Afternoon Keynote — Brad Liljequist & Betin Santos

Transcript:

 

Music

 

>> I'm with McKinstry, and we are a national leader in designing, constructing, operating and maintaining high performance buildings. I'm with the south region. And that means Texas and Arkansas. And in the energy group in our area, we have energy and tech services. And we work with schools, cities, counties, universities, to reduce their energy use, and we help them to retrofit some of their older high-energy-use buildings by doing so out of their savings. Is that better? Can you hear that? Okay, awesome. I want to think Georgeann for her vision and for inviting us to be here today so that we can talk about solar and zero energy. And also I wanted to thank Dan. I've had the opportunity to meet Dan before and see his solar work job, so I was really happy that you guys had that experience here today.

 

Our afternoon keynote speaker is Brad Lilljequist. And he is a leader in the zero-energy world. He is the zero-energy senior program manager for McKinstry, where he leads our company's zero energy efforts nationally. Previously, he directed energy and community programs for the International Living Future Institute. Brad has developed the first certified multi-family zero-energy project in the United States, called zHome. He is currently managing zero-energy elements for the Catalyst Project, which is currently under construction in Spokane, Washington. And I think that's the project that Georgeann was talking about. It's a really awesome project, and he's going to share some information with us today.

 

At its completion, it's going to be the largest zero-energy building in the Pacific Northwest and one of the largest in the world. So, he joins us today to discuss net-zero energy. Incredible, practical, and doable lessons from its first decade. Thank you, Brad.

 

Applause

 

>> Thanks, Betin. And let's keep this real casual and interactive and stuff. So, if people have questions, please ask them as I go. And if we get too bogged down, I may say, let's hold them and we'll cover them at the end. I have a lot to cover today, so I'm going to go pretty quick. You know, before I get started, I really want to do a sincere shout out for community colleges in general. Yes. I really believe that a lot of innovation at the community level happens at community colleges. And just want to share my own. I went through a mid-career, kind of an early mid-career transition. My deep background is in land-use planning, and I started to get interested in sustainable building. And in 2000, there was a program at Seattle Central Community College that I went through. And that kind of kicked me off in a different direction. And I say that having a master's degree from the University of Washington and undergrad from Georgetown and stuff. And the education that I had at Seattle Central was terrific and really helped me out in making a transition. So, you guys are awesome.

 

Okay, so, Betin talked a little bit about McKinstry, just 1 quick slide about who we are and what we do. McKinstry is an unusual company in that I'm from Seattle. So, McKinstry is headquartered in Seattle, but we operate off of a regional network of offices that are pretty standalone or not standalone but pretty independent, I should say. And at the regional scale, we do a lot of energy services work, a lot of retrofit type work in the energy space. We also do a lot of what we call technical services. Stuff like retro commissioning, energy modeling, that kind of stuff.

 

At the scale in Seattle, we actually do, we're actually the largest MEP contractor in Washington state. So, in Washington state, we have kind of a different kind of presence. We have about 85% engineering and design unit there in Seattle. I'm actually part of that group, and that group also operates nationally, so I'm involved right now in 3 different zero-energy projects that are in design right now. So, and those are sprinkled around the western US.

 

Okay, let's talk a little bit big picture here. The, you know, I like to think big and then get real specific. Like, okay, why zero energy, why do we care about this? And I think Dan may have said this very quietly this morning.

 

Or just sort of as a side comment, but I think it's really important for us to recognize when we look at our national energy footprint that the largest single use of energy in the United States is building operations. It's about 40%. It's more than transportation, which surprises the heck out of me. I'd always think, you know, you get on the freeway, and it's like, for sure this is the biggest load. But no, its buildings like this, like downtown Dallas, like the neighborhoods around Dallas. These sorts of things, lights, HVAC. We've been hearing the HVAC, you know, all day, the air conditioning that's serving us. You know, this system, those cameras, these lights. All this stuff just really adds up. And it's kind of almost like background noise, but it accounts for, you know, quite a bit. So, when we think about, and this is not going to be a conversation on climate or energy independence or what have you. I have the feeling any of you have your own set of reasons for trying to get more efficient. You know, in terms of thinking about where to focus our energies, building is an excellent place. So, almost everybody, I think, I captured from this morning, almost everybody in this room is involved in the building sector in one way or another. And so, you have the ability to influence that 40%.

