot city, and with officials at the state level as necessary. Many cities are still figuring out how to organize around sustainability initiatives, however, and organization differs from city to city. Sometimes we work with a city’s director of sustainability; sometimes we work with urban planning directors or building energy directors. In West Union, we’re working with the City Administrator and with the State Office of Economic Development. Iowa is a very progressive state in terms of sustainability.

Where is money available to finance these projects?

Although the numbers usually work quite well long-term, these projects require up-front investment, and have high construction costs. Most projects require help from the federal government, local government or a private firm that can act as a local utility. Because the payback is long-term, it’s often helpful if the financing comes from an entity with considerable resources and experience.

West Union is using a combination of funds. Significant funding comes from a competitive Energy Efficiency Community Block Grant from the Department of energy. Funding also comes from the Iowa Department of Economic Development and from an EPA Climate Showcase Community program grant. The city raised an additional $4 million in municipal bonds, an investment it plans to recoup in future income from operating the district energy plant. The pilot also benefits from a fortunate synergy with another project: West Union received USDA funding for a complete streets project, which will involve construction on the streets that dovetails nicely with the needs of the district energy project.

The Preservation Green Lab is doing an economic analysis and an analysis of the potential reduction in greenhouse gas emissions, which will be distributed to other cities as a case study report. The West Union system is an interesting case because it’s based on ground-source energy, which is essentially free — except that it requires up-front cost to drill the central wells into the ground, and uses electricity on an ongoing basis to power the heat pumps that transfer this energy into hot water and heating for the buildings.  The economic outcome will depend on how much people pay for natural gas to fire up individual furnaces and boilers, compared to how much the power for the heat pumps will cost, not just now but years down the road. In some communities, natural gas is so cheap that the district energy system could actually drive the cost of energy up in the short term, but rates will stabilize and stay lower in the long term.

If we assume that the power going to the heat pumps will get greener all the time – either through use of local renewables or because the power grid in Iowa will get less dependent on dirty fuels like coal, then the reduction to greenhouse gas emissions over time should be significant. It’s a strategy for future-proofing this community against shocks when energy becomes more expensive.

When should a city or neighborhood consider undertaking the construction of a district energy plan?

Certain basic characteristics of a community lend themselves to district energy – like compactness, and a diverse mix of uses with different energy demands at different times of day, and a lot of buildings that are ready to have their heating/cooling systems replaced. There are also catalysts like the complete streets program in West Union, which can defray the costs for engineering, construction and piping through complementary planning. District Energy St Paul, for example, is about to expand the city’s existing system out along the corridor of a planned light rail extension.

How can interested owners and entrepreneurs take action?

It takes joint leadership between community activists and their local government.  I encourage interested owners to organize within their own communities, get excitement around district energy and its benefits, and then talk to their local policymakers. In St. Paul, for example, where you find the nation’s largest and most successful example of a district energy program that was introduced into an existing urban neighborhood, a group of building owners initiated it from the beginning, and were able to get strategic help and financing from the City to make it happen.  We’re collecting case studies from around the country of successful examples like these, and the new ones that are emerging, and we’ll keep posting this information on our web site, in the media, and to city policy makers everywhere.

Julia Levitt, a Seattle-based journalist, is the former managing editor for the nonprofit media organization Worldchanging.com. She specializes in building and design topics and has worked with the Preservation Green Lab in a consulting capacity. She is currently completing her Masters at the University of Washington’s College of Built Environments. You can reach her at julia.v.levitt@gmail.com.

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