smart building strategies program webcast 10 17 12

Navigating an Industry in Transformation: Introducing IDC Energy Insights' NEW

Smart Building Strategies Program Casey Talon, Senior Research Analyst October 17, 2012 at 11:00 a.m. EST

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Today’s Speaker

Casey Talon Senior Research

Analyst [email protected]


Agenda

Market Context & Industry Status

IDC Energy Insights’ Smart Buildings Definition

Smart Buildings Technologies Value Proposition

What we’ve learned, and what we want to know…

Discussion of ROI

Preview of Upcoming Research

Highlights of Vendor Landscape

Recommendations


Market Context & Industry Status:

Dollars & Sense

http://www.energystar.gov/ia/business/challenge/learn_more/FastFacts.pdf?d56c-fb2e

Impact of Waste

Opportunity in Saving

C&I Energy Costs = $202 Billion 45% of Total US GHG Footprint 30% Energy Wasted

10% Efficiency

Improvement = $20

BILLION





Market Context & Industry Status :

Role of Energy in Facility Management

Challenges Goals

http://apps1.eere.energy.gov/buildings/publications/pdfs/alliances/business_case_for_energy_efficiency_retrofit_renovation_smr_2011.

pdf

Driving Investment in

Energy Efficiency:

92% looking for

operational savings

73% want to demonstrate

market differentiation

71% look for improvement

in employee satisfaction &

productivity

-- DOE “Business Case for Energy Efficient Building Retrofit and

Renovation”

http://apps1.eere.energy.gov/buildings/publications/pdfs/alliances/business_case_for_energy_efficiency_retrofit_renovation_smr_2011.pdf





Economy-Wide Challenge

3,000 Energy Star Partners

** This slide highlights a few corporate drivers for SB investment, and the logos are companies that have joined the Better Buildings Challenge of the DOE as partners.


IDC Energy Insights’ Smart Buildings Definition:

From Energy Efficiency to Smart Buildings

Defining “Smart”:

Moving from check lists & weatherization to IT-enabled efficiency

A smart building is defined as a facility that utilizes

advanced automation and integration to measure,

monitor, control, and optimize building operations

and maintenance.



Facilities Management Transformation

Key concept is Optimization: real time adaptation to external

data and internal policies:

Changes in operations and maintenance

Changes in business processes

The nature of building management is being transformed by

the demand for new ways to achieve a range of business goals,

including reducing energy costs and attaining sustainability

objectives. New, highly integrated building automation and

information technology (IT) solutions are becoming more

widely available.

2 Key Themes: Optimization & the Convergence of IT-Building Automation


IDC Energy Insights’ Smart Buildings Definition :

Facility Transformation

Energy Auditing & Developing the Facility Baseline

Existing Infrastructure Energy Management Upgrades

New Automation & Controls for Energy Efficiency

Adaptive Controls Responding to External Data Streams

Integration Across Building Assets & Enterprise Applications

1

2

3

4

0

Path to Optimization


The Mature Smart Building

Comprehensive Integration

Real Time Adaptation

Internal Policies

External Signals

OP

TIM

IZA

TIO

N


IDC Energy Insights’ Smart Buildings Definition :

Maturity Model

Technology ecosystem:

– Six segments:

HVAC

Lighting

Plug Loads

Fire & Security

Distributed Energy

Resources

Analytics & Data

Management

– Focus on Convergence of

IT & Building Automation


IT-Building Automation Convergence

Smarter equipment,

smarter control systems

lead to holistic energy

management IT is now

increasingly involved as

systems run over

networks, support

middleware, IT

infrastructure, storage,

policies & security

Focus on building

equipment (chillers,

boilers, lighting, etc.) – not

process equipment

Analytics & Data Management

Control Software

Network

Sensors Controllers



Technology Infrastructure

External Inputs Internal Inputs

Smart Building Systems

Lighting Control System

• Daylight Sensing • Occupancy Sensing • Dimmable Ballast Control

HVAC Control System

• Temperature Sensors • VSDs/VFDs • VAV Controllers

Plug Load Control Systems

• Occupancy Sensors • Energy Supply Controllers via Surge Suppressors

Enterprise Analytics & Integration

• Integrated System-Wide Analytics • Visual Analytics (Dashboards) and Reporting • Full System Integration: HVAC, Lighting, and Plug Loads

