Navigant Research Blog

IoT – A New Source of Competitive Advantage in Commercial Real Estate

— August 29, 2017

Whatever business you are operating inside a commercial building, if you aren’t collecting, storing, using, and learning from data, then you are not doing your job. That is the sentiment in today’s intelligent buildings market. Commercial real estate faces this reality as the effective use of data, analytics, and Internet of Things (IoT) becomes a competitive advantage. The use of all these tools can maximize occupancy, amplify tenant satisfaction, and even attract and retain employees.

Intelligent building solutions entered the market as tools to improve specific facility systems—HVAC, lighting, and physical security—and it started with connecting devices. Once the devices were connected, the next step was collecting data and analyzing it to be communicated visually. These intelligent building technologies improved the operations of equipment and demonstrated value through the lens of energy efficiency. What makes IoT unique is the ability to unify and process data at the enterprise level, which has been the vision of the intelligent buildings market. IoT enables more cost-effective data acquisition, aggregation, communication, analysis, and ultimately, performance improvement.

Capitalizing on IoT for Fully Occupied, High Value Commercial Real Estate

Journalist Oliver Burkeman wrote in 2009, “Without most of us quite noticing when it happened, the web went from being a strange new curiosity to a background condition of everyday life.” Today, we are entering the next era in which uninterrupted access to data from our mobile phones and wearables to legacy building systems can create a seamless data profile of an enterprise portfolio of facilities to redefine the occupant’s experience, create new productivity for operations and service providers, and create more value for building owners. A holistic, data-driven approach to real estate management is critical as we look into the future of workspaces.

The US Bureau of Labor Statistics estimates that today’s students will have 8-10 jobs by the time they are 38. Furthermore, the agency estimates that by 2020, 50% of the workforce in the United States will consist of freelancers. What this means is that the demand and use of commercial office space will look completely different than it does today. Technology and an IoT approach to facility optimization can help real estate owners differentiate their buildings to win the competition for tenants and even employees.

What is the process to move the real estate industry toward the digital office of the future? How can IoT deliver cost savings, sustainability, and customer satisfaction? Join us on September 12 at 2 p.m. EDT for an Intel-sponsored Navigant Research webinar. We’ll explore how Rudin Management is working with Intel and Prescriptive Data to demonstrate how IoT can optimize the occupant experience in the commercial office.

 

The United Kingdom Takes Giant Steps toward Market Transformation

— August 29, 2017

Coauthored by Marc Bartlett

In July 2017, the United Kingdom’s Department for Business, Energy and Industrial Strategy (BEIS) and energy regulator Ofgem published their Smart Systems and Flexibility Plan. This document outlines the United Kingdom’s next phase in its transition to a low carbon future. It is the result of a long consultation period launched in November 2016 with many different stakeholders. The United Kingdom is making significant progress toward a more flexible energy system by removing barriers, encouraging innovation, and placing the customer at the center of the energy market. The plan is bolder than many other countries’ energy policies and sets a foundation for business model innovation. For example, the United Kingdom could well be the first to introduce a residential transactive energy market.

However, publishing a plan is far easier than implementing one. BEIS and Ofgem must work closely with the industry to ensure the UK energy market transition remains on track, they manage the different aspirations of stakeholders, and consumer protection remains at the top of the agenda. The Smart Systems and Flexibility Plan focuses on three areas: removing barriers to smart technologies—with a strong emphasis on storage—enabling smart homes and businesses, and making markets work for flexibility.

Regulations Adapt to Incorporate Storage

Storage is considered an increasingly important technology for the UK energy market. However, the country’s regulatory environment had not adapted quickly enough to address the specific requirements of storage. For example, since the United Kingdom had no clear definition of storage, its regulatory status was unclear. This uncertainty led to the charging of final consumption levies on storage, despite it not being a final consumer. The Smart Systems and Flexibility Plan also incorporates improved planning and licensing processes for storage, encouraging the colocation of storage with renewable generation and providing more streamlined processes to connect storage.

