As the concentration of carbon in the atmosphere reaches a level not seen in human history, it’s worth considering how much the conventional wisdom surrounding energy has changed in the last 5 years.  In 2008, domestic fossil fuel production (other than coal) was considered to be in permanent decline, with local debates on where to site natural gas import terminals.  Coal-based electricity generation was assumed to be as irreplaceable as it was undesirable.  Increasing energy costs and volatility were unavoidable, while renewable generation cost parity appeared within reach as the bar moved lower.  A nuclear power renaissance was effectively promoted as the only carbonless solution with the potential capacity to displace coal.  The dawn of transportation electrification seemed upon us, while the smart grid took a laser focus on peak load reduction.

Much has changed since then.  Conventional wisdom has caught up with the gas industry experts (including some of my Navigant colleagues), who foresaw how the shale gas boom would reshape the North American energy landscape.  With domestic oil and gas production up sharply, costs are expected to stabilize and volatility decrease.  Planned natural gas import terminals, while still locally controversial, are morphing into export terminals.  Natural gas generation is rapidly displacing coal, leading to significant carbon emissions reductions, though the enabling fracking technologies trigger new concerns.  Even as the cost parity goalposts keep moving, the cost of renewables continues to decline.  The Fukushima accident stalled a North American nuclear renaissance while driving Germany and Japan, at least notionally, to nuclear exits.  Home refueling of natural gas vehicles could replace electric vehicle charging stations in consumer imaginations.  Meanwhile, long-haul trucks, fleet vehicles, and even locomotives are adopting natural gas.  And the smart grid is becoming more important as a means of power resiliency in the face of hurricanes and superstorms than as a vehicle for peak load reduction.

Cheap Gas, Smart Buildings

This all came to mind recently when I moderated a panel discussion titled “The Future Direction of Energy in North America and the Impact on the Intelligent Buildings Sector” at CABA’s Intelligent Buildings Forum in Toronto.  CABA is the Continental Automated Buildings Association, a 25-year old organization dedicated to the advancement of intelligent home and intelligent building technologies (I am privileged to serve on CABA’s board).  The panel participants represented the perspectives of commercial property owner/managers (Cadillac Fairview), utilities (Ontario Power Authority), suppliers (Siemens), and technology researchers (CanmetENERGY).

So what do the major shifts of the last half-decade mean for intelligent buildings?  The panelists agreed that demand for improved energy efficiency remains strong, even if all the incentives for deploying the technology to deliver such efficiency are not always aligned.  Local codes and mandates may be drivers, but even lower-cost energy is not free energy.  Building-to-grid technologies and distributed generation may become even more important if natural gas enables local generation, which is becoming an intriguing option for the storm-ravaged Northeast United States.  Most importantly, all agreed that “cheap, abundant” natural gas is unlikely to spur new interest in dumb buildings.

As intelligent energy management technology has evolved, it has expanded considerably beyond the initial systems and platforms designed to help enterprises manage energy in their facilities.  We’ve seen some energy management players – from enterprises to utility customers – reorient their offerings to serve as a demand-side management tools.  Others have decided to specialize in certain high-value applications such as demand response.

One of the newer frontiers in intelligent energy management is the integration of energy management and facility management technology.  At first, it might appear that these two services have little to do with one another.  The former is concerned primarily with monitoring and reducing energy consumption and consumption, while the latter is focused on a range of issues affecting interior spaces (such as space planning, mail management, catering, janitorial services, and security).  However, several of the IT systems used to monitor and govern many of these facility management services also create data relevant to energy management.  Thus, they create opportunities to build additional applications onto the same IT backbone.

Yin, Meet Yang

One of the best examples of this integration is Jones Lang LaSalle’s IntelliCommand offering, which is a white-labeled version of Pacific Controls’ energy and operations management software.  The tools provide Jones Lang LaSalle’s commercial real estate customers with a suite of applications, such as energy visualization, energy management, and demand response, that help reduce energy costs while maintaining (or improving) building operations and the quality of the interior environment.  In addition, the system ties directly into Jones Lang LaSalle’s existing workflow management system, which its customers are already familiar with, an advantage over similar offerings that have independent user interfaces and functionality.  Meanwhile, IBM’s acquisition of facility management software firm TRIRIGA in 2011 and Ameresco’s acquisition of FAME Facility Software Solutions in 2012 also demonstrate the rapid integration of facility management with business operations and energy efficiency offerings.

