The JBG Companies are one of the largest investors and developers of real estate in the Washington, DC metropolitan area. By all measures, they are doing everything right in terms of sustainability. The vast majority of their 23.6 million square feet of office, residential, hotel, and retail space is comprised of urban infill and transit-oriented development projects—in other words, places where people can get where they need to go without getting in a car. Many of their facilities are LEED certified, but the company has gone one step further and taken a close look at not just the efficiencies that can be gained through design, but those that come through their energy supply. In doing so, they’ve entered a much broader conversation about sustainability and expanded the impact of their sustainability investment.
WGL—one of the primary natural gas and electricity providers in the DC area—has taken up the sustainability conversation with JBG and helped to ensure that the power coming into their buildings is as clean as possible. “We purchase renewable energy for 50% of our electric usage,” says Jessica Long, LEED AP, sustainability manager for JBG. “WGL provides us with those credits for our Virginia portfolio.”
Take, for example, JBG’s multi-tenant office building at 800 North Glebe Street in Arlington, Virginia. This 10-story, 316,000-square-foot LEED Gold for Core and Shell project has all the bells and whistles that add up to an Energy Star score of 89. It also has individual metering for each tenant, “which allows us to be more transparent with our energy use,” Long says. “Plus, the tenants are more cognizant of how they use energy when they’re paying directly for it.” Because 50% of the energy used in the building comes from wind power provided by WGL’s network of wind energy partners, JBG is able to attack the challenges associated with fossil fuel use in three ways—through design, careful monitoring of use, and purchasing from a renewable source—which in turn gives them a leg up on attracting the top-tier tenants who share those values.
And that, says Sanjiv Mahan, president of WGL Energy, is exactly the intention. “The first step is always to take advantage of the ‘low hanging fruit’—LED lighting, low-flow plumbing fixtures, replacing windows, etc.—to reduce consumption. The next step is to look at energy as a commodity and figure out how to get it more sustainably.” Mahan says WGL’s goal is not only to increase the availability of renewable energy sources, it’s to make them available at a competitive price. By doing so, WGL enables greater use. “[Building] energy managers want to drive down energy use, while still providing comfort to their customers, and they want to do it in a way that shows they are being good to the environment,” Mahan says. “At the end of the day, we have to be ‘green’ in two ways: in terms of the environment and in terms of the bottom line.”
The Energy Ecosystem
WGL Energy Systems, the division of WGL for which Mahan is president, is the arm of the company that deals with energy solutions. In other words, they listen to what their customers want, and they figure out the most efficient way to get it done, whether that’s a combined heat and power, fuel cell, or a solar solution. “We look at a customer holistically and map out the best way for them to achieve their goals,” Mahan says. “Sometimes it’s about mixing two or three products in order to have the right combination to fulfill sustainability and affordability goals, as well as to fulfill the need for resilience and reliability.”
WGL Energy’s systems business works mainly with large government and commercial customers who have a mandate for reducing greenhouse gas emissions, creating customized “energy ecosystems” in partnership with local utility providers. They’ve been at it since 1997 and have now spread far beyond the Washington DC area to work with customers in 16 states and the District of Columbia. WGL has invested over a half billion dollars in this arm of the company so far and is currently ramping up their capacity significantly: they’ve recently announced plans to invest another $100 million per year for the next 5 years.
One key to their success, says Mahan, is their depth of experience. WGL originated more than 165 years ago as the Washington Gas Light Company, chartered by Congress to supply energy to the growing national capital. The first gas lamp that was lit on Capitol Hill was powered by the company. Their dexterity in navigating the evolving energy industry is now one of their greatest assets. “We want to make sure that energy managers have the tools they need at their fingertips to manage their consumption in the most intelligent, simple way possible,” Mahan says. “It’s one thing to put in all the technology, but it’s also important to have the right levers in front of you to make follow-up adjustments to meet the needs of customers. Otherwise it gets to be a very large, complex system that people don’t quite understand.”
The Net-Zero Nest
The scope of WGL’s offerings is impressive: they supply natural gas, electricity, green power, carbon reduction and energy services to more than 1.4 million customers nationwide, including all the federal buildings in Washington DC, and they are increasingly involved in renewable technologies, ranging from wind and solar to innovative approaches like solid oxide fuel cells, and combined heat and power systems (CHP). In addition to providing these technologies to the federal government, Fortune 500 companies, and other heavy-hitting clients, they also make a point to reach out to the young people who will lead the way into a future where fossil fuel-based power sources are likely to be less and less prominent in the energy landscape.
