Balancing supply and demand of electric and natural gas grids is more challenging than ever. For a variety of political, economic, and environmental reasons, electric grids are largely unable to add new fossil fuel-based generation plants — and have become increasingly reliant on intermittent renewable sources, like wind and solar. In addition, natural gas grid constraints are an increasingly prevalent problem, with demand surging in urban markets and pipeline development at the transmission and distribution (T&D) levels lagging.
In this new paradigm, real-time energy management at the level of the end-user and at the building level, is more important than ever — to help grid operators keep the lights on and boilers running. The problem is that most buildings still lack even the most basic energy data and system controls, both of which are needed in order to truly make energy usage reactive to real-time stress signals from the energy grid.
The good news is today’s technology is already solving this problem. Innovative hardware and software are leveraging mass deployment of advanced metering infrastructure (AMI) and low-cost internet of things (IoT) control devices (think smart thermostats) to create instantaneous smart buildings.
Historically, it has been difficult and expensive to extract and analyze data from both utility meters and building equipment. The sectors of energy management and building automation are both siloed, niche sectors with very few companies who can bring the two together, effectively bridging the grid edge to the building edge.
However, in the last few years, both sectors are independently experiencing an industry-wide push toward normalized data standards: “Green Button” for utilities and “Project Haystack” for building automation. These are game-changing developments. For example, Green Button enables energy management software companies to use the same code-base to extract and analyze meter data from multiple utilities, enabling scale and exponential growth.
Gamification and the Value Stack
Gamification of energy management is a relatively new idea and it is overdue. Making energy savings and participation in load-shifting programs simple and rewarding confers real, measurable benefits to both building owners and energy utilities. While users of gamified management platforms accumulate reward points that can be traded in for various smart building prizes (like a Google Home or an Amazon Dot), building managers are saving real dollars. At the same time, utilities are gaining educated and engaged controllers of energy assets in commercial buildings — ideal participants in load management programs because of their reliability and the large share of flexible demand they represent.
The value stack of behind-the-meter energy management is complex and varies by utility jurisdiction. Today’s leading technologies smooth out complexities and integrate utility-driven factors into their services. They ingest and analyze all of the signals from the energy market about specific stress points, which come in the form of time-of-use rates, day-ahead hourly prices, tariff structures, demand response events, coincident peaks, VDER, and ancillary services.
The software then recommends specific energy-saving actions to building operators at specific times that provide outsized cost savings (this process is also completely automated in many cases). These small operating changes add up to reduce energy costs by 10% to 20%. By highlighting these user benefits to their commercial and industrial customers, utilities can make a powerful argument for adoption of advanced technologies and draw connections to load-shifting programs to help bring more users — and more megawatts of capacity — into the flexible demand category.
More Data and More Opportunities Mean More Stable Energy Grids
The proliferation of AMI, IoT, and a push toward industry-accepted data standards are creating new opportunities for buildings to become grid-responsive faster and at a lower price point. Markets that are most primed for smart-building technology expansion have high, volatile energy prices, seasonal climates and smart meters.
As more buildings take advantage of today’s advanced technology, electric and natural gas grids will become more flexible, more efficient, and more reliable. Which of course means smoother operations and lower operating costs for utilities and grid operators as well as lower prices for ratepayers — and it all starts with smarter buildings.