May 2012
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The Smart Buildings / Smart Grid Interface Business

The technology is in place and both Smart Grid and Smart Buildings benefit from the integration.

Allan McHale
Allan McHale,
Director,
Memoori

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One of the important findings of Memoori’s annual report The Smart Grid Business in 2011-2016 showed that some 40% of the worlds annual spend on Electrical Transmission and Distribution Equipment goes to Industrial and Commercial markets. Whilst the main body of the industry preoccupies itself with the electrical utility market the traditional manufacturers that span electrical and mechanical controls have also focused on the interface between Smart Buildings and Smart Grid in the industrial and commercial building business. 
 
Well before the word Smart Grid entered our lexicon, companies such as Schneider and Siemens were quietly investigating how they could meet the Industrial and Commercial client’s need for a more secure efficient and better quality electrical supply. This market was being badly served by the Utility companies in a number of countries through delivering “dirty power” which was causing outage problems to their internal electrical network. The solution was to overlay intelligent controls across the network to monitor and control it. 
 
At the same time these companies together with Honeywell and Johnson Controls were installing DDC controls to manage the environment in the same buildings. However little integration took place between these services despite the fact that one supplied the energy and the other used it; primarily because they were designed, engineered and purchased through different contracts. The environmental controls suppliers extended their integration activities first into safety and security in the building and more recently, through IT Convergence interfacing with different aspects of the business enterprise.  

Now introduce Smart Grid, Negawatts, Distributed Energy and Virtual Power with or without the Cloud and we have the possibility of delivering an elegant solution to conserve energy and reduce CO2 emissions at the lowest cost. 

In a new report Smart Grid / Smart Buildings Interface Business 2012-2017 to be published next month, we have built onto the sections in our annual Smart Grid report, that reviewed the development of Smart Grid over the next 20 years and assessed the market size across the various product segments in the major country markets of the world. These figures incorporate the cost of interfacing at the consumer end of the grid for all types of consumers. The new report is directed at the commercial and industrial building sector because we believe at this time it presents a real opportunity to develop a business through integrating Smart Grid with Smart Buildings and here are our reasons;  

  1. In most developed countries Industrial and Commercial Buildings consume 40% of all generated electrical power.
  2. The vast majority of these buildings are already fitted with fully automatic DDC controls.
  3. A significant proportion already generate their own power and many are investing in more efficient systems including renewable power.
  4. Virtual power plant technology provides the opportunity to aggregate their supply and demand.
  5. EMSCO’s and other third parties manage large real estates and are in a strong position to move this business forward.  

Reliable Controls This fits in well with what major Electrical Utilities want;

  1. A clean source of distributed electrical power generation to meet its CO2 reduction targets whilst reducing the investment that they would need to make in new generating facilities.
  2. A fine tuned system that automatically receives the data from the Smart Building control systems and balances supply and demand in real time.
  3. It would be to the utilities advantage if it could achieve this through aggregating electrical production and consumption through joining together a large number of plants.
  4. This can be achieved by EMSCO’s through having contracts at many sites through treating them as virtual power plants.

The technology is in place and both Smart Grid and Smart Buildings benefit from the integration. It does not require vast sums of money to bring it about and the likely slowing down of the development of Smart Grid because of the present poor economic conditions and lack of finance will push more investment in their direction. 
 
Last and by no means least, the suppliers that can deliver all of this include major companies such as Schneider Electric, Siemens, Honeywell and Johnson Controls. In addition they have the clout to supply these packages as part of a “Total Energy Management Solution”, whereby they invest their money in the controls and energy saving equipment, manage and maintain the plant and get paid from the guaranteed reduction in energy consumption and reduced power cost. Recently they have taken the service a stage further by acquiring companies that buy and sell energy.
 

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