Future Benefits

3 Barriers To Large-Scale Energy Storage Deployment

By Guest Contributor
View the original article here

Victoria Big Battery features Tesla Megapacks. Image courtesy of Neoen.

In just one year — from 2020 to 2021 — utility-scale battery storage capacity in the United States tripled, jumping from 1.4 to 4.6 gigawatts (GW), according to the US Energy Information Administration (EIA). Small-scale battery storage has experienced major growth, too. From 2018 to 2019, US capacity increased from 234 to 402 megawatts (MW), mostly in California.

While this progress is impressive, it is just the beginning. The clean energy industry is continuing to deploy significant amounts of storage to deliver a low-carbon future.

Having enough energy storage in the right places will support the massive amount of renewables needed to add to the grid in the coming decades. It could look like large-scale storage projects using batteries or compressed air in underground salt caverns, smaller-scale projects in warehouses and commercial buildings, or batteries at home and in electric vehicles.

A 2021 report by the US Department of Energy’s Solar Futures Study estimates that as much as 1,600 GW of storage could be available by 2050 in a decarbonized grid scenario if solar power ramps up to meet 45 percent of electricity demand as predicted. Currently only 4 percent of US electricity comes from solar.

But for storage to provide all the benefits it can and enable the rapid growth of renewable energy, we need to change the rules of an energy game designed for and dominated by fossil fuels.

Energy storage has big obstacles in its way

We will need to dismantle three significant barriers to deliver a carbon-free energy future.

The first challenge is manufacturing batteries. Existing supply chains are vulnerable and must be strengthened. To establish more resilient supply chains, the United States must reduce its reliance on other countries for key materials, such as China, which currently supplies most of the minerals needed to make batteries. Storage supply chains also will be stronger if the battery industry addresses storage production’s “cradle to grave” social and environmental impacts, from extracting minerals to recycling them at the end of their life.

Second, we need to be able to connect batteries to the power system, but current electric grid interconnection rules are causing massive storage project backlogs. Regional grid operators and state and federal regulatory agencies can do a lot to speed up the connection of projects waiting in line. In 2021, 427 GW of storage was sitting idle in interconnections queues across the country.

You read that right: I applauded the tripling of utility-scale battery storage to 4.6 GW in 2021 at the beginning of this column, but it turns out there was nearly 100 times that amount of storage waiting to be connected. Grid operators can — and must — pick up the pace!

Once battery storage is connected, it must be able to provide all the value it can in energy markets. So the third obstacle to storage is energy markets. Energy markets run by grid operators (called regional transmission organizations, or RTOs) were designed for fossil fuel technologies. They need to change considerably to enable more storage and more renewables. We need new market participation rules that redefine and redesign market products, and all stakeholders have to be on board with proposed changes.

Federal support for storage is growing strong

Despite these formidable challenges, the good news is storage will benefit from new funding and several federal initiatives that will develop projects and programs that advance energy storage and its role in a clean energy transition.

First, the Infrastructure Investment and Jobs Act President Biden signed last year will provide more than $6 billion for demonstration projects and supply chain development, and more than $14 billion for grid improvement that includes storage as an option. The law also requires the Department of Energy (DOE) and the EIA to improve storage reporting, analysis and data, which will increase public awareness of the value of storage. And even more support will be on its way now that President Biden has signed the historic Inflation Reduction Act into law.

Second, the DOE is working to advance storage solutions. The Energy Storage Grand Challenge, which the agency established in 2020, will speed up research, development, manufacturing and deployment of storage technologies by focusing on reducing costs for applications with significant growth potential. These include storage to support grids powered by renewables, as well as storage to support remote communities. It sets a goal for the United States to become a global leader in energy storage by 2030 by focusing on scaling domestic storage technology capabilities to meet growing global demand.

Dedicated actions to deliver this long-term vision include the Long Duration Storage Shot, part of the DOE’s Energy Earthshots Initiative. This initiative focuses on systems that deliver more than 10 hours of storage and aims to reduce the lifecycle costs by 90 percent in one decade.

Third, national labs are driving technology development and much-needed technical assistance, including a focus on social equity. The Pacific Northwest National Laboratory in Richland, Washington, runs the Energy Storage for Social Equity Initiative, which aligns in many respects with the Union of Concerned Scientist’s (UCS) equitable energy storage principles. The lab’s goal is to support energy storage projects in disadvantaged communities that have unreliable energy supplies. This initiative is currently supporting 14 urban, rural and tribal communities across the country to close any technical gaps that may exist as well as support applications for funding. It will provide each community with support tailored to their needs, including identifying metrics to define such local priorities as affordability, resilience and environmental impact, and will broaden community understanding of the relationship between a local electricity system and equity.

Fourth, the Federal Energy Regulatory Commission (FERC) is nudging RTOs to adjust their rules to enable storage technologies to interconnect faster as well as participate fairly and maximize their energy and grid support services. These nudges are coming in the form of FERC orders, which are just the beginning. Implementing the changes dictated by those orders is crucial, but often slow.

States support storage development, too

Significant progress to support energy storage is also happening at the state level.

In Michigan, for example, the Public Service Commission is supporting storage technologies and has issued an order for utilities to submit pilot proposals. My colleagues and I at UCS and other clean energy organizations are making sure these pilots are well-designed and benefit ratepayers.

Thanks to the 2021 Climate and Equitable Jobs Act, Illinois supports utility-scale pilot programs that combine solar and storage. The law also includes regulatory support for a transition from coal to solar by requiring the Illinois Power Agency to procure renewable energy credits from locations that previously generated power from coal, with eligible projects including storage. It also requires the Illinois Commerce Commission to hold a series of workshops on storage to explore policies and programs that support energy storage deployment. The commission’s May 2022 report stresses the role of pilots in advancing energy storage and understanding its benefits.

So far, California has more installed battery storage than any other state. Building on this track record, California is moving ahead and diversifying its storage technology portfolio. In 2021, the California Public Utilities Commission ordered 1 GW of long-duration storage to come online by 2026. To support this goal, California’s 2022–2023 fiscal budget includes $380 million for the California Energy Commission to support long-duration storage technologies. In the long run, California plans to add about 15 GW of energy storage by 2032.

To accelerate their transition to clean energy, other states can look at these examples to help shape their own path for energy storage. Illinois’ 2021 law especially provides a realistic blueprint for other Midwestern states to tackle climate change and deliver a carbon-free energy future.

Energy storage is here, so let’s make it work

Storage will enable the growth of renewables and, in turn, lead to a sustainable energy future. And, as I have pointed out, there has been significant progress, and the future looks promising. Federal initiatives are already helping to advance storage technologies, reduce their costs, and get them deployed. Similarly, some states are supporting this momentum.

That said, more work will be needed to remove the barriers I described above, and for that to happen, the to-do list is clear. The battery industry needs to develop responsible, sustainable supply chains, FERC needs to revamp interconnection rules to support faster deployment, and regional grid operators need to reform energy markets so storage adds value to a clean grid. My colleagues and I at UCS are working to ensure all that happens.

Energy storage industry hails ‘transformational’ Inflation Reduction Act

By Andy Colthorpe
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US President Joe Biden signed the Inflation Reduction Act yesterday, bringing with it tax incentives and other measures widely expected to significantly boost prospects for energy storage deployment.

“The Inflation Reduction Act invests US$369 billion to take the most aggressive action ever — ever, ever, ever — in confronting the climate crisis and strengthening our economic — our energy security,” Biden said.

The legislation was readied for Biden’s signature at a speed which took many by surprise, from the announcement of compromises being reached by West Virginia Senator Joe Manchin and Senate Majority Leader Chuck Schumer at the end of July, to its quick passing in the Senate and then the House of Representatives in just over a fortnight.

Its investment in energy security and climate change mitigation targets a 40% reduction in greenhouse gas (GHG) levels by 2030, supporting electric vehicles (EVs), energy efficiency and building electrification, wind, solar PV, green hydrogen, battery storage and other technologies.

