Navigant Research Blog

The Future of Buildings: Connected and Comfortable

— November 6, 2015

During October 26-29, I attended VERGE in San Jose, a conference on “accelerating sustainability solutions in an interconnected world.” This annual GreenBiz event covers the gamut of technology and sustainability—from agriculture and water to my own area of interest: next-generation buildings. At VERGE, the keynotes and panel discussions made it clear that technology is changing our experience in buildings and that the future is not just smart or sustainable, but also connected and comfortable.

Sensors, IoT, and Automation for Comfort

As explained in the Future of Building Management panel, “landlords will be caught flat footed if they don’t follow suit with the consumerization of technology.” This discussion between technology providers and commercial and corporate real estate representatives AtSite, Building Robotics, WeWork, and Under Armour made it clear that the future of the work space is undergoing fundamental change. The growth of co-working space and the commonality of personal technology is changing the definition of best-in-class office space. According to WeWork, the future looks to be dominated by independent workers, with up to 40% of the workforce being defined as entrepreneurs or independent contractors. Furthermore, office workers want to be in control. According to Building Robotics, companies deploying apps for HVAC optimization on individual employee cell phones are seeing 75% engagement.

So, the new workspace is fundamentally about technology and comfort. There is a shift in the marketplace where the business case for intelligent building solutions is expanding from green, to energy efficient, to networked, fine-tuned, and comfortable.

There are also alterations in the way data is gathered. As Enlighted explained, the business case for sensing is changing. The idea of the intelligent building as a platform brings a whole new set of opportunities. According to Enlighted, the applications can now pay for the hardware. The company explained with an example from healthcare: networked lighting with embedded sensing could now be a tool for asset tracking, and this kind of capability dramatically changes the return on sensor investment when the high cost, the movement of assets within a hospital, and the value of loss prevention are considered.

IoT and Defining the Intelligent Building 

At Navigant Research, we are tracking the evolution of the intelligent buildings market. It is clear that the Internet of Things (IoT) is gaining traction in the facilities industry as cost-effective devices make advanced sensing widespread. These applications pay for hardware upgrades and enable unprecedented occupant engagement, delivering energy savings alongside comfort.

Watch for further details on the future of intelligent buildings and the evolution of advanced sensors in Navigant Research’s upcoming report in its Building Innovations service.


Buildings and Climate Change

— November 6, 2015

Telescopers_webAccording to the United Nations (UN) Environment Programme, the buildings sector is estimated to be worth 10% of global gross domestic product (GDP), or roughly $7.5 trillion. Currently, buildings consume about 40% of global energy, 25% of global water, and 60% of global electricity. Buildings also emit more than 30% of global greenhouse gas (GHG) emissions. Under the business-as-usual projection accompanied by rapid urbanization, emissions caused by the buildings sector may more than double by 2050.

However, the buildings sector has among some of the most cost-effective and proven solutions for reducing energy consumption and GHG emissions. There are commercially available technologies that can reduce energy demand in buildings by 30% to 80%. Investment in building energy efficiency will lead to significant savings that will help offset incremental costs, providing a quick return on investment. Also, because existing buildings perform far below efficiency potentials in general, there are enormous opportunities for reducing energy consumption. Meanwhile, due to population growth and increasing urbanization, a new construction market is growing in developing countries, where construction activities account for up to 40% of GDP and provide opportunities for adopting energy efficient technologies.

UN Buildings Day

The buildings sector can play a critical role in mitigating climate change by reducing energy consumption and GHG emissions. Consequently, for the first time in the history of climate negotiations, a Buildings Day will be held on December 3, 2015 at the COP21 UN conference on climate change in Paris. This meeting is a mandate from the Lima-Paris Action Agenda of 2014, and it aims to discuss ways to limit global warming to a maximum of 1.5°C to 2°C. The Buildings Day at COP21 will showcase actions already taken by the buildings industry and will serve as an opportunity to encourage communications, collaboration, and implementation among various stakeholders.

In addition, a Global Alliance for Buildings and Construction consisting of governments, companies, financial institutions, organizations, academia, associations, professionals, and user networks will officially launch on that day. By putting the buildings and construction sector on the below 2°C path, the alliance commits to helping countries realize their Intended Nationally Determined Contributions, which are essential drivers for achieving the ambitious global climate goal.


More Corporate Leadership on Climate Change

— October 12, 2015

The corporate giants that shape America’s economic future are taking a stance to mitigate climate change. From manufacturing to commercial real estate, the biggest corporations in the United States are voicing support for climate change policies and are setting corporate emissions reductions targets.

