Duke Carbon Offsets Initiative: Energy Efficiency Carbon Offsets A Project Evaluation

Duke University aims to achieve carbon neutrality by 2024 by a combination of efforts to reduce on campus energy consumption and off campus carbon offset generation. One of the offset options that DCOI is evaluating is energy efficiency retrofits in residential buildings leading to indirect emission reductions. The problem we have attempted to address in our project is how Duke University can identify potential carbon offset opportunities in terms of improving energy efficiency in homes and businesses and how these offsets can be verified and quantified. In order to determine the feasibility of energy efficiency carbon offsets the team started with evaluating data from a similar residential retrofitting project implemented by the City of Durham’s Sustainability Office. The pre and post retrofit energy consumption data from these houses was analyzed to determine the energy savings and resultant carbon emissions reduction. The average emission reduction obtained from this project was then used to determine the carbon price. This carbon price was used to conduct a comparative analysis with carbon prices found in the market, literature and regulations. The second step of the project involved studying energy efficiency retrofit projects that have been undertaken in other regions at various levels and sizes. The last question that this project aimed to answer was regarding the suitability of various financing mechanisms for the retrofitting project. In order to address this question a demand assessment survey was designed to determine the willingness of Duke employees to participate in such a program and pay for the retrofits. DCOI plans to conduct the survey in the foreseeable future. The results of our analysis showed that average electricity savings of 113.13 KWh per month can be generated through retrofits including air and duct sealing and insulation enhancement. The average cost of retrofit was determined to be $1/sq feet of heated area. Using this investment cost and annual savings, the carbon price was determined to be 133.37 $/metric ton of CO2 equivalent reduction. Sensitivity analysis conducted for this carbon price showed that the factors that had the largest impact on carbon price are the initial investment and annual energy savings. To further evaluate the results, we compared the City of Durham’s returns on investment in terms of energy reduction, 0.97 kWh/$, and in terms of greenhouse gas reduction, 0.00046 metric ton of CO2 equivalent/$, to returns on investment of 22 other residential energy efficiency programs around the U.S. The City of Durham program lies in the middle of the range of return on investment indicators. The calculated carbon price of 133.37 $/metric ton of CO2 equivalent reduction, compared to 13.00 $/metric ton of CO2 equivalent reduction median of 44 other carbon prices found in regulation, literature, and market is extremely high. The final set of recommendations provided to DCOI are based upon the results obtained from the City of Durham data analysis and the comparative programs and carbon price study along with the essential project requirements for meeting the Verified Carbon Standard carbon offset program criteria