The synergy between building electrification and smart grid innovation

Our industry is engaged in an important dialogue to improve sustainability through ESG transparency and industry collaboration. This article is a contribution to this larger conversation and does not necessarily reflect GRESB’s position.

In the make-believe city of Nexus, grid-interactive efficient buildings (GEBs) became central to its energy transformation. These advanced structures could “listen” to the electric grid and dynamically adjust their energy use in response to real-time signals. Buildings dimmed lights and shifted energy use during periods of high demand. The entire city responded in unison during a heatwave, helping prevent blackouts without overburdening the power plants.

As Nexus’s buildings became more sophisticated, they began to collaborate, sharing energy across the grid to optimize performance. Hospitals, schools, and homes could exchange power, creating a resilient and efficient energy ecosystem. The city became a model of sustainability, reducing its carbon footprint and stabilizing its grid. Nexus became a beacon of hope in an electrified world, demonstrating the potential of grid interactivity and GEBs.

Perhaps this story sounds like a fantasy, but electrification and grid interactivity are very real and important efforts, that are happening in real-time today.

Buildings and the construction sector are responsible for ~40% of global greenhouse gas (GHG) emissions, and if left unchecked, these emissions could double by 2050. The high level of emissions is largely due to building reliance on natural gas, oil, and propane for heating and cooking. By electrifying these systems, buildings can transition to cleaner energy sources, particularly when paired with renewable energy such as wind and solar power. In addition to the environmental benefits, building electrification can lead to lower energy costs over time, increased comfort, and reduced health risks associated with indoor combustion from gas appliances. While some HVAC equipment would benefit from electrification, there are also some cases where alternatives make more sense.

Key equipment for building electrification

1. Heat pumps (for heating and cooling)

• Air-Source Heat Pumps (ASHPs): Efficient for most climates, ASHPs transfer heat between the building and the outdoor air. They can provide both heating and cooling, making them a versatile option.
• Ground-Source Heat Pumps (GSHPs): Also known as geothermal heat pumps, GSHPs transfer heat between the building and the ground. They are highly efficient, particularly in extreme climates, but have higher upfront installation costs.

Results: Heat pumps can be 2-4 times more efficient than conventional heating systems. When powered by renewable electricity, they can significantly reduce a building’s carbon footprint.

2. Electric water heaters

• Heat Pump Water Heaters (HPWHs): These use electricity to move heat from the air or ground into the water, making them highly efficient compared to traditional electric resistance water heaters.
• Tankless electric water heaters: Provide on-demand hot water and eliminate standby heat loss associated with storage tanks. Ideal for smaller homes or apartments.

Results: HPWHs are up to three times more efficient than traditional electric water heaters, offering significant energy savings over time.

3. Electric cooking appliances

• Induction cooktops: Induction cooking is more energy-efficient than both gas and traditional electric cooking. It heats pots and pans directly through electromagnetic fields, providing precise temperature control and faster cooking times.
• Electric ovens: Modern electric ovens offer even heating and greater energy efficiency compared to gas ovens, with options for convection cooking that further improve performance.

Results: According to the EPA, induction is 85% efficient, whereas radiant electric is 75-80% efficient, and gas is only 32% efficient. Induction also runs cooler and cleaner than gas, lowering the load on ventilation and on heating and cooling systems in your home.

4. Smart thermostats and Building Energy Management Systems (BEMS)

• Smart thermostats: Devices like the Nest or Ecobee optimize energy use by learning occupant habits and adjusting heating and cooling schedules accordingly.
• BEMS: Advanced systems that manage the energy consumption of an entire building by integrating various electric systems (HVAC, lighting, etc.) and optimizing their operation for energy efficiency and grid interactivity.

Results: Smart thermostats can reduce heating and cooling energy use by 10-15%, while BEMS can achieve even greater savings by optimizing energy consumption across multiple systems.

1. Single-family homes: Case studies have shown that electrifying a typical single-family home can reduce its carbon emissions by up to 50%, depending on the local energy mix. Homes that replace gas heating with air-source heat pumps, switch to induction cooking, and install electric water heaters can see significant reductions in both energy consumption and emissions.

2. Multifamily buildings:  Electrification in multifamily buildings often involves retrofitting central heating and hot water systems with electric alternatives like heat pumps. In one study, a retrofit of a 100-unit apartment building with heat pump water heaters and electric HVAC systems led to a 40% reduction in energy consumption and a 70% reduction in greenhouse gas emissions.

 3. Commercial buildings:  Commercial buildings, including offices, schools, and retail spaces, benefit from electrification through reduced operational costs and enhanced energy efficiency. Retrofitting an office building with a ground-source heat pump system and a BEMS led to a 35% reduction in energy use and significant savings on utility bills.

