Navigant Research Blog

Building the Future Through Digitization

— April 25, 2016

modern square and skyscrapersBy and large, commercial buildings are inefficient. Owners and operators manage hefty energy bills, suboptimal maintenance processes, and varying levels of dissatisfaction from occupants. Intelligent building solutions are an alternative to the status quo for building operations, and recent trends suggest we are facing a tipping point for technology adoption. Simplicity in execution and non-energy benefits will help customers take the plunge to begin transforming their facilities into intelligent buildings, and it’s all centered around the idea of digitization.

Navigant Research is bullish on the outlook for intelligent buildings. The rapid adoption of building energy management systems (BEMS) has been a central indicator of the demand for data-driven solutions to the challenges of operating commercial buildings. In fact, Navigant research estimates the revenue for these software analytics solutions will reach nearly $11 billion dollars by 2024, a 18% compound annual growth rate (CAGR) from 2015. This optimistic outlook on a cornerstone of the intelligent buildings market reflects the overarching assertion that digitization is transforming the buildings industry.

What Is a Digitized Building?

If software is a cornerstone of the intelligent building, it’s built on data. BEMS have been helping building owners and managers improve operations for about a decade. As with any emerging technology area, the market continues to evolve. These software offerings are becoming more powerful as facilities become truly data-rich environments; this evolution is itself an effect of digitization.

The old adage of ‘garbage in, garbage out’ may be a bit extreme, but in reality, digitization is an anecdote that helps intelligent building solutions deliver business improvements. An infrastructure of devices for sensing, controlling, and communicating equipment and facility use data is redefining the capabilities of intelligent building software. You’ve inevitably heard the buzz surrounding the Internet of Things (IoT); but in the intelligent buildings market, the IoT is not just buzz, it’s the construct for actionable information. An IoT intelligent building platform is defined by digital devices that enable software analytics to compute actionable information.

Why Will Digitization Make a Difference?

What this means is that these advanced sensors, controllers, and communications gateways acquire, analyze, and transmit data that in turn helps decision makers set priorities and rely with confidence on automated system improvement. Major technology providers are redefining their value through the lenses of digitization and IoT.

On April 1, Schneider Electric CEO Jean-Pascal Tricoire kicked off the Innovation Summit in Paris, where digitization was front and center. The technology giant is positioning to supply technologies that catalyze industry transition for a world that is “more electric, more digitized, more decarbonized, and more decentralized.” Schneider argues this pathway to the future is critical to meet the demands of a growing population against the pressures of climate change and resource limitations. The company also released a new IoT 2020 Business Report, arguing this new technology landscape represents “a new era of meaningful opportunities.”

Actionable insights, meaningful opportunities—these ideas are the crux of value in digitization. Customers can be bombarded by new technology and new data, but what delivers is better data, better processes, better automation, and better services.

Beyond Energy

Take a look at the capabilities of the world of cloud-based intelligent building software. As one example, Switch Automation and Intel are offering an IoT-enabled software solution that drives operational efficiency and continuous improvement in commercial building operations. IoT-enabled intelligent building solutions help customers aggregate data from inside a single building and across a portfolio to benchmark and monitor operations for energy efficiency, operational efficiency, and improved occupant satisfaction.

Register today for the upcoming The Road to the Intelligent Building webinar and join the conversation on how digitization and the IoT is redefining the facilities industry with Navigant Research, Intel, and Switch Automation on May 6 at 2:00 pm EDT.

 

Ecova’s Retroficiency Acquisition Spurs DSM Momentum

— October 30, 2015

Data analytics for energy efficiency and demand-side management (DSM) programs is a relatively new trend in the energy industry. Data analytics can be used in residential DSM programs to teach consumers how their home is using energy (by appliance level in some cases) and in commercial and industrial (C&I) DSM programs to help find opportunities for energy savings in large buildings. Data analytics can even be used in retail, restaurant chains, or in other small and medium businesses in order to make operations more efficient, as has been seen in the work done by PlotWatt.

