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Energy 2.0: Where the Future of Building Automation Systems is Headed

Smart Grid

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June 13, 2012

Energy 2.0: Where the Future of Building Automation Systems is Headed

Zpryme, in collaboration with Clasma, recently published a free report regarding the stakeholders and milestones involved with Energy 2.0 and the evolution of the Smart Grid.


The goal of Energy 2.0 is to provide abundant, affordable and clean energy and has been formulated because of skyrocketing energy costs, a lack of clean energy supply and an increasingly information-rich world. While Zpryme’s report is robustly thorough regarding all facets of the roadmap, this article focuses strictly on the future of the Building Automation industry.

Meeting energy demand for commercial, industrial and institutional buildings is critical to building a fully optimized Smart Grid. They account for approximately 40 percent of the world’s energy consumption and 20 percent of total CO2 emissions. The U. S. Energy Information Administration (EIA) is expecting demand for electricity in the commercial sector to grow to 42 percent by 2035. For commercial and industrial consumers, energy bills comprise a large percentage of operating expenditures, particularly demand-related charges which represent an average of 30-70 percent of the total electric bill.

The intersection of the Smart Grid and the Smart Building will therefore open the way for significant opportunities for building owners, utilities, technology vendors and entrepreneurs.

Building automation systems monitor and control a building’s lighting and mechanical systems and are operating in roughly half of all buildings over 100,000 square feet in the United States. The industry as a whole is poised for the benefits of advances in internet technologies and the inclusion of the commercial, industrial and institutional buildings into the Smart Grid as a virtual energy source, with the ultimate objective of taking them off the grid altogether.

The goal of net zero buildings is to shift load off-peak using thermal storage and on-site renewable energy sources. Within this context, the energy internet is an important solution as it will allow rapid interaction with the supply grid to enable supply and demand to talk and cooperate with one another to achieve action and reaction in real time without manual intervention.

Coupled with real-time pricing and automated demand requests, great changes can be made within the existing electrical infrastructures.

Commercial and industrial consumers are looking to become “prosumers,” a group defined as electricity consumers who produce small amounts of electricity at or near the point of consumption. This process will move forward as the “prosumers” enable the connection of buildings to the Smart Grid (B2G) by actively engaging themselves via critical enablers such as demand response, distributed energy production, co-generation, renewables-based microgrids and more. Another keystone technology in this march forward will be energy storage. Good energy storage does more than anything to lessen the dependence on central resources whether it be thermal, chemical or potential energy.

But energy storage policies need a lot of attention. “There are cases where regulations dictate that storage cannot be used to store cheap energy and discharge it at peak,” said Mike Edmonds, vice president of Strategic Solutions for the S&C Electric Company. “The roles of storage to enable this two-way ‘ebb and flow’ of power – by improving reliability, enabling peak shaving and peak shifting, regulating grid frequency and voltage – has yet to be fully valued in many jurisdictions, which means the returns allowed on stored energy investments don’t match the true value provided by this technology.”

Absent the leadership of the Federal government, 25 states of the union have become interested in building energy rating and disclosure as a tool to encourage building energy retrofits. These mandates are primarily aimed at existing buildings, which comprise the vast majority of building stock. The U. S. marketplace is already factoring energy efficiency into its real estate decision-making. Energy-efficient properties have greater occupancy levels and higher lease rates and sales prices than comparable but less-efficient buildings. If consumers show deference to energy-efficient properties, the owners of less efficient buildings will be forced to make energy efficiency improvements to remain viable in the market. It goes without saying that this would be a huge driver in pushing smart building and smart automation technologies forward.

Several concepts are emerging that extend the reach of the Smart Grid from electricity systems to broader energy contexts. One of these is the Smart Community, or Smart City. A Smart Community integrates several energy supply and use systems with a given region in an attempt to optimize operation and allow for maximum integration of renewable energy resources, from large-scale wind farm deployments to micro-scale rooftop photovoltaics. The concept includes existing infrastructure systems, such as electricity, water, transportation, gas, waste and heat, as well as future systems like hydrogen and electric vehicle charging.

Smart Communities are likely to ultimately evolve to other infrastructure systems such as commercial, industrial and institutional Smart Buildings.

The future of building automation is already seeing innovative technologies being introduced into the market. These include self-powered wireless devices to integrate smart building technologies into existing buildings. The cost of re-wiring and retrofitting buildings makes automation too costly for most existing buildings, particularly of a historic nature.

GE has partnered with German self-powered wireless technology provider, EnOcean, to offer more than 50 products to make it easier and cheaper to integrate building technologies where installing wires or batteries are impractical.

In addition, Johnson Controls recently completed an acquisition of EnergyConnect Group, a well-known demand response provider. JC hopes to get a jump on their competitors by aggressively pushing into more advanced DR applications. The company also believes it will be able to increase peak reductions by using buildings and water heaters for thermal storage.

Finally, a foundation will need to be created to support new services that will come as the Smart Grid matures. We are still in early days with mobile internet, cloud, Big Data analytics, and especially cyber security. Cyber security continues to play a significant role in the Smart Grid, particularly within the T&D segment of the utilities industry. Some utilities are voluntarily securing their critical cyber assets, and for others, NERC (News - Alert) CIP legislation is forcing them to make security a priority. 

“In 2012, SUBNET will enhance it automated password management and remote IED access control solutions for substation devices,” stated Brian Neufeld, VP of Marketing for the Canadian Company of SUBNET Solutions, Inc. “These solutions help utilities comply with NERC CIP legislation by creating a more secure and reliable system.”

In summary, linking commercial, industrial and institutional buildings to the grid is heating up, and at the end of the rainbow is a pot of gold. Companies with huge global footprints, such as Siemens (News - Alert), GE, IBM, Schneider Electric, Johnson Controls, Honeywell, Echelon, EnerNOC, SAP and Oracle, are snatching up young technology innovators to be sure they can capitalize in this growing market.

These heavy weights are throwing their weight (and cash) around by covering upfront costs in return for later sharing in revenues from the energy savings realized through building automation.




Edited by Braden Becker
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