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The Building Electrification Push Has Only Just Begun

If you listen to the oil and gas industry, natural gas is a cheap, clean, and plentiful energy resource that can act as a ‘bridge fuel’ in the fight against climate change. The gas industry has invested heavily in this argument. The American Petroleum Institute, an oil and gas lobbying group, launched an advertising campaign in 2020 called Energy for Progress that described natural gas as an environmentally friendly resource that’s lowered carbon emissions in the United States. 

This is partly true. Burning natural gas produces about half the emissions of coal and has fewer pollutants that affect human health. But climate scientists and environmentalists aren’t buying the natural gas talk, and they certainly don’t like the bridge fuel idea. “Natural gas cannot play a long-term role in creating our desired carbon-constrained future, as its benefits are not enough to support our carbon reduction goals,” wrote Steve Weissman, a Senior Policy Advisor for the Center for Sustainable Energy, a clean energy advocate. 

To reach ambitious net-zero carbon emissions goals by 2050, it’s become clear to climate scientists that fossil fuels of any kind, including natural gas, must be phased out. These scientists say natural gas emissions are growing and becoming a climate threat. The world is on track to produce 70 percent more natural gas in 2030 than would be compatible with net-zero emissions goals, an UN-backed team of researchers discovered.

This battle between climate scientists and the gas industry has significant implications for commercial property owners. Natural gas is heavily used in commercial properties for everything from space heating in offices, hot water supply in multifamily, and cooking in restaurants and kitchens. And increasingly, cities and municipalities are instituting natural gas bans in new construction, setting the stage for widescale electrification of building systems. The push to ‘electrify everything’ has just begun, and it holds great promise to decarbonize our buildings and improve our quality of life.

But at the same time, building electrification comes with a host of thorny challenges that won’t be easy to solve. Electrifying old buildings has an economic and environmental cost and the reality that only around 19 percent of the energy production in the U.S. is currently from renewable sources.

Make no mistake about it, though, the calls for electrification will only grow louder. Natural gas may be a cleaner alternative to coal-burning, but the energy resource is dirtier than we previously thought, and gas-fired heating systems in buildings have become a target in the push to fight climate change.

Cooking up poor air quality

One implication for property owners, and chefs, in the fight against natural gas is what it means for our kitchens. Electrification advocates think switching to electric stoves could be a gateway appliance to further efforts like replacing gas-fired furnaces and water heaters. The problem is that most people like gas stoves. They’re used to them, they can see the flame, they burned themselves on an electric heating element before. Innovation is helping, new induction stoves are quite different than the spiral branding irons we cooked on in the past; many bakers prefer the steady heat of an electric oven.

Now, recent research has revealed gas stoves aren’t just bad for the climate, they could be troublesome for indoor air quality, too. Gas stoves directly expose people to emissions, including formaldehyde, carbon monoxide, and nitric oxides, triggering asthma, coughing, wheezing, and other respiratory problems. Hood use and better ventilation help reduce these pollutants, but surveys show the average use of hoods for kitchen ventilation in American residences is only around 25 to 40 percent. Stanford University researchers discovered that people who don’t use range hoods or have poor ventilation can surpass EPA’s guidelines for one-hour exposure to nitrogen oxide within a few minutes of using a gas-fired stove. This is especially true in small kitchens, and it’s interesting to note the EPA guidelines are for outdoor exposure to nitrogen oxide. EPA doesn’t have indoor guidelines, the feds have declined to regulate gas stoves more strictly.

Besides the air quality impacts, Stanford’s study also found climate change impacts of gas stoves. The researchers discovered that methane leaking from gas-burning stoves inside U.S. residences has a climate impact comparable to the carbon emissions of about 500,00 gasoline-powered vehicles. Carbon dioxide is more abundant in the earth’s atmosphere, but methane is more potent. Pipeline leaks of methane while delivering natural gas have been studied extensively, and they’ve become a primary reason that some scientists are sounding the alarm on natural gas. But Stanford’s study on gas-burning cooking appliances and other studies like it have received comparatively less attention.

“Gas stoves are probably the part of natural gas emissions we understand the least about, and it can have a big impact on both climate and indoor air quality,” said study lead author Eric Lebel, a graduate student at Stanford’s School of Earth, Energy and Environmental Sciences.

While there’s a push to “kill your gas stove” and some states, like New York and California, may ban gas hookups on new construction, others say the gas-stove impacts are overblown. Space and water heating account for a much larger share of natural gas use in residential and commercial facilities. And even the effects of gas stoves on indoor air quality have been questioned. Still, the fight against even gas-powered stoves shows how much natural gas has fallen out of favor. More widespread switching to electric stoves in multifamily could become common soon, though gas utilities will undoubtedly fight back.

