CASE STUDY: DEVELOPMENT ADVISORY SERVICES

Using District Infrastructure to Reduce Energy Use in a Large Urban Project

Sidewalk Labs identified a district infrastructure alternative that can save $24 million in net present cost over the baseline design, while significantly reducing energy use and carbon impact.

District energy infrastructure case study comparison

Case Summary

New policies and operational models enable district-scale energy systems to be a practical solution to mixed-use development. In a recent advisory engagement for a large development project in a major U.S. city, Sidewalk Labs identified four district infrastructure alternatives with net present cost savings in the range of 10 percent resulting from improved operational efficiencies and incorporation of renewable resources, ultimately recommending an option that reflected a savings of $24 million over the developer’s baseline plan.

Thanks to the efficiencies of district systems, all four recommended alternatives significantly reduced annual electricity consumption and annual carbon emissions compared with the baseline plan, while freeing up 10,000 square feet of building space and 27,800 square feet of roof space for other more valuable uses.

Project Background

The developer client is building a mixed-use project in a high-cost urban environment, and the project combines new, ground-up construction with rehabilitation of historic structures. The client approached Sidewalk Labs to explore a district-scale infrastructure solution that is capable of providing energy and carbon reductions at a comparable or lower cost. District systems often provide a better infrastructure solution for larger-scale projects because they allow for sharing of renewable resources between buildings and enable more efficient operations. Sidewalk Labs was retained to help the client understand how to meet its goals in an economically feasible way.

Advisory Process

During the initial engagement, the client identified their key objectives and challenges around building program, energy performance, GHG emissions, project costs, operating model, regulatory constraints, and delivery risk. Sidewalk Labs worked with the client as well as the client’s larger consultant team, leveraging previous work completed to date.

Sidewalk Labs analyzed potential solutions using our district energy modeling tool, which incorporates specific details about the development with relevant local data, such as weather and utility rates, to guide energy planning across all buildings. The analysis measured outcomes relative to the developer’s baseline scenario, assessing dozens of potential innovation options to identify (and then optimize for) the best-performing alternatives.

Sidewalk Labs also developed a roadmap for implementation that accounts for regulatory context, financing, ownership, operations, and governance.

Recommended Plans

Sidewalk Labs' analysis first examined the developer’s baseline scenario for energy systems. In this case, the baseline infrastructure consisted of stand-alone heating and cooling equipment designed to serve each individual building type, with 496 kW of rooftop photovoltaic (PV) generation. The four highest-performing district-scale system alternatives were:

  • District Heating and Cooling (DHC): This option incorporated a thermal grid — a type of energy system that shares thermal energy between buildings through a distribution pipe network — with a central utility plant and energy transfer stations at each building. The energy sources at the central utility plant included air source heat pumps, water cooled chillers, and heat recovery chillers. This option matched the baseline of 496 kW from rooftop PV.
  • DHC + Max PV and Battery: This option built on the DHC option by maximizing rooftop PV at 1,560 kW and adding 3,130 kWh of battery storage. The battery storage was right-sized based on how much energy the site could generate from PVs and the opportunity for rate arbitrage during peak times when energy from the grid is more expensive.
  • DHC + Thermal Storage: This option built on the Max PV and Battery option by adding a thermal storage system, which is a large tank that stores a reservoir of heat capacity for the thermal grid.
  • DHC + Ground Source: This option built on the Max PV and Battery option by adding a ground-source heat exchange system with a capacity of 1,060 kW.

Note: The above options are based on site-specific conditions and may not be suitable for all developments, though they do illustrate the general potential to apply district solutions in large-scale development.

Key Outcomes

Sidewalk Labs recommended the client use the DHC + Max PV and Battery plan given its combination of significant cost savings alongside substantial reductions in energy use and carbon emissions. This option exceeded the client's baseline infrastructure plan on the following measures:

  • Net Present Cost: The DHC + Max PV and Battery option reflects a savings of $24 million in net present value compared to the baseline infrastructure approach over a 20-year lifecycle that factors in comparable user rates, escalation, and financing cost. This option has higher upfront costs but lower annual operational costs, resulting from improved operational efficiencies and incorporation of renewable resources.
  • Building and Roof Space: The recommended option provides additional real estate value not accounted for in the net present cost analysis, in the form of 10,000 square feet of additional building space and 27,800 square feet of additional roof space. These spaces can then be used for revenue-generating uses rather than be used as mechanical space, thanks to the efficiencies of a district-scale approach, which centralizes infrastructure systems rather than distributing equipment throughout the site.
  • Annual Electricity and Carbon: The recommended option reduces annual electricity use by 5,531 MWh and cuts annual carbon emissions by 5,960 metric tons compared with the baseline approach. These savings are achieved thanks to the expanded supply of on-site renewable energy as well as the system's reliance on thermal energy sources that are less carbon-intensive than the baseline options.
  • Eligible Incentive Programs: In addition to analyzing cost, space, energy, and carbon savings, Sidewalk Labs identified several financial incentive programs that can provide additional value to developers pursuing more sustainable infrastructure approaches in this locality.

Savings by the Numbers

The recommended alternative produced the following savings over the baseline design.

  • $24Mnet present cost
  • 10ksq ft free building space
  • 27.8ksq ft free roof space
  • 5.5kMWh annual electricity use
  • 6.0kmetric tons annual carbon emissions

Implementation

The next step in the engagement following selection of the preferred system is moving toward design and procurement with further optimization of building and infrastructure performance. In preparation for implementation, Sidewalk Labs also identified best-in-class technologies, ownership/operational models, and potential partnerships that would enable the client to implement district systems off-balance-sheet or to develop them as part of an asset managed under their district operations.

About Development Advisory Services

Sidewalk Labs provides innovative urban development advisory services to deliver more sustainable and equitable outcomes alongside strong returns. Our comprehensive, end-to-end approach starts with an urban innovation strategy tailored to your objectives and can continue through the design and planning, construction, and management phases. We're currently advising on more than 10 large-scale projects, working in Las Vegas, Miami, San Francisco, Portland, and several other U.S. cities.


Learn more about Sidewalk Labs’ development work here.

This case study captures lessons from a paid engagement between the client and the Sidewalk Labs development advisory services team that occurred in Q3 2021.

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