 

Okay, so, what is a zero-energy building or net-zero energy? And I'm just going to give it to you at a very high level. So, Dan this morning was talking about, you know, we spent the morning talking about renewables, specifically solar. A little bit on wind. You know, what is, you know, that generation curve look like? So, if you look at this blue line on this chart, and that's January through December. That line represents a year of annual energy. In the blue, that's energy production. So, if you, and I will say, this is Seattle-based. So, Dallas would be a little bit different. That would be a bit flatter, because in Seattle, believe it or not, we have very sunny summers. We have a lot of drought, actually, in Seattle in the summer. And we also have very long days, because we're up high north. So, our solar production is quite high in the summer. And then in the winter, it's almost nothing, because the sun drops down to 19 degrees at the horizon. Believe me, that's when we're all depressed up there. And you know, that's why we, you know, grunge. All that stuff. That's because of that December-January thing.

 

And then we have clouds, too, so that's a two-for. But, you know, that's a typical, you know, if you put an array on this building, you know, with a little bit of modification, that's what that output would look like.

 

So, with a typical zero-energy building, you know, you are going to reduce energy use. And we'll be kind of unpacking this and elaborating this. But you're going to reduce energy use a lot. And so, a typical energy use of a zero-energy building would be expressed by that yellow line. And again, I apologize. This is a Seattle building. So, actually, your solar production and your use kind of match a little bit more than in Seattle. In Seattle, it kind of ends up being this weird opposite thing. The good news is at a regional grid level, we can balance out our renewables with hydro. But what's cool here, is your renewables and your use kind of tend to kind of correlate. And your sun and your AC tend to kind of match each of the profile, which is kind of great.

 

So, the basic idea with the zero-energy building is that on a net annual basis, and this is why the net term is in there. That a net-zero-energy building generates as much power as it consumes over the course of a year. So, in Seattle, typically, a zero-energy building will have kind of a surplus in the summer and a deficit in the winter. And if you take that deficit and compare it to the accumulation. You think about the meter spinning backwards and forwards, as Dan was talking about, it nets to zero. Okay?

 

Any questions on that? That's just the basic idea. And there's lots of permutations on that. But just at the most simplified level, that's what that's about.

 

So, but you're thinking wow, you know, like Dan, like we were talking about this morning, like, look, can you actually generate enough power to do that, you know? And the answer is actually on the efficiency side. If you take your most average building out there and throw solar panels on it, yeah, if you throw a lot of solar panels at it, you can get it to net-zero energy. But typically speaking, including I mean, a building like this would be an awesome candidate for zero energy in a retrofit, in a deep retrofit scenario. And this building's new enough, I'm not sure I would suggest that. But with a new building or a deep retrofit, this is kind of what it typically looks like.

 

So, I'm going to move left to right. You know, a typical office building actually fairly nationally has, I'm going to use a term called energy use intensity. How many of you know what that term means? If you could raise your hand.

 

So, energy use intensity is just a very, I'm not going to get down in the details about it. It's kind of like miles per gallon for buildings. But it operates in opposite. So, lower is better. And what it represents is what 1 square foot, if you take a building. Say, this building. I don't know, 100,000 square feet. Maybe less. I couldn't see around the corner. Pretty big. If you take a representative square foot of a building. And you say, "How much energy does that square foot use over the course of a year?"

 

So, say, you know, this little carpet tile. You know, let's take a square foot of that. If this is a 100,000 square-foot building, I'd take the amount of energy the whole building uses, and I divide by that. And that little square foot is what an EUI is. They measure it in BTUs, of course, which is even more confusing. But once you get a little bit used to it, you start to know, like, okay. You know, average office, residential, would be in the kind of the 50 to 100 range typically. But what happens with zero-energy buildings is you really start to whack that down. So, kind of the process that we would go through is typically the main energy use of a building, an office building or an education building, is in the heating and cooling. So, we would get very efficient. And we're going to spend most of the time talking about how to do this. We'll get you down below 50. We'll do things like super-good lighting, super-good controls. That'll get you down into the 30s. And then really the balance is a really tight look at how the tenant is using the building. That'll get you maybe down into the teens.

 

Probably not for an education building. We're learning a lot of stuff on our catalyst building. Which is actually half education, Eastern Washington University is going to be in there. And then that balance of how low it gets is in the solar. And then this is a representative chart. And these are actually the 20 buildings that are in The Power of Zero book that Georgeann was showing you guys that I was able to write a couple of three years ago. You know, that is the nationwide average. Here, it's listed in the 70s as that orange bar. And then the observed performance, not including renewables. This is before you get to renewables are those other 19 buildings are in the blue. Just to give you a sense of the range. So, those are averaging out kind of into the high teens.

 

So, kind of radical. I mean, we're talking about 60 to 80% reduction in energy use. That always just kind of blows my mind. Like, really? We're that wasteful? And yeah, we really are that wasteful. This isn't like going from, you know, a mid-size car to a small car, where you get, like, 20% better. We're talking about a major improvement.