Most directly relevant to the downstream energy storage industry is the introduction of an investment tax credit (ITC) for standalone energy storage. That can lower the capital cost of equipment by about 30%, although under some prevailing conditions it will be more or less, depending on, for example, use of local unionised labour.

It also unties developers from pursuing a disproportionately high percentage of solar-plus-storage hybrid projects, since prior to the act, batteries were eligible for the ITC, but only if they charged directly from the solar for at least 70% of every year in operation. The industry has campaigned for the standalone ITC for many years.

For the upstream battery and energy storage system value chains, there are also tax incentives for siting production within the US, as there are for wind and solar PV equipment manufacturers that source components or make their products domestically.

There are also 10-year extensions to existing wind and solar ITCs along with new or extended clean energy production tax credits (PTCs) and the ITC for solar goes up from 26% to 30%, while the standalone storage ITC will also be in place for the next decade.

There are also provisions that community solar installations where at least 50% of customers live in low to moderate income communities can prevail of an extra 20% ITC, and an extra 10% ITC for projects built with at least 40% domestic content, rising to a 55% threshold in 2027.

Interconnection costs are also included in ITC-eligible project costs.

Incentives will scale down by small increments every couple of years but could be further extended if targeted emissions reductions are not achieved in that timeframe.

As might be expected, many companies and commentators across the industry had plenty to say on the act becoming law with the stroke of Biden’s pen. Here are a few of their comments:

American Clean Power Association

National trade association representing clean energy companies, since last year merged with the national Energy Storage Association

“This does for climate change and clean energy what the creation of Social Security did for America’s senior citizens. This law will put millions more Americans to work, ensure clean, renewable and reliable domestic energy is powering every American home, and save American consumers money.   

For our industry, it’s the starting gun for a period of regulatory certainty which will triple the size of the US clean energy industry and generate over US$900 billion in economic activity through construction of new clean energy projects,” Heather Zichal, CEO.

Stem Inc

Provider of standalone storage and solar-plus-storage solutions to behind-the-meter commercial and industrial (C&I) and distributed front-of-meter market segments

“…we view the investments in clean energy within the Inflation Reduction Act as transformational for our country, the energy industry, and our company as we continue to accelerate the clean energy transition.

For customers deploying energy storage and solar, the most significant parts of the bill are tax credits for clean electricity investment and production. We anticipate that these incentives will increase investment certainty and make adoption more affordable in existing and new energy markets,” John Carrington, CEO

LDES Council

Trade association representing technology providers and large end-users for long-duration energy storage (LDES)

“The passing of the landmark Inflation Reduction Act is a critical win for long-duration energy storage technologies. This historical act enables energy storage to accelerate to the scale we need by levelling the playing field for all types of storage. LDES improves grid reliability, resiliency, and flexibility around renewable energy sources like wind and solar, and has the ability to standalone [sic] and contribute increased stability to the grid,” Julia Souder, executive director.

Stryten Energy

US-based provider of vanadium redox flow battery (VRFB) solutions

“Stryten Energy welcomes this legislation’s long-term, standalone energy storage investment tax credits and its ten-year runway, which will help our customers incorporate medium and long-duration energy storage such as VFRB batteries into their operations more economically than before.

Leveraging domestic VFRB technology and other long-term energy storage solutions will enable reliable access to clean power and help the U.S. achieve energy security as it transitions to a clean energy economy,” Tim Vargo, CEO.

KORE Power

Manufacturer of battery cells, racks and complete systems, serving the energy storage system (ESS) and electric mobility infrastructure sectors

“The clean energy provisions in the Act prioritise scaling the domestic clean energy ecosystem, renewing our focus on raw material production and manufacturing, and catalysing the maturation of the nation’s domestic supply chain. It will position domestic suppliers to meet the demands of decarbonisation in the energy and transportation sectors.

As a lithium-ion battery cell manufacturer building a gigafactory outside Phoenix, we look forward to accelerating the growth of an end-to-end battery supply chain by delivering American IP built by American workers with recyclable North American materials to power e-mobility and energy storage solutions.

As a partner to suppliers, end users, and recyclers, we are most excited that the Act will expand access to the jobs needed to realize these goals and will rapidly expand the benefits that modern electrification and energy storage offer our economy, our customers and communities,” Lyndsay Gorrill, CEO.

International Zinc Association

Trade association representing zinc production and related companies, including a subsidiary trade group, Zinc Battery Initiative

“The International Zinc Association (IZA) applauds the passage of the Inflation Reduction Act of 2022 for bringing critical focus and funding to the cleantech space. This unprecedented climate legislation will promote the production of critical minerals required for batteries as well as the manufacture and purchase of energy storage, such as rechargeable zinc batteries. IZA members are proud to provide safe, sustainable options for the energy storage industries, an essential part of the clean energy transition,” Andrew Green, executive director.

Center for Sustainable Energy

National clean energy non-profit group

“These tax credits and incentives will spur increased manufacturing and adoption of clean technologies by all Americans, including people with low and moderate incomes and communities that have borne the brunt of pollution. We’re investing in climate solutions – including energy-efficient, all-electric homes; rooftop solar; energy storage; and electric vehicles,” Lawrence Goldenhersh, president.

Howden

Provider of mission-critical air and gas handling products

“The very generous tax credits, up to US$3/kg for 10 years, will make the renewable H2 produced in the US the cheapest form of hydrogen in the world.

“There is no doubt that this step will accelerate progress in the global hydrogen market, and more and more countries and organisations will now start speeding up their plans to become major players in this growing sector,” Salah Mahdy, global director of renewable hydrogen.

No doubt, there will be much more to follow on this topic…

How cities can fight climate change

Urban activities — think construction, transportation, heating, cooling and more — are major sources of greenhouse-gas emissions. Today, a growing number of cities are striving to slash their emission to net zero — here’s what they need to do.

By: Deepa Padmanaban
View the original article here

Global temperatures are on the rise — up by 1.1 degrees Celsius since the preindustrial era and expected to continue inching higher — with dire consequences for people and wildlife such as intense floods, cyclones and heat waves. To curb disaster, experts urge restricting temperature rise to 1.5 degrees, which would mean cutting greenhouse gas emissions, by 2050, to net zero — when the amount of greenhouse gases emitted into the atmosphere equals the amount that’s removed.

More than 800 cities around the world, from Mumbai to Denver, have pledged to halve their carbon emissions by 2030 and to reach net zero by 2050. These are crucial contributions, because cities are responsible for 71 percent to 76 percent of global carbon dioxide emissions due to buildings, transportation, heating, cooling and more. And the proportion of people living in cities is projected to increase, such that an estimated 68 percent of the world’s population will be city dwellers by 2050. 

“Urban areas play a vital role in climate change mitigation due to the long lifespans of buildings and transportation infrastructures,” write the authors of a 2021 article on net-zero cities in the Annual Review of Environment and Resources. Are cities built densely, or do they sprawl? Do citizens drive everywhere in private cars, or do they use efficient, green public transportation? How do they heat their homes or cook their food? Such factors profoundly affect a city’s carbon emissions, says review coauthor Anu Ramaswami, a professor of civil and environmental engineering and India studies at Princeton University.

Ramaswami has decades of experience in the area of urban infrastructure — buildings, transport, energy, water, waste management and green infrastructure — and has helped cities in the United States, China and India plan for urban sustainability. For cities to get to net zero, she tells Knowable, the changes must touch myriad aspects of city life. This conversation has been edited for length and clarity. 

Why are the efforts of cities important? What part do they play in emissions reductions?

Cities are where the majority of the population lives. Also, 90 percent of global GDP (gross domestic product) is generated in urban areas. All the essential infrastructure needed for a human settlement — energy, transport, water, shelter, food, construction materials, green and public spaces, waste management — come together in urban areas.

So there’s an opportunity to transform these systems. 

You can think about getting to net zero from a supply-side perspective — using renewable, or green, energy for power supply and transport — which is what I think dominates the conversation. But to get to net zero, you need to also shape the demand, or consumption, side: reduce the demand for energy. But we haven’t done enough research to understand what policies and urban designs help reduce demand in cities. Most national plans focus largely on the supply side.

