Navigant Research Blog

The Growth of Automation and Market Competition

— November 14, 2016

Ethernet CablesHumans have amazing analytical capabilities; it has taken decades and some of the most powerful computers ever produced to finally challenge and beat top-level chess players due to the complexities of the game. Now, however, we are seeing autonomous cars driving themselves on our roads, and more and more automation is creeping into basic the technologies that we use every day.

The same is true for commercial buildings and other related energy equipment and technologies.  Automation is taking over tasks and settings that were either normally left alone or adjusted based on a human’s intervention or intuition. The difference between a human and a machine with built-in intelligence lies in focus and attention span. Computers don’t lose focus, nor do they get bored, tired, or stressed; humans do. That’s why it makes sense to let computers check and recheck a setting or make an adjustment to a piece of equipment a couple of hundred times per second, 24 hours a day. Humans simply cannot do this kind of work.

So why is automation so complex, and why is it taking so long to implement into something that a computer can do? First off, a human has to understand any automated tasks and translate them into a language a computer can understand. But that’s not all; new sensors need to be designed and built, software has to be written, and computers require more power to run these automated processes.

An Evolutionary Step

Automation is an evolutionary step to a market dynamic that started years ago with the advent of big data. While many touted the benefits of how much data they were collecting, as it turns out, data can be meaningless, useless, and even costly. A facilities manager can’t do much with a terabyte of building system data collected every day. A computer, however, is a different story.

After years of collecting data, many industries are now starting to understand how it can be used to make significant differences in the efficiency and optimization of equipment operations. They are also starting to take a more holistic view of how disparate pieces of equipment actually work together as an ecosystem of technology to serve a common purpose.

There is still a long way to go. Companies that have started the process of assessing their capabilities in this area will have a significant market advantage over those that have not, and the ones that have an automated offering are already industry leaders. In the near future, it may be the case that a company that does not have some form of automation or intelligence in its commercial building efficiency product or service will have little chance to compete.

 

The Digital Transformation of Buildings: Creating Business Value, Not Just Data

— November 2, 2016

Intelligent BuildingThe ubiquity of unstructured and real-time data streams has the potential to revolutionize business. Consumers expect technology to make their homes more comfortable, their schedules more productive, and their travel more efficient. The unyielding pressure to be connected is beginning to transform expectations for how commercial buildings are operated. The challenge is now to align occupant and business expectations with real estate and facilities management realities.

Navigant Research has been tracking the development of the intelligent building industry and specific innovation through the convergence of IT with commercial building equipment and controls. Energy efficiency has been the bedrock of market development because the improvements in operations translate into reductions on utility bills—a transparent monetization of return on investment. The energy story is a critical starting point, but it is only part of the promise of intelligent building technologies. As the market continues to mature, a more comprehensive story is unfolding around the business value of digital transformation in commercial buildings.

IoT for Bigger Impact and Better Decisions

The Internet of the Things (IoT) characterizes an important shift in positioning technology for improving commercial building operations. The fundamental idea is that IoT is a platform approach to data creation, communications, aggregation, and analysis. It’s about creating data-rich environments for a more comprehensive view of what is happening inside the walls of a commercial facility to make better decisions. The ability to translate the data into information that resonates across business units and stakeholder points of view is what’s really impactful about IoT in commercial buildings. In other words, one IoT intelligent building solution can address big business pain points—energy efficiency for the head of sustainability, predictive maintenance for the head of engineering—while also generating enterprisewide key performance indicators (KPIs) for the C-suite.

There is a big-picture opportunity here. When IoT-enabled intelligent buildings are a reality, the benefits are wide-reaching. As explained in a recent Huffington Post article, “It is through a change in mindset, enabled by the Internet of Things, that buildings become smart. If we get buildings right, we get the energy system right. … Smart buildings reduce the cost of the energy transition—both upfront, as smart buildings allow fewer investments in new power capacity, and on an ongoing basis due to less energy consumption and integration of renewables such as surplus energy from other parts of the city.” Navigant Research agrees. In fact, we have been outlining the importance of buildings in our ongoing research into the energy industry transformation, or as we frame it, the development of the Energy Cloud. In our most recent Energy Cloud white paper, we discuss this very idea as Building2Grid. Watch for more on this big-picture idea for the intelligent building in the coming months.

Interested in learning more about Navigant Research’s IoT research? Check out our new IoT research service here.