1. Start with a comprehensive energy audit: Before beginning electrification, an energy audit can identify opportunities for efficiency improvements and help understand the building’s energy usage patterns which, in turn, helps in selecting the most appropriate electrification technologies.

2. Prioritize energy efficiency upgrades: Improving insulation, sealing air leaks, and upgrading windows can significantly reduce the heating and cooling load, making electrification more effective and reducing the size and cost of new electric systems.

3. Pair electrification with renewable energy: Whenever possible, combine electrification with on-site renewable energy generation, such as solar panels, to further reduce operating costs and enhance sustainability by ensuring that the building’s electricity comes from clean sources.

4. Incentives and rebates: Take advantage of government incentives and utility rebates for electrification projects. Many regions offer financial incentives for upgrading to electric heat pumps, water heaters, and energy-efficient appliances.

5. Consider the long-term ROI: While electrification can have higher upfront costs, the long-term savings in energy costs and reductions in emissions make it a worthwhile investment. Future-proofing your building against rising fossil fuel prices and carbon regulations will also add value in the long run.

Building electrification represents a vital step toward a low-carbon future. With the right equipment, such as heat pumps, electric water heaters, and induction cooktops, buildings can transition away from fossil fuels and contribute to cleaner, more sustainable energy systems.

New York City’s grid reliability is critical, especially as the city moves toward increased electrification. The city’s electric grid, managed primarily by Con Edison, has a reliability rate of over 99.9%, ranking among the highest in the U.S. However, summer heat waves and increased demand challenge this reliability. In 2023, peak electricity demand reached 12,200 megawatts (MW), close to the grid’s capacity of 13,300 MW.

To address future demand, the city plans to invest in renewable energy and grid upgrades, such as the 1,250 MW Champlain Hudson Power Express project, which will deliver hydroelectric power from Canada to NYC. Despite these efforts, aging infrastructure remains a concern, with over 50% of NYC’s grid equipment over 50 years old, and the increasing demand for electricity brings about challenges for grid management. Grid interactivity addresses these challenges by integrating advanced communication technologies, sensors, and controls that allow the electric grid to respond dynamically to changes in supply and demand. We are building this future one step at a time through GEBS.

Grid-interactive efficient buildings (GEBs) represent the intersection of electrification, energy efficiency, and grid interactivity. These buildings use smart technologies and connected systems to optimize energy use and interact dynamically with the grid, helping to balance supply and demand while reducing costs and emissions.

Benefits of grid-interactive efficient buildings

• Energy cost savings: GEBs can reduce energy costs by optimizing energy use based on real-time price signals and participating in demand response programs.
• Reduced emissions: By integrating renewable energy, improving efficiency, and reducing peak demand, GEBs contribute to significant reductions in greenhouse gas emissions.
• Grid resilience: GEBs can enhance grid resilience by providing flexibility and reducing stress on the grid during peak demand periods. Their ability to adjust energy use dynamically can prevent blackouts and reduce the need for expensive infrastructure upgrades.

While GEBs present significant opportunities, there are challenges to their widespread adoption:

• Technology integration: The integration of various smart technologies and systems requires advanced technical knowledge and substantial upfront investment.
• Regulatory barriers: Regulations and building codes need to evolve to support the adoption of GEBs, particularly in terms of demand response participation and renewable energy integration.
• Data privacy and security: Using connected devices and systems in GEBs raises concerns about data privacy and cybersecurity. Ensuring that these systems are secure is critical to their success.

Despite these challenges, the future of GEBs is promising. Policies that promote electrification, renewable energy, and smart grid technologies are accelerating the development and deployment of GEBs. As the grid becomes more interactive and renewable energy becomes more prevalent, GEBs and electrification will play a critical role in achieving a sustainable and resilient energy future.

This article was written by Jenny Chen, Energy Engineer II at CodeGreen Sustainability. 

References:

“Electrification: The Path to a Low-Carbon Future.” Energy Policy Journal. Accessed September 2, 2024.

“Grid-Interactive Efficient Buildings.” Department of Energy. Accessed September 2, 2024.

“Demand Response and Smart Grid Interactions.” NREL. Accessed September 2, 2024.

“The Role of Electrification in Global Energy.” International Energy Agency. Accessed September 3, 2024 at Tracking Clean Energy Progress 2023 – Analysis – IEA

“Energy-efficient Products.” ENERGY STAR. Accessed September 3, 2024.

“Climate Mobilization Act.” New York City Government. Accessed September 3, 2024.

“Electric System Overview and Reliability.” Con Edison. Accessed September 3, 2024.

“2023 Load & Capacity Data Report.” New York Independent System Operator (NYISO). Accessed September 3, 2024.