Navigant Research Blog

Moving Toward Building Systems Integration with New Market Offerings

— September 26, 2016

HVAC RoofThe More Things Change?  

Energy efficient building market trends in 2011 included the increased adoption of intelligent systems throughout commercial buildings. The main focus of these systems was to more effectively manage energy consumption. Today, most vendors serving the commercial buildings market have moved toward intelligent building systems and controls. These systems not only manage building energy consumption, but also critical aspects of a building’s operations, including tenant comfort, asset management, wayfinding, predictive maintenance, and a host of other functions. It’s now a strategic necessity for commercial buildings to have some form of software monitoring, data collection, visualization, and control of key systems as this market evolves.

The Convergence of Building Equipment and Operational Silos

The industry as a whole is recognizing the benefits of taking a more holistic view of managing disparate building systems and processes. New construction design is made simpler by dealing with fewer vendors and systems that may not easily communicate with one another. Retrofits can also be made simpler and less costly with Wi-Fi wireless networking technologies. Overall, maintenance and serviceability can be managed more easily, and duplication of sensors, software monitoring solutions, controls, and other system infrastructures can be eliminated.

Earlier this month, Acuity Brands, Inc. introduced the nLight ECLYPSE controller, which allows the integration of commercial building lighting systems with a building’s heating, ventilation, and air conditioning (HVAC) controls onto one common platform. Acuity follows Daintree Networks, which offers ControlScope, a programmable wireless HVAC thermostat that connects to any conventional or heat pump HVAC system. These advanced tools give building owners and managers the ability to configure, monitor, and control an integrated set of critical building equipment systems using a common interface. With real-time data acquisition and monitoring, the efficiency of critical building systems and operational processes can be maximized while maintaining optimal energy consumption.

Adoption Hurdles Still Exist

These benefits do not preclude the presence of hurdles to the adoption of integrated building systems. As with any technology adoption cycle, early adopters see the benefits of these types of technologies, but others are slower on the uptake. Facilities managers can be hesitant to change and be trained on the most effective use of integrated systems with a common interface. The vast amount of data collected by a multitude of sensors is effective only if it is being used, and used appropriately. Connected devices of any kind increase the risk of security breaches, necessitating the coordination of facilities management and IT departments—a historically uncommon pairing. Finally, proving that the financial ROI and payback period estimates are within acceptable corporate standards continues to be a significant vendor challenge.

Acuity Brands and Daintree Networks have taken an important strategic step with their integrated technology offerings. It all makes sense and should see increasing adoption in the market over time. But commercial building operations has been one of the industries that is historically slow to adapt to technological change. With strategies and technologies that help vendors access both new construction and retrofits in commercial buildings, it may be inevitable that fully integrated building systems become commonplace in the coming decade.


The White House Leading the Way to a Greener Future

— August 5, 2016

HVAC RoofOver the past couple of weeks, Americans have tuned in to watch and listen to speeches at the Republican and Democratic National Conventions and hear each party’s endorsements of their presidential candidate nominees. In her speech at the DNC, First Lady Michelle Obama stated, “I wake up every morning in a house built by slaves,” a statement that has been the center of many conversations since then. The White House was, in fact, built by slaves, along with several other American structures that exist today. The purpose of this blog, however, is not to take a political stand on the first lady’s statement, but rather to examine the transformation of the White House through energy efficiency efforts.

Greening the White House

On a global scale, commercial and residential buildings account for 37%-45% of total energy consumption, and improving the efficiency of buildings to reduce overall energy use has been an increasingly important policy focus worldwide. Historically, buildings were not constructed with many of the energy saving technologies incorporated in new buildings today. Retrofits to improve a building’s efficiency focus on energy efficient lighting, HVAC, building controls, and water efficiency, among other building functions.

The Clinton Administration’s Greening the White House initiative, announced on Earth Day in April 1993, aimed to improve the energy and environmental performance of the White House and Old Executive Office Building by analyzing, designing, and implementing an energy saving program. The program consisted of an audit, feasibility study, early actions, demonstration spaces, long-term initiative, and technology transfer/outreach. Components implemented as part of the initiative include improving energy and water efficiency, utilizing renewable energy sources, reducing waste streams, improving indoor air quality, and improving overall building comfort and performance. Clinton’s administration replaced the White House’s incandescent bulbs with CFLs and changed out all windows in the Eisenhower Executive Office with double-paned glass windows. The improvements implemented saved $1.4 million in 6 years.

President George W. Bush continued Clinton’s work, and in 2003 installed the White House’s first solar electric system in the maintenance area of the main building. Additionally, Bush executed a recycling program for office paper and added additional solar systems that heated the water in the pool cabana.

The Current Administration’s Initiatives

Reducing America’s carbon footprint has been an important policy initiative of President Obama. Obama’s initiatives started in the White House and included the planting of a 1,000 SF garden and solar panels added to the roof of the White House in 2014, which generate 6.3 kW of energy. The Obama Administration has set a goal to reduce the federal government’s greenhouse gas (GHG) emissions by 40% from 2005 levels by 2025, an objective that is part of the country’s overall aim to reduce GHG emissions by 26%-28% from 2005 levels by 2025.

The U.S. Department of Energy launched the Better Buildings Initiative in 2011, partnering with organizations to increase investment in energy efficiency, reduce energy bills, and avoid carbon pollution. Initially 60 organizations with roughly 2 billion SF of building space accepted the Better Buildings Challenge to improve the efficiency of their building portfolios by 20% or more. Through this program, the government committed to $2 billion in third-party financing. More than 310 organizations representing 4.2 billion SF and 1,000 industrial facilities that have participated in the program, with public and private financing commitments of over $10 billion. The partners have shared their confirmed strategies, increasing overall success of energy savings in buildings.

