Navigant Research Blog

Inexpensive Offerings Driving Deeper Penetration of Efficiency Technologies

— March 22, 2017

Technological development is evolving quickly in all areas of the energy efficient buildings market. From HVAC systems with advanced controls to building energy management systems (BEMSs) that can drive deep efficiency gains, it is possible for commercial buildings to reduce energy consumption by up to 50% or more in a well-conceived project. Software has become a ubiquitous and necessary piece of almost every building component.

Most connected, intelligent devices of all types were devised to accomplish a defined purpose while gathering volumes of data along the way. But according to IBM Research’s Global Technology Outlook 2015, 90% of the data collected in the 10 years prior to 2015 was abandoned. Additionally, 60% of sensory data collected at the edge of intelligent systems loses its value in milliseconds. Like the parable about the tree falling in a forest, if these advanced digital tools collect data but nobody uses it, does it really add value? It may … eventually.

Early Adopter Phase

A large segment of the overall building stock is still managed using older technologies, with little or no digital data to support efficient operations. Some building owners and operators have the necessary sophistication and resources to proficiently understand and utilize more advanced digital toolsets, while many others do not. It is still the early adopter stage for much of the sophisticated new technologies. This dynamic, however, is feeding other emerging trends on the energy efficient buildings landscape.

So many buildings operate inefficiently that even the most basic forays into gathering data and understanding operational efficiency can lead to significant savings. Many of the initial efficiency activities can also be done at low or no cost by simply understanding operational setpoints and other characteristics. This simple understanding can lead to energy savings from 5% to 25% or more and provide enough information to lead to more significant projects and savings over time. This trend has been identified as a valid business model in its own right, and it serves what has been recognized as a valid market need.

Innovative Business Models

EnergyAI is an example of a company that offers a no touch analysis of a building’s performance at a very low price point—approximately $25 per report. EnergyAI utilizes a company’s utility interval data and produces a comprehensive report on the buildings energy consumption patterns with a simple, itemized list of suggestions for improvement. Gridium is another company with a similar utility data approach, but with more of an ongoing presence in the building. Eco-Energy works with larger clients and annual energy spending (+$10 million) and utilizes a sophisticated software package, but it sells energy savings, not the software itself.

These business models eliminate large upfront expenditures, work within the resource and experience constraints of a typical building, and identify meaningful savings at a lower cost. They are also enabling greater penetration of efficiency initiatives in a larger portion of the global building stock. The energy efficient buildings market continues to evolve.


Intelligent Digital Systems Enabling New Strategic and Operational Paradigms

— March 20, 2017

Data in and of itself has little value. Dashboards and other business intelligence software are excellent at compiling and displaying collected data from a multitude of sources in a useable and understandable format. At times, however, these analytical tools do not go deep enough with intelligent calculations on that data to transform a business, increase efficiency, promote deep understanding and learning, and add the most value. In these instances, it can be a case of you don’t know what you don’t know—leaving important insights on the table.

A good yet simple example of this was outlined in an IBM white paper on facilities management. A commercial building designed to accommodate 1,800 people showed an occupancy rate (assigned space) of 66%. However, further study of the data using access card information showed that average daily occupancy was only 28%, leading to a better understanding of the actual space being used and paving the way for eliminating unnecessary costs associated with rather large and consistent underutilization of the facility.

Beware of Silos

In energy efficient buildings, care must be taken when assuming that smart components are always operating efficiently and in the best interests of whole building optimization. In a recent interview, an intelligent building component OEM stated that he has seen instances where the intelligent cooling and heating equipment each reported that they were operating at peak efficiency—but they were efficiently cooling and heating the building simultaneously. In this instance, the overlord building energy management system (BEMS) identified and resolved the issue. Intelligence systems operating in a silo can be as ineffective as data that has yet to be transformed into useful information.

Analyze the Analytics

Today, the general use case for data analytics is well understood and accepted. This acceptance arose in a similar fashion to a market dynamic that happened in the LED lighting industry. Ten years ago, questions arose when LEDs were specified for a construction or retrofit project. Today, questions arise if LEDs are not specified for a project. The same largely holds true now for BEMSs and other intelligent systems that generate analytics regarding building performance. With the variety of analytics engines available in the market—at all price points and complexity levels—it is assumed that some form of analytics will be included in any efficiency effort, no matter how deep or superficial the project is.