As regulated, unbundled monopolies, UK distribution network operators (DNOs) will not be permitted to directly own storage. BEIS and Ofgem believe that storage services should be tendered in a competitive market and that if a DNO were to own storage, it could hinder innovation and market developments. Yet, there is also an argument for DNOs to become suppliers of last resort. In this case, they would be permitted to provide and own storage where open markets fail to attract investment. BEIS and Ofgem have yet to finalize their plans for storage and will publish further guidance on unbundling storage services from DNO operations.

Smart Households to Play a More Active Role in the Future Energy Market

Demand-side response (DSR) will play a significant role in future UK system flexibility. At present, there is no technology to support residential DSR. However, the nationwide smart meter rollout will provide this foundation. Smart metering will allow half-hourly settlement, enabling the creation of time-of-use and other tariffs that shift peak demand. Household appliances and EV smart charging points will be the primary loads targeted in residential DSR programs. The government has stated its intention to work with industry, appliance manufacturers, and other countries to develop a common standard to ease the incorporation of these loads into DSR programs.

Barriers to New Business Models Will Be Removed

The plan acknowledges the need to evolve existing roles and responsibilities so networks are efficiently managed and barriers to new technologies or business models are removed. It specifies regulated monopolies’ need to plan, engage with new businesses, and explore the use of markets to solve issues. The days of the asset-focused DNO are numbered. These businesses will transform into system orchestrators that create platforms to interact more closely with service providers, system operators, and transmission network operators.

 

Making the Case for Short-Term Solar Forecasting in Plug-and-Play Remote Microgrids

— August 25, 2017

The microgrid market is tilting toward solar PV generation as a preferred resource. This is especially the case within the context of remote microgrids due to the economic advantages these systems present from an ongoing operations and maintenance perspective. A concentrated effort to move closer to plug-and-play microgrids is also underway, with a variety of vendors touting this approach.

One can make the case that displacing high cost diesel fuel with fuel-free solar is a valid value proposition on paper. However, a variety of ancillary technologies can also be integrated into a remote microgrid setup to transfer this concept into economic savings in the field. Such integration could displace as much diesel as possible while also limiting wear and tear on fossil fuel generators and batteries. Yet, the hype surrounding the dynamic duo of solar plus storage is obscuring the fact that different tools can help build a market for microgrids, including short-term solar forecasting.

A Game Changer in Australia

The Commonwealth Scientific and Industrial Research Organization (CSIRO) of Australia has helped develop a plug-and-play microgrid offering that marries low cost short-term solar forecasting with load optimization and diesel scheduling innovations. The game changer is the ability to integrate low cost short-term solar forecasting into remote microgrids featuring ever increasing solar PV penetration over time, with early tests showing a 97% reduction in high ramp rate events and fuel savings of almost 8%.

Solar forecasting falls into two categories: long term and short term. Long-term forecasts look out over a period of time (such as a week) to optimize resource scheduling. This forecast is more relevant to grid-connected solar PV resources. Since these forecasts look out over a longer-term time horizon, error rates tend to be lower because the forecasts are far less granular than short-term solar forecasts.

Remote microgrids cannot sell any services back to a grid operator; thus, the prime focus for remote microgrids featuring high penetrations of solar PV is short-term solar forecasts. Fluctuations at this scale can lead to blackouts or inefficient use of scarce and expensive diesel fuel.

According to the analysis Navigant Research performed for CSIRO, it appears the key to commercial success of short-term solar forecasting is minimizing capital cost and error rates. One could argue that short-term solar forecasting should be the first response to managing the variability of solar energy, since it is far less costly than major hardware investments like advanced batteries.

Short-Term Forecasting Adds Value

The short-term solar forecasting technology embedded in the plug-and-play microgrid solution from CSIRO is well-suited to Australia. It also offers other forms of value. For one, it can be used in the planning process to shape the initial design. First Solar claims it can get within 1% accuracy of annual energy estimates from available solar resources, but the company has difficulty sizing batteries properly since short-term solar power production is too variable. The technology being developed by CSIRO can address this gap, developing better estimates of required capital costs during the design phase for better battery sizing.

