Climate Legislation Proposes Zero Energy Construction, Deep Energy Retrofits For Existing Buildings


Following the lead of Boston, New York, Seattle, Washington D.C., London, Vancouver and other gateway cities around the world, the General Assembly is considering legislation that makes major changes to energy use in new and existing buildings.

The Climate Solutions Now Act, Senate Bill 414, would set performance standards for private and public buildings. Beginning in 2024 new private buildings of 25,000 square feet or more would have to be 30% more energy efficient than the 2018 International Energy Conservation Code. Efficiency requirements drop to 40% below code in 2027, 60% in 2030 and reach net zero energy beginning in January of 2033.

Beginning in 2022, existing buildings that undergo a major renovation or change in use would be required to achieve a 40% reduction in energy use, provided the changes could be accomplished with a 15-year payback period.

By prescribing the means and methods for climate mitigation in the building sector, the bill would make moot a transition plan developed by the Maryland Commission on Climate Change and supported by the NAIOP Maryland Chapters. The commission workplan for 2021 contains a series of recommendations designed to develop least-cost approaches to meeting the state’s climate goals including:

1) conducting an analysis of consumer costs and greenhouse gas reduction potential in the building stock;

2) allowing utility incentive programs to pay for reduced emissions via fuel switching of space and water heating equipment; and

3) producing an emissions reduction plan for buildings in the state.

In 2019, the General Assembly passed legislation requiring that 50% of the state’s electricity generation come from renewable sources by 2030 and evaluating a 100% clean energy grid by 2040. Mandating net zero energy buildings would redirect the focus of current climate mitigation efforts in Maryland which emphasize reducing greenhouse gas emissions from on-site combustion of fossil fuels and increasing the percentage of building electricity generated by zero carbon sources.

The legislation ranges far beyond buildings, proposing to increase tree planting, study how to mitigate against climate related economic dislocation, develop carbon trading markets and change how the economic impacts of climate mitigation policies are measured and factored into decision making.

The bill would steepen the rate of carbon reductions, increasing targets to a 60% decline by 2030 and economy-wide net zero emissions by 2045 versus a 40% reduction by 2030 and an 80% reduction by 2050 in current law. Importantly, the future use of carbon capture and sequestration technology to help reach these more aggressive goals would be prohibited. This would effectively eliminate the use of natural gas power plants fitted with carbon capture technologies to provide generation as a backup for times when wind and solar cannot produce enough power.

Preventing access to technologies, narrowing the set of compliance options, and limiting location choices will unnecessarily increase compliance costs and slow progress. The academic literature makes clear the need to preserve the option to use a full range of future technologies related to carbon capture, nuclear, green hydrogen, biofuels, synthetic and natural gas technologies. 

An opinion piece in Utility Dive by two principals at the consulting firm Energy and Environmental Economics contains an important warning that building a 100% clean electricity system with only variable renewables and short-duration storage, “would be massively, unsustainably expensive.” A recent study by that firm of least-cost carbon reduction options for the utility grid serving Maryland reveals ways forward but details the challenges of preventing access to technologies. “Reaching the end points of many ‘100%’ goals being set today may require carbon capture and sequestration, new nuclear generation, new sources of renewable biogas or hydrogen fuels or other forms of clean generation that while technically achievable are not commercially available today. Achieving absolute zero carbon emissions requires one or more of these resources to become available.”

Copyright 2021, NAIOP Maryland. Reprinted with permission from NAIOP-MD 360.

Recent Deals

Interested in advertising your deals? Contact Edwin Warfield.