March 2017

Innovations in Comfort, Efficiency, and Safety Solutions.

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Beyond Smart Grid…

the Internet of Energy Things Grows Up
Jack Mc Gowan
Jack Mc Gowan, CEM
The Mc Gowan Group

Contributing Editor

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Buzzwords appear out of nowhere, capture everyone’s attention and then fade away.  These words, or phrases, often get our attention because they bring huge problems, or opportunities, into focus.  Smart Grid was an eye-opener when the eastern seaboard went dark on August 14, 2003.  Who knew the electric system, the heartbeat of our economy and lifestyle, was antiquated and dumb?  This article isn’t about the electricity business; rather it concentrates on how technology and energy solutions are improving buildings.  Interestingly, work done addressing Smart Grid has been central to the last decade’s most significant technology developments; from Internet of Things to Web services and Building Automation to Big Data Energy Analytics.  The graphic below depicts a technology confluence.  Electricity is vital to this building topic, but unfortunately, articles on electricity dwell too much on utility business, especially electric generation.  Electric utilities are important, but facility managers often ask why should I care?  That question is answered here but, more, the article highlights how progressive managers are using technology to drive cost savings and energy optimization; making their buildings coveted places to work, shop and live.  The real action is with this transformation of buildings on the customer (demand) side of electric meters.  IT and building trends merged with Smart Grid, and several unexpected things also happened: an 80% drop in rooftop solar cost and Climate Changes’ impact on Electricity.  This combination of factors disrupted the electricity business to building owners’ benefit.  Utilities, slow to embrace change, are providing financial benefits like rebates, and are adapting to integrate more Distributed Energy Resources (DER).  Some notable examples would include the: New York REV, California’s DER integration, and Hawaii’s efforts to deal with rapid growth in solar PV.  However more energy innovation is being driven by the building industry, and facility managers are getting paid for risk with dramatic cost savings.


The building / demand side of electricity is very different today.  After that 2003 blackout, the Department of Energy (DOE) formed the Gridwise Architecture Council that I later chaired.  It took only eight seconds for power to fail, costing consumers millions of dollars in business disruption, etc.  DOE’s initial goal was to add smart utility technology to insulate customers from outages.  My focus was aligned with another DOE goal; improving efficiency and changing the electricity business model to unlock benefits for buildings.  Utility technology was lacking because the grid design was; power goes one way and money the other when customers pay their bills, but two-way (energy and information) transactions were needed.  Two-way transactions would create a new energy marketplace and saving money on customer bills was critical.  Three decades in energy management showed us how to reduce building energy cost.  Yet the full cost optimization potential was limited because policy and antiquated business practices locked savings behind the utility’s one-way business model.  Technology cannot overcome these issues completely, but it can produce tremendous value.

Big DataTechnology developed in the last decade, as part of the Confluence, unlocks economic value for buildings.  Cost reduction and other benefits are being achieved, but not just energy.  My book, Energy, and Analytics, Big Data and Building Technology Integration, The Fairmont Press, highlights energy, cost, and operational saving benefits.  On the confluence graphic, trends and technology are shown as outputs creating benefits like high performance, improved comfort, longer equipment life and energy resilience.  Marc Petock, a Project Haystack founding member and V.P. at Lynxspring calls these outputs “Impact Drivers” for buildings.  We cannot cover these trends completely here. Instead, the goal is raising awareness that technologies can drive improvements.   Many think first of Fault Detection & Diagnostics (FD&D) as Analytics, but there are other applications.  FD&D can improve equipment operations and comfort, but energy, another Analytics application, can also produce cost saving benefits.  Analytics can be used to evaluate service contractors, track Sustainability goals and help understand building Capital Asset Value.  Tim Dettlaff, Sr. VP & General Manager with Ameresco, says “Asset Sustainability is critical because it’s at the intersection of Predictive Life Cycle forecasts and energy conservation initiatives.  As buildings age, so do the building systems supporting them.  If aging infrastructure goes unattended, Deferred Maintenance backlogs can place buildings at risk.  Big Data must include life cycle costs and models of all energy, AND non-energy related systems.  Since systems work together harmoniously, analytics and life cycle costing help prove business cases for capital investments.   For example, if an energy-related building system, at the end of life, is replaced with something energy efficient, an opportunity arises to explore Alternative Capital strategies.  Integrating Life Cycle methodology into Big Data greatly enhances the Decision-Making process.”

Readers may ask how the Smart Grid could impact all these developments?  Because the DOE and the National Institute of Standards and Technology (NIST) efforts targeted integrating smart technology to improve business process.  Actually, Al Gore called Smart Grid the “Electronet,” highlighting its’ goal to enable energy systems networking.   Beyond networking, the emphasis became system “interoperability,” which drove the need for “standards.” 

