Isn’t it Time for Energy Management to Include Smarter Buildings Working with a Smarter Grid?

Posted on June 13th, 2012 by

With all this emphasis on creating smarter buildings and enabling smart grids, we still find ourselves utilizing manual solutions to try and get the results we want – that is, better energy management with measurable costs savings.

A smart building analyzes multiple variables in real-time to accomplish its energy performance goals. It uses internal temperature, environmental conditions, room occupancy, amount of sunlight exposure and other variables to optimize heating, ventilation, air-conditioning and lighting within the building. For optimal energy performance throughout the market, there needs to be an on-going partnership between buildings utilizing energy management technology and utilities. The ultimate partnership would result in a two-way communication between the smart building and the smart grid – a power grid that uses digital sensors and computer processing to relay information.

Most commercial buildings consume electricity long before people get to work and long after they clock out at the end of the day. Depending on the industry, the building could be operating 24 hours a day and consuming energy each of those hours. And for building’s that aren’t in 24-hour operation, they typically lack the intelligence to consider the day of the week or external factors such as weather when making changes to the HVAC system. According to Pike Research, “commercial buildings are responsible for approximately 20 percent of the energy used annually.” This means commercial buildings are the largest consumers of energy in the United States.

This has inspired new green building codes to be implemented in many major U.S. cities. For example, New York City’s PlaNYC program codes emphasize the importance of energy management systems for commercial buildings, not only to save money and energy, but also to ultimately create a healthier and safer environment.

While these green building codes are a step in the right direction, the future of energy management for commercial buildings is going to be based on bringing together the management of energy in commercial buildings, the buildings themselves and the utilities. Currently, the best solution to drive this future is the combination of the smart grid and smart buildings, which aim to provide a comfortable work environment for tenants and minimize environmental impact while being as cost efficient as possible.

As the Pike Research report discusses, “a number of vendors are promoting a new generation of energy management systems (EMS), which are a combination of building management systems and advanced software solutions that assist in managing the building functions in a more energy efficient way to provide demand response controls when situations within the power grid demand it.”

With greater control and automation of energy use in buildings and greater insight into demand response (DR) requirements, commercial building owners and facility managers would be better able to control their energy usage, costs and occupant comfort. However, many existing energy management systems don’t have the capabilities to incorporate predictive modeling-based optimization strategies that address weather data, energy supply pricing/constraints, and occupant comfort.

As we head into the summer months, this is even more of a strain on both building managers and the utilities. Every summer (typically), the top forty hours of energy consumption are by far the most costly for utilities, contributing as much as 20 percent of a building’s total electricity costs for an entire year due to an increase in energy usage for HVAC. On some of the hottest days, utilities even have to switch on the back-up power plant in an effort to keep up with the demand. Energy management is vital during these months to shift the load.

As utility markets continue to expand efforts toward incentive-based and real-time pricing, DR programs will increase in importance. Smart buildings need to be able to adjust usage based on this real-time pricing information provided by utility companies as well as shift electric loads in response to requests by a utility given market price conditions.

What does all this mean?

A relationship needs to exist between the utility company and building owners and managers. This relationship will ultimately reduce the strain put on the smart grid during peak usage hours. But it will only fully exist when energy management technology is installed and implemented to react in real-time. A win-win-win.

Real-time pricing means usage rates need to be negotiated in real time, as well. The smart building needs to know when it would be beneficial to generate revenue by dropping energy usage below average and selling its load reductions back to the smart grid. Triangulation among the smart building’s management systems, the smart grid and the utility company is the direction in which this market is heading. Without this integrated network, a smart building and smart grid can never truly operate at maximum efficiency.


The opinions expressed in this article are solely those of  the author Mike Zimmerman, Founder and CEO of BuildingIQ.

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