You also need to devise ways to create carbon sinks: that is, remove carbon from the atmosphere to help offset the greenhouse gas emissions from burning fossil fuels.

These three — renewable energy supply, demand reduction through efficient urban design and lifestyle changes, and carbon sinks — are the broad strategies to get to net zero. 

How can a city tackle demand? 

Reducing demand for energy can be through efficiency — using less energy for the same services. This can be done through better land-use planning, and through behavior and lifestyle changes. 

Transportation is a great example. So much energy is spent in moving people, and most of that personal mobility happens in cities. But better urban planning can reduce vehicle travel substantially. Mitigating sprawl is one of the biggest ways to reduce demand for travel and thus reduce travel emissions. In India, for example, Ahmedabad has planned better to reduce urban sprawl, compared to Bangalore, where sprawl is huge. 

Well-designed, dynamic ride sharing, like the Uber and Lyft pools in the US, can reduce total vehicle miles by 20 or 30 percent, but you need the right policies to prevent empty vehicles from driving around and waiting to pick up people, which can actually increase travel. These are big reductions on the demand side. And then you add public transit and walkable neighborhoods.

Electrification of transportation — the supply side — is important. But if you only think about vehicle electrification, you’re missing the opportunity of efficiency. 

Your review talks about the need to move to electric heating and cooking. Why is that important? 

There’s a lot of emphasis on increasing efficiency of devices and systems to reduce these big sources of energy use, and thus emissions — heating, transport and cooking. But to get to net zero, you also have to change the way you provide heating, transport and cooking. And in most cities, heating and cooking involve the direct use of fossil fuels.

For example, house heating is a big thing in cold climates. Right now, we use natural gas or fuel oil for heating in the US, which is a problem because they are fossil fuels that release greenhouse gases when they are burned. With many electric utilities pledging to reduce the emissions form power generation to near-zero, cities could electrify heating so that the heating system is free of greenhouse gas emissions.

Cooking is another one. Some cities in the US, like New York City and others in California, have adopted policies that restrict natural gas infrastructure for cooking in new public buildings and neighborhood developments, thereby promoting electric cooking. Electrifying cooking enables it to be carbon-emissions-free if the source of the electricity is net zero-emitting.

Many strategies require behavior change from citizens and public and private sectors — such as moving from gasoline-powered vehicles to lower-emission vehicles and public transport. How can cities encourage such behaviors? 

Cities can offer free parking for electric vehicles. For venues that are very popular, they’ll offer electric vehicle charging, and parking right up front. But more than private vehicles, cities have leverage on public vehicles and taxi fleets. Many cities are focusing on changing their buses to electric. In Australia, Canberra is on track to convert their entire public transit fleet to electric buses. That makes people aware, because the lack of noise and lack of pollution is very noticeable, and beneficial.

The Indian government is also offering subsidies for electric scooters. And some cities across the world are allowing green taxis to go to the head of the line. Another incentive is subsidies: The US was offering tax credits for buying electric cars, for example, and some companies subsidize car-pooling, walking or transit. At Princeton, if I don’t drive to campus, I get some money back. 

The main thing is to reduce private motorized mobility, get buses to be electric and nudge people into active mobility — walking, biking — or public transit. 

How well are cities tackling the move to net zero? 

Cities are making plans in readiness. In New York City, as I mentioned, newly built public housing will have electric cooking and many cities in California have adopted similar policies for electric cooking.

In terms of mobility, California has among the world’s largest electric vehicle ownership. In India, Ola, a cab company similar to Uber, has made a pledge to electrify its fleet. The Indian government has set targets for electrifying its vehicle sector, but then cities have to think about where to put charging stations.

A lot of cities have been doing low carbon transitions, with mixed success. Low carbon means reducing carbon by 10 to 20 percent. Most of them focus entirely on efficiency and energy conservation and will rely on the grid decarbonizing, but that’s just not fast enough to get you to net zero by 2050. I showed in one of my papers that even in the best case, cities would reduce carbon emissions by about 1 percent per year. Which isn’t bad, but in 45 years, you get about a 45 percent reduction, and you need 80-plus percent to get to net zero. That means eliminating gas/fossil fuel use in mobility, heating and cooking, and creating construction materials that either do not emit carbon during manufacturing or might even absorb or store carbon.

That’s the systemic change that is going to contribute to getting to net zero, which we define in our Annual Review of Environment and Resources paper as at least 80 percent reduction. The remaining 20 percent could be saved through strategies to capture and store carbon dioxide from the air, such as through tree-planting, although the long-term persistence of the trees is highly uncertain.

Are there notable case studies of cities you could discuss? 

Denver has been covering the most sectors. Some cities cover only transportation and energy use in buildings, but Denver really quantified additional sectors. They even measured the energy that goes into creating construction materials, which is another thing the net zero community needs to think about. Net zero is not only about what goes on inside your city. It is also about the carbon embodied in materials that you bring into your city and what you export from your city. 

Denver was keeping track of how much cement was being used, how much carbon dioxide was needed to produce that cement, called embodied carbon; what emissions were coming from cars, trucks, SUVs and energy use in buildings. They measured all of this before they did any interventions.

The city has also done a great job of transitioning from low-carbon goals (for example, a 10 percent reduction in a five-year span) to deep decarbonization goals of reducing emissions by 80 percent by 2050. During their first phase of low-carbon planning back in 2010, they counted the impact of various actions in each of these sectors to reduce greenhouse gas emissions by 10 percent below 1990 baselines, through building efficiency measures, energy efficiency and promotion of transit, and were successful in meeting their early goals.

Denver is also a very good example of how to keep track of interventions and show that it met its goals. If the city did an energy efficiency campaign, it kept track of how many houses were reached, and what sort of mitigation happened as a result.

But they realized that they’re never going to get down to net zero because, while efficiency and conservation reduce gas use for heating and gasoline use for travel, it cannot get them to be zero. So in 2018, they decided that they’re now going to do more systemic changes to try to reduce emissions by 80 percent by 2050, and monitor them the same way. This includes systemic shifts to heating via electric heat pumps and shifting to electric cars as the electric grid also decarbonizes.

So it’s counting activities again: How many electric vehicles are there? How many heat pumps are you putting into the houses that can be driven by electricity rather than by burning gas? How many people adopt these measures? What’s the impact of adoption? 

What you’re saying is that this accounting before and after an intervention is put in place is very important. Is it very challenging for cities to do this kind of accounting? 

It’s like an institutional habit — like going to the doctor for a checkup every two years or something. Someone in the city has to be charged with doing the counting, and so many times, I think it just falls off the radar. That was what was nice about Denver — and we worked with them, gave them a spreadsheet to track all these activities. 

Though very few cities have done before and after, Denver is not the only one. There are 15 other cities showcased by ICLEI, an organization that works with cities to transition to green energy.

I have worked with ICLEI-USA to develop protocols on how to report and measure carbon emissions. One of the key questions is: What sectors are we tracking and decarbonizing? As I mentioned at the start, most cities agree with tackling energy use in transportation and building operations, and greenhouse emissions from waste management and wastewater. ICLEI has been a leader in developing accounting protocols, but cities and researchers are realizing that cities can do more to address construction materials — for example, influencing choice between cement and timber, which may even store carbon in cities over the long term.

I serve on ICLEI-USA’s advisory committee for updating city carbon emission measurement protocols, and I recommend that cities also consider carbon embodied in construction materials and food, so that they can take action on these sectors as well.

But we don’t have the right tools yet to quantify all the major sectors and all the pathways to net zero that a city can contribute to. That’s the next step in research: ways to quantify all those things, for a city. We are developing those tools in a zero-carbon calculator for cities. 

Floating Cities May Be One Answer to Rising Sea Levels

An idea that was once a fantasy is making progress in Busan, South Korea. The challenge will be to design settlements that are autonomous and sustainable.