Many of the companies that have been advocating data analytics for energy efficiency are either startups (working on a handful of small deployments) or pilots or large companies with the resources to dabble in energy management, such as Apple with HomeKit. Because of this, data analytics as a solution for DSM programs is still in the early stages of market adoption

Acquisition Makes for New Player

That is, until October 14, 2015 when Ecova announced its acquisition of Retroficiency. A building efficiency analytics startup founded 6 years ago, Retroficiency initially worked at streamlining onsite audits, which quickly evolved into its current Building Efficiency Intelligence software platform to enable utility-scale customer targeting and engagement. Ecova, a large provider of energy and sustainability management services, has a behind-the-scenes style platform that helps utilities manage DSM programs. In addition to developing joint solutions for utility customers, Ecova will be able to use Retroficiency’s data analytics capabilities to provide its C&I clients—which collectively have more than 700,000 sites in North America—with better information on where they can save energy, where to prioritize efficiency investments, and how to manage energy costs.

Ecova’s acquisition of Retroficiency sends an important message to other players in the energy industry that there is value in data analytics for energy efficiency, which means even more when considering that Ecova has the backing of a larger energy efficiency company. In 2014, Ecova itself was acquired by Cofely USA, a subsidiary of French utility company Engie (GDF Suez). The depth of experience, geographic reach, and expanse of resources that a company like Engie can bring to the data analytics market through subsidiaries like Ecova can mean real growth and development in a very similar way to what the home energy management market saw when Google acquired Nest.

Furthermore, Engie also happens to be an investor in Tendril, a Boulder, Colorado-based startup offering a cloud-based energy services management platform for helping energy providers better engage residential customers. With Ecova’s acquisition of Retroficiency, the company now has the resources to offer a combined residential and C&I platform to utilities that can counter Opower and Firstfuel’s new platform. The newly joined forces of Ecova and Retroficiency not only signal to others the value of data analytics, but also bring to the market a big name in energy and increased competition, which could give the data analytics market the momentum it needs to take off and become a vital part of energy efficiency.

 

Building on Big Data

— November 10, 2014

Advanced methods of interpreting large volumes of data have brought innovations in areas such as healthcare/pharmaceuticals, meteorology, marketing, e-commerce, government services, national security, and financial services.  Despite success in other areas, though, big data is only beginning to have an impact on building automation and energy efficiency.  In a 2013 blog, my colleague Bob Gohn discussed big data in the context of buildings.  In this blog, I’ll take a look at some of the solutions emerging in this area and how the buildings industry will be affected.

Continual Correction

Currently, the most common use for big data in buildings is fault detection and predictive maintenance.  Advances in sensor technology have enabled unprecedented views into the status and functionality of building systems such as heating, ventilation, and air conditioning (HVAC).  Sensors are capable of regularly measuring every aspect of the system’s performance by analyzing the data to identify equipment that needs to be replaced or may be about to fail.  Bringing technicians onsite to service equipment can be a major expense for building owners.  This type of data analytics allows a diagnosis to be made before the technician arrives, while also providing information on replacement parts and other relevant items. Data analytics solutions can also build a list of the known problems in a building and derive each piece of equipment’s usage and cost, enabling a quantitative return on investment (ROI)-based assessment of which upgrade or investment should be implemented first.

As building automation and data analytics continue to advance, new applications within the buildings industry are emerging.  Advanced building energy management systems (BEMSs) harness large quantities of data to provide a visualization of the overall energy consumption of a building or portfolio of buildings.  These systems also have the ability to leverage historical data to provide recommendations for how to best reduce consumption.  Next-generation BEMSs have the capability to adjust building system parameters automatically to maximize occupant comfort and energy efficiency.  One example of this type of advanced system is SHIFT Energy’s Intelligent Live Recommissioning (ILR) solution, which provides ongoing re-adjustments.  Another cutting-edge solution is offered by Ecorithm, whose program also includes richly detailed graphics to visualize processed data across a building’s floor plan, identifying areas of waste and recommending corrections.