 

So, I'm going to talk kind of big picture about what's good about this as a concept. Why would we pursue it? You know, there's certain sort of obvious benefits that I'm going to talk about. At a couple of points, I'm going to talk about benefits. Because I think it's important for us to think about, like, well, you know, this needs to make sense in more ways than just one way I think for it to truly get traction. So, one thing that's really cool about zero energy, and I've been literally in this world for about 15 years. 2003 was the first year I started pursuing zero-energy buildings. Is that it really gets people psyched up. You know, I hate to say it. Those of us who are in energy efficiency, it just bores the heck out of most people. Sorry, my colleagues, but yes, it can be actually boring. And you know, it's just the way, you know, like, what? Zero energy? That's kind of cool. And it just appeals, you know, to a broad spectrum.

 

When I had, so I developed, as Betin was saying, the zHome Project, we had a period of open houses there. And we had 10,000 people visit zHome over the course of 2 months of weekends. I mean, these were just townhouses, you know. I mean, they were cool townhouses, but they were townhouses. And people came.

 

And they learned about solar. And they learned about heat pumps and all this. And they learned about excellent envelopes. And if we said, you know, come visit our project with excellent envelope, you know, we would've had like 20 people. So, if it's like, hey, it's zero energy, it's kind of more like Buck Rogers and cool and you know, like, all sorts of different people come. Not just kind of, you know, more fringy people.

 

Another thing, you know, this is a real issue. I'm sure here in Texas you're starting to see some utility-scale solar that is pretty big. And you know, you might look at it, and I'm like, whoa, is that good? I mean, obviously, we want to say, sure, that solar's good wherever it is. But maybe it's taking over some good grazing land or something else. It's like, well, I'm not sure we want to do that. I'm not saying we shouldn't be doing that. I actually do think we should be doing that. But we also need to take advantage of all the roof and ground resources that we can. And you know, I think Dan's Google slides were awesome that way.

 

Another thing that is really exciting about zero-energy buildings, and this is a very, very real effect. We see it, I have, I developed a zero-energy building. I worked in a zero-energy building for 5 years. I mean, I've been around them enough to know, like, if you're in a zero-energy building, you actually start to become very aware of your energy footprint. You actually start to think, like, oh, my gosh. Like, my computer right now that I left on overnight is actually going against the annual energy budget that this building is trying to achieve. It just helps, you know, all those people that are working together to try to do something about it. And so, things like plug loads, which do end up, again, we'll talk about that later. It's a great way to kind of catalyze that group.

 

Dan also mentioned this this morning. And just to put a specific number on it, transmission losses through high-voltage lines in this country account for 5% of our total energy use or our total electricity use. It is just loss. So, the cost of the buzz is 5% of all that energy. That's a lot of energy. So, if you can produce right by where you're using, nothing bad about that.

 

It does support local economies, and I think it does it in more ways than one. I mean, I think, I really think there is this huge point. And you know specific to the context of DCCD. Did I get all the C's in there? DCCCD. I think I needed one more, didn't I?

 

>> Yeah [laughter].

 

>> It's triple C. I figured that out. D-triple-C-D. I like that. You know, like, I'm guessing operating budgets are a little challenging around here. They are with almost every institutional client I've ever seen. And sometimes getting a bond issue passed is maybe a little bit easier in aggregate. I'm not saying that was easy. I know that was super hard. But it's actually a way to take capital funding and take it off of the operating funding ledger. So, if you look at this bond issue as an opportunity to actually pay down your operating costs in the future, that's an amazing opportunity.

 

Okay. Zero energy does not mean you have to become a hobbit. I mean, a lot of times, you might think, like, okay, that's kind of a granola thing. This dude kind of came here from Seattle. We know about Seattleites. They're all weird up there. And I mean, there are a lot of weird people in Seattle, for sure. But you know, we're not all hobbit people. We don't, say, you know, move to caves. I live in a very normal house, as do all my friends and family and other people that I work with. So, now, if you want to build a hobbit cave that's zero energy, you totally can. And it actually might be really awesome. So, I'm not trashing that, but you don't have to do that.

 

You also, so, this is the Apple Headquarters. You also don't have to be totally far out, either. Zero energy, you know, can come in lots of different forms. So, it can really integrate with your design process. I mean, you might like that. That's cool. That's the infinity loop at Apple. But you might not like that.

 

Okay, so, just coming full circle, this is kind of what we're talking about. This is the big picture. Kind of, I already showed you the one, the four slides kind of going down to the low EUI. And this is a little bit more granular. So, on this slide, the blue represents the heating energy. Again, I apologize, this is specifically for the Catalyst Project in Spokane.

 

So, pretty decent cooling load. Not like here. We don't have humidity, so you don't have that kind of extra wild card in the mix.  You know, much higher heating load. I know you guys still have heating loads, but Spokane's higher.  But it just gives you a sense of what we're talking about. So, you know, heating comes way, way down. Cooling down a lot. And then lighting and plug loads and kind of equipment come down a decent amount, but not as much as the HVAC system. And that's a very typical profile that we see with zero-energy buildings.