Part of the prototype for the Oceanix floating city.Photographer: Oceanix/BIG-Bjarke Ingels Group

By: Adam Minter
View the original article here

Thanks to climate change, sea levels are lapping up against coastal cities and communities. In an ideal world, efforts would have already been made to slow or stop the impact. The reality is that climate mitigation remains difficult, and the 40% of humanity living within 60 miles of a coast will eventually need to adapt.

One option is to move inland. A less obvious option is to move offshore, onto a floating city.

It sounds like a fantasy, but it could real, later if not sooner. Last year, Busan, South Korea’s second-largest city, signed on to host a prototype for the world’s first floating city. In April, Oceanix Inc., the company leading the project, unveiled a blueprint.

It sounds like a fantasy, but it could real, later if not sooner. Last year, Busan, South Korea’s second-largest city, signed on to host a prototype for the world’s first floating city. In April, Oceanix Inc., the company leading the project, unveiled a blueprint.

Representatives of SAMOO Architects & Engineers Co., one of the floating city’s designers and a subsidiary of the gigantic Samsung Electronics Co., estimate that construction could start in a “year or two,” though they concede the schedule might be aggressive. “It’s inevitable,” Itai Madamombe, co-founder of Oceanix, told me over tea in Busan. “We will get to a point one day where a lot of people are living on water.”

If she’s right, the suite of technologies being developed for Oceanix Busan, as the floating city is known, will serve as the foundation for an entirely new and sustainable industry devoted to coastal climate adaptation. Busan, one of the world’s great maritime hubs, is betting she’s right.

A Prototype for Atlantis

Humans have dreamed of floating cities for millenniums. Plato wrote of Atlantis; Kevin Costner made Waterworld. In the real world, efforts to build on water date back centuries.

The Uru people in Peru have long built and lived upon floating islands in Lake Titicaca. In Amsterdam, a city in which houseboats have a centuries-long presence, a handful of sustainably minded residents live on Schoonschip, a small floating neighborhood, completed in 2020.

Madamombe began thinking about floating cities after she left her role as a senior adviser to then-UN Secretary General Ban Ki-Moon. The New York-based native of Zimbabwe had worked in a variety of UN roles over more than a decade, including a senior position overseeing partnerships to advance the UN’s Sustainable Development Goals. After leaving, she maintained a strong interest in climate change and the risks of sea-level rise.

Her co-founder at Oceanix, Marc Collins, an engineer and former tourism minister for French Polynesia, had been looking at floating infrastructure to mitigate sea-level risks for coastal areas like Tahiti. An autonomous floating-city industry seemed like a good way to tackle those issues. Oceanix was founded in 2018.

As we sit across the street from the lapping waves of Busan’s Gwangalli Beach, Madamombe concedes that they didn’t really have a business plan. But they did have her expertise in putting together complex, multi-stakeholder projects at the UN.

In 2019, Oceanix co-convened a roundtable on floating cities with the United Nations Human Settlements Program — or UN-Habitat — the Massachusetts Institute of Technology Center for Ocean Engineering and the renowned architectural firm Bjarke Ingels Group (better known as BIG). “The UN said there’s this new industry that’s coming up, it’s interesting,” Madamombe said. “They wanted to be able to shape the direction that it took and to have it anchored in sustainability.”

At the Oceanix roundtable, BIG unveiled a futuristic, autonomous floating city composed of clusters of connected, floating platforms designed to generate their own energy and food, recycle their own wastes, assist in the regeneration of marine life like corals, and house thousands.

The plan was conceptual, but the meeting concluded with an agreement between the attending parties, including UN-Habitat: Build a prototype with a collaborating host government. Meanwhile, Oceanix attracted early financial backers, including the venture firm Prime Movers Lab LLC.

Busan, home of the world’s sixth-busiest port, and a global logistics and shipbuilding hub, quickly emerged as a logical partner and location for the city. “The marine engineering capability is incredible,” Madamombe tells me. “Endless companies building ships, naval architecture. We want to work with the local talent.”

Busan’s mayor, Park Heong-joon, who is interested in promoting Busan as a hub for maritime innovation, shared the enthusiasm and embraced the politically risky project as he headed into an election. An updated prototype was unveiled at the UN in April 2022.

Concrete Platforms, Moored to the Seafloor 

The offices of SAMOO, the Korean design firm that serves as a local lead on Oceanix Busan, are located high above Seoul. On a recent Monday morning, I met with three members of the team that’s worked closely with BIG, as well as local design, engineering and construction firms, to bring the floating city to life.

Subsidiaries of Samsung don’t take on projects that can’t be completed, and SAMOO wants me to understand that they’re convinced this project is doable. They also want me to understand that it’s important.

“Frankly, it’s not the floating-city concept we were interested in, but the fact that it’s sustainable,” says Alex Sangwoo Hahn, a senior architect on the project.

Floating infrastructure is nothing new in Korea. Sebitseom, a cluster of three floating islands in Seoul’s Han River, were completed in 2009 and are home to an event center, restaurants and other recreational facilities.

But they are not autonomous or sustainable, and they were not built to house thousands of people safely. Built from steel, they are likely to last years. But corrosion and maintenance will eventually be an issue.

Oceanix Busan must be more durable and stable. Current plans place it atop three five-acre concrete platforms that are moored to the seafloor, with an expected life span of 80 years. The platforms will be 10 meters deep, with only two meters poking above the surface. Within the platforms will be a vast space designed to hold everything from batteries to waste-management systems to mechanical equipment.

That’s a lot of space, but the design and engineering teams are learning that there’s never enough room to do everything. For example, indoor farming — an aspiration at Oceanix — requires large amounts of energy that must be devoted to other goals.

Dr. Sung Min Yang, the project manager on Oceanix Busan and an associate principal at SAMOO, acknowledges that — for now — the floating city won’t meet all its aspirations. “We hoped to be net positive with energy, we would recycle everything and not have any waste going out,” he says. “Now we are striving for net zero, but we are also looking at a backup connection to the mainland for electricity and wastewater.

Madamombe, who spends much of her time working out differences between the various teams involved in the project, isn’t bothered that some of the initial vision must be reined in. She recounts a piece of advice she received from advisers from the MIT Center for Ocean Engineering: “Don’t try to prove everything.” She shrugs. “If we grow 50% of our food and bring 50% in, will it be a great success?” she asks. “Yes, it would be. It’s a city!”

That wouldn’t be the only success. Creating three massive floating concrete platforms that can safely support multi-story buildings while recycling the wastes of residents (including water) would be a major technological advance, and one that Oceanix says that it — and its partners — can pull off, and profitably market. In time, the technologies will improve, becoming more autonomous and sustainable, in line with Oceanix’s earliest aspirations.

But first a prototype must be built. SAMOO estimates that constructing the first floating platforms will require two to three years as the contractors and engineers work out the techniques. Even under the best of circumstances, construction won’t start until next year at the earliest, putting completion — aggressively — mid-decade.

Costs are also daunting. Estimates for this first phase of Oceanix Busan range as high as $200 million and — so far — that funding hasn’t been secured. That will require private fundraising, including in Korea.

Madamombe says Busan will “help raise money by backing the project and making introductions,” not by contributions. But the slow ramp-up isn’t dissuading anyone. According to SAMOO, multiple Korean shipbuilding companies are interested in the project.

An aerial view of the design. 
Photographer: Oceanix/BIG-Bjarke Ingels Group

It’s a Start

Visionaries have long dreamed of floating cities that are politically autonomous, as well as resource autonomous. One day, that dream might be achieved. But for now, Oceanix is about developing technologies that help coastal communities adapt to climate change and persist as communities.

To do that, Oceanix Busan will be directly connected to Busan by a roughly 260-foot bridge. Rather than function as an autonomous city, it will instead function as a kind of neighborhood under the full administrative jurisdiction of Busan city hall.

Of course, three platforms and 12,000 planned residents and visitors won’t be enough to save Busan from climate change. Neither will the additional platforms that Oceanix hopes to see built and connected to the first three in coming years.