Terry McCallister, WGL’s current chairman and CEO, has seen to it that students at Missouri University of Science and Technology, his alma mater, have the materials they need to pioneer new approaches to energy efficient design. Every two years, a team of students at the school collaborates on a design for the Solar Decathlon, the US Department of Energy’s biennial student competition for solar-powered houses. The teams are encouraged to reach out to corporate sponsors for funds and materials; through their connection with McCallister, WGL has become a generous donor and provided the solar panels for the most recently completed home at Missouri S&T.
Known as the Nest Home, this year’s submission is the school’s sixth to be accepted to the competition, more than any other college to date. It is built largely with local, found materials—“just like the way birds collect natural objects from their environment to build a home that fits their family,” saysChris Ramsay, the director of the Student Design Center who oversees the crop of student’s working on the Solar Decathlon house each year. The house is based around three upcycled shipping containers with interiors insulated with a product derived from recycled blue jeans and exteriors insulated with closed-cell spray foam, clad with wood from old shipping pallets. Even the carpet is woven with discarded fishing nets. Greywater from the home is purified and reused in hydroponic gardens that produce enough vegetables to feed a small family. Thanks in part to the solar panels provided by WGL, the Nest Home is a net-zero structure designed to produce more energy than it consumes.
Far from being a one-off creation, the home is designed with off-the-shelf materials and waste products that can be found in virtually every community. It is truly a modular home where additional shipping container ‘rooms’ can be “added or removed as a family grows or as children leave the ‘nest’,” says Mary Puleo, the student project manager for the team. “It makes it a truly scalable design.” The shipping container also makes the Nest Home a truly shippable design—it was disassembled and loaded onto trucks for the Solar Decathlon event that was held this fall in Orange County, California. If you happened to have been on an interstate somewhere between southern Missouri and southern California in late September and saw a caravan of tractor trailers loaded with very unusual-looking wood and steel structures, you were lucky enough to witness one promising possibility for the future of energy efficient design whizzing by.
Working Toward a Smarter, More Diverse Grid
When Terry McCallister took over as CEO in 2009, WGL had already been investing in energy efficiency for decades. But the new chief envisioned a much more aggressive approach to tackling the challenges of a “carbon-constrained future,” as he put it. The company had a century and a half under its belt as a leader in the energy industry; the question on McCllister’s mind was what would WGL need to do to remain a leader for the next century and a half?
A cost-effective mix of clean energy sources is the key to answering that question. Lou Hutchinson, WGL’s chief revenue officer, says “we started 165 years ago to light the Capitol; we’ve seen many changes in the industry since then, but in the 21st century, there are multiple revolutions going on, one of which is a requirement for diverse energy sources.” The company’s dual bottom line approach was reinforced as McCallister came on board in the midst of the Great Recession. The federal government, one of WGL’s largest clients, was establishing stringent targets for reductions in greenhouse gas (GHG) emissions by 2020, but at the same time, “there was an acute need to focus on macroeconomic recovery,” Hutchinson says. “Our goal is to always be an asset to our customers. What I mean by that, is that we tend to be on the better side of their balance sheets, while also supporting their GHG reduction mandates.”
Most energy customers expect to pay a premium for ‘green’ energy, but is it really possible to have clean energy with lower rates? WGL is one of the few players in the energy market today that can answer that question in the affirmative. And the ability to do that, says Hutchinson, rests on the ability to provide multiple energy sources to each client. “When you can provide the entire energy spectrum, there may be some components you can be very competitive on in terms of price compared to others. When you look at the overall per unit spend across that spectrum, the answer is very much yes.”
Distributed Generation, Distributed Impact
One linchpin in the energy mix that supports financial and sustainability goals on an equal basis is known as distributed generation. Simply put, distributed generation is any energy source that comes from a clean on-site source, rather than through the grid. This may be a photovoltaic array, methane capture and conversion to electricity or other small scale, sustainable systems. These package systems may be installed at an office complex, residential development, campus environment, or a mixed-use development. They may not supply the total energy requirement of the site, but they offset the amount, and thus the cost, of the energy coming from the grid. With technologies like wind and solar that may have larger daily fluctuations in productivity, the energy can be sent back to the grid when it is in excess of consumption, ‘running the meter’ backwards, as it is known in the industry, and saving the client even more money.