 

So, in about the next 15 slides now, I'm going to show you kind of how do we do that? What's typically involved? So, as a starting point, we really focus on the envelope of the building. Kind of the exterior of the building. And one just dead basic thing is that, you know, a lot of our buildings are very leaky. The average house in the United States exchanges its indoor air with outdoor air every 3-1/2 hours. I mean, that's really shocking if you think about it. It's like, and do you think that's good in any way? No, it's not good in any way. Because it's inefficient. Every time it moves in and out, it's actually bringing little dust particulate and dirt that build up in your wall cavities. And it's not good for air quality. There's all sorts of bad things about it.

 

So, in addition to, just, you're leaking out the heat or the cool that you've already created. You want to treat the hot and the cold as a precious thing that you gained somehow. We'll talk about that in a sec. By sealing up the envelope. And the good news is that the technologies around this are very advanced. There's a lot of stuff that has happened in the last, I would even say 5 years, in terms of tapes and particular membranes. Those sorts of things that allow you to seal up different penetrations. There's little gussets, there's gaskets, all sorts of things that are really advanced.

 

And then connected to that is air performance testing. So, actually putting a set of fans on a building, depressurizing the building and seeing what the actual resistance. Like, the suction resistance of the building is on those fans. And using that as a diagnostic tool to limit the air infiltration or exfiltration through the building.

 

How many folks here have done a blower door test like this? Okay, great. It's actually kind of fun. I've actually done it on my own house. I cruised around with a can of caulk, and it's kind of like, you know, you've got something to shoot. And it's kind of fun, except you're just shooting caulk. It's, you know, it's worth doing, and it's not that hard to do.

 

Another thing that is very typical. And these are very, I want to stand back for a second. These are pretty broad recommendations. And I do want to say for Dallas, north Texas, this all needs to be refined somewhat, you know, based on regional considerations. I mean, one particular thing is the humidity in the environment is something to really pay attention to, particularly with mold and dew points and condensation and some of that. I put an asterisk by some of all this.

 

But basically, trying to improve the insulation maybe beyond what is the base and finding what I would call an optimized level of insulation. I'm saying added, and I probably said have said optimized insulation here. This is a project in Oregon where that is a 2 by 6 wall, and they're putting what's called mineral wool, rigid mineral wool on the outside that is putting that envelope up to probably R30 or R35 level.

 

Another really exciting thing these days are high-performance windows. These are actually starting to get much less expensive. So, if you think about your typical window, you know, maybe a double-paned window. Folks are now coming in with triple-pane and even quad-pane windows. And with quad, they get really, really heavy, so they've transitioned to really thin glass or even double film inside and then 2 panes of glass outside to help with that. Thermal spacers. Kind of the spacers between the glass. Gas in between the glass. And then coatings on the glass. All those things working together so that, you know, I'll translate it to U value, because that's usually how they talk about windows. But say a typical window, code window here might be U.35, something like that. You know, one of these windows might be half that, might be .18 or something like that, so twice as efficient. And you do start to see some of these windows where it's like, wow, that actually has the same R value of what a 2 by 4 insulated wall.

 

I mean, that's a really good window. They're starting to get down into that range. The frame is also very important, as well.

 

So, that's the envelope. Just talking a little bit about HVAC and thinking about, you know, how we heat and cool and ventilate buildings. One really cool approach is to actually use nature to help us with our heating and cooling and ventilation. And that is harder to do, I recognize again that we're kind of in this, you know, I realize that we're in kind of a more humid zone here. Do you guys, I should know this right off, are you dry sometimes and humid at other times? Or is that?

 

>> Sometimes we can be a little humid.

 

>> You guys are kind of in that swingover area. Okay. This would maybe be a little bit tougher. Because obviously if you leave the humidity in the air, it becomes more, you know, it's more, it's harder to heat and cool if you're pushing against that residual humidity in the air. So, but I'll just show it to you for grins. This is in Hawaii. And this is actually in a humid environment. What they did with this building is they actually used wind-driven, and this is a location with a fair amount of wind, wind-driven ventilation. The building was designed as an air foil. And you can see that high peak on the roof. That creates kind of an eddy and a vacuum on the backside of that peak. And so, there's actually automated shutters right below that rough peak as well as kind of that base of the building. Or that little edge of the building at the left side of the screen. And then also at the far right, basically the building just kind of ventilates itself. It just kind of creates a natural vacuum that ventilates the building. And actually given the temperatures there, allows them to be, you know, comfortable.