But it’s a start that can serve as a model and inspiration for other communities hoping to adapt to sea-level changes, rather than just respond to them. After all, disaster assistance and sea walls are expensive and require intensive planning, too.

Long term, humanity will need to learn to live with rising sea levels. Floating cities will be one way for coastal communities to do it.

Lightyear 0 Is a Solar-Powered Car You Can Drive for Months Without a Charge

The company claims it is the “world’s first production-ready solar car.”

By Marc Carter
View the original article here

Lightyear

Over the past few years, several startups have released one-off solar-powered concept vehicles, but up until now, we have yet to receive a mass-produced solar-powered car. It looks like that will change soon with the introduction of the Lightyear 0—an electric sedan that gets its power from the sun.

Lightyear is a Dutch startup that has an ambitious goal to start production of the Lightyear 0 this fall with the first deliveries starting in November. The Lightyear 0 features 5 square meters of double-curved solar arrays that can charge the electric vehicle while it’s driving or parked outdoors. The solar panels can add up to 43 miles (70 kilometers) of range a day in addition to its estimated 388 miles (625 kilometers) on Europe’s WLTP cycle. 

This means drivers can literally drive for months without having to use an outlet or public charger. Lightyear estimates people who drive an average daily commute of about 22 miles, could go up to seven months between charges. Lightyear estimates the solar panels can add up to 6,835 miles (11,000 kilometers) of range per year.

“Today is the day we’ve all been waiting for since us five co-founders sat in a kitchen sketching out our dream of building the most sustainable car on the planet,” says Lightyear co-founder and CEO Lex Hoefsloot. “In 2016, we only had an idea; three years later, we had a prototype. Now, after six years of testing, iterating, (re)designing, and countless obstacles, Lightyear 0 is proof that the impossible is actually possible.”

In addition to its groundbreaking solar panels, the Lightyear 0 also stands out from current EVs with its four in-wheel motors. The electric motors generate a combined 174 horsepower and 1,269 pound-feet of torque, which can accelerate the Lightyear 0 from 0-62 mph in 10 seconds and a top speed of 100 mph.

With an energy use of 10.5 kWh per 62 miles (100 kilometers), Lightyear says it is the most efficient electric vehicle and its drag coefficient of less than 0.19 makes it the most aerodynamic family car yet. Although the Lightyear 0 is more than 16.4 feet long, it only weighs 3,472 pounds.

Inside the Lightyear 0 focuses on sustainability and minimalism with naturally-sourced and vegan materials, like microfiber suede seats and rattan palm detailing. Its interior also features a 10.1-inch touchscreen infotainment system that runs the Android Auto operating system.

Hoefsloot said in a statement that the Lightyear 0 is unique from electric vehicles: “Electric cars are a step in the right direction, but they have a scaling problem. By 2030, we can expect 84 million electric vehicles (EVs) on roads in Europe alone. There’s no hiding from it, access to charging stations will not keep up with the demand for electric cars. To minimize plug-charging and maximize range, the industry’s strategy, so far, has been to add batteries. That increases the carbon footprint of production and, in turn, boosts weight and the need for high-power charging stations. Our strategy flips that approach. Lightyear 0 delivers more range with less battery, reducing weight and CO₂ emissions per vehicle.”

The company only plans to build 946 Lightyear 0 vehicles a year. It hasn’t announced the market distribution.

The Lightyear 0 is definitely not cheap with a starting price of €250,000 ($263,243 USD), which means accessibility will be a barrier to entry for most consumers. The good news is the company is also working on a second model that will better appeal to the mass market with its €30,000 ($31,589 USD) starting price. Production of its second EV will begin in late 2024 or early 2025.

There’s still much to be seen with the Lightyear 0. While the most sustainable way to view car ownership is to not own a car, the reality is many people need vehicles in their day-to-day lives and Lightyear’s concepts spotlight innovation in the car space.

4 ways U.S. cities are accelerating the switch to electric vehicles

By Bloomberg Cities Network
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As gas prices surge past $5 a gallon and the global climate crisis deepens, city leaders stand on the front lines of America’s transition to more sustainable and affordable transportation options. 

Cities are taking bold steps to accelerate the changeover to electric vehicles (EVs), using their purchasing power to prime new markets for electrified cars, trucks, buses, and bikes, and making it easier for residents to make the switch. Leading the way are 25 cities who received support and resources from Bloomberg Philanthropies’ network of partners while participating in the American Cities Climate Challenge.

Mayors in these cities increasingly see transforming transportation as critical to delivering results for residents when it comes to sustainability, equity, and public health. The transportation sector is the single largest source of carbon emissions in the United States. It’s also a driver of air pollution and respiratory conditions such as asthma that disproportionately impact people of color and low-income households. On both fronts, electric vehicles offer benefits over models that run on fossil fuels.

“We can’t afford to wait for someone else to take the kind of bold action on climate change we need to protect our community,” Albuquerque, N.M., Mayor Tim Keller said while announcing his city’s first purchase of EVs for the municipal fleet. “Any realistic effort to fight climate change has to include steps to reduce the impact of vehicles on our air quality and public health…and the time has come to turn the page on gas-powered cars and trucks.”

With billions of federal infrastructure dollars available to supercharge this transition, local leaders will have an even bigger role to play in the years ahead. Cities that want help navigating federal infrastructure funding opportunities can sign up for supports through the Local Infrastructure Hub, a new initiative of Bloomberg Philanthropies and its partners.

Here are four ways that the 25 cities that participated in the American Cities Climate Challenge  are driving innovation with electric vehicles—using data, resident engagement, and collaboration to make a lasting impact. 

1. Establishing community car sharing programs and charging stations

Car-sharing programs have already shown that they can save participating households thousands of dollars and take cars off the street.  Now, cities are electrifying these car-sharing programs, expanding access to both EVs and places to charge them, particularly for traditionally underserved communities. 

St. Paul, Minn., for example, launched the largest publicly owned, renewably powered, electric car-sharing program in the nation, Evie Carshare, with 100 EVs currently operating and plans to grow the fleet to 173. Equitable access was a major factor in determining the pricing structure and charging locations. The program design was informed by a prototyping process with residents and, to make it affordable to all, Evie Carshare includes a discounted membership rate for people with low incomes. Car-share locations also include spots where anyone with an EV can charge up, effectively boosting the number of public EV charging ports in the city by 70 percent. 

An Evie carshare and charging station. (Photo courtesy of St. Paul, Minn.)

Similarly, Boston partnered with E4TheFuture and the Massachusetts Clean Energy Center for the launch of the EV car sharing program Good2Go. It’s an income-tiered service with a focus on equity that enables qualifying residents to pay as little as $5 per hour to use a vehicle. Meanwhile, St. Louis is piloting a program for social services agencies to share EVs in order to shuttle seniors to medical appointments and to deliver meals. The agencies are seeing savings in reduced fuel costs, freeing up resources for other services.

2. Electrifying municipal fleets

City leaders also are looking at their own fleets of vehicles as a big opportunity to reduce carbon emissions, cut fuel and maintenance expenses, and lead by example. Across the  American Cities Climate Challenge, 22 cities have already purchased more than 1,300 electric vehicles and have made plans to purchase dramatically more in the years ahead. 

St. Louis, for example, started by adding four new EVs to its municipal fleet, and plans to acquire at least eight more in the coming months. Each vehicle is labeled “Zero Emissions 100% Electric” with eye-catching green streaks on the side, to promote the change with residents. For the long term, an executive order requires city agencies to continue prioritizing the purchase of low- and no-emission vehicles to keep the municipal fleet transition going. 

Albuquerque has likewise committed to a 100-percent clean light-duty fleet, meaning that any eligible pickup truck and passenger vehicle purchased from now on will be an electric, hybrid, or alternative-fuel vehicle. Meanwhile, Boston added a new kind of vehicle to its municipal fleet: an electric-assist cargo tricycle. City leaders are testing it to see if employees would be willing to use the e-bike for work-related trips instead of a car or truck.

