Executive Summary

Potential for Geothermal Heat Pumps in the Federal Civilian Buildings Market, RP-008

The Federal government represents a potentially large market for geothermal heat pump (GHP) technology.

For a full copy of this Report available to GHPC members only, please make a request for "RP-008" to 1-888-2555-4436, by fax 202-508-5927, or info@ghpc.org

The Federal government is the largest single user of energy and the largest landlord in the United States.

Federal agencies face stringent mandates to reduce energy consumption in their buildings and facilities. The Energy Policy Act of 1992 (EPACT) calls for a 20 percent reduction from 1985 levels in energy consumption per square foot in Federal buildings by 2000; Executive Order 12902 raises the requirement to a 30 percent reduction per square foot by 2005.

GHPs can help Federal agencies achieve significant reductions in buildings energy consumption, and offer the added benefits of lower operating and maintenance costs, reduced pollutant emissions, and high reliability.

Although GHPs appear to offer significant benefits to Federal agencies seeking to reduce energy use, the potential Federal buildings market has not been well characterized.

Electric utilities and their GHP industry allies can develop a targeted approach to this market if they have information on

-the size of the market

-the types of buildings represented

-the distribution of Federal buildings in utility service territories

-current HVAC systems, and plans for replacement/retrofit

-key Federal decision-makers in HVAC system selection

Examination of readily available current information on the Federal civilian buildings segment and its energy consumption patterns has resulted in a preliminary "thumbnail sketch" profile of this potential market for GHPs. Further research is needed to define and characterize this market.

The main Federal buildings databases are maintained by DOE's Federal Energy Management Program (FEMP) and the General Services Administration (GSA). GSA maintains data on Federal property owned and leased in the U.S. and abroad. FEMP collects and compiles energy use monitoring data from agencies. In addition, agencies maintain data on the individual buildings they manage, but limit access to these data to government personnel.

The Federal civilian buildings segment consists of approximately 500,000 buildings and facilities, comprising nearly 3.1 billion square feet. Energy used in Federal buildings is over 30 percent of the total energy used by the Federal government and 47.5 percent of the total Federal energy bill. Energy consumption reductions must be made in both owned and leased buildings.

Twenty-six percent of all building space owned by the Federal government is in three states: California, Texas, and Virginia. One third of the California holdings are residences, mostly military housing. Federal buildings in Virginia, by contrast, are devoted primarily to offices, followed by housing.

Ninety percent of Federally leased space is held by civilian agencies. One third of the total leased area is in California, Maryland, Virginia, and the District of Columbia. Largest lease holders are GSA (over 50 percent) and the U.S. Postal Service (35 percent).

Federal buildings space is as follows: housing, 25 percent; offices, 18 percent; service buildings, 16 percent; storage The allocation by use of the total buildings, 16 percent; hospitals, 5 percent; schools, 5 percent; industrial buildings, 4 percent; and other buildings 11 percent.

The Federal government accounts for two percent of total U.S. energy consumption, using 1.2 quads a year for transportation, energy-intensive operations, and space conditioning and lighting of Federal buildings. HVAC and lighting consume .38 quads, of which .12 quads is in civilian buildings. The Federal government has achieved a 16.9 percent reduction in total energy use since 1985; Federal buildings have achieved an 18.2 percent reduction in the same time frame. (All numbers represent end-use consumption)

Five agencies account for nearly 80 percent of the total civilian agency energy consumption: Postal Service, DOE, Veterans' Administration (VA), GSA, and Health and Human Services (HHS).

EPA buildings are the least energy-efficient, in terms of Btu per square foot, followed by DOE buildings, although DOE reduced energy consumption by 17 percent over the period 1985-1994. Other relatively energy-inefficient agencies are HHS and NASA. The most energy-efficient Federal buildings are owned/managed by the Agriculture Department (USDA), GSA, and the Interior Department (DOI).

Although the relatively energy-inefficient agencies may appear to represent the best initial target markets for GHPs, the available data may be misleading, since consumption data may include unmetered process energy and other energy-intensive operations carried out at agency facilities.