Designed with Data

Big data is also playing an increasingly important role in the design of resource efficient buildings.  Building information modeling (BIM) programs allow architects to analyze key performance metrics such as natural ventilation, daylighting, solar heat gain, overall energy usage, and even how people will likely interact with spaces.  These programs utilize vast amounts of data from existing buildings to visualize how a conceptual building may perform.  Such analysis can speed the construction of new buildings by leveraging the data-rich plans from previous projects, modified to fit the specific characteristics of the new site.  This also allows designers to cut costs by eliminating the duplication of work from past projects.  Reducing the time and cost required to construct new buildings is an essential factor in addressing rapidly growing urban populations that lack sustainable buildings and infrastructure.

Despite these achievements, the buildings industry is not yet exploiting available data to the extent that other industries are.  Looking forward, advances in building design, construction, and management can leverage big data and advanced analytics to reduce costs and improve efficiency.  As buildings and cities become increasingly automated and digitalized, data analytics will play a growing role in energy efficient buildings.

 

Coming to the Motor City: A Smarter Grid

— July 13, 2014

The smart grid in Detroit is about to get smarter – and so are utility industry executives exploring options for real-time grid data and analytics.  Distribution grid sensor developer Tollgrade Communications recently announced a $300,000 project to deploy its LightHouse sensors and predictive grid analytics solution across DTE Energy’s Detroit network.  The companies aim to demonstrate how outages can be prevented.

The 3-year program was selected as a Commitment to Action project by the Clinton Global Initiative (CGI) at the recent CGI event in Denver, where Tollgrade CEO Ed Kennedy took to the stage with former president Bill Clinton to discuss the project.  Tollgrade, Kennedy said, will make public quarterly reports on the project, beginning in 1Q 2015, identifying best practices and sharing detailed performance statistics.

Cheaper Than Building a Substation

With 2.1 million customers and 2,600 feeder circuits, DTE Energy has already begun piloting the system around Detroit, and Tollgrade says that it hopes to prevent 500,000 outage minutes over the next 3 years.  Because of the heavy concentration of auto manufacturing in the Detroit area, those saved minutes should translate into substantial economic benefits.  The system will leverage several communications protocols, including DTE’s advanced metering infrastructure communications network, reducing the startup cost and improving the return on investment.

The sensors will be placed along troublesome feeders as well as outside substations where older infrastructure increases the likelihood of outages.  Combined with the predictive analytics solution, the sensors cost just a few thousand dollars per location and could help DTE Energy avoid or defer replacing a million-dollar substation.  Both investors and regulators are sure to like those stats.

Predicting Change

Predictive grid analytics has been a hot topic in the industry for the last few years, but only recently have the prices of solutions and sensors fallen to a level where utilities can justify the cost to deploy them widely throughout the distribution network.  Navigant Research expects the market for distribution grid sensor equipment to grow from less than $400 million worldwide today to 4 times that amount by 2023.  (Detailed analysis of distribution grid sensors can be found in Navigant Research’s report, Asset Management and Condition Monitoring.)

Since its first meeting in 2011, CGI America participants have made more than 400 commitments valued at nearly $16 billion when fully funded and implemented.  The Modern Grid was one of 10 working groups this year; others include efforts in Sustainable Buildings and Infrastructure for Cities and States.

Another CGI Commitment to Action grant announced last week will fund a market-based, fixed-price funding program for solar and renewable technologies.  The Feed-Out Program from Demeter Power will support solar-powered carports with electric vehicle charging stations at a net-negative cost to the customer.  In other words, eligible businesses pay a fixed monthly fee to Demeter Power (lower than their previous monthly electricity bill) and their employees and customers enjoy free car charging while parked there.  Demeter will own and maintain the infrastructure.

The program will initially make financing available to commercial properties located in Northern California communities participating in the California FIRST property assessed clean energy (PACE) Program, which is offered through the California Statewide Community Development Authority.  Interested participants must register with Demeter Power Group to participate in the program, which is expected to launch in the first quarter of 2015.

 

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