The White House has historically served as a symbol freedom and democracy, but now also represents the efforts of the federal government in its goal to reduce the environmental impact of buildings.


Keeping Cool Without Climate Change

— August 3, 2016

HVAC VentAs a heat dome lingers over much of America, many are grateful for air conditioning. Though some credit air conditioning with shaping our history, evidence is emerging that it may also be putting humanity at risk. Globally, stationary air conditioning systems account for nearly 700 million metric tons of CO2-equivalent emissions, roughly the same emissions as all of Germany. The future may herald even more emissions as the growing wealth and growing populations of developing countries prompts the greater adoption of air conditioning.

Changing the current environmental influence of air conditioning is imperative to avert the catastrophic effects of climate change. In a new report published by the U.S. Department of Energy, Navigant outlines the changes in air conditioning technology needed to reduce greenhouse gas emissions and highlights the R&D pathways to get there.

From Air Conditioning to Energy System

One of the next-generation air conditioning technology research areas highlighted in the report is the integration of air conditioning and other building systems. Fundamentally, air conditioning is the transfer of heat from inside a building to outside a building, which requires the use of energy. Meanwhile, additional energy is spent creating heat for other needs: domestic hot water, cooking, and manufacturing processes. At times, buildings may require both heating and cooling just for thermal comfort. This happens during temperate days where the sunny side of a building may need cooling while the shady side needs heating, or in the scenario of the notorious space heater under the desk.

In a perfect building, waste heat could be reused productively. This is a fundamental shift from individual building processes to a building energy system. Indeed, this is already beginning to happen. Ground-source integrated heat pumps that provide space heating, space cooling, and water heating are already commercially available. Energy recovery ventilators similarly transfer thermal energy between air that is exhausted from a building and fresh air brought into a building.

Deeper building integration is not only necessary, but forthcoming. Axiom Energy, Ice Energy, and CALMAC all have solutions that turn air conditioning and refrigeration systems into energy storage, folding these systems into the Energy Cloud. Moreover, air conditioning controls are beginning the transition into the Internet of Things as more data from different sources can be used to optimize performance. This pivot to an energy system and deeper integration can transform air conditioning from a threat to humanity into a resource that meets the changing energy needs of the world.


The IoT and Intelligent Buildings: An Optimization Roadmap

— June 7, 2016

Intelligent BuildingThere is a lot of discussion around the importance of buildings in tackling big challenges, ranging from climate change to energy resilience. Intelligent building solutions are the tools that maximize the flexibility and responsiveness of facility operations to manage energy consumption, allowing for reduced greenhouse gas emissions and response to grid pressures. The intelligent buildings market has been maturing through investments made predominately by the largest customers managing large portfolios and facilities. Technology, and specifically Internet of Things (IoT) and data-driven services, are the evolutionary developments of the intelligent buildings market that now enable optimization of the market as a whole. The opportunity is huge, and as a result, technology giants are making big investments. New partnerships and acquisitions set the stage for deeper market penetration with enterprise customers as well as the midmarket.

Enhancing the Enterprise

Navigant Research has tracked the development of the intelligent buildings market and specifically the evolution of software solutions. Building energy management systems  have been the focus of our research, as they are the offerings that first disrupted the building automation and facilities management industry. This market continues to evolve, and the focus on investment increasingly spans both energy and operational efficiency. The growing demand for showcasing operational efficiency has been the foundation for big moves on the business front, including partnerships and acquisitions.

Siemens and Capgemini recently announced the Navigator platform, a “joint engagement to provide analytics-based services for connected buildings.” The move underscores the magnitude of opportunity to engage enterprise customers in the intelligent buildings market. As the press release framed it, “Together with Capgemini, Siemens is now further developing this Navigator platform to help corporate real estate owners drive business results and meet energy efficiency goals, while maximizing the lifecycle potential of their customers’ real estate assets.” Other major technology players have announced similar partnerships, including Hitachi’s launch of its Insight Group, which is expected to deepen partnerships with tech partners such as SAP and Microsoft. The investment and commitment of both the building technology and information technology and services giants validates the bullish outlook on the intelligent buildings market for enterprise customers.

Setting the Stage for Midmarket Penetration

The midmarket is another important segment of the facilities industry because of the sheer number of these facilities and a legacy of inefficiency in operations that presents big opportunity for optimization. Navigant Research’s new Building Energy Management Systems for the Midmarket report presents the outlook for investment to 2025. The acceleration of the IoT market and continued growth in customer awareness sets the stage for rapid investment in BEMS for the midmarket, which we estimate to reach $1.6 billion by 2025 (at a 24% growth rate from 2016). Our optimistic outlook on the market is built on clear market signals, including similar partnership and acquisition trends that we are tracking in the enterprise segment.

For example, Current by GE announced the acquisition of Daintree Networks to enhance its IoT and energy management capabilities. As a company press release states, “This acquisition will enable Current to expand its building automation platform and its energy-as-a-service offering to small- and medium-size facilities through the deployment of Daintree’s open, standards-based wireless control systems.” There are others taking advantage of the new opportunities in the midmarket through IoT; for example, Intel has made numerous partnerships with companies from Lucid to Building Robotics.

IoT may seem to be a buzzword, but it is increasingly evident the technology trend is changing the game for building energy and operational efficiency. Expect significant partnership and acquisition announcements through the rest of 2016 as the market continues on a fast pitch to broad customer adoption.


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