Enterprising minds are creating better opportunities for buildings to interact with the Smart Grid.
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.
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 PROGRAMSEnterprises 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 nation.
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, Internet-based 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 DEVELOPINGThe 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 electric market.
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 cost-effective.
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 LEED® 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. GIB