Buildings that Act Like Guinea Pigs for Energy Efficiency: The Puget Sound Regional Council Plan for Green Jobs

9/2/10

Everyone is looking for the next big thing during an economic downturn, whether it be individuals searching for ways to reinvent their careers after lags and layoffs, or whole regions needing to rebuild their economies.

This region has a history as a technology and innovation hub, which has translated in the past to jobs—lots of them—primarily in software, engineering, and development. But what Microsoft’s 50,000-person campus can bring, Boeing’s layoffs can take away. With technology trends changing so fast, the Northwest, like any other region, is competing for ways to stay relevant and grow its economy and job base.

Considering the Northwest’s strengths in the tech sector, and the surging interest in clean energy, it seems the region is perfectly primed to become a leader in clean technology. All it needs is a little support to push it along. At least that’s the thinking from the folks at the Puget Sound Regional Council‘s economic development arm, the Prosperity Partnership, a coalition of more than 300 government, business, community, and labor organizations throughout King, Kitsap, Pierce, and Snohomish counties.

After extensive research, the Prosperity Partnership determined that cleantech—and specifically, energy efficiency—could be an economic driver for the future. And after a year of planning, the group devised a strategic business plan that it hopes will help establish the central Puget Sound region as a global leader in clean research, technology, and innovation. The result was the Building Energy-Efficiency Testing and Integration Center and Demonstration Network, or the BETI Center for short.

When the PSRC started the Prosperity Partnership in 2005, one of the first things the team did was look at the region’s economic foundation.

“We have one of the more diverse economies in the country—there are over a dozen industry clusters that are at or above the national average in terms of employment concentration,” says economic development program manager Eric Schinfeld.

The central Puget Sound's key industry clusters, courtesy of the Prosperity Partnership.

The central Puget Sound's key industry clusters, courtesy of the Prosperity Partnership.

The five industry clusters that were really driving jobs and growth, however, were information technology, life sciences, logistics and international trade, aerospace, and finally, cleantech. Of the lot, cleantech was the least mature sector—and the one with the most promise for igniting growth.

One of the first things the Prosperity Partnership did in this sector was help found the Washington Clean Technology Association (WCTA) back in 2007, which “hopefully will become the leading trade organization in the state for cleantech,” Schinfeld says.

In fall 2009 the group put together a hard report on cleantech. It found that of the 24,000 jobs identified in the regional cleantech industry, about 40 percent were within the energy efficiency sector, which Schinfeld says obviously drew on the area’s strong software and computer expertise. And within this energy efficiency cluster, Schinfeld says there were two areas the Prosperity Partnership got really excited about.

“One was, of course, the green building architecture, construction, and engineering world, which we’re already really strong in,” he says, citing firms like Mithun and Sellen, among others. “Not as strong, but a big potential, we think, is the energy demand management—the IT and software piece—where building energy use can be controlled and monitored…With the incredible strength in IT that our region is known for, it seems like a huge potential for us.”

At around this time the Brookings Institution approached the Prosperity Partnership about getting involved with a big new idea that involved creating metropolitan business plans. “It’s a pretty straight-forward idea,” says Schinfeld. “The idea is: Can you plan your economy using the discipline of a business plan? They wanted to test it out.”

The central Puget Sound region joined the metropolitan areas of Cleveland and the Twin Cities to become test dummies for this regional economic pilot project. And although the region already has a number of well-established industries, Schinfeld says energy efficiency was the one his group focused on as offering the greatest opportunity for expansion.

“For a pilot project you’re not going to be able to write a business plan for everything, so we chose energy efficiency, and growing the energy efficiency cluster,” he says. “It came back to, we’ve worked on cleantech, we see it as a big emerging opportunity for our economy, and then this report that just came out that said energy efficiency was where our strength lies, so why not build on a strength?”

But rather than just raise a bunch of money and use it to fund emerging energy efficiency companies, the Prosperity Partnership had to figure out a way to take a small amount of capital, and turn it into an engine that would help churn out more and more local companies.

This desire to build a catalyzing ecosystem was the genesis of the BETI Center. A 40-person steering committee made up of industry experts and community stakeholders was formed to iron out the kinks.

A key problem many companies, developers, and investors face when reviewing energy efficiency technologies, the committee found, is that they fail to live up to their laboratory—or marketing—promise. “The number that we’ve heard anywhere from 10 to 30 percent less energy savings, on average, than what is promised for new energy efficiency goods and services,” Schinfeld says.

The wide margin of error can be attributed to three varying factors. The first is climate, which, along with weather, “can have a big impact on energy use in buildings,” he says. The second is the human factor. “People do things like open a window, or turn on a thermostat, and all of your best-laid plans get thrown off,” he says. Lastly, energy efficiency technologies are often tested in empty buildings, so the first two variables are often times not even considered in the calculation. “So how do you solve this issue of actually verifying and certifying that these new goods and services are going to work in the real world?” Schinfeld says.

The BETI Center would seek to solve this problem by allowing technology companies to come together in one place and test and demonstrate efficiency levels in real buildings—rather than empty ones—for a more accurate data reading.

