November 2013
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Smart Cities could drive BAS Opportunity

Exploring the role of Building Automation in smart cities further, these buildings require technology to interact and operate as systems.

Jack Mc Gowan
Jack Mc Gowan, CEM
President
Energy Control Inc.

Contributing Editor

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Perhaps the greatest challenge for the building automation industry in recent years; has been the lethargic economic recovery we are seeing for construction after the great recession of 2008.  According to the Bureau of Labor Statistics, the U.S. residential construction market lost 1.4 million jobs from the start of the recession, and has only added back 138,000 as of 2013.  Residential data is easier to get than commercial, but a reasonable estimate would be that commercial job loss is equally dramatic.   One exciting development that appears to be a potential job engine for the smart technology segment of commercial buildings is a trend toward Smart Cities. City Buildings provide venues for delivery of city services and dramatically impact how and where communities interact; and often the quality of interactions.  An already controversial issue before a governing body can escalate if the chamber is too hot or cold, crowded, etc.  Existing Buildings are central to discussion of city resources because city’s’ spend 10% of operating budgets on Energy. This energy maintains building environments, which directly impact employee productivity, and the planets’ environment.  These concepts drive why buildings are integral to communities, both as structures where we live and work, and as elements of civilization.   This is critical as US cities will invest $57 Trillion to renew structures1.

Understanding buildings better informs how to improve operations, how new buildings should be designed, and how to integrate intelligence technology.  Electricity is essential because it’s the highest cost and highest quality form of energy. Quality means it can enable diverse types of work, like government IT.  Electricity is the most resource and environment intensive energy type, making it central to energy discussions.  Use and cost for Natural Gas, the other critical energy type, is saved by optimizing buildings, yet gas is not as resource constrained nor as cost intensive as electricity today.  The other alarming fact is that within the electricity system, the Department of Energy says that commercial and residential buildings make up 80 percent of projected energy growth between now and 2040.  So energy is important for Cities, but another major issue is electricity resiliency. Hurricane Sandy reminded Americans of its’ fragile electric system. Smart Cities, such as those in Connecticut and New York are seeing a resurgence in on-site electric generation, which must be effectively controlled to optimize overall building and campus performance.

Exploring the role of Building Automation in smart cities further, these buildings require technology to interact and operate as systems.  Just as citizens have come to expect ubiquitous Wi-Fi services to follow them around, it is essential to develop similar seamless interfaces between citizens and city services.  Building Intelligence must be part of every building, as with Envision Charlotte, a Web service tracking real-time city energy use.  Building and campus centric approaches can help cities optimize performance by tying systems through “Tech” Integration.  Building Automation Systems (BAS), elevators, security, video, access control, fire alarms, etc.) are integrated electronically to share information and functionality.  Buildings can be “occupant aware”, sensing how many people are onsite. So on Friday afternoon systems know people leave early, and begin to set building to unoccupied temperatures earlier than normal to save energy, money and environmental impact.  “Big Data” also shows promise for Cities.  Many cities use data tools like EnergyStar Portfolio Manager to benchmark buildings and identify large energy users.  The Environmental Protection Agency (EPA) says Portfolio Manager is being used by New York, Seattle, Boston and others cities with mandatory building performance ordinances.  Combining Big Data and Integration, cities go beyond inputting utility bill data for benchmarking.  Software and WebServices can be used to extract real-time energy meter data, BAS data, etc.  Combining Data and Integration technology strategies saves energy cost by managing buildings better, and save taxpayers money while conserving natural resources.

Money is a constrained resource, so BAS technology often requires creative strategies along with thoughtful design and implementation.  Financing options include; Energy Service Company (ESCO) traditional third-party financing or ESCO 1.0 and ESCO 2.0 to leverage utility payments as well as efficiency savings, GO bonds, On-bill utility repayment, Demand Response payments (DR$), Property Assessed Clean Energy, Power Purchase Agreements, self- funding and grants from sources like ARRA, as well as Net-Metering, Renewable Energy Credits and Utility Rebates.  Using finance and project approaches makes it possible to move forward with Smart BAS Initiatives for cities.

City buildings consume energy to provide services, partly for office environments, but also for water, waste water, outdoor sporting / recreation venues, etc.  Cathedral Thinking is critical to address the aging built infrastructure.  Buildings may last 100 years but lighting, heating, air conditioning, etc. is often operated beyond its useful life.  This presents challenges and unparalleled opportunities to replace equipment with new units that optimize energy use, enhance building operations and expand Tech elements to improve community interaction.  Analyzing building condition and energy use allows benchmarking to compare city buildings and reveal retrofit opportunities.  Citizens are telling leaders that they’re concerned about energy and the environment.  The good news; energy cost is among the few “controllable” budget line items. Doing the right thing to renew buildings efficiently reduces cost that can be shifted to other city services, and the cost savings can be used to finance equipment upgrades. This is why Former Colorado Governor Bill Ritter says that these projects “…have something for everyone”.  He points out that both sides of the political isle can support efficiency projects because they provide environmental benefits that some constituent’s value, but they also create jobs and stimulate the economy while conserving scare government resources to appeal to other constituents.   .