IT Architecture

Smart Building

Wireless Network

Integrated Control & Automation for Building Optimization

Outcomes

Optimal Tenant Comfort

Decreased GHG Emissions

Cost Savings

Tenant Polling

Sensor Network

Real-Time Mkt Prices

DR Signals

Weather Forecasts Sub-Meter Network

Servers Enterprise Applications


0.00

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

2010 2011 2012 2013 2014 2015

$M

Global Smart Buildings Spending Forecast

Source: IDC Energy Insights, 2011


<$10b Market Opportunity


Investment Influencers

Vendors Electric Utilities

Smart Building

Investments

Building Owners

ROI Payback

Value Proposition

Demand Response Opportunities:

- Incentives - Rates


Drivers Benefits Challenges

Electric

utilities

Peak load

management under

new resource

shortages

Grid reliability and

stability

Customer engagement, demand

response program maturity and adoption

Regulator-mandated

energy-efficiency

improvement Regulatory compliance

Technology investment, hesitation over

resource management on customer side

of the meter

Competitive market

pressure for

customer

acquisition/retention

Expansion of market

share (in competitive

markets)

Balancing revenue from energy sales and

conservation benefits to consumers

Building

owners

Rising uncertain

energy costs

Energy cost

containment

Building infrastructure limitations,

technology familiarity/benefit awareness

Inefficient, scheduled

O&M

Business process

improvement: Proactive

O&M procedures

Change management — business

process transformation

Stakeholder/sharehol

der pressures

Intangible business

benefits CSR,

sustainability, GHG

reduction

New technology investment capital

constraints, limited perspective on

investment benefit calculations

Research Lessons:

Smart Buildings – Smart Grid Future Reality


Building-Grid Interface

Early

Opportunities

with Demand

Response

Value of Smart

Building

technologies

Mutually

Beneficial to

Utilities,

Vendors & End

Users

Source: OpenADR Alliance: http://www.openadr.org/

http://www.openadr.org/


Smart Buildings Technologies Value Proposition:

Addressing End User Pain Points

• Manage & reduce energy costs

• Streamline Operations & Maintenance for cost savings (e.g. catch equipment, settings, scheduling errors)

• Differentiate facility to attract and retain tenants/employees

• Achieve Corporate Social Responsibility (CSR), Sustainability, and Greenhouse Gas (GHG) Reduction Goals

• Comply with new regulations and codes (i.e. municipal building codes, state energy efficiency resources standards)


Manage & Reduce Energy Costs

Upcoming Smart

Building Strategies

Research:

Analytics & Data

Management for

Smart Buildings

IDC MarketScape:

Smart Building

Analytics

Plug Load Solutions

for Smart Buildings

Source: GSA Lighting Study http://www.gsa.gov/graphics/pbs/OccupantResponsiveLighting_508c.pdf

GSA Lighting Study:

3 Control Strategies Deployed: • Institutional tuning and scheduling • Occupancy sensing • Personal control

http://www.gsa.gov/graphics/pbs/OccupantResponsiveLighting_508c.pdf


Streamline O&M for Cost Savings

Upcoming Smart

Buildings Strategies

Research

Analytics & Data

Management for Smart

Buildings

Cloud Services for

Smart Buildings

Global Smart Buildings

Technology Spending

Forecast

Energy Services Model

for Smart Buildings

“You Can’t Fix What You Don’t Measure”

