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In February 2006, I wrote about the coming of a serious killer application, one that would drive business for building automation and integration players alike. The prediction was based on the emerging opportunities around energy and specifically electricity that is in short supply in North America.
The Killer App is here; it’s called DR (Demand Response).
A killer app is defined as being a product or service that is so useful that people will buy particular piece(s) of computer hardware and/or an operating system simply to gain access to the application, one that is so valuable that it transcends any concerns, risks or need to learn something new.
For many building automation and control contractors and integrators, DR is old hat. It’s something that has done for many decades though have yet to deliver any significant value, in other words, it’s easy to do, and the tools and technologies required is well known to most.
That does not sound like a Killer App does it?
The fundamentals of DR are not new, but what is new is the circumstances around a new form of DR, some people are calling this ADR (Automated DR) while others IDR (Intelligent DR). This form of DR uses all of the technologies that have been talked about in AutomatedBuildings.com and BuilConn for years. This form of DR leverages the application of open systems, standards and IP based connectivity for a specific business opportunity that carries a great deal of promise for increased business returns.
The second reason the “new” DR is not to be ignored are a number fundamental business drivers; the impending scarcity of electricity in the nation’s electricity system and the increased concerned by US companies of green and sustainability issues, driven by climate change that is now an accepted scenario world-wide.
The combination of the above makes DR a major contender to be categorized in our minds as a “Killer App”, a combination of opportunity, technology and capability to deliver.
For those BAS players that understand this new DR proposition, it will provide a significant new angle to increase business and specifically profitability and value proposition to their customers, here is why:
DR today delivers real and tangible benefits for building owners that can shed some load at peak times, and building automation is what can help deliver those benefits. To owners, it will mean money in their pocket and actions that will go toward their green objectives if their corporations have them.
Implementation of DR will require additional products and services that can only be provided by building automation players, so either you will provide them, or your competition will. It all depends on your awareness of DR.
Those who can deliver DR to owners will command significant benefits from a renewed relationship with the building owners, one that will enable them to increase business and margins with them.
On the technology side, half of the DR equation is already in building automation’s toolbox, the control systems. The other half, the link between the building and the utilities is rapidly developing as technology companies sharpen their solutions to focus on DR applications and evolving standards and best practice matures.
The end analysis is that building automation is likely to return to the core function of energy management, one of the cornerstones of why we have control systems in buildings in the first place.
Learning about this new DR proposition is the critical next step for all building automation players. There are a number of things to learn:
Firstly to learn what DR is all about, and how from a business point of view, DR is implemented today and in the future. This involves learning about the programs that utilities and ISO’s have put in place for DR to be rolled out across the US and Canada. Unfortunately, the programs differ from region to region but fortunately all of the active DR regions will be represented at the upcoming DR-Expo in Chicago.
Secondly, understand the business value and business model that you as a new DR player will need to put into place, and how you will need to sell this proposition to building owners. It is not the same as selling a control system to control temperature, it’s a financial sale that if you know how, is very doable by most if not all control contractors and integrators.
Lastly understand the implementation steps from a technology point of view. What technologies and standards are applicable, the skills and tools required for successful implementation of DR and also learn the best practices that experts have evolved.
Additionally, you will need to understand the new DR-centric community that will emerge as this space develops. New players, new names, new experts, new thought leaders and new partnership opportunities.
All of the above next steps are the key agenda of the upcoming DR-Expo in Chicago, an event that is focused on implementing DR now!
For more information on DR-Expo, visit www.dr-expo.com.
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