The Jones Lang LaSalle model, which integrates energy management into a broader facility management offering, would appear to be the inverse of the IBM/Ameresco model, which adds facility and asset management capability to energy management systems that offer a multitude of energy-related applications.  Rather than arguing that one or the other is the “right” model, I will say that both models will likely coexist within the building industry for years to come.  This yin-yang effect – with facility management nested into energy management and vice versa – will ensure that customers have options that suit their priorities, budget, and existing building IT infrastructure.

The building automation world was rocked last week by the news that Google’s Wharf 7 building in Australia was hacked.  The building management system (BMS), built on the Tridium Niagara AX platform (Honeywell acquired Tridium in 2005), was compromised by security researchers Billy Rios and Terry McCorkle, who used a backdoor to access the system and gain access to the building automation system (BAS) – and all the equipment it controls – as well as the other systems running on the same network.

This is not the first time an Internet-connected BAS or BMS has been hacked.  History buffs may remember that when the U.S. Chamber of Commerce was hacked in 2011, they discovered that a thermostat in a Chamber of Commerce-owned property was communicating with a computer in China.  However, this is certainly the most high-profile breach of a building’s automation system to date, and it emphasizes the fact that, as the industry grows and embraces the Internet’s capabilities, it must also embrace the Internet’s challenges.

Chaos Scenario

The threats are very real.  In this case, the hack was orchestrated for demonstration purposes, so there was no real risk involved.  But think about the individual systems controlled by a BAS/BMS: fire and life safety, security, elevators, etc.  It’s not a far leap to consider worst-case scenarios where fire suppressant systems are de-activated or unwarranted persons are allowed into sensitive areas of secure buildings.  Chaos could be induced if control of the BAS/BMS landed in the wrong hands.

Everyone involved in the building automation industry should be working to improve BMS security.  The magnitude is huge – Navigant Research forecasts that the market for building energy management systems will grow to nearly $6 billion by 2020.  Rios and McCorkle claimed they found 25,000 active Tridium systems online, and with customers like ABB, Boeing, Changi Airport, and James Cook University Hospital, the scale of the risk is enormous.

Lynxspring – a leading provider of building automation and control solutions – recently announced a partnership with Netop to develop a cyber security solution for BAS/BMS.  The attention around this week’s event reminded me of a great article by Lynxspring’s Marc Petock on the subject of cyber security for building automation, in which he declared, “Gone are the days of security through obscurity.”  Now it’s time for all stakeholders in the industry to come together to protect its customers, their assets, and most importantly, the people within these buildings.

The building and property management industries have been invigorated over the last few years by the advent of building energy management systems (BEMSs) that harvest, visualize, analyze, and report energy-related information in buildings.  The market is crowded and highly competitive worldwide; over 300 players – from Azbil to Zerofootprint – offer solutions that tie energy-related data to the decision makers that are in a position to act on them.

No two of these BEMSs are exactly the same.  Each offering pulls in unique data sets, runs proprietary algorithms on the data, and provides a front end designed to report the information in the most actionable way possible.  The overwhelming number of solutions and the fast pace of BEMS technology evolution have made it difficult for many software vendors to grasp the state of the art today and how best to differentiate their products.  These conditions have also led many would-be BEMS customers to hesitate to invest in BEMS technology, as they are waiting for the products to mature and commoditize before making major investments in new enterprise technology.

Given the complexity of the BEMS market structure, Pike Research has developed a typology of BEMS technology to provide a simple way to understand the market.  As explained in Pike Research’s recent research brief, Building Energy Management Technology Landscape, the landscape for BEMS technology can be classified based on the four primary types of data upon which the platforms are built:

• BMS/BAS data
• Facility operational data
• Utility data
• Enterprise-level data

This data is then folded into the software applications available today, as shown in the diagram above.

Most of the offerings available today focus on squeezing value out of one of these data sources.  However, some software platforms allow users to access and compare data from a much broader range of sources.  For example, Schneider Electric’s StruxureWare platform ties in information from the building management system (BMS), utility bills, asset management schedules, and corporate sustainability metrics into a single interface.  Other players with a stronghold in one type of data management are increasingly looking to diversify their features to gain broader reach.

As software vendors look to elbow their way into a competitive position in the BEMS market, the existing offerings will continue to expand.  What will the market look like in a few years?  Some consolidation is inevitable, either through targeted acquisitions of specialty firms or the demise of insufficiently differentiated offerings.  Yet, firms in this space need to be mindful not only of providing robust solutions independently, but also of the opportunities available through strategic alliances with other firms and interoperability.  The rapid expansion of this market means there’s opportunity for many players to succeed – but many will fall aside as well.