The combination of multiple sources of distributed energy in a geographic area that are all tied to the same grid of ‘conventional’ energy is known as a distributed energy system—exactly the type of energy infrastructure that WGL is developing. A side benefit of having such an integrated, multi-faceted energy system is stability, which has its own intrinsic economic value. After all, conventional energy is important as a back-up “when the sun doesn’t shine and the wind doesn’t blow,” Hutchinson says. Having multiple energy sources available satisfies the mandate for infrastructure resiliency that has arisen in light of recent natural disasters, but the notion of resiliency can also be applied to the marketplace. “Volatility can come from many places,” says Hutchinson, “whether it’s dramatic changes in the weather or as a result of macroeconomic shifts.” He says that blending all these energy sources together, and factoring in their various direct and indirect benefits, allows WGL to offer a “blended price” to customers that reflects the total efficiency of the system, a phenomenon that he likes to refer to as “distributed impact.”
Building the Grid of the Future
On a practical level, integrating local and site-scale systems with the grid can occur in myriad ways. In Washington DC, WGL is involved in the formation of various ‘eco-districts’—neighborhood-scale systems that are being built across the city where the energy infrastructure is being planned in a systematic way. The company has embraced a mentality that every drop of energy counts, which runs counter to the approach of most large utility providers that generate huge quantities of energy at a single site and then distribute it in a vast, centralized system.
In Minnesota, says Mahan, the COO, WGL is implementing a series of 40 kW photovoltaic systems for schools and small businesses. “There are very few companies of our size and nature where you have small 40 kW systems and large 5 MW systems in the same portfolio,” he says. “We don’t build utility scale systems in the middle of the desert. That’s not our model.” Instead, the WGL model is to identify the missing pieces of the energy ecosystem in any given locality and come up with a cost-effective plan to fill them. Not only do they provide a plan, they provide financing and work with local contractors to bring the systems into reality. The company then sets up an agreement that provides a fixed price for the energy produced for a 15 or 20 year period to the customer. “That way they’re not worried about what’s going to happen on the market and whether the price of energy from the grid will spike,” Mahan says.
With each installation WGL has one more drop in its energy bucket and one more customer who is getting clean energy at a competitive price. “It offsets their need for energy, but more importantly it offsets their need for capital. They can then take that capital and invest it in their core business.” In this way, the grid of the future will not only be ‘cleaner’, it will have a more stable foundation in times of uncertainty. By shielding its customers from the negative economic implications of a shifting energy landscape, WGL is securing its role as an industry leader for a long time to come.
The Business Case for Sustainability
WGL wisely invests in efficiency at the company’s operations headquarters in Springfield, Virginia
Scope: 5 stories, totaling 438,768 ft2 on a 20-acre site
Context: Suburban Office Park
Program: Operations Headquarters
Certification: LEED Gold
Design: Fox Architects
When WGL laid plans for a new operations center, the environmentally friendly energy solutions providers knew that they had an opportunity to showcase the technologies and strategies that they supported in their customer base in one of their very own facilities. In the spring of 2012, Springfield Center opened its doors, giving the energy industry a window into the level of efficiency that can be possible when sustainability concerns are taken to heart. The LEED Gold facility encompasses everything from reclaimed wood to low-flow plumbing fixtures, but its star attraction is the Bloom Energy Server—an innovative type of fuel cell—which is an excellent example of the company’s approach to distributed generation.
Local: 21% of building materials were harvested or manufactured in the region
Impact: Greenhouse gas emissions have dropped 92% compared to the previous operations center
Reduce: 30% reduction in water use over baseline* as a result of installing low-flow restroom fixtures throughout the facility
Re-Use: 31% of the total building materials used are recycled content, including recycled wooden pallets reused as walls
Recycle: 89% of construction waste was diverted from landfill during the construction process
The Bloom Energy Server
• Runs 24 hours/day and 365 days/year, converting gas to electricity without combustion
• Has 60% or better conversion efficiency—compared to 33% conversion efficiency typical at coal-fired plants
• Provides 200 kW of power, enough to meet the demand of an entire office building or 160 homes
• 2 fuel options: natural gas or biogas
• Reduces greenhouse gas emissions by up to 50% compared to conventional grid electricity
• Converts fuel to electricity with 2X the efficiency of older model fuel cells
• On-site generation means zero energy loss through transmission lines—compared to 10% in some domestic grid systems and 50% in the developing world
• The Springfield Center has the 1st system of its kind installed on the East Coast
Corporate Sustainability Goals
• The Springfield Center is helping to achieve WGL’s goal of reducing the greenhouse gas emissions from its fleet and facilities 70% by 2020, compared to a 2008 baseline.
• WGL aims to reduce greenhouse gas emissions by 12% for every therm of natural gas delivered to customers in 2015, and at least 18% by 2020, compared to a 2008 baseline.