Not the cheapest upgrade

New technology is making the switch to electric-powered building systems easier, but there are still some practical challenges. Newer construction can be more easily electrified, but older buildings will face more issues, according to David Cohan, Senior Advisor at the Institute for Market Transformation, a nonprofit advocating for high-performing buildings. 

One of the ways that buildings can be switched over to on-demand, electric heat is with heat pumps. These act much like an air conditioner in reverse and can push heat from a central unit to exhaust registers using liquid coolant. They are both more efficient and easier to install than a traditional ducted furnace system. About 180 million heat pumps were used globally in 2020, a 10 percent increase per year over the last five years, according to the Internation Energy Agency.

Upgrading to a heat pump can save money because of better energy efficiency than conventional heating and cooling systems. Many commercial buildings have boilers and furnaces that just stay hot, while heat pumps can be turned on and off, enabling more strategic energy consumption. Heat pumps also don’t use as much energy because they don’t actually generate heat like gas-fired systems, they just relocate it. Heat pumps move air around instead of producing heat by burning fuel or gas. In cold weather, heat pumps extract warm air from outside and move it into a building. They do the reverse process in hot weather, taking the hot air inside a building and releasing it outside. Some heat pumps can transfer up to four times more thermal energy in the form of heat than they consume in electricity, according to Robert Brecha, Professor of Sustainability at the University of Dayton.

Still, upfront costs for heat pumps remain a barrier to installation for some buildings. Larger air source heat pumps haven’t seen much of a drop in installation costs in the past few years, remaining at about $20 to $30 per square foot, according to a recent study by Tompkins County, New York, where there’s a moratorium on the use of natural gas in new buildings. Interestingly, installation costs have dropped for smaller air source pumps from $10 per square foot to $6 per square foot. Costs for smaller pumps are dropping for several reasons, such as increased demand. It’s expected that installation costs for larger air-sourced heat pumps will drop eventually.

In the meantime, finding green energy tax incentives and rebates can help. Heat pumps require electricity to run, and if a property doesn’t generate enough of its own renewable energy, it’ll rely on the grid. “The only way to fix the problem for some buildings is to upgrade their electrical service,” Cohan said. “In large commercial buildings, that can be really expensive. Like hundreds of thousands of dollars.”

Heat pumps aren’t exactly a new technology, but many contractors may not be used to working with them. He said once contractors and the industry become more familiar with heat pumps, it’ll become easier, property owners won’t have to scavenge around finding the one contractor who can do installations and repairs. If they really want to take the electrification battle into their own hands, properties can also consider adding on-site solar energy and other renewables to further reduce costs and carbon emissions. 

It’s gonna take a while

Cohan is a building electrification proponent, but he’s not the only one who admits the complexities of widespread electrification. Large-scale electrification is essential to putting the world on a low-carbon path, but simply saying ‘electrify everything’ is too simplistic, according to a report by the ClimateWorks Foundation, a global philanthropy platform. Their report points out that policies and regulations should target which parts of transportation, buildings, and industries can be electrified now, later, or never. For example, some building activities can scale now and quickly have cost-effectively benefit from available technologies. But the lack of a competitive retrofit industry for older buildings means it may take a while for electrification.

About 70 million American homes and buildings burn fossil fuels for heating and cooking, according to the Rocky Mountain Institute, a sustainable energy research and consultancy firm. To meet net-zero goals, about five million buildings per year will need to be at or near net-zero emissions. 

The enormity of this task can not be overstated. But it could be an opportunity for increased job growth, decarbonizing the country could create 25 million jobs, typically well-paying jobs in the mechanical trades. Cohan pointed out that the uptake of these jobs is being slowed by the well-known shortage of skilled workers. “Everyone wants to be a software engineer, and no one wants to be a plumber or HVAC tech,” Cohan said. “At a personal level, that probably makes sense. But at a societal level, that is a serious issue. If contractors can’t get enough help and workers, the electrification process will be slowed down.”

Fossil fuel combustion, mainly for heating, is responsible for about 13 percent of U.S. greenhouse gas emissions, according to 2019 figures from the EPA. Even still a federal ban on natural gas is likely a long way off. But that hasn’t stopped cities from passing their own bans. Conservative states have worked to prevent this by passing laws that limit municipalities from prohibiting gas. Even still, ambitious net-zero goals will mean that natural gas bans will likely be inevitable.

The commercial real estate industry is traditionally resistant to change, but many property owners are now very much engaged with ESG efforts and aware of the building sector’s impact on carbon emissions. There’s a natural worry about the expense and regulation that comes with electrification, but as technologies become more common and widely adopted, it is expected prices will come down. The natural gas industry, climate scientists, environmentalists, and legislators will be fighting over the fate of natural gas for the foreseeable future, as it’s become a focal point in the climate change battle. Meanwhile, property owners should pay close attention to the action because phasing out natural gas and the push for building electrification is ramping up.

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