When it comes to demand response, the demand is there. What’s your response?
The September issue of AutomatedBuildings.com focused on how demand dollars are fueling our new economy. More than 21 articles talked around the changes and deep integration that needs to occur, but how do we turn this buzz into bucks to allow our industry to profit from the new economics?
The simple answer to that question is that automation is the “enabling technology” for demand response. John J. “Jack” Mc Gowan,_CEM of Energy Control Inc., expounds:
Buzz is good, but how do you turn buzz into business? Combining energy and building automation with a profitable business model is the primary focus. In an industry that is in a death spiral towards least cost, there is a tremendous need for business strategies that allow integrators to earn income and revenue that reflects their skills. Readers, who have seen my articles before, already know that Energy Control Inc. (ECI) has put emphasis on these ideas for three decades. In addition to automation and integration, ECI is also an energy service company (ESCO) and does turnkey energy projects for its customers.
All of that, however, may not seem to make sense as a business model for many integrators. Yet many integrators already provide controls to ESCOs as part of performance contract projects. This can be a great source of business, and it is not dependent on the new construction market. Energy retrofits can be expected to continue to grow in popularity. The first major business opportunity for integrators will be to rethink control sequences from an energy perspective. Over the last two decades, the emphasis with DDC has been to meet specs and to provide comfort.
At a minimum, integration contractors should be mining their customer database to propose energy upgrades to optimize the performance and efficiency of their existing buildings. This makes sense, but it can also open the door to one of the most exciting new building industry business opportunities to come along in years: demand response.
Ed Richards, president and CEO of Richards-Zeta Building Intelligence, Inc., advises:
Today, the supply side (utilities and energy service providers/ESP’s) is now offering huge incentives for consumers to participate in (demand response) DR programs. These incentives fund the technology infrastructure as well as very lucrative rate contracts. The funding of the technology infrastructure in some regions is excess of $250 per kW and with this infrastructure in place, very creative and lucrative energy rate contracts are available that can yield a net savings of 10% on annual bills. The more these solutions are automated and real time (this is ADR) the greater the incentives. These incentives won’t last forever, but will definitely seed the market. Now is the time to engage!!
Bob Coppenhaver, director, product management and marketing at Novar, states:
Energy is a growing business expense, and large retail organizations with multiple facilities have a particularly significant challenge when it comes to managing this expense. Managing these utility expenses, which requires a comprehensive effort, can be accomplished using a multi-site energy management system. Novar, a global energy management firm that markets intelligent building control systems, has taken this concept a step further and developed a multi-site demand response pilot, which allows users to more fully manage utility expenses across multiple sites.
Jim Butler, CTO of Cimetrics, includes this observation:
Buildings that have BACnet-based building control systems are particularly well positioned to participate in DR programs. BACnet’s new load control object was developed specifically for applications like DR. This object provides a high-level interface that allows an energy management application to send demand reduction requests to a BACnet-based control system and monitor the system’s compliance with the request. The definition of the load control object does not specify how demand is to be reduced - that must be determined by a controls engineer. Multiple objects may be used in the same building (or collection of buildings) for distributed load control.
Similar opportunities exist for Lon, Niagara, N2, SCADA, EIA, Modbus, and other widely installed field networks.
The upcoming DR-Expo (www.dr-expo.com/2007/) will be the first time a conference is convened that focuses on how building owners, contractors and integrators can participate in DR. The DR-Expo provides an agenda of practical and immediately actionable information on participating in DR programs. As part of the DR-Expo, experts from utilities and independent system operators (ISOs) from around the U.S. and Canada will be describing how potential participants can enroll in a DR program.
Now is the time to get involved; learn what the buzz is all about and better understand the opportunities being presented to you with DR. Talk to your local utility and/or ISO plus your existing clients to unlock this new business. If you do not seize this opportunity, someone else will.ES
Building Automation: Turning Buzz Into Bucks
October 1, 2007