Agency conservation efforts include reduced lighting levels, lower hot water temperatures, shutting off unused equipment, and energy awareness programs. Some agencies have replaced lighting, modernized HVAC equipment, and made building envelope improvements.

For agencies currently conserving energy through such measures as reduced lighting and lower hot water temperatures, GHPs can achieve significant energy consumption reductions without sacrificing comfort.

Seventy-three percent of Federal buildings energy consumption is in electricity (41 percent) and natural gas (32 percent), followed by fuel oil (15 percent), coal (7 percent), and LPG/propane, steam and renewables (5 percent). GHPs may be best targeted to buildings using electricity or fuel oil.

Federal agency expenditures on energy efficiency and conservation projects were $120.9 million in 1993 and $230.2 million in 1994. Greatest expenditures on energy efficiency projects in 1994 were made by DOD ($109 million), DOE ($24.8 million), GSA ($37 million), and NASA ($24.6 million). Funding for energy conservation and efficiency projects has been dramatically reduced in 1996 due to budget cuts.

Federal energy management activities are coordinated through interagency groups.

Energy management activities among agencies are coordinated through FEMP, the Federal Interagency Energy Management Task Force and the Federal Interagency Policy Committee. FEMP coordinates and assists the efforts of the two interagency groups.

The Renewable Energy Working Group (RWG) under the Energy Management Task Force promotes the use of renewable energy in Federal buildings. The RWG

- encourages the procurement of renewable energy technologies

- facilitates energy savings performance contracts (ESPCs)

- develops criteria for renewable energy projects appropriate for Federal buildings

- identifies sites for showcase demonstrations of renewable technologies

Legislatively-mandated Federal buildings energy audits can help identify buildings which could benefit from the GHP technology.

The National Energy Conservation Policy Act (NECPA) requires Federal agencies to perform energy audits of all Federal buildings by 2004.

The FEMP SAVEnergy Program provides audits to agencies, in return for which agencies agree to implement the recommended actions. Audit program results are available to the public.

Information FEMP uses to target specific buildings for energy audits is published in FEMP's Annual Report to Congress.

Opportunities for GHPs in Federal buildings may exist through requirements for life-cycle cost analysis in procurement decisions, Federal Energy Efficiency Fund grants, and energy savings performance contracts (ESPC).

GHP projects which offer significant savings in operating and maintenance costs can compare favorably with competing technologies in a life-cycle cost analysis.

The Federal Energy Efficiency Fund provides grants to agencies to assist them in meeting NECPA-mandated energy efficiency and water conservation goals. The DOE-administered program provided $6 million in grants in FY 1994.

ESPCs allow leveraging of Federal funds with private sector funds. EPACT provides authority for Federal agencies to enter into ESPCs for energy efficiency and conservation projects.

On the basis of the initial research on the Federal civilian buildings segment, the following activities are recommended:

Monitor government agencies to determine where energy efficiency retrofits are planned. These buildings must be identified during the energy audit stage, before technology selection and procurement decisions are made. Data from the SAVEnergy Program can be used to identify buildings for which HVAC equipment replacements are planned. FEMP's Tracks database also targets buildings for audits and/or retrofits, and provides more extensive information than the SAVEnergy Program.

Encourage the use of life-cycle cost analysis in all technology selection decisions.

Identify ESPC and area-wide contracting opportunities for GHPs: identify financing options by examining ESPC-financed projects which have already been undertaken and contacting individual agency personnel involved in performance contracting.

Cooperate with the RWG by providing information on GHPs, providing draft GHP standard specifications for use in performance contracts, and encouraging the consideration of GHP technology in project criteria the RWG develops for Federal agencies.

Further study in the following areas will improve understanding of the Federal civilian buildings segment as a potential market for GHP technology:

Use of Tracks and SAVEnergy auditing data to target individual buildings which might benefit from a GHP installation.

Data collection and analysis to determine how Federal buildings are distributed in utility service territories by agency and type of building.

Examination of the procurement process for specific agencies, targeting three or four agencies. Initial candidates for further study may include GSA, the Postal Service, and DOE.

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