Big Business, Big Impacts

The 2015 Global Real Estate Sustainability Benchmark (GRESB) United States Snapshot highlighted the sustainability and climate change perspectives of 143 real estate companies and funds representing $813 billion in assets. Water and energy management are fundamental to respondents’ corporate strategy. The stats are impressive; respondents reported 112,591 MWh of onsite renewable energy use, and 94% incorporate water policies into their overall sustainability strategies.

Mars has pledged to be Sustainable in a Generation through water conservation, waste management, and the elimination of fossil fuel-based energy consumption by 2040. The company has adopted a four-pronged approach to meet its goals. Investments in operational efficiency, capital efficiency, new technology, and renewable energy will move the $33 billion manufacturing giant to zero landfill waste and 25% reductions in greenhouse gas emissions and water consumption.

Microsoft has gone a step even further—according to the New York Times, the company has established an internal carbon tax. TJ DiCaprio, Microsoft’s Senior Director of Environmental Sustainability, stated that the key was making emissions reduction targets understandable: “When we started talking about carbon emissions not in metric tons, but in terms of dollar amount, the business people could understand it. We’re all speaking the same language now: What is the cost to my group?”

Industry and Intelligent Building Technologies: Keys to Success

In September 2015, Siemens CEO Joe Kaeser outlined the importance of industry in tackling climate change, explaining, “We understand that taking action is not just prudentit’s profitable.” Siemens has committed to an aggressive 50% reduction in global carbon footprint by 2020 through initiatives on facilities, vehicles, and fuel. Kaeser reports the company’s $110 million strategy should see a 5-year payback period and then generate $20 million in annual savings in the years that follow.

Navigant Research’s recently published Industrial Energy Management Systems report highlights the ways intelligent building technologies and services can help deliver these same types of climate change mitigation achievements. The research highlights the struggle for industrial businesses to recover from the economic crisis in face of the increasing pressures to produce more with fewer resources while at the same time meeting more aggressive sustainability targets. Industrial energy management systems offer just the kind of software and services to help these customers overcome those obstacles. The future is bright for this evolving marketplace, and Navigant Research projects the estimated $13.5 billion industry is poised to grow to an expected $36.5 billion in 2024. This aggressive growth trajectory reflects customer demand for software and services that create competitive advantages through strategic energy management.


Software and Services to Deepen the Benefits of Factory Energy Management

— September 1, 2015

The manufacturing sector is realizing the opportunity to generate impressive financial savings with energy efficiency. Recently, the Institute for Market Transformation (IMT) released a series of case studies showcasing the benefits of energy efficiency investments, including an example from a lab at the University of Minnesota and an Ohio factory. From retrocommissioning to equipment retrofits, factory owners are realizing significant improvements to their bottom lines through investment in energy efficiency measures. An upcoming Navigant Research report on industrial energy management systems (IEMSs) finds that a growing market for software and services can help industrial customers expand the opportunity for energy efficiency benefits with solutions for measuring, monitoring, and predicting the impact of operational and equipment changes.

IEMSs are defined by software and services offered to reduce energy use and costs while meeting the operational requirements of the facility’s business. These solutions provide site-level insights on equipment and operational performance and enterprisewide perspectives for continuous business improvement.  Industrial customers can leverage an IEMS as a cost-effective tool for internal transparency on energy consumption and analytics to support strategic changes in energy use for regulatory or corporate policy compliance.

Energy Management as a Differentiator

When oil prices continue to drive downward to historic lows, the question of why manufacturers would care about energy efficiency is a logical one. The fact is that energy efficiency still has a real and significant business value for the industrial sector. Executives in charge of industrial facilities are becoming more aware of the benefits of strategic energy management as a competitive differentiator and source of opportunity for business improvement. These customers are demanding more integrated systems in terms of operations and enterprise IT that utilize granular equipment and operations data for predictive maintenance and optimization of equipment and operations. IEMSs are becoming the go-to solution for leveraging data to deliver economic and business benefits.

The IMT case study from the University of Minnesota illustrated how organizational commitments can drive interest in efficiency. The university’s senior energy auditor explained, “We implement energy conservation projects as a key component of the University’s sustainability goal of becoming carbon neutral by 2050.” In Ohio at the Tusco Display factory case study, the company CEO explains how real benefit of energy efficiency is that economic and sustainability benefits go hand in hand: “Over the last 10 years, we have increased both production and per person productivity while cutting energy usage by 41 percent. We will continue to invest in energy efficiency because it’s good stewardship with a long-term, positive impact on our bottom line, too.”

Watch for our new Industrial Energy Management Systems report, coming soon!


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