 

The Real Value of Digital Transformation for Commercial Buildings

— August 5, 2016

Home Energy ManagementThe Internet of Things (IoT) and digital transformation are hot topics that appear to be reaching a buzz, but there are practical implications for customers within these developments. The idea is that digital transformation and IoT deliver better information for comprehensive insight and management strategies. IoT is a platform of devices, communications, and analytics that creates a comprehensive picture of the commercial building. IoT enables a digital transformation of a commercial building that results in a data map that can be translated into vital information to orchestrate new business models for bigger revenue streams and a smaller risk to the bottom line. The generation of data from equipment operations and occupant behaviors married with weather and grid conditions help customers save money, minimize power outages, and maximize the occupant experience.

Data for Optimization

The intelligent building is defined by integrated controls and automation that optimize how space is used, how equipment is operated, and how behavior modification is directed because of insights garnered through software analytics. A pinnacle in optimization, the intelligent building maximizes the effects of capital expenditures, operations and maintenance management, and occupant engagement. This is all made possible by data. Today’s reality is that many buildings are far from data rich and, therefore, incapable of optimization. There is a major shift underway thanks to technology innovation beneath the umbrella of IoT.

IoT is about the proliferation of devices, the connectivity of systems, and the access to data. In the commercial building environment, this is a major shift that will redefine how buildings are operated. IoT is the foundation, the data platform that enables the digital transformation for unprecedented business value in corporate and commercial real estate. It is all about better information for better management. A recent survey by Dell highlights the customer perspective: “Investing in cloud applications, cloud infrastructures, mobile and/or IoT solutions to transform their businesses. By adopting these technologies, most companies hope to drive up employee productivity (75%) and grow their businesses (67%).”

The commercial buildings industry is known as a slower mover, but there is gaining momentum around digital transformation. Major technology incumbents, software startups, and even electric utilities are moving to promote solution adoption. A few interesting examples include:

  • Bala Ram, the vice president of SAP Labs, explained the growing momentum of digital transformation: “Across multiple sectors, whether it’s manufacturing, energy and natural resources, healthcare … there is a big awareness right now that we must use this sensor data to create new business opportunities, and then solve the existing problems.” Ram’s statement highlights that the pace of adoption may vary, but customers across the economy now understand the power of data.
  • IBM recently explained the benefits of digital transformation, stating that it will “help us to create buildings that can sense, respond, self-improve and communicate, putting them in far greater harmony with humans and the planet.”
  • New York State Energy Research and Development Authority has announced $30 million available for Real Time Energy Management system implementation and services with Noveda Technologies for up to 5 years. “These funds will support the use of advanced technologies to help building owners fine-tune their building’s energy systems, identify capital projects to cut energy costs, and reduce operations and management costs by an expected 5% to 25%.”
 

A New Way to Evaluate Energy Efficiency

— May 9, 2016

HVAC RoofAt a high level, energy efficiency retrofits can be challenging to evaluate. Often, decision makers would like to see a rough estimate on simple payback; however, many case-by-case variables make common energy conservation measures either a quick payback for some projects or unrealistic for others. Some of these variables include baseline energy consumption, utility rate structures, facility hours of operation, climate, and implementation costs. For instance, a solar thermal water heating system would generate more energy savings for a facility that consumes more hot water and is located in a climate with high solar insolation.

It would be inaccurate for a facility manager to compare the simple payback from a different facility to their own without knowing how the operating conditions and potential install costs would vary. While payback is generally the most important factor in deciding on energy efficiency retrofits, the American Society of Heating and Refrigeration and Air-Conditioning Engineers (ASHRAE) recently published a report analyzing efficiency in a unique way.

Energy Efficiency without Cost Consideration

ASHRAE has provided a study analyzing the efficiency potential of commercial and multi-family buildings if cost is not a consideration. After examining 400 measures, the top 30 were chosen for additional analysis and modeling on prototype buildings in various climate profiles already consistent with ASHRAE 90.1-2013 standards. Sixteen buildings were profiled in 17 different climate zones, and the resulting national weighted energy consumption for the buildings was nearly half when compared to ASHRAE 90.1-2013 standards.

Additional study details and the 30 measures evaluated are also available. While cost is generally the most important factor in deciding on efficiency improvements, removing the cost from this analysis provides value in allowing facility designers to realize which systems could provide the most energy savings and helping them find ways to implement those designs at lower costs. Additionally, those developing standards can better determine which efficiency retrofits may provide the most savings independent of cost.

Non-Energy Benefits

Facility managers should also consider the additional benefits of energy efficiency improvements beyond just energy costs. Efficiency can boost residual facility value by improving staff productivity and retention, marketing potential, tenant satisfaction, competitive rent prices, sales, and academic performance. Building owners looking to simplify their energy management efforts may decide to partner with an energy services company that can provide feasibility studies to help scope energy savings opportunities.

 

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