January 2011

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B2G - Moving Smart Grid, Beyond the Grid
The opportunities of integrating smart buildings with the Smart Grid

Anto Budiardjo
President & CEO,
Clasma Events Inc.

Contributing Editor 

It is no longer a question of “if” or “when” – it is now clear that 2011 will be a major year for building-to-grid (B2G) implementation. It is now only a matter of “who” will benefit from B2G and who will be left out. In 2011, building players will stake their claim and develop new business opportunities in this value-rich space.

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To be successful in 2011, the industry needs to focus heavily on developing the value proposition, business models, and technologies to ensure the transition of Smart Grid, beyond the grid, is a success.

The Value Proposition

What is the value proposition of B2G? The value proposition of B2G is crystal clear if you understand Smart Grid. The key to understanding the value of B2G is appreciating that one of Smart Grid’s critical functions is to facilitate demand side management (DSM).

DSM is a way for utilities to create virtual power plants, what many call “negawatts,” where the avoidance of generating a megawatt is more valuable than actually generating the same megawatt. Thus, buildings that can drop load when capacity is short can benefit in real terms financially.

While great for carbon reduction and thus climate change, the growing amount of renewable generation sources on the grid can create havoc for grid operators as they work to maintain the fine balance of supply and demand. Consider what happens when 30 percent of generation comes from solar and wind, and the sun is suddenly obscured by clouds and the winds die down, causing a major drop in power within seconds! The amount of electricity available will be reduced, and without backup generation available, the only option would be to reduce demand quickly. How is this done? By sending a signal to large loads – like buildings – to essentially switch large-consuming devices “off” based on the building owner’s preferences.

The above two scenarios are clear examples of how linking buildings with the grid -- B2G -- can create significant value.

Business Models

So how is this value captured by businesses in this new emerging market? A few models are emerging; although, in reality, we are still in the early days of B2G innovation.

Demand Response (DR) companies, like EnerNOC, Comverge and Constellation Energy, are making big waves to monetize B2G opportunities focused on curtailing demand when electricity prices are high.  If building operators can buy and sell power based on the market price of electricity, then there is an opportunity to lower the overall energy bills for the building. Working with utilities and Independent System Operators (ISOs), who manage the regional wholesale electricity market, DR companies and building automation solutions (BAS) providers could realize tremendous business opportunities in the B2G space by helping building operators facilitate DR activities.

As building systems connect to Smart Grid, the need for technology to help manage the growing complexity of building systems will be required – providing opportunities for industry entrepreneurs. From data normalization to managing complex control system logic strategies, BAS contractors and integrators should find tremendous opportunities suited to their expertise, technology, and business profiles.

B2G can bring additional value to businesses through equipment retrofits, continuous commissioning, predictive maintenance, and increased intimacy with existing building owners whom many BAS companies have strong relationships with. 


What technologies are required for this business area to flourish?

Much of the technologies on the building side already exist today in building automation systems. BAS today can handle extremely complex logic in controlling HVAC equipment that make up the largest percentage of energy loads within buildings. BAS providers typically do this to ensure occupant comfort, while relegating management of energy consumption since the cost of energy is generally low in many parts of the world -- particularly in North America. Tweaking BAS to take input from external sources, such as signals from the utility, would not be overly complicated. 

One of the missing components is the availability of standards, since it would be much more effective if there were a single mechanism to connect buildings to the grid. Fortunately, partly as a result of the standards work being done by the National Institute of Standards and Technology (NIST), a number of critical standards are now evolving to help ease the integration of Smart Grid with buildings.

An initiative called OpenADR, initially created by the Lawrence Berkeley National Laboratory, is now providing a focused solution to implementing open automated demand response (OpenADR). A number of vendors are implementing or planning to implement OpenADR into products that should come to market soon.

Expanding Smart Grid Beyond the Grid

[an error occurred while processing this directive]For a number of years now, the Smart Grid has been promoted as the next “big thing” in electric grid technology. While this may be true, the focus has mainly been on the utility’s grid and the modernization that is necessary for the grids of the western world to manage an increase in loads, and the building of new grids in developing parts of the world to provide much-needed energy for economic growth.

The reality of the Smart Grid is that it will affect the full, end-to-end energy system from generation (wherever it may be) to consuming devices (wherever they may be). This, by necessity, has to include electricity consumers that are both small (residential) and large (commercial and industrial).

Smart Grid cannot happen without smart buildings, and B2G is the bridge to make this happen and a significant opportunity for building automation players.

The B2G Summit at AHR Expo

Working in conjunction with many organizations in the Smart Grid and BAS areas, Clasma Events is organizing the B2G Summit for the fourth consecutive year at the AHR Expo in Las Vegas on Tuesday, Feb. 1, 2011.

The summit will be a great venue for BAS professionals to better understand the opportunities around B2G, and to network with thought leaders in the space. For more information, visit www.b2g-summit.com.

Major gathering at ConnectivityWeek

Further out, the major gathering for B2G will be at ConnectivityWeek in Santa Clara, CA, taking place May 23-26, 2011. With an expected 1,500 attendees, the BuilConn and DR-Expo portions of ConnectivityWeek will dig in much more deeply into the opportunities for businesses in the growing B2G space. For more information, visit www.ConnectivityWeek.com.


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