Open communication standards have enabled access to this disparate universe of intelligent and connected digital systems and the data they generate. The cross-pollination of information from these diverse data-driven systems opens a multitude of possibilities that reverberate across the entire organization with all key stakeholders, enabling new paradigms of strategy formulation and operational success.


There Is No Cookie-Cutter Approach to Energy Efficiency

— January 11, 2017

Energy efficiency is a resource available in abundance, no matter the location. It is the lowest cost option of energy investment, beating all other forms of generation. But if energy efficiency is so beneficial, why is its implementation not standardized across platforms or locations in some form or fashion? Can’t similar measures be prescribed for all buildings, old and new? Is it possible to take a boilerplate project and implement that across all buildings to gain the present efficiencies? For example: Fix these components, install this equipment, follow this process, and you’ll have an efficient building. Sounds simple, right?

It may not be that easy. There are so many variables to an energy efficiency project or engagement that one prescribed set of technologies, process improvements, or maintenance services will not be optimal across all buildings in general.

One size does not fit all. The profile of the end-use consumption of standard building components is dramatically different in cold climates versus moderate to warm climates. So, when analyzing a building for an efficiency project, all of these factors—and many, many more—must be taken into consideration.

Transition to Sustainable Buildings, Strategies and Opportunities to 2050

(Source: International Energy Agency, 2013)

Efficiency performance requirements, codes, and standards have been proven to work as prescriptive guidance for both new construction and retrofits. Defining these locally is important for the same reasons that each efficiency project is unique. For example, heating codes may not be as important or effective in a warm climate as in a cold climate.

There is still a long way to go until the value of energy efficiency is maximized around the world. A full 70% of global energy consumption is not covered by any energy efficiency performance requirement. This is despite the fact that the International Energy Agency found that performance measures are the most effective action to take in the optimal pathway to a decarbonized energy system. The good news is that, although most projects are unique to a situation or location, energy efficiency experience can be transferred to other groups, countries, and regions. The diversity of experience created by project uniqueness adds to this body of knowledge, making energy efficiency accessible anywhere and for any application.


Meeting Global Challenges with Energy Efficiency

— January 9, 2017

Energy CloudAccording to the International Energy Agency (IEA), efficiency is the only energy resource that all nations possess in abundance. Similar to other resources, energy efficiency must be mined. Not from the ground per se, but by examining the available opportunities and by implementing a holistic plan that looks at methods and actions appropriate for the locale, climate, population, demographics, and a host of other interrelated inputs.

According to the IEA’s World Energy Outlook 2013, every $1 invested in efficiency saves $2 in new power plants and electricity distribution costs. Globally, buildings are responsible for nearly 40% of energy use (including 60% of electricity use), 12% of water use, 40% of waste generated by volume, and 40% of material resources. This vast amount of resource consumption provides a significant opportunity that amounts to more than mere cost reductions for building owners, managers, and tenants. Energy efficiency competes on price with the cheapest of energy generation technologies.

Example End Use Consumption of Standard Building Components in Different Climate Zones

(Source: American Council for an Energy-Efficient Economy)

This value has consistently held up over time, making it a stable and relatively predictable alternative to new generation sources of any kind. Overall, investments in energy efficiency enable more effective capital utilization to help meet difficult global challenges such as accelerating urbanization, climate change, national energy security, energy access, and worker productivity, to name just a few.

Opportunities in Buildings Efficiency

Navigant Research’s 2015 Global Building Stock Database report noted that residential and commercial global building stock was expected to reach 160 billion square meters in 2016. There are many opportunities to expand and extend the value of this resource, and the world is making progress. Gross domestic product and population growth has been largely decoupled from the demand for energy, the energy intensity of nations has decreased, and energy efficiency policies covered 30% of energy consumption (up from 11% in 2000). All this has happened despite the fact that oil prices fell as much as 60% in 2014.

Overall, progress continues to be made on efficiency gains in developed and developing nations, and regional and country specific momentum may be strong enough to withstand the temporary political climates that could serve as a hindrance.


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