3. Electrifying public transit

City buses are a ripe target for electrification. Compared with existing diesel models, electric buses significantly reduce air pollution, make less noise, lower maintenance and operating expenses, and can deliver a more comfortable experience for passengers. 

Honolulu is looking to leverage all of those benefits as part of an effort to make public transit a more attractive option for residents. In addition to building its first dedicated bus lane since 1988, the city has incorporated 17 fully electric buses into its service routes. It’s also installed a charging system to support the process of transitioning 100 percent of the city’s bus fleet to fully electric by 2035. These zero-emission electric buses are not only providing cleaner transportation, but they are notably quieter, to the enjoyment of passengers and residents. 

The addition of the 1.3-mile bus lane in Honolulus’ busiest downtown corridor is help move more residents throughout the city. (Photo courtesy of Honolulu)

In Charlotte, N.C., the city council approved a groundbreaking approach to overcome initial hesitation about upfront costs of transitioning to electric buses. A pilot program enables the city to try out—and train staff on—18 electric buses and charging infrastructure from various manufacturers in order to collect data on what works. The program is an important first step in the city’s mission to reach net-zero emissions targets and has the potential to be a model for other cities.

4. Requiring new buildings to be ready for EV charging infrastructure

For EV owners, more than 80 percent of their vehicle charging occurs at home. But workplaces are also a popular place to charge. That’s why a number of cities are requiring newly constructed residential and commercial buildings to design-in the ability to scale up future EV charging infrastructure. Doing so up front adds less than 0.2 percent to construction costs, while sparing much higher costs associated with retrofitting buildings later.

Through its new EV Ready code, Orlando, Fla., is now requiring all new buildings and major remodel projects to integrate EV charging infrastructure. Specifically, the ordinance requires 20 percent of multi-family, hotel, and parking structure spaces and 10 percent of non-residential parking spaces to be EV-capable, which requires installing dedicated electrical capacity and conduit to parking spaces. By starting with community engagement workshops and then collaborating with developers and EV-industry stakeholders, city leaders garnered support needed to pass this ordinance, a major milestone in achieving its sustainability goal of reducing greenhouse-gas emissions 90 percent by 2040. Similar EV-readiness ordinances recently passed in Boston, Columbus, Ohio, Charlotte, St. Louis, and Pittsburgh.

ESG and Its Impact on the Real Estate Industry

By: Amy Menist
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Environmental, social and corporate governance (“ESG”) practices are becoming an increasingly significant topic for businesses and a vital investment criterion for real estate capital sources. Increases in the frequency and intensity of severe-weather-related events are forcing companies to assess property vulnerability and resiliency to proactively manage risk and mitigate the effects of climate change. A company’s corporate social responsibility is just as important because it draws attention to community outreach and talent development. Furthermore, with proper governance in place, management can implement and assess its policies, goals and reporting efforts for their ESG initiatives. Due to these compounding matters, real estate companies now have an increasing responsibility to perform climate-risk due diligence; assess its corporate social responsibility initiatives; and develop, implement and govern its ESG policies. As a result, investors and lenders are beginning to factor a company’s ESG policies into their decision-making processes because they want to ensure the business is developing sustainable plans to combat the effects of climate change; reduce costs; attract tenants; create ways to support the community; retain talent; and properly set, monitor and report on the company’s goals. What exactly is ESG, and how does it influence investor and lender decisions within the real estate sector?

Environment

The environmental aspect of ESG represents management’s responsibility to assess each property’s vulnerabilities, resilience and fortification with respect to its climate and to investigate the environmental impact of operating its properties. While reviewing or developing a building portfolio, it is crucial for management to perform an environmental analysis of each property to determine each building’s vulnerability and/or resistance to severe weather (e.g., hurricanes, flooding, extreme heat or cold, wildfires, tornadoes, blizzards) as well as to consider the environmental and community impacts associated with property development.

Using a variety of tools, management can establish and track key environmental factors associated with property development and operations, including the amount of energy used, the usage and/or possible contamination of water, the amount of waste generated and/or avoided in favor of recycling initiatives, and the building’s impact on air quality and the surrounding ecosystem. By evaluating a property’s environmental impacts, companies can be proactive about mitigating risk and assuring proper protocols are in place—not to mention saving money.

Management also should consider weather forecast predictions and climate migration trends in its analysis because climate change poses both physical and transitional risks that can have a substantial financial impact on a real estate business. As outlined in “Climate Risk and Real Estate Investment Decision-Making,” an article published by Urban Land Institute, “Physical risks, such as catastrophes, can lead to increased insurance premiums, higher capital expenditure and operational costs, and a decrease in the liquidity and value of buildings. Transitional risks—which center on the economic, political and societal responses to climate change—can see locations and even entire metropolitan areas become less appealing because of climate-change-related events, leading to the potential for individual assets to become obsolete.” Accordingly, climate migration presents a legitimate concern to real estate investors because climate relocation will lead to significant shifts in demand for real estate as individuals respond to environmental changes.

ESG initiatives are gaining significant attention among regulators and the Biden administration due to a rise in the necessity of, and public interest in, sustainability. In January 2022, the Biden administration launched a coalition of states and local governments to strengthen building performance standards. This partnership, consisting of 33 state and local governments, focuses on providing “cleaner, healthier and more affordable buildings.” The new commitments to design and implement more efficient building performance standards are intended to “accelerate progress toward reducing buildings emissions, advance climate action and environmental justice, create good-paying union jobs, lower energy bills for consumers, keep residents and workers safe from harmful pollution, and cut emissions from the building sector.” Property owners and operators must closely follow the developments of these governmental policies to stay current with their ESG initiatives.

Additionally, as part of the government’s initiative to strengthen building performance standards, the Department of Energy (“DOE”) and the Environmental Protection Agency (“EPA”) announced technical assistance opportunities to design, measure and manage local building-performance policies. For example, the “Biden-⁠Harris Administration Launches Coalition of States and Local Governments to Strengthen Building Performance Standards Whitehouse Statement” outlines the following:

  • The DOE will share best practices for state and local governments that are adopting building performance standards, including public- and private-sector financing options, and will also provide analytical support to examine how policies targeting emissions reductions in existing buildings can pave the way for minimum new-construction building energy codes.
  • There will be enhanced support from the EPA Climate Protection Partnerships Division. The EPA will support policy development and implementation, including through analysis and recommendations of metrics and best practice toolkits. The EPA will provide insight into current building energy use data as the foundation for jurisdiction-specific analysis and target setting and will enhance ENERGY STAR Portfolio Manager to provide new policy tracking and reporting capability and will assist jurisdictions in its use. The EPA will also provide new tools that calculate localized greenhouse gas emissions to inform reporting, compliance and assessment.

High-performing buildings are not only good for the environment, but they are also good for the bottom line. Although capital is needed to build or retro fit such properties, companies that invest in ESG initiatives often see a quick return because high-performing buildings attract higher occupancy rates, thereby generating more revenue and decreasing the amount spent on utilities, insurance premiums and repairs due to severe-weather-related events. Additionally, there are incentives available at both the federal and state levels that are issued to businesses to help make the initial investment more attractive. Businesses today should assess their building portfolios, evaluate their alignment with industry benchmarks and leading practices, evaluate future trends and possible policy changes, and identify gaps and opportunities. With a thorough understanding of the company’s current position, its plans and stakeholders’ expectations, management can prioritize goals and set efficient ESG targets.

Businesses can develop appropriate strategic ESG plans by using climate risk scorecards, performing property vulnerability and resilience assessments, mapping physical risk, and evaluating benchmarks established by organizations such as the Sustainability Accounting Standards Board, Global ESG Benchmark for Real Assets or ISO 14001, as well as state and local governmental regulations.

