Expert: Developers Should Seek Alternative Energy

This is Part II of a two-part series.

NEW YORK CITY-The assumption always has been–if you build it, the local utility will hook it up, but that will mostly likely not always be the case. So said Frederick Fucci, a partner at Arnold & Porter LLP, at Wednesday’s PLI Green Real Estate Summit 2008 chaired by Ellen Sinreich of Green Edge LLC.

In a session titled, “Climate Change and Alternative Energy Sources,” Fucci, who followed CTG Energetics Inc.’s Christopher Pyke’s discussion of climate change, focused on encouraging the audience to look at alternative energy solutions when planning and developing real estate. He also pointed to the growing trend towards encouraging or mandating developers to meet LEED standards and use other energy-efficient building methods.

“If planners and developers rely on the conventional methods of electricity–gas and fuel delivery for those buildings–the crucial issues of the source of the energy used and what fuels have gone into its production and delivery to the point of use are not addressed,” Fucci said. He said that this is important because buildings are the biggest consumers of energy in the US.

“Alternative energy” as Fucci explained, refers to onsite or local generation of electric or thermal energy, either through systems using natural gas, fuel cells, solar energy or biomass. Wind, hydro and tidal–while renewable–are not generally available in site-specific applications, at lease not in urban or suburban areas, he added. “Conventional energy” refers to “central generation” or a grid supplied electricity and natural gas and back-up diesel generators for emergency power, he said. “Every time you flick the switch today in most places in the US, it means that you are tapping into a huge infrastructure that, in the end, relies on highly polluting, inefficient and outmoded technology. …It is the greatest single contribution to the global warming problem in the US and, were it not for China and its even heavier reliance on coal, the world.”

Fucci said that a reliable supply of energy is a prerequisite to every development project and should be taken into account in the earliest stages of the planning process. “A considerable effort needs to be made to reduce the amount of energy they consume,” he said. “More fundamentally, real estate is an important part of the solution because every commercial and residential facility is potentially a small power plant–and this is the real alternative to the central generation model.”

Some measures that reduce the amount of electricity buildings and facilities use include: