Bruce Schlein - Low hanging fruit in the Big Apple

In the basement of Rockefeller Center, in a room that looks like it belongs in a brewery, is a prime example of an energy efficiency retrofit project. An ice-maker and storage tanks take advantage of N.Y.C. off-peak electricity rates to make ice through the night that is then used during the day by the complex's central air-conditioning system; essentially a battery that stores less-expensive energy in the form of a coolant. What makes this project, developed by Tishman Speyer's sustainability team, with attractive returns unique is its application of a specific technology in a custom-built solution for a single, albeit significant, efficiency improvement. What makes it potentially commonplace is the existence of tens of thousands of similar opportunities scattered across the built landscapes of N.Y.C. and other cities around the world. It is this combination: small, specific and fragmented projects, and in the aggregate huge (McKinsey estimates the U.S. market alone at about $500 billion investment resulting in $1 trillion of energy savings) that both tantalizes and vexes property owners, policy makers, banks, environmentalists, and entrepreneurs. Why the big tent? In addition to the monetary rewards, energy efficiency also offers a host of other benefits. Because retrofits by definition take place where a building is, they can be a local economic development and job generator; jobs for engineers, and skilled and basic trades. And because efficiency results in reduced energy use per unit of output, for energy importers it enhances energy independence. And then there are the environmental benefits: squeezing more energy out of the built environment means reduced extraction and combustion of fossil fuels, and associated negative impacts. Citi has had the opportunity to work with, and learn from, many of the aforementioned players in our efforts to both green Citi's facilities and develop financing solutions that enable our clients to green theirs. Our direct footprint story is a good one: 10% absolute greenhouse gas emission reduction by 2011 from a 2005 baseline (on target), which has recently been raised to a cumulative 25% by 2015. Financing is one of several categories of barriers that contribute to the vexing. Citi is developing a suite of solutions to help overcome these barriers, and doing so together with our clients from major energy services companies (ESCOs) to smaller entrepreneurs such as Transcend Equity, Metrus Energy and Green Campus Partners. Transcend offers an innovative managed services model that uses operating savings to fund improvements without placing debt obligations on a building. N.Y.C. is also committed to promoting efficiency as evidenced by the newly formed N.Y.C. Energy Efficiency Corp. (NYCEEC); an entity initially capitalized by grants from the American Recovery and Reinvestment Act (ARRA) for providing revolving loans and credit enhancements. With its extraordinary but in many cases inefficient building stock, N.Y.C. is a prime market for developing and proving the potential of energy efficiency at scale. And as the Big Apple, it is aptly named for what many call the "low hanging fruit" of cleaner energy. Bruce Schlein is the vice president, corporate sustainability at Citi, New York, N.Y.