The topic of smart buildings has been generally been dominated by a
focus on improving environments and optimizing energy performance,
along with integrating the host of electronic systems in the typical
building. This topic of integration revolves around building automation, special systems for fire and security, vertical transport, signage, and others.
| Green Buildings and EZ Electricity
Enterprising minds are creating better opportunities for buildings to interact with the Smart Grid.
"Jack" Mc Gowan, CEM
With the advent of green, this integration has been expanded to include
meter data management and a variety of analytics. This author started
talking about dashboards more than a decade ago, and today there are
dozens of web-enabled devices of this type on the market. This article
proposes that the next frontier for smart buildings will be to
integrate communities or campuses of facilities.
All of these technologies will be combined with on-site electricity
production and access to electric markets to create enterprise zones
(EZ) for electricity. A reasonable question would be: why is this only
about electricity, and shouldn’t we focus on all forms of energy? The
response would be that all forms of energy should be addressed, but
electricity is the highest-quality fuel, is truly the lifeblood of the
economy, and, as a business, is antiquated and in great need of renewal.
Enterprise in this case relates to smart web-enabled building services
for automation and energy management or what this author called energy
business intelligence. The enterprise includes networked buildings
leveraging automation technology to optimize energy performance and in
campus applications to leverage central plants. The enterprise, as it
relates to electricity, is about enabling this network of buildings to
also participate in the Smart Grid. Although Smart Grid is a somewhat
open-ended term, Figure 1 should begin to identify some of the major
components. Today’s building owners are concerned about energy’s impact
on operating cost, about carbon, and increasingly about how to balance
the electricity that is purchased from the utility against what can be
cost-effectively generated onsite.
PACE AND OTHER PROGRAMS
Enterprises are also cities, some of which are creating new taxing
districts, and enterprise zones present a host of opportunities for
building owners. Property-assessed clean energy (PACE) is one example
of an enterprise zone concept that started in Berkley and has swept the
Quite simply, this approach allowed a home or building owner to have a
solar photovoltaic system installed on the roof and to pay for the
technology with an increase in their property tax. Recently, PACE was
derailed somewhat by the mortgage industry because the banks were
objecting to language in PACE bonds that required them to be paid ahead
of the mortgage in a default.
Cities across the country are implementing energy efficiency and
renewable energy, while a much smaller number, like Austin and Boulder,
have Smart Grid programs. Universities are much like small cities, and
many have projects that utilize smart building and smart energy
technology to measure and automate energy efficiency in buildings. Some
are beginning to use state-of-the-art, Internetbased web-services, or
“energy business intelligence tools,” to provide user friendly,
real-time information on how buildings are performing economically and
environmentally. They use technology that focuses on energy use, or
what utilities call the demand side, meaning inside the building.
These buildings must also be enabled to benefit from a variety of
electricity programs that include on-site generation from renewable,
etc. The need for this transformation in electricity is critical
because buildings represent between 30% and 50% of the electric load on
a typical utility, and they present a huge amount of potential for
efficiency as well as the EZ concept.
DEMAND RESPONSE DEVELOPING
challenges with electricity are what led Bob Galvin, former CEO of
Motorola, arguably the catalyst for creation of the cellular phone
industry and one of the first U.S. manufacturers to adopt Six Sigma, to
create the Galvin Electricity Initiative and call for perfect power.
This idea is not about abandoning the current electricity system,
but transforming it with information technology and the Web, in the
same way that they have transformed every other industry. The concept
of EZ electricity is truly at the intersection of the smart buildings
and Smart Grid or perfect power, but it blends demand response (DR) and
energy management to create next generation smart buildings.
This is a great example of some of the most well-received trends in
the building space blending to create real value for building owners.
This value will be in the form of electric cost payments for DR and
savings from smarter control, but it will also come from avoided power
outages. This latter concept was put to the test this summer during the
during the east coast heat wave. The jury is still out, but DR was the
primary technology that is widely credited with supporting the electric
grid to avoid catastrophic rolling brownouts and blackouts. DR is a
concrete example of how building technology can play an instrumental
role in the energy system.
One major leader in the electricity space that is
actively engaged in DR is Constellation NewEnergy, and they made
business news recently by acquiring CPower to increase their market
size. The company also introduced the VirtuaWatt Energy Manager product
during the ASHRAE show last year. The product takes DR to a new level
by integrating Web-services to send DR event notifications
electronically and integrate to the BAS and meter.
In California, this is called Auto DR, and it utilizes both
commercially available technology and custom software that leverages
the power of smart buildings. EnerNOC, another industry leader, is also
integrating building systems with its solutions showcased at their
recent Energy Smart 2010.
Universities, commercial real estate companies, and a host of other
building operators are participating with DR and see it as a foundation
strategy for this energy management programs and a way to derive more
value from smart building systems. DR is exciting because it leverages
existing technology in most buildings and creates new revenue streams
for building owners, but that is just the start. The Federal Energy
Regulatory Commission has a rulemaking process underway that would
change the way that DR payments are made by utilities.
Today, DR companies bid prices into a utility or electricity
wholesaler, called an independent system operator (ISO); either way,
the fee is set at that time. This means that the fee paid is the same
throughout a contract period, regardless of how much the power is
needed. Jon Wellinghoff, chairman of the FERC, said at a recent Tridium
Niagara Summit that the goal of this FERC rulemaking would be allow the
“price” or fee for DR to fluctuate in real time with the wholesale
The good news is that building owners would get paid more when the
electricity is in greater need. There is better news, though: this rule
would be an important first step in creating electricity markets where
buildings can participate. The building can sell DR, but if it is part
of an EZ for electricity and has on-site generation or battery storage,
it can also sell power back to the grid. A manufacturer can move
production to a third shift and make more profit by not making products
when electric demand is high. All of these things make buildings
“virtual power plants,” but they also make them more efficient and
One of the challenges for building owners is to really understand
what all of this technology looks like (and to discern what is hype).
To help show the industry what success looks like, the Galvin
Electricity Initiative has developed a seal of approval, similar to
LEEDŽ or Energy Star, which evaluates Smart Grid, DR, and distributed
energy resources in buildings as a function of how effectively they
leverage these resources in the context of the overall building.
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