Corporate energy and sustainability strategies are most likely to take root when there is a compelling financial case to be made. Today's building automation systems offer that compelling case in simple terms: energy cost savings pay for retrofit costs within the first year or two. But the promise of smart building technology extends far beyond energy reduction, offering a wide range of benefits today, and potentially changing the way we work and live in the future.
In the world of sustainability, the advent of smart buildings is the 'next big thing'. With today's advanced technology, owners can expect energy efficiency to improve 15-20% in the first year, even at buildings with strong energy management programs already in place. In addition, smart systems can automatically calculate carbon and other greenhouse gas emissions, thereby streamlining the CSR reporting process. And as more cities and countries around the world invest in smart grid technology, the financial argument for on-site renewable power generation becomes much stronger.
Perhaps the most important reason that intelligent building systems are starting to transform the energy and sustainability landscape is that owners are adopting the technology. Corporate and investor owners alike are installing smart solutions across their portfolios, not only for the sake of energy efficiency, but also to reduce risk, improve operational performance, and enable better capital planning.
The buildings industry has lagged other sectors in terms of adopting new technology, but it is catching up quickly. Companies worldwide spent $5.5 billion on intelligent buildings in 2012, and the figure is expected to rise to $18.1 billion by 2017 – a 27.1% compound annual growth rate according to IDC Energy Insights.
Smart systems connect the real estate world to the 'Internet of things', the notion of machine-to-machine communications is revolutionizing business processes. This article discusses smart buildings - what they are, how they work, and what they mean to global sustainability and urban development.
These days, everything - from phones to cars - is called 'smart', but what does the term mean for commercial real estate? To be considered an intelligent system, automation should be able to: monitor performance; detect inefficiencies; diagnose possible causes; make automatic adjustments; alert facilities management staff to issues that can be automatically corrected; and suggest possible tools and parts that may help staff members get the job done quickly.
This definition centers on active elements of a building's design, equipment and operations. Broader definitions exist that also entail passive elements, such as building insulation, advanced glazing/shading and the building's orientation. These elements are certainly smart in that they improve energy efficiency and financial performance, but if they are not hooked into a cloud-based system of analytics and self-correction, then they are not what we mean by 'smart' technology.
An intelligent solution can be applied to an existing facility by tapping into and connecting the building automation systems (BAS) that control heating, ventilation and air conditioning (HVAC) and lighting systems and, in some cases, water, fire and life safety. BAS have monitored and controlled energy usage for many years. But only in recent years have several technological advancements come together to enable real-time remote monitoring and control of buildings and portfolios worldwide:
This process - constant data collection, analysis and adjustment - amounts to continual commissioning. Buildings generally undergo a commissioning process when they're new, and retro-commissioning periodically throughout their lives, to recalibrate systems like lighting, heating and air conditioning.
These and other building systems affect each other in multiple ways, and as one component or system drifts from its optimal performance, other elements may overcompensate and fall out of calibration themselves. Experts recommend a full building commissioning every five years to reset peak performance and save substantially on energy. By performing commissioning on a continuous basis, a smart building system ensures optimal efficiency at all times, eliminating waste much more effectively than a periodic process can match.
IntelliCommand, Jones Lang LaSalle's smart building solution powered by Pacific Controls technology, was installed at four large facilities owned by Procter & Gamble, resulting in an average combined savings of 10 percent in just 11 months with a three-month overall return on investment. That led P&G to start implementing IntelliCommand across its global portfolio with similar results.
Two examples of ways that IntelliCommand was able to identify inefficiencies that previous systems could not:
For more information about Jones Lang LaSalle’s IntelliCommand please click here: http://www.us.jll.com/united-states/en-us/intellicommand
In addition to cost savings on energy, the data analytics also optimize maintenance management. A smart building platform can analyze performance curves for large equipment, such as chillers and boilers, and schedule preventive maintenance to reduce breakdowns. This prevents damage to equipment and minimizes the need for expensive repairs.
For many organizations, high energy cost is not the worst-case scenario - an unplanned facility shutdown is. Although mission-critical facilities, such as data centers, laboratories and hospitals, generally have backup generators in the event of a power failure, it is better not to have to rely on fail-safe systems. The failure of one piece of equipment can have a domino effect on other systems, which in rare cases can cause a building to lose power. An important ability for a state-of-the-art smart building system is to recognize the signs of a piece of equipment that is ready to fail, so that facilities staff can examine it and, if necessary, replace it before it fails.
A smart solution can also increase facilities staff efficiency, particularly on large portfolios of small facilities, such as retail chains or branch bank networks. A portfolio owner that can't justify the cost of full-time facility managers at each location can get much the same result with the lower cost option of remotely monitoring and controlling facilities. This is one of the ways that smart technology can help avoid 'truck rolls', the number of trips needed to maintain and repair facilities. Reducing truck rolls saves on staff time, and a small side benefit is the reduction in carbon emissions from fleet vehicles.
Other sustainability benefits are more substantial, such as a smart system's ability to measure and report greenhouse gas emissions. This is not merely a matter of calculating energy consumption, since the level of emissions and particular mix is different for every utility, but that smart systems can tap into the information for each building and report emissions for each greenhouse gas accordingly. Some owners feed building emissions data to multiple benchmarking organizations, such as Greenprint and GRESB, as well as to Ceres and similar third-party reporting organizations, and smart systems can roll up the information from across a portfolio to simplify any reporting process an owner follows.
Smart buildings are also ready for integration with smart electric grid technology, as more and more utilities upgrade from archaic old switching systems to more efficient information and communication technology enabled systems. Although a full discussion of smart grids is a subject for another day, it's useful to note the benefits in terms of smart building interaction.
Unlike traditional energy generation from large, centralized power stations which travels in just one direction - from utilities to end-users - smart grids enable information and energy to flow both ways. As a result, owners of smaller and distributed power generation installations may be able to sell on-site power to utilities rather than let it go to waste.
Many facilities with heat-intensive uses, such as manufacturing plants, are already investing in co-generation, while facilities such as data centers are exploring combined heat and power (CHP) strategies. With the focus on energy efficiency and carbon reduction, distributed power strategies are expanding to more and more types of facilities.
Smart grid infrastructure would provide a market for excess energy generated at the site level, and would reduce the amount of energy lost in transmission. It is estimated that about 10% of energy from power plants is lost on the way to its destination, but the loss factor increases as the distance between the source and the end-use increases.
The reduction in greenhouse gas emissions from buildings is an important bonus for cities, where governments are concerned about the effects of climate change. Cities also care about efficiency. But more than any other issue, city leaders are continually focused on competiveness for business attraction and expansion.
Cities that work with their utilities and business communities to accelerate installation of smart grids may gain a competitive edge from improved energy efficiency, lower carbon emissions and enhanced appeal to forward-looking businesses. A recent report from technology market research leader IDC, entitled 'Building Synergies in the Smart Ecosystem', emphasized that cities which "build an issue-based ecosystem around sustainability in buildings will most effectively promote smart building technology adoption and maximize progress toward Smart City energy, sustainability and private development goals."
IDC notes that municipal governments and building owners have complementary goals to improve efficiencies, reduce costs and enhance sustainability. "Cities need to develop strategies to promote common sustainability and efficiency goals and help building owners adopt smart building technologies at a faster rate" by developing supportive policies, accelerating investment and using city buildings as proof of concept on promising new technologies.
Smart buildings and green buildings are not identical concepts, but they overlap in many areas, from the aim of reducing energy and carbon to the need for metrics and measurement. These two key aspects of building performance will continue to grow together as new innovations and the adoption of proven strategies point the way to a more sustainable future.
Originally published : June 2013