ClimateWire had a fascinating story on Monday about federal
efforts to increase the energy efficiency of buildings, which are
estimated to consume about 40% of our nation's energy. The
story concerns the less than inspiringly-named Greater Philadelphia
Innovation Cluster for Energy-Efficient Buildings, which is seeking
to substantially alter how building owners think about energy
efficiency and the use of technology.
The problem facing GPIC, as it is known, is one with which I
confess I was not familiar. According to the statistics from
the Energy Information Administration:
"Over the past 20 to 30 years, every important building
component has improved in energy performance. From air conditioners
to lighting to windows, construction crews today have an array of
green technologies at their disposal.
Once they're put together, though, the finished
building performs no better than its predecessors of two or three
decades ago. The parts have gotten better, but not the
It's not clear why this happens, but the theory is a
combination of lack of coordination among different members of
design teams, and a set of incentives that almost inevitably lead
each individual component to be substantially overdesigned and thus
incapable of taking advantage of the efficiencies provided by new
I have to say that this conclusion is sufficiently startling
that I am skeptical. The EIA reports that, from 1986 to 1999,
energy use per square foot of building did not
change. Apparently, 1999 is the last year for which EIA has
data. (Which of course is also troubling, in its own
way.) It would be interesting to know if energy efficiency has
increased at all since 1999.
Even if the situation is better than the EIA data suggest,
it would not be surprising if the problem does exist, at
least to some extent. If so, it raises some very interesting
issues regarding government regulation of building
efficiency. States such as California and Massachusetts are
likely to start regulating building efficiency at some point as
part of their broader plans to attain GHG emissions
targets. Will they be able to do so in a way that actually
leads to decreased energy use per square foot? Based on this
article, simply requiring use of more efficient components may not
lead to the outcomes the states want. On the other hand,
regulations that actually affect the design process will be
considered by building owners to be unreasonably
This is definitely one to continue to watch.
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The Supreme Court of Texas recently held that a liquidated damages provision in a contract for renewable energy was unenforceable because it operated as a penalty without having any reasonable relationship to actual damages.
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The Mintz Levin Energy & Clean Technology practice group worked on over 45 transactions in 2013 and helped energy and clean technology clients on a wide range of matters, including financing transactions, joint ventures and other arrangements with investors and global corporations from the United States, China, Russia, Europe, India and Japan.