Social

Strong ESG policies and procedures can help build trust, attract and retain employees and tenants, and prevent costly mishaps while meeting community needs. Social initiatives, which are often assessed at the partnership and overall company level, represent the company’s corporate social responsibility. Today, the need for companies to evaluate their social actions is great because employees are demanding ESG services and better working conditions. These include demands for ensuring diversity, equity and inclusion throughout the business and governing board; developing ways to attract, retain and promote employees; and implementing an effective code of conduct. Additionally, businesses could further enhance their social responsibility by ensuring all employees have a safe and clean work environment, requiring all vendors and contractors to follow the company’s code of conduct, hiring contractors and vendors whose social responsibility is in line with their own social efforts, and assigning an internal resource dedicated to the ESG initiatives. Businesses today excel from the use of strong social responsibility practices because they incorporate diversity and inclusion, recruitment, talent development and mentorship programs, health and wellness, and create a conducive work environment for everyone throughout the company.

Tenants today are also considering companies’ ESG initiatives as a deciding factor for their tenancy because they want to rent high-performing spaces from a socially responsible company with strong ESG policies. Therefore, it is imperative that management evaluates its social responsibility with respect to the surrounding community. This could include a company publicly displaying its ESG policies, promoting its progress in sustainability efforts, and asking its tenants for feedback. Furthermore, tenants want affordable and accessible space, quality access to/from the property, and equal access to features and amenities within the community including good schools and shopping centers. By management taking into consideration tenants’ desires and opinions, it will help the business improve tenant attraction and retention and, thus, generate more rental income.

Governance

ESG is metrics-based with documented evidence. Consequently, it’s necessary that there are strong governing practices in place to help the company report and oversee its business performance, track progress, and strengthen data management and analytics. Management has a responsibility to implement the ESG policies and procedures as well as maintain and evaluate its progress and standards. Therefore, governing practices need to be in place to enable the company to perform due diligence and collect data and documentation to further improve planning efforts. Investors and lenders expect companies to track their environmental and sustainability metrics at the asset level and provide transparent reports that support the process for making meaningful and effective ESG plans. Through use of effective governing practices, management can perform decisive analytics, track progress, and create accurate and transparent reports on its corporate social responsibility and ESG efforts that showcase sustainability evidence to attract investors, lenders and tenants.

Companies often struggle with collecting data to support their ESG plans. However, data is in high demand because it enables companies to understand where change or innovation is needed. There are a variety of software and tools available that can help management efficiently document, track and assess its ESG progress. New emerging property technology (“proptech”) and proptech companies are designed to help streamline the gathering of data and aid in auditing and reporting for real estate. Using proptech, companies can review real-time data on energy usage, determine if environmental and sustainability opportunities exist, and quantify and standardize resource consumption to maintain safer and more valuable real estate. Through use of proper and effective governing practices, companies will develop a more efficient work environment backed by strong and accurate data, thus fostering a greater likelihood they will successfully achieve their ESG initiatives.

ESG and Investors

ESG is shaping and influencing real estate valuation and, therefore, gaining in importance among capital providers. Investors today use a variety of tools to determine future opportunities, and ESG policies are getting higher on their due diligence checklists. Although not a deciding factor, a business’s ESG plans can significantly impact an investor’s decisions. Through developments in technology and an increased transparency in reporting, investors now have more insight and want to know that businesses are forward looking and have sustainable business practices in place. By assessing a business’s ESG plans, investors can assess the risk versus the rewards as well as potential growth areas. Additionally, investors often believe the more proactive a company is with its ESG initiatives, the more attentive and responsive the company will be in mitigating risks. Accordingly, a strong ESG policy adds value to the investment because it attracts tenants, reduces operating costs and increases capital demand.

Debt and equity capital providers are incorporating the analysis of ESG and climate risk in their transaction due diligence. Recent floods, fires and extreme heat are forcing tenants (and their insurers) to assess property vulnerabilities. As confirmed in EisnerAmper’s article, “Commercial Real Estate 2022 Outlook: Fixing the Horizon to Navigate Through Change,” real estate companies should consider:

  • Hodes Weill’s 2021 Institutional Real Estate Allocations Monitor indicates that 49% of investors globally consider the ESG policies of the investee.
  • ULI’s 2022 Emerging Trends in Real Estate indicates that 82% of survey respondents consider ESG elements when making operational or investment decisions.
  • A recent report by JLL showed that office tenants are considering an owner’s ESG activities when selecting space, focusing particularly on building sustainability and efforts to create a healthy work environment, including quality air flow.
  • A Cushman & Wakefield study found that sellers are achieving 25% higher prices per square foot in Class A LEED-certified office buildings and 77% higher prices in Class B LEED-certified office buildings versus non-certified buildings.

Real estate companies and their management must develop a plan for prioritizing the implementation of ESG policies and initiatives because capital providers look for climate data and disclosures as well as resiliency, proactiveness and a property’s ability to attract tenants. Furthermore, as governmental policies are being implemented and net zero targets are set for 2050, capital providers need to know real estate companies are forward looking and performing due diligence to assess the impact of net zero goals on its assets to achieve new ESG standards. As a result of a growing trend and strong push for a decrease in the carbon footprint worldwide, there is an increase in investor demand for ESG policies that will significantly impact their decision-making process.

Most businesses today are looking to limit their impact on the environment by following real estate trends, moving away from fossil fuels, using renewable energy and developing net-carbon-zero real estate efforts. For property developers, this formidable endeavor includes management mapping out the ideal location using weather forecast predictions and climate migration trends, while also developing properties with the lowest emissions level possible and then offsetting the emissions created by finding ways to reduce and/or reuse waste and utilize renewable energy sources. Resilience is the key because it generates value. The initial investment will be repaid after these companies attract tenants and capital on the revenue side and reduce operating costs.

The need for socially responsible business practices will continue to grow because there are strong demand indicators for ESG and sustainability services. This, it is imperative that real estate companies continue to be forward looking and implement ESG initiatives to protect their assets. Effective ESG policies are directly correlated with stronger financial performance and better risk management because they provide companies the opportunity to mitigate risks and appease investors. Creating sustainable business practices, while preparing for implementation of future regulations, will help companies be environmentally conscious and socially responsible in conducting their day-to-day business, while simultaneously aide them in mitigating risks associated with climate change, improving relationships with investors and increasing overall long-term financial performance.

How urban transformation will be different in the 2020s

Social impact and decarbonization strategies will be the pillars of urban development projects in the coming years
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From revamping disused docklands to rejuvenating rundown neighbourhoods, cities are embarking on urban development projects that put health and sustainability at the heart of placemaking.

These mixed-use schemes increasingly focus on implementing features that support wellbeing, champion strong environmental credentials, build communities and promote equality and inclusion.

The redevelopment of the western edge of Dublin city center aims to bring the concept of the 15-minute city to life while Rotterdam’s M4H project will re-green the site surrounding a manufacturing hub, and add sport facilities, housing, hospitality and cultural space.

Such schemes show how thinking around what makes a successful city is shifting, says Jeremy Kelly, Lead Director, Global Cities Research at JLL.

“City governments are looking beyond traditional metrics like GDP and employment growth and are refocusing on harder-to-measure factors relating to liveability, opportunity and experience,” he explains.

“That has implications for real estate because city governments now expect the industry to deliver developments that have a positive social impact.”

Looking beyond the money

Many of today’s schemes draw from major urban projects of the previous decade – such as Hudson Yards in New York City and London’s King’s Cross.

“These were substantial projects that changed the spatial logic of a city, opening up new areas that were increasingly mixed-use, and cutting-edge when it came to responding to the demands of occupiers and well-off residents,” says Kelly.

One big difference is that urban transformation projects of the 2020s will positively impact surrounding communities, in part by addressing challenges to provide affordable housing.

“That’s where the shift is – thinking about the community impact,” says Kelly. “And for developments to boost or retain their value, they’ll need to be part of neighbourhoods that are also regenerating.”

Health is another key focus for today’s projects, tying into trends such wellness in the workplace and more active lifestyles.

Outdoor access, natural light and green areas – long shown to boost mental health – will be critical features for projects, along with easy access to leisure and healthcare amenities.

“Health and wellbeing concepts are foundational to today’s developments, whatever the size of the project,” says Walid Goudiard, Head of Project and Development Services at JLL. “It’s a matter of placemaking and curating the built environment to provide a healthy, positive experience whether in an office or residential setting.”