So what does Success with City Buildings look like?  Here are a few examples. 

The City of Santa Fe is a great example of expanding from efficiency to renewable energy.  Mayor David Coss tells Governing that he “envisions Santa Fe becoming the sustainability and renewable-energy capital of the U.S.”  Santa Fe will may just warrant the title. “When Solar projects currently underway are completed, 24.9% of the city’s electricity will be generated onsite from renewable sources” according to Nick Schiavo, Director of Public Utilities.  Santa Fe is a great example of forward-thinking energy strategy because the City focused first on efficiency; tackling lighting retrofits ranging from traditional T-12 to T-8 lighting in twenty-five (25) facilities to one with interior LEDs.  Beyond lighting, the City replaced atmospheric boilers with high efficiency (96%) boilers in four (4) buildings.  Work like this is critical to effective and strategic management of City buildings because these retrofits optimize energy use.  Such retrofits can be part of capital projects or deferred maintenance programs to replace equipment as it reaches the end of useful life.  Yet Santa Fe went beyond straightforward efficiency projects to creative strategies like waste heat recovery from the ice arena compressors to melt zamboni ice at the Skating Rink.  The net impact of this impressive range of efficiency projects was a 7% reduction in energy consumed by City of Santa Fe facilities.  Pursuing efficiency first means that Santa Fe gets much more effective energy utilization from their renewable energy projects and that looks like real Sustainability leadership.  Santa Fe was equally creative in financing these projects.  Utilizing many of strategies outlined in this article the City leveraged $781,000 in ARRA Federal grants plus $500,000 from the state, along with $60,000 in utility rebates for efficiency.  With optimized City facilities the next step was to enter a Power Purchase Agreements (PPA) for 2.5 Megawatts of Solar generation.  The City utilized other funding sources build a 100 KW hydroelectric facility and installed solar generation at two other buildings, a water booster station and community center.  The later projects were self-funded by the City, so they were able to get the full benefit of net-metering and direct Renewable Energy Credit payments from the utility.

Reliable Controls Tallahassee Florida also has an active Smart Electricity program by BAS that are integrated into Demand Response.  The focus was on developing Tech-based solutions leverage automation and middle-ware technology, with a broader goal to combine electric, gas and water metering that provides real time usage information to both the City utility and consumers.  Tallahassee also created the Automated Demand Response (ADR) system, funded by an ARRA grant to allow them to offer variable rate strategies to customers.  Armed with this Tech, customers can make smart decisions that minimize energy and water use plus save money.  The City has also implemented Tech for ADR strategies in City Hall, Tallahassee Airport and several other municipal facilities.  ADR programs also help utilities avoid power outages when electric demand is high.  Utility and energy trading companies are also offering Cities creative financing models to leverage DR dollars, rebates and energy savings to finance projects, that have been called ESCO 2.0 here.  Another way to refer to ESCO 2.0 might be “day-trading for energy”. 

Regardless of the finance approach or Tech applied, it is clear that local government buildings are actively pursuing ways to make their buildings automated and smarter in total. To ignore opportunities to benefit future generations by developing the more efficient and effective projects possible would be a real mistake.

To learn more about this trend in Smart Cities, visit http://www.futurestructure.com/.  The FutureStructure topic is bigger than just buildings, but… so is Automation.

Footnotes:
1. According to the Governing Institute

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About the Author

Jack McGowan is President of Energy Control Inc. (ECI), an OpTerra Energy Group company.  He is an Associatin of Energy Engineers Fellow and Chairman Emeritus of the U.S. Department of Energy GridWise Architecture Council, and was Founding Co-Chair of the National Institute of Standards and Technology Building to Grid Working Group.  ECI won a 2008 American Business Award sponsored by Dow Jones and the Wall Street Journal as Best Overall Company in the U.S. with less than 100 employees.  McGowan is author of 5 books on Fairmont Press and Prentice Hall and over 200 articles. McGowan is an internationally known energy, buildings and technology expert, and was chosen by his peers as 2006 Visionary at the Builconn Intelligent Buildings event. He was named Newsmaker of the Year by automatedbuildings.com in 2007. The Association of Energy Engineers admitted him to the “International Energy Managers Hall of Fame” in 2003 and named him “International Energy Professional of the Year” in 1997. He also sits on Technical Advisory Boards and is a Contributing Editor with several magazines including Engineered Systems, Green Intelligent Buildings Today and www.automatedbuildings.com

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