Smart Grid efforts concerned communication and interoperability (data exchange) between systems, as much as electricity.  Complexity arises because the information and systems technology was developed by different companies at different times.  So getting these systems to connect (network) and interact effectively is difficult.  “Standards” are required for data exchange in systems.  Sound familiar? Readers who remember the development of BACnet will also remember that Building Automation had the same issues.  ASHRAE’s BACnet standard solved that problem by enabling system interoperability.  Interoperability may mean exchanging information (Data), a critical function for Analytics or Continuous Commissioning.  It may also mean, both sharing Data and executing action strategies like Demand Response.  Work at NIST focused on identifying standards to deploy for interoperability between energy users and electric utilities.  As founding Co-Chair of NIST’s Building to Grid effort, I’ve seen these standards create interoperability for many systems; driving value for electricity, Analytics, and Sustainability.

Confluence is exciting because buildings apply this technology in many ways.  Some success stories show just one technology’s impact, while others blend technologies to create something completely unexpected.  Microsoft’s “88 acres” story, for example, created “the smartest corporate campus in the world” through an “Internet of Things meets Big Data” approach. Darrell Smith, former Microsoft Director of Facilities and Energy, said; "give me a little data, and I’ll tell you a little. Give me a lot of data, and I’ll save the world." This data-driven software solution saved millions in operating cost over 125 buildings.  That data might not have been available without Confluence, which included: BAS, BACnet, Integration, Middleware, meters, and Analytics.

DOE’s focus today is “Building to Grid” (B2G) and “Transactive energy,” promoting standards for “solutions that think (coordinate) across the meter.”   Projects like Microsoft’s will be easier if new systems contain onboard standards that think across the meter.  But let’s be realistic, buildings are still one-off, and the built environment contains most opportunity.  So near-term, solutions must work in existing buildings.  This requires that integration technologies continue advancing and standards are deployed.  Meanwhile, BACnet is particularly important for buildings.  Articles about Internet of Things and Big Data developments, in other industries, emphasize that it’ll take time and big investments to make these ideas reality.  BACnet is a game changer because it’s already the Internet of Things for buildings.  Since 1995, when BACnet was first published, buildings have achieved comprehensive system communication, but ASHRAE kept working.  Jim Lee, CEO, Cimetrics and Former President of BACnet Manufacturers association says that BACnet’s Web Services addenda was recently published, and BACnet is coordinating with Project Haystack to develop semantic models for building equipment.  Communication protocol standards may be familiar, but data models are new to some.  Big Data Building Analytics require two things to succeed; 1) a standard protocol allowing systems to exchange data and 2) the Analytics tools must be able to understand the data.  BACnet and integration address data exchange, Project Haystack was formed to address data understanding.  For understanding, there must be a standard way to name data points and describe what’s measured; temperature, kWh, etc.  Data standards will simplify access to new solutions and ultimately accelerate adoption.  ASHRAE, NEMA and Smart Grid Interoperability Panel work also spawned the Facility Smart Grid Information Model (FSGIM), a new data standard (ANSI/ASHRAE/NEMA 201-2016) for modeling energy information in buildings, including the building to grid interface. 

Confluence concerns both technology and “applications.”  Application has several meanings, two are important 1) defining how energy is used (i.e. type of building) and 2) defining tools (i.e. Analytics).  The Confluence graphic directs readers toward High-Performance buildings, which technologies like Analytics to understand operations, energy consumption and the relationship to energy supply.  Just as efficiency opportunities should be addressed before installing Solar panels, “building understanding” is critical to achieving high performance, because you can’t manage what you can’t measure.  Investment Grade Audits are a start, but Analytics are essential to strategically planning future deployments.  CopperTree Analytics General Manager Carey Collins shared this Johnson Geo Centre example, “where analytics were used to uncover operational issues in the staging of heat pumps.  Correcting those issues drove 18% energy savings, see chart, in an already highly efficient building.  Analytics not only uncovered problems but helped make the business case for investments.”  Following efficiency efforts, facility managers can evaluate whether DER or Microgrids make sense. Analytics tools are also critical to making results repeatable, ensuring that buildings continue performing, and diagnosing appropriate steps to correct if performance fails.  The urban myth when states were deregulating electricity was that more sellers would reduce energy cost, but more sellers are not as important as smarter buyers.  Beyond Smart, the vision is that all buyers will be smart buyers.

Graph Showing New and Old Staging vs Demand

Jack was inducted into the ControlTrends Hall of Fame this year


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