The McEwan in Edinburgh, for example, is the first European residential scheme to receive a Fitwel 3-start rating for its focus on health and wellbeing through landscaped gardens and neighbourhood amenities.

And there will be more to come. “The pandemic has accelerated that transition toward creating more human and sustainable places,” says Richa Walia, Director, Work Dynamics Research at JLL. “There’s a genuine desire among companies to act responsibly and their first priority is to create human-centric places.”


Sustainability for social good

Environmental concerns will equally guide urban development, as municipalities develop plans to hit net zero targets and more real estate companies report their environmental impact in line with globally recognized standards.

In Paris, the recently completed regeneration of Clichy-Batignolles is designed as an eco-quarter with low-energy building powered from geothermal and solar sources.

Biodiversity, too, will become a key pillar for transformation projects, with city authorities more likely to greenlight schemes with features such as green roofs, areas given over to rewilding and living walls. Many municipalities now restrict the construction practice of soil sealing to improve carbon capture in buildings and boost biodiversity.

What’s more, plans will need to consider retrofitting and repurposing existing buildings instead of embarking on carbon-intensive new builds. Here, technology and digitisation can offer two vital benefits in optimising resources, says Goudiard.

“Firstly, sensor-enabled smart buildings can automate operations for improved efficiency and reduced emissions,” he explains. “Digitizing spaces also helps with tracking how they’re used and then getting the maximum value from them – especially in dense city centers. The concern is how to embed tech solutions in a way that really benefits users.”

Technology could also boost inclusiveness in urban developments through data analytics that align space design with users’ needs – such as enhancing play areas or accessible walkways – or digital services that offer more equitable access to housing and infrastructure. However, with less defined metrics to track than decarbonisation initiatives, inclusion can be a design challenge in many projects.

“There is a lot of work to be done when it comes to creating inclusive spaces,” says Walia. “The elements that make up diversity and inclusion need to be addressed holistically. Companies are trying to understand how a development can truly create social impact.”

Governance is also moving with the times.Whole of place governance, where authorities collaborate closely with the users of a space, will be the critical difference in urban transformation projects of the coming years.

City planning in Paris, for example, now calls for developers to run consultations where local communities provide feedback to design teams and investors on major projects, helping to improve inclusiveness.   

“It’s a more holistic view that’s not just based on the economic output of that district,” says Kelly. “It’s about value creation and improving quality of life for the whole neighborhood.” 


This Toronto Building Is a Model for a Post-Pandemic Office

It’s small, wood, local, efficient, and it has the best bike room in town.

By: Lloyd Alter
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Exterior in the evening of the building. Leaside Innovation Centre

The future of the office post-pandemic has been a subject of many posts in the last few years. I have written that we will be living in a hybrid world, with “one foot in the real world, one foot in the virtual, and everything will be flexible and adaptable.” I have suggested that we will see the return of the satellite office in the 15-minute city, in a new hub-and-spoke world. Oh, and the new office buildings will be made from low-carbon materials and nobody is going to want to work in a building without seriously good ventilation.

That’s why I was so intrigued by a new office building proposed for Leaside, in a former industrial area of Toronto that first transitioned to big box stores but now appears to be evolving again. The Leaside Innovation Centre (LIC) is being developed by Charles Goldsmith, designed by Greg Latimer of Studio CANOO, and engineered by David Moses, who is known for his expertise in mass timber construction.

The LIC is a five-minute walk to a new transit line and is surrounded by very expensive homes in desirable residential areas. Basically, it’s what could be ground zero in a Leaside 15-minute city, and may well attract tenants and buyers from the immediate area.

Leaside Innovation Centre

Like many new office buildings, it is built of mass timber. On their website, they list the benefits:

“Mass timber structure is the contemporary equivalent of the beloved industrial warehouse structures that have populated the downtown core for well over a century and are now being repurposed for housing and office space to meet the needs of the 21st century. The mass timber structure (comprised of Cross-Laminated Timber (CLT) floor plates and glulam beams and columns) is substantially lower in its carbon footprint than steel or concrete. The harvesting of renewable forest products to fabricate CLT captures atmospheric carbon helping to mitigate the impact of climate change by storing the embodied carbon in the finished product. In addition, the CLT structure weighs approximately 25% less than a comparable concrete structure reducing the load on the foundation and allowing for reduced concrete use in the foundations.”

Leaside Innovation Centre

What Is CLT?

It’s an acronym for Cross-Laminated Timber, a form of Mass Timber developed in Austria in the 1990s. It’s made of several layers of solid dimension lumber such as 2X4s laid flat and glued together in layers in alternating directions.

CLT can work as a two-way slab, and when you have beams it can often be less expensive to use Nail-Laminated Timber (NLT)—learn about the different LTs here—but Latimer of Studio CANOO tells Treehugger they wanted longer spans matching those in the parking garage for maximum material efficiency. They are also getting their CLT from Element 5, the new supplier in St. Thomas, Ontario (on Treehugger here). Latimer tells Treehugger the finish on their CLT is far better than you can get from NLT or from other suppliers.

There’s still lots of glass! Leaside Innovation Centre

Many office buildings are clad in floor-to-ceiling glass, including mass timber structures where the developers want to show off the beauty of the wood. Unusually, the Leaside Innovation Centre is clad in prefabricated thin brick panels with only a 40% glass-to-wall ratio. They note this allows for much more insulation, reducing the size of the mechanical systems. Latimer tells Treehugger they are looking at triple-glazing the windows as well, but he also notes that it is much easier to furnish the building when the walls are not all glass, and you get much more efficient office layouts.

Building science expert Monte Paulsen has discussed this many times: all-glass buildings are not sustainable even if they are made of wood. In our coverage of the building that Paulsen is criticizing I mentioned those in passing, but it should be taken far more seriously. It is good to see that Latimer and Studio CANOO are doing exactly that.

In my now-archived review of Joseph Allen’s book “Healthy Buildings,” I noted that after the pandemic, tenants and buyers will have lots of options and will be demanding more fresh air, more filters, more air changes.

“The dramatic drop in the demand side of the office market means that tenants will get to be picky, and they are going to go for the buildings that have the best ventilation; developers will be competing to offer the most and cleanest fresh air, the biggest heat recovery ventilators (so that you get lots of air without lots of heating and cooling costs). Any office building that doesn’t offer this stuff is going to be a see-through (a building with no tenants where you can look in one side and see right through to the other) in short order.”

The LIC is doing exactly that: “Mechanical ventilation air supply will be treated with Ultraviolet Germicidal Irradiation (UVGI) and MERV 13 filters to improve indoor air quality, and minimize the amount of airborne contaminants, germs, bacteria and viruses entering the building.”

Latimer explains that the UVGI “explodes the RNA of the virus” and that the system is the same as being done in the fanciest buildings by engineers like ARUP.

Ground Floor Plan. Leaside Innovation Centre

Latimer also tells Treehugger the building is designed with active transportation in mind: There is currently parking for 30 bicycles and it is not stuck down the ramp in the parking garage, but conveniently sits on the ground floor space smack beside the main entrance, along with two showers. That’s very impressive. When I asked if 30 bikes were enough, Latimer noted they are looking at stacking systems to get in more.

Leaside Innovation Centre

It is a tribute to the success of the mass timber industry that small buildings are getting almost too common to cover anymore. As Monte Paulsen demonstrates, people are also getting a lot more critical. It’s like judging the freestyle skiing and snowboarding at the Olympics; you’ve got to really perform, and you have to have more than one trick.

The Leaside Innovation Centre has lots of moves that make it interesting, not just the relatively locally sourced mass timber but the location, the mechanical systems, the cladding, and yes, the bike room. If people are going to get dragged back to the office, this is where they will want to go—close to home, lots of light and fresh well-filtered air, a little biophilic goodness from all the wood, nice amenities, and a glorious bike locker.

It well may be the model of a speculative office project in the post-pandemic world.