 

I will say that's a very particular, I'm not saying that's what you should do here. I'm just using this as an example. You know, maybe a more interesting example. And this is kind of what I think of as a little bit of a hybrid between a mechanical system and also working with nature to provide kind of natural cooling. Is what people are calling dedicated outdoor air systems. Has anybody here been involved with one of these? This is where, so, you know, typically with HVAC, your HVAC system will be one big monolith that's like heating and cooling and ventilation. And kind of everything is, you know, in it. There's now a new trend out there. And this is actually, believe it or not, it's code in Washington state now as of just a year or two ago. Where ventilation systems and heating and cooling systems have to be separated. And what that allows you to do is basically scale down each system and use each system a bit more efficiently.

 

So, the ventilation system has a device on it called a heat recovery ventilator. Here you use what's called an energy recovery ventilator, ERV. Because of the humidity issues here. And what that does is it basically uses the outgoing, the exhaust air, to bring the inside air basically up to or down to the temperature that you want inside. And so that you don't have to then mechanically cool or heat it. Now, sometimes you do have to mechanically cool and heat it, too, depending on the outside air conditions. But what that dedicated outdoor air system allows you to do is you don't have to do it as much, and you don't have to do it as often.

 

One thing that's really neat about these systems is, and we're doing this on Catalyst right now, which I'll talk about in a minute. Is we are, you do a nighttime cooling flush during the summer. So, you basically cool the building down using the temperature swing of the evenings. And again, this doesn't work all the time. It works some of the time. Let's say if, during the day it's, say, 85. And during the night, it's 55, you basically use the ventilation system to cool down the building to 65 in the morning, just by running the fans, the ventilation fans. You get the temperature stabilized inside, and then everybody is walking into a cool environment. And then your cooling system maybe can kick in, you know, maybe it turns on halfway through the day.

 

Another item, and this, you know, again, this is going to be, I don't know what percentage heating versus cooling load that you guys have here. Yeah, I know it's mostly cooling. I'm not sure what the ratio is. But a trend on heating versus cooling is that heating, you know, cooling will use chillers. We use air conditioning units, that sort of stuff. For heating, rather than using a boiler, typically what we'd use in a zero-energy building is an air-source heat pump or some form of a heat pump like we've been talking about. The Lady Bird Johnson School uses ground-source heat pump. That's just a different form of a, it's a form of a heat pump. And it's not a complicated technology. It's almost exactly the same as a chiller. It's just giving you heating instead of cooling. It's using the same technology. Because a chiller creates cold, and then it blows hot air out as a waste. What a heat pump does is it reverses that cycle. It's blowing cold out as a waste, and it's sending the heat inside the building.

 

And then with advanced systems, you have advanced systems that do heat recovery and do these cool things that do both at the same time. Yeah.

 

>> What you are saying is similar to, so you are using, when you cool, when you use the cooling of the gas, a refrigerant in the condenser. You take the heat of that, the hot air, and use it for warming another part of the building.

 

>> That's right. Yeah. That's exactly right. Yeah, it's just more efficient. If you think about, I mean, the beauty of anything that uses a compressor in refrigerant, it uses this, I won't go into the details of it because we don't have time right now. But it's an extremely efficient way to cool or heat. Because for every unit of electricity you put into that system, you get about 3 unites of heating or cooling energy out of it. Now, if you're able to take both the heating and cooling energy at the same time. Let's say you have a use that could use both. Maybe the hot water and cooling, you actually then it's like 6 times more efficient.

 

Now the conditions have to be right to make it work. The devil's in the details like many things, but. Lighting and daylighting is a really important thing. And one thing I'm not talking about in any sort of detail today is this idea that, you know, I mean, how often do you go home and say, God, I wish I spent more time inside today. I was outside way too much, you know? No, we never say that. Because the average American spends 94% of the time inside, okay? And that's not good for any of us. And so, you know, if that is reality, let's start to try to bring the outside in as much as possible. So, one way to do that is through daylighting and views, different ways to connect with the outside. And that has an efficiency benefit, too.

 

There's just a, you know, couple of, I mean, this is like, okay, how could that not work? You know, that's only whatever that is, 35 feet wide, 80% window-to-wall ratio. I mean, it's like, that actually breaks every rule that you, but I still like that picture, so. It's just, like, yeah, daylighting all the time. But, you know, this is more, like, well, that's, you know, that's kind of, like, I'm thinking, like, okay, retrofit scenario. You know, if, you know, you maybe aren't going to be able to totally tear a building apart. But maybe you can pop in some skylights and do some different things to improve daylighting.