Finally, short-term solar forecasting technology can also be an important tool utilized outside of a remote microgrid application such as in the case of virtual power plants (VPPs). Australia is emerging as a hotspot for VPPs, too. In fact, CSIRO is sponsoring a free event focused on VPPs on December 1. Australia just may be the center of digital grid innovations.

 

Natural Gas Demand Response – Exploring Opportunities: Part 4

— August 24, 2017

Coauthored by Brett Feldman

As discussed in earlier blogs (parts 1, 2, and 3), demand response (DR) has been less prevalent in the natural gas industry than in electricity markets due to the lack of clear market signals that would otherwise enable market participants to put a price on deferred natural gas consumption. However, changing market factors are leading to increased interest in the practice. In this blog, we discuss how one company, National Grid, is participating in innovative natural gas DR programs to discern the value of DR to alleviate distribution system constraints.

Getting with the Program: EnerNOC and National Grid Partnership

From 2012 to March 2017, National Grid offered a fuel switching tariff, known as the Temperature Controlled (TC) rate, to industrial, commercial, and institutional customers in Brooklyn and Queens in New York. National Grid partnered with EnerNOC to manage natural gas consumption at approximately 4,000 customer sites in Brooklyn and Queens. EnerNOC provided National Grid with wireless hardware that enabled automated fuel switching at enrolled customer sites. When onsite sensors detect that outdoor temperatures have dropped below a predefined level, the devices automatically shift fuel sources, optimizing fuel use based on weather and availability.

National Grid is now interested in developing a scalable offering that does not require or incentivize the use of backup fuels. It is exploring opportunities to apply targeted DR to understand how such an offering could alleviate physical delivery constraints on its natural gas distribution system. As part of a pilot program in its downstate New York service territory, National Grid is investigating customer willingness to reduce natural gas demand for a specific 3-hour block of time, 6:00 a.m. to 9:00 a.m., during peak morning usage. Unlike the TC, this pilot will not require customers to have a backup system and will not rely on fuel switching to achieve demand reductions. Instead, National Grid will work with customers to understand how they use gas and what usage can be shifted, earlier or later, or reduced to minimize demand during the peak period.

National Grid hopes to learn how reducing demand during periods of peak usage can serve as an alternative to system expansions. It also wants to gain insights into customer willingness to participate in incentivized natural gas demand reduction programs, similar to its electric DR offerings.

“National Grid knows how valuable [DR] can be based on our experience with electric [DR]. We are hopeful that this pilot will demonstrate that same sort of benefits can be achieved for our gas system while offering our customers a new revenue stream and a program that works for how they do business,” says Owen Brady, New Energy Solutions program manager. “National Grid is always seeking innovative ways to optimize operational performance. Unlike the traditional utility business model of installing pipes to address system needs, we see gas [DR] as a non-pipe alternative that will help us make possible the energy systems of tomorrow.”

In Massachusetts, National Grid is implementing a similar pilot program that is focused on conducting market research to ascertain the appetite of firm and commercial customers for natural gas DR. This program is funded by the Massachusetts Department of Energy Resources (DOER) via a grant to the Fraunhofer Center for Sustainable Energy.

Reducing Costs

The absence of a clear price signal is a significant impediment to the adoption of natural gas DR. Yet, these innovative programs demonstrate that natural gas utilities have a strong interest in exploring the promise of natural gas DR to provide a potentially less expensive means of alleviating pipeline constraints at the distribution level.

 

Blog Articles

Most Recent

By Date

Tags

Clean Transportation, Digital Utility Strategies, Electric Vehicles, Energy Technologies, Policy & Regulation, Renewable Energy, Smart Energy Practice, Smart Energy Program, Transportation Efficiencies, Utility Transformations

By Author


{"userID":"","pageName":"2017 August","path":"\/2017\/08?page=2","date":"12\/15\/2017"}