Archive for the ‘General Electric’ Category

Connecting Smart Buildings to the Smart Grid

Friday, November 20th, 2009


Suggesting turning off the lights in our buildings has been a constant theme. Saving or conserving energy, especially when the cleaning crew and security personnel are the only ones occupying a 250,000 sq ft office tower, makes sense at a very basic level. You would think that a simple concept such as conserving energy in our built environment would be easy to deploy. Given that energy, and thus our independence, is on everyone’s mind, combined with the fact that buildings use 40+% of the total daily energy spend, one would expect it to be a high priority.

Over the years engineers have introduced a number of different ideas, concepts and technologies that would help building owners conserve energy. Even to this day, adoption of these “common sense” ideas have been met with great resistance. In trying to better understand why this remains such a low priority I’ve summarized the common client drivers  / observations:

1) during the boom times, making money trumped every other priority,

2) in many situations tenants paid the utility bills and the landlord had no motivation to conserve,

3) real estate companies have struggled with “who” in their organization should take responsibility for this issue (IT,PM,FM,Energy),

4) while executives promoted “green” for marketing purposes, commitment and execution was superficial and

5) many of these technologies involve CAPEX or in some cases initial impacts to OPEX investments and without the motivation of a “return”, never made it past the budgeting process.

There have been bursts of interest in this topic by the built environment over the last 5-7 years. In fact there are case studies of real estate companies who have implemented sophisticated technology solutions to monitor and manage their energy consumption with a much greater level of accuracy. Over the last 24-30 months, many of our trade associations have also joined in the battle to conserve and begun to aggressively educate their memberships on conserving energy. While all of these “green” initiatives have been positive, there has been little discussion on the role that technology, automation and innovation can play. While insulated windows an important part of the strategy so is a lighting strategy that can reduce energy costs by 50%.

Enter the Smart Grid discussion.

About 2-3 years ago the discussion of the Smart Grid started to heat up. Major companies like GE, IBM, Siemens and, most recently