 

We already talked a lot about renewables. That's actually my zHome project that I was talking about. I always have to slip in a little photo of zHome so I can brag about it. And then, that's some, you know, wind. Just really quick, you know, we were going to talk about plug loads. And this is maybe a bit too much detail for here, but I thought I'd keep it in. You know, I like to think about these things from the standpoint of, like, well, what can you guys do today? You know, and you know, there's a range of alternatives of what we can do. Some of the stuff is, like, oh, my gosh. Okay, new construction, we can do whatever. Retrofit, hmmm, okay, that's a little more complicated. But some of that stuff you can do right off the bat. And I do think aggressive plug load strategies. We have our Power Ed program at McKinstry that helps with these sorts of things. You know, in a zero-energy building, that might be the biggest individual load. So, really getting aggressive. You know, designing for, you know, the human decides when to turn it on, but it automatically turns off. That's a great strategy. Really trying to optimize your workstations and standardize them. And maybe even doing remote control by IT of the scale down settings. I know that can be a little, you know, people are like, "Don't touch my computer. It'll die or something." But you know, a lot of people also put it on that setting, like, never turn off. And they forgot they did it. And everybody does that and suddenly, you know, that's 10% of your energy.

 

It's quite dramatic. I meant to add a slide on this. But you know, equipment is going through a radical change right now in terms of efficiency. And on my neighbor's desk at the office, I will even admit this. At McKinstry this happens. This person had a monitor that was as 2008 monitor and a 2018 monitor. They were both Energy Star monitors. The 2008 monitor used 65 watts when it was on, and the 2018 monitor used 15. So, the old one is 4 times more than the new one. So, spending a lot of attention on just that upgrade cycle, replacing old equipment, large unique equipment, large stuff in labs, is really worth metering and maybe putting on a special switch outlet. Okay.  I'm going to end there with that.

 

So, I just have a couple of slides. I've been trying to think about this whole frame for you all. And you know, the exciting situation that you're in and the opportunity that you're in. And I was just trying to frame, like, okay, and don't take these numbers. This is not a guarantee of performance. But just, I'm trying to give you a sense of the range of activities as they match up with improvements in efficiency. So, you know, again, I don't know, you know, with your bond issue, you're probably looking at a mix of, you know, okay, what the heck are we going to do? We're going to have, you know, some retrofit work. We have a ton of deferred maintenance. Everybody always has a ton of deferred maintenance. And that is a huge issue. Probably going to have a little bit of new construction.  You know, what does that whole mix look like? And maybe we're going to have a couple of buildings we're going to really go crazy on and tear apart. But we're going to have other buildings that are pretty close to new. What do we do with those?

 

So, I'm not going to go through these. I'm just going to let you look at these. But just to kind of whet your appetite towards you can do different things at different level. And there's different level of prices associated with it.

 

And the other nugget I want to feed to you is that, you know, there are different financing approaches with some of these things. I mean, it was interesting when Dan was talking about solar. You know, sometimes you can use, you know, an investment to catalyze a larger investment. You know, there's different contracting mechanisms. Those sorts of things. And I think, you know, getting your head around all those different options is probably good just to maximize where you're at. And I just wanted to share a couple of things. And I'm sorry. I hate it when people show slides, and they're like, "I know you can't read this." It's like, "Well, why did you do the slide then?" And so, I broke that rule.

 

But you know, at McKinstry, one of the things that we have been doing with our facilities condition assessments and kind of trying to assess how to approach a campus, you know, or multiple campuses. This is actually for a school district, this is actually a sample, but we do this for an array of clients. Where we actually look at a multiple campus portfolio and kind of the overall condition of everything. And you can feed different kind of variables into an analysis like this. Like facility assessment. And energy use. And dollars available to spend. And you know, those sorts of things. And we actually then also bring that down onto an individual building basis. And this is an actual hospital that we've done this on. And they did this, this is kind of data visualization. Where they broke things down into quadrant by quadrant level at a building scale on a per floor basis to help people identify, like, okay, what's our deferred maintenance needs? How much energy are we spending on these things? To help use the technology to help us reign in and kind of focus on different areas.

 

That's just a little side thing I wanted to show you. But just to help you think about, you know, kind of next steps on what might happen here for you guys with the bond issue. How am I doing on time? I'm going to pause actually and see if anybody has questions.  I know I'm going pretty quick here.

 

>> Question is, you know, when we talk about [inaudible]. In the beginning, you show us these 2 curves, right?

 

>> Yeah.

 

>> Now, we try to take energy from, say, the summer, right, and use it in the winter. Now, what kind of method you kind of stole that energy. And then you use it later on in the winter.

 

For example, the hot weather in the summer, you know. How you, because of your company, you know, how do you convert that to energy to store it, then use it in the winter?

 

>> Yeah. I clearly skipped over a huge detail. Which is all these buildings, we're assuming are connected to the electrical grid.

 

>> Oh.