“We said, what if we could recruit a bunch of real buildings throughout the state of Washington? Go to building owners, and building operators, and facilities management companies, and say, ‘we want to install these technologies in your building. The benefit to you is your building will run more cheaply, you’ll get the green sheen of having a very energy efficient building, and then the benefit to the entrepreneurs is they get this real-world testing,’” Schinfeld says. “We’re essentially creating guinea pig buildings around the state to be able to do this work.”

This is the kind of shared infrastructure that Schinfeld says everyone in the energy efficiency space can benefit from. “For the utilities and the energy service companies [ESCOs], they need to know because they are promoting these technologies,” he says. And for the entrepreneurs looking to sell their technologies to utilities, energy companies, investors, or even incubators like the McKinstry Innovation Center, testing a product at the BETI Center would serve as proof that it actually works in a real-time environment. “Demonstration and certification of new technology is No. 1,” says Schinfeld.

The second aspect of the BETI Center is slightly more complicated. The central laboratory, where the center would test new technologies and monitor the “guinea buildings” equipped with those technologies, would also serve as a collaboration facility for energy efficiency companies to innovate in a group environment— a “‘sandbox’ where people would come together and work jointly on integrated technology developments,” as Schinfeld describes it.

“Energy efficiency in buildings is not a product, it’s an outcome. And it’s an outcome of a number of very diverse factors all working together. It’s how you build a building, it’s where you build a building, it’s what materials you use in the building, it’s what you put inside the building, it’s how you operate those things that are inside the building,” Schinfeld says. “Most people are in their companies, developing their technologies that are a piece of this. You’re an architect, or you’re a software person, or you’re a Weyerhaeuser developing building envelope products, but they’re not working together—so how do you do that?”

The answer, he says, is by integrating the technologies that you’re building so that they can work together, seamlessly, from the earliest stage—development.

The solution the group zeroed in on: creating a central place for testing and integration of energy efficiency technologies and certifying that they work as advertised. Being able to point to that validation “would give companies that are here, that have access to those services, a huge leg up in the markets,” says Schinfeld. “We believe it would catalyze the ability for local folks to sell their energy efficiency goods and services to other people.”

A big issue will be figuring out ways for companies that might traditionally look at each other as competitors to share, learn, and build something together in the ‘sandbox,” all while protecting their intellectual property, Schinfeld acknowledges. But he is convinced there’s a market for a service like BETI’s. “We have actually heard from folks that there is an appetite for collaboration, particularly where there are products that are complimentary,” he says. “What if you could take someone who does HVAC and someone who does windows and put them together, and build an integrated product. I think people will be excited about that.”

Unlike an incubator model, where companies are physically located at a third party facility for an extended period, firms would utilize the BETI Center only for specific testing, monitoring, and collaboration, on a for-fee-service basis. That way BETI can accommodate a larger volume of companies long-term, Schinfeld says. “We are going to be competitor neutral in testing these technologies,” he says. “Our goal is not to pick winners, our goal is to help companies launch into the marketplace successfully.”

Schinfeld and PSRC associate economic policy analyst Sherry Ambrose say it will take approximately $8 million to $16.5 million to jumpstart the project, which the Prosperity Partnership will seek through a combination of government and independent grants, private fundraising, and membership development. The group was unable to secure a hoped-for $2 million in federal grant money from the U.S. Department of Energy, but Schinfeld says the program has other options to move forward. He says the program also doesn’t need the full $8 million to get going.

To that end, the Prosperity Partnership has already started talking to the Seattle 2030 District, a mix of city representatives, local architects, and utilities companies about involvement in the project, according to Schinfeld.

“The main stakeholders are five of the biggest downtown property owners—so Unico, and Vulcan, and folks like that,” he says. “They’ve all come together and they’ve all said ‘We want to make our buildings in downtown Seattle the most energy efficient that we can make them,’ which is fantastic… I would say, in an ideal world, we could start doing some things within six to nine months.”

Building the actual center would come well down the line, of course. But Schinfeld already has his eyes on a couple of locations that he thinks are ripe to become an energy efficiency hub. The first: one of the large buildings downtown that would, ideally, be one of the project’s guinea pig sites. The second: in a lot right next to the McKinstry Innovation Center in Georgetown, where he says the region could “set up a whole little energy efficiency neighborhood.”

“You’ve got the Innovation Center, which is developing new technologies, then you’d have BETI, which is testing and demonstrating those new technologies, and then you’ve got McKinstry, which would go out and use them, and sell them. It would be genius,” Schinfeld says.

The BETI steering committee is holding its next meeting next week, when it will finalize the financial aspects of the plan, and the five-year budget. In the meantime, Washington State has set aside $5.5 million in the current budget for cleantech investment, and Schinfeld is hoping to persuade the state to put some of that money toward the Center.

Regardless of where the Center gets its funding, Schinfeld and Ambrose are confident that the plan could put the central Puget Sound region on the map for energy efficiency.

“If proximity to BETI and BETI services is the best way to market for energy efficiency goods and services, those companies will move here,” Schinfeld says. “The national play is still an economic development play to grow jobs here in the long run.”

Thea Chard is a correspondent for Xconomy Seattle. You can e-mail her at theachard@gmail.com or follow her on Twitter at http://twitter.com/theachard. Follow @

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