Regardless of industry and portfolio size, the crux of decarbonizing—particularly across standing assets—hinges on the ability to view and manage a strategy at two levels: the portfolio and the asset. In theory, this is simple, but in practice it’s anything but. The experience of our team and clients has illustrated time and again that understanding how and when to align asset-level goals to portfolio goals, and how and when to allow asset-level goals to diverge from portfolio goals, can make or break your decarbonization efforts.
#1: Portfolio view
This is the 30,000-foot view, or the forest, where assets are aggregated by use type, market, and other key characteristics. Through this view, organizations develop a data-informed portfolio strategy that optimizes impact, effort, cost, and timeline. This strategy provides the overarching vision and direction for operational decarbonization, and helps organizations identify groups of assets that may be prioritized for acquisition and disposition, further investigation and data improvement, and emissions mitigation.
#2: Asset view
This is the up-close view, or the trees, where individual asset performance and investments come into play. At this level, we work with organizations to identify individual assets for investment, and to set asset-level targets. Accurate data is particularly powerful at this level because it drives decisions related to where and when certain strategies will be deployed, as well as the required investment and payback periods.
At the asset level, engagement is the linchpin of strategic action. It’s worth every minute to solicit new ideas, gain buy-in, build ownership, and ensure alignment—all of which are required for operational decarbonization, which is a highly cross-functional effort.
In practice: Electrification
From a net-zero perspective, electrification of all new developments and of standing assets must occur, as it’s the only way to directly eliminate an existing building’s fossil fuel consumption. This transition is relatively easy to incorporate into portfolio-level forecasts and high-level mitigation planning but is much more complex to plan for and implement at assets.
Since 2009, Stok has partnered with the County of San Diego in developing and operationalizing net-zero energy and net-zero carbon across the County’s facilities. Electrification is a key feature of this work. All new County facilities are all-electric; all existing facilities are being studied for electrification. To date, Stok has completed electrification feasibility studies across 11 facilities covering 1.2M square feet, identifying GHG savings of approximately 2,000 metric tons of carbon dioxide equivalent (CO2e).
In developing the County’s Zero Carbon Portfolio Plan in 2022, it became clear that achieving net-zero-carbon goals on time would require the County to replace gas-fired equipment ahead of end-of-life and/or to pursue significant project volume leading up to their target year. The County opted to take a proactive approach, spreading out projects between now and 2030 to smooth out funding requirements.
Funding, of course, is not the only challenge electrification presents. An additional challenge is planning for downtime at critical facilities. While planning for these challenges is underway, forward movement has not stalled. Stok is working today with clients to implement the supporting infrastructure for electrification, inclusive of onsite renewables, battery storage, and electric vehicle charging stations. These measures are generally less costly and easier to implement, making near-term action more accessible than larger capital projects.