>> So, like these meters, I think, you know, I don't think Dan, Dan I think displayed it individually up here. But basically, with the net metered scenario, the buildings, the meter runs backwards and forwards. So, in the summer, where you're generating more than you're using, the meter's spinning backwards. And you literally, I mean and this depends on the utility you're in, you build a utility credit.

 

>> electricity to the utility.

 

>> And then you kind of, you pull off of your credit in the winter months. Now, I mean, that leads to all sorts of questions about how buildings interact with the grid. Grid integration. All those sorts of things. And frankly, that's where the whole zero energy conversation is evolving right now. And I'll talk about that in a sec with Catalyst. Okay. Yeah. Georgeann.

 

>> You're probably heading there, but I was just wondering. Are you going to talk about the Eastern Washington project? Okay.

 

>> Yeah. I'm going to go there right now. I've given you guys enough sales stuff. But I mean, sales on why zero energy is good. But just, I was starting to blaze through these. You know, better buildings equals higher performance on average. You know, building overhead costs are probably at most 10%, if you look at the cost of a building, you know, 90% is the salaries of the people inside. At most, absolute most, 10% is the building itself. So, a little nugget of extra goodness in the building that leads to higher performance by the occupants or the students, it pays off massively.

 

I do think there is this thing with envelope when you're with the higher performance building. You're looking more at the envelope. That's a good opportunity to deal with mold, those sorts of things.  I do think zero-energy buildings done right actually are more durable rather than less durable. I know I have a lot of facilities people here, so you guys can jump up and say, "No way, buddy." But I do think that's true. And we can chat about that.

 

One kind of cool thing is, I actually think, again, done right, a zero-energy building has kind of more what people call resiliency. Which to me is, I don't know, that term is a little funky. I mean, it's like, it just works without power inputs, which I think is really powerful. You know, like, if you have a well daylit building, it's not the end of the world. I mean, there's some parts of frankly McKinstry headquarters where the power goes out, and it's like, what do I do if the emergency lights don't go on, because you don't have daylight. But in a building that has daylight everywhere, okay, no biggie. I can see. I can walk out.

 

This is a well-daylit conference. Believe it or not, this is the Consumer Electronics Conference in somewhere, maybe Phoenix or somewhere. You know, you think about some conferences where you're, like, on the conference floor and there's no windows. And man, if the power went out, it would just be, like, oh, my god. You know, like, you would have 10,000 people freaking out. They just kept on having their conference, you know. And that wasn't actually that hard. So.

 

And then, another thing, and I'm sorry, all the Cowboys fans, but I had to leave a Seahawk slide in here. Just saying. No, I'm kidding. I was going to put a Tom Landry picture in here. I thought that would be awesome, but I didn't have time. No, but quite seriously, I do think there's this thing. I mean, zero energy is exciting, and it's good for all the outside people. But people on the design team and the construction team and the operations team do get pumped up. And I do think people just do better work working in zero-energy buildings. That's not to be underestimated.

 

Okay, now I'm going to talk about Catalyst. So, this is a project that is actually being, it's under construction. It's actually halfway finished. I unfortunately don't have, well, the construction photos aren't actually that interesting at this point. But it's being developed by the McKinstry  ownership team. So, McKinstry is a company that is privately owned by a small group of individuals. And the core group of those individuals are basically also do some development. And they are developing a high-performance district energy system including zero-energy buildings. And they're doing this is Spokane, Washington.

 

So, that is the building. I'll be just giving you kind of the high level of it. So, this is kind of a high-level photo or image of the campus when it's done. The upper left building is the building that's under construction right now as well as that smaller building that's in the very middle of the campus. And that small building in the middle is called the hub. And that's actually where the district energy system for the community is. So, you know, Catalyst includes a bunch of the technologies that we've talked about. Pretty much everything that I showed you already is in Catalyst. So, the high-performance envelope. It's actually using, the whole structure is actually wood. It's using what's called cross-laminated timber. So, rather than a normal steel-and-cement building, which is very carbon intensive, it's using wood, which actually can be carbon positive if the logging is done correctly.

 

We're doing a ton of things with plug loads, as well. But one very interesting thing about Catalyst is that it is, as I said, the heating and cooling for Catalyst is being provided through a district energy system. So, the heating and cooling for the project is not created onsite. It's actually created offsite, and then there's a set of pipes that are under the streets on the campus, and that's delivered to each building. The level of efficiency of this district system is quite high. For any engineers who know what I mean when I say coefficient of performance. The aggregate coefficient of performance of the whole system is in the high 3's, like 3.8. It's really quite good. And it's doing that through a combination of basically air source heat pumps, heat recovery, chillers. And there is an electronic boiler that provides peaking loads when it's quite cold out. But that's a small amount of the annual use.