Heighten visibility into equipment operations

– Fault detection & alarms

– Ongoing Commissioning

– Preventive Maintenance

Defer Capital Expenditures on new equipment

Reduce truck rolls

“We know from our research and experience that the marketplace already has the necessary technology and skill sets to reduce energy and operational costs in new ways. Our research and others have shown that information technology could help accomplish these goals.” – Rick Diamond, Lawrence Berkeley National Labs

http://gsablogs.gsa.gov/gsablog/2012/05/18/gsa%E2%80%99s-smart-buildings-here%E2%80%99s-what-the-industry-is-saying/



















Differentiate Facility to Attract & Retain Tenants

Upcoming Smart


Research

Role of Social Media in

Developing Smart

Buildings

Smart Building Plug

Load Solutions

Smart Building Solutions

for Commercial Real

Estate

Impact of Wireless

Networks on Developing

Smart Buildings

Energy Dashboard Kiosks

Highly Visible Lighting Retrofits

Occupant workstation dashboards

Plug Load Controls


Achieve Corporate Targets (i.e. sustainability, CSR, GHG Reductions)

Upcoming Smart


Research

The Role of Social

Media in Developing

Smart Buildings

Smart Building

Solutions for

Hospitality

Smart Building

Solutions for

Commercial Real

Estate

Energy Conservation

– Reduced kWh or BTU = CO2e

Space Utilization

LEED Certification

Energy Star Ratings

Voluntary Reporting

“LEED recognizes the importance of continual improvement in operational performance and the foundational role of information, communication systems, and analytics in reducing operating costs and the broader impacts of excess energy consumption.” – Roger Platt, US Green Building Council




















Compliance

Upcoming Smart


Research

Analytics & Data

Management for

Smart Buildings

Smart Buildings –

Smart Cities

Smart Water

Solutions for Smart

Cities

New Building Codes

Retrofit requirements

Lighting efficiency mandates

State Energy Efficiency Resource

Standards

Federal Government leadership in

sustainability – EO13514 & EISA 2007

impact on buildings GSA Smart

Buildings Initiative


Research Focus:

Return on Investment

Limitations in upfront capital

Variance in payback threshold

Shifting role for energy financing – role of

energy services providers

Challenge of budgets and benefits –

impact of efficiency improvements on

future budgets in the public sector

Split incentives in non-owner occupied

spaces – role leasing contract

“Not only does this assessment

demonstrate that responsive lighting

delivers deep energy savings across the board, it also helps

GSA understand where deployment of

this technology maximizes payback.”

- General Services Administration


Upcoming Research

Social Business

Big Data & Analytics

Mobility Cloud

3) Collaborative Research - IDC 4 Pillars - Future of ICT

New IDC MarketScape: Smart Building Analytics

Update: Global Smart Buildings Technology Spending Forecast


Vendor Landscape B

uild

ing

Effic

ien

cy

• Engineering Expertise : Automation & Control Experience

• Existing Services Relationships

Info

rma

tio

n T

ech

no

log

y

• Legacy analytics expertise

• Integration capabilities

Nic

he

En

erg

y M

an

ag

em

en

t

• Innovation in energy management

• Open architecture, integration across building systems


Recommendations for End Users

Stakeholder Alignment

Goals Assessment

Investment Prioritization

Awareness of Financial Incentives

Exploration of Opportunities with Utilities


Recommendations for Vendors

Understand End User Pain Points

Clear Value Proposition

Communication of ROI

Identify Partnership Opportunities

Become Familiar with Utility Incentives to Support Upfront

Capital Costs


Recommendations for Utilities

Build relationships with C&I customers outside largest 1-2%

Use Demand Response as entry point

Become familiar with new Smart Building technologies and

where incentives to replace older energy efficiency incentives

make sense


Have you joined our IDC online community?

http://idc-insights-community.com/energy

Features Include:

– Analyst blogs and videos

– Discussion forums

– Resource library/complimentary research

– Networking – invite, find and interact with analysts and other members

– Events calendar

Sign-up for our free monthly newsletter: www.idc-ei.com/newsletter

Questions & Answers

Twitter: @CaseyTalon_IDC Direct: (303) 385-0327 Email: [email protected]

mailto:[email protected]


APPENDIX


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smart building strategies program webcast 10 17 12

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