In my opinion, municipalities are the greatest underachievers of energy independence in the world.
While municipalities are generally leaders of sub-nationals in fighting climate change, they are playing climate change with an arbitrary hand behind their back.
In general, today’s real estate asset owners are living in the paradise of the old paradigm of energy.
low-cost (cheap) capital assets for delivery of energy/ ventilation
high-commodity driven operating of energy/ ventilation systems
High-tech to control comfort and HVAC and building controls
Like I wrote, old paradigm.
HVAC/Buildings Controls/Rate-regulated Utilities enjoy tremendous ongoing revenues of this business model. It’s no wonder why they are not changing.
It is understood that for developers and operators of these real estate assets, they have a short-sighted view of the market and generally need to have an ability to divest of assets just as quickly as when they acquired them. I don’t agree, but they have a rigid shorter term view because their shareholders have quarterly financial commitments that drive strategy.
But municipalities. They are large asset owners of diversified portfolios and they set the policies and rates for the development of new facilities within their boundaries and their ongoing taxation. They also happen to have very long term hold aspirations when they build facilities in their communities.
It’s in that context that I believe municipalities are under-achievers in fighting climate change, within their own facilities and within their boundaries.
Many have great aspirations, but I think they lack vision.
Municipalities don’t have the resources to layer in experts in energy monetization nor real estate assets. The market of real estate assets itself is underperforming, so there are slim pickings on visionaries to begin with.
But in general, energy, climate change and real estate are not first things you think of when asked about core competencies of municipalities.
If I break down the problem, before I get to the hurdles, I would suggest that with all best intentions by staff, they fundamentally don’t know what they don’t know, but more importantly, do very little to identify and mitigate the risks of what it is they do not know.
They don’t know leading edge proven technologies that they can deploy. They don’t know how to transform one real estate asset using energy to create additional value that the market is oblivious to.
In fact, the hurdles I referenced earlier aren’t trivial:
lack of stakeholder engagement and education
lack of financial prowess
rigid procurement policies
lack of change management capabilities
lack of inventory awareness
industry norms (HVAC servicing)
they generally own their utility and are seen biting the hand that feeds them
fear of failure (no success of failure only varying degrees of success)
old school developers fighting change
old school general contractors and engineering firms peddling off-the-shelf plans
But, we know that do-nothing is not an option.
We know that re-inventing a value proposition to lure economic development and people is a necessity. We know that laggards don’t create any value proposition.
Embracing change is doing things radically different, or it’s not really change.
Imagine looking at each of your properties and rights-of-ways in a way that identifies unappreciated value, value to communities, industry, students, etc.
Use this under-utilized and undervalued assets to meet long terms visions.
Ford didn’t put a crank shaft, seats and engine to augment a horse; he created a new platform altogether.
Reimagine your city in a way that hasn’t been done before.