 

There's one other thing in the mix that I'm not thinking of right now. We did look at doing a ground source system there. The ground source, the ground conditions were real tough for drilling. If you're doing ground source, you do always want to really check the ground conditions to see what those are like for drilling. We had a lot of bedrock that was kind of fracturey, and it was going to be very expensive for us to drill. 

 

And then an interesting part about Catalyst, and it's something we haven't talked about at all. But I do want to kind of leave you with. And then I'm happy, we've got 10 minutes to chat about things. Is, you know, at a certain point, you think about that scale of building use to building efficiency. If you think about it, at a certain point, high-density buildings, like anything above maybe 4 or 5 stories. Or very high energy intensive uses, say a hospital or a lab building, like, how the heck are you going to do zero energy at that scale? And the way, there's kind of a new process in which to do that. And that is what's called an offsite renewable zero-energy project. And that was something that the Living Future Institute introduced a couple of years ago and defined that, put parameters on that. But essentially, if you have a higher intensity use, if you basically are as efficient as you can be and maximize all your solar onsite, you can still be zero energy if you do some offsite renewables, as well.

 

So, what we found, and I was running the energy program and ILFI when we launched that. It opened up. It's like 50% of all the buildings in the United States fall in that category. And so, we knew that we had to do a shift with that. And so, that's quite exciting. And so, Catalyst falls in that category. So, Catalyst is about 50% office and then will be about 15% STEM education for Eastern Washington University, as I was mentioning. And so, the STEM stuff is a little bit higher energy. The energy, electrical engineering group, the visual communications group, which is pretty computer intensive, and the computer science group. They have, like, hacking lab. They have 2 onsite server rooms. Just things that tend to push up the energy, so rather than this building being in the probably high teens, which we might expect if it was just straight office. Kind of a lower density office. For zero energy, it'll be probably in the mid- to high-20's I'm guessing.

 

And that basically pushed us toward an offsite thing. And so, it's pretty fun what we're doing in that case is we're going to, actually McKinstry's creating a grant program. Where we are essentially saying, you know, we're installing solar on other folks rooves. And actually, we're reaching out to school districts specifically in the Spokane area. And basically giving, selling the solar at a subsidized rate that basically gives the school districts inexpensive power. And then we claim the renewable credit and apply it to Catalyst. Which is really exciting and kind of, you know, a creative way to deal with it.

 

Okay, we have about 7 minutes, and I'd be thrilled to answer any other questions.

 

>> Could you talk a little bit on Catalyst about kind of the financial piece of that? Because I know that we had talked about the fact that you can do zero-energy facilities for pretty much the same cost. Whether that's over the lifecycle of the building or upfront as a traditional building. Can you talk about that a little bit?

 

>> Yep. And that's a long, really long conversation. But it's good. I've got 10 seconds [laughter]. I think, you know, my rule of thumb with zero-energy buildings is that if you look at the total cost of ownership in particular. And that's the way we should be thinking about these things when we are looking at institutional buildings. And it might even be on its head, where, like, actually, the first cost is less important than the operating cost. Because sometimes the operating costs are actually and the operating dollar is harder than a capital dollar to get. Maybe I'm wrong here, but that's just a general rule of thumb. And so, the total cost of ownership of a zero-energy building is less than a new building. I mean, then a code building. I mean, just generally speaking, it is less. If you look at it over the term of the bonds, you know, if it's a 20-, 25-year bond. I don't know what this bond will be. It should be less. And so, that's kind of a no-brainer. I think when, I know with Catalyst, when Ash was talking about Catalyst. He was actually, I think, mostly looking at it through the eye of the salability, kind of the rentability and kind of the business proposition for them as the developer. And they were basically saying, okay. We came in saying we wanted, you know, we're putting our money on the line. We're putting like a hundred million bucks or whatever it was on the line. We want to get a return that we would get if we were just building a "normal" building. And everything they had said was, like, yes, we are achieving that. We wouldn't have done otherwise. So, and the one last thing I want to say is I know that there is a lot of decision making that needs to happen with this. I mean, you guys have your work cut out for you. But it's like really exciting work to figure out how to allocate the dollars. You know, I think there's the numbers part, and then there's the science, and then there's the art. I do think, you know, you're probably going to find that when you look at allocating all those dollars, you know, it's going to be, like, do we go super, you know, do we, is it deferred maintenance and baseline efficiency? Or, you know, what's the right mix here? You know, I think doing, you know, doing at least some level of high aspiration buildings is a really good thing to do. You know, even if it's 1 or 2. I don't know where you'll end up budget-wise, but you know, hopefully you can do more than that. But you know, building a legacy or even a building on each campus, that kind of a thing. You know, that is kind of like, hey, that is the future. That is, you know, that's where we all need to head, you know, is a really big opportunity. Okay.

 

 Thanks.

 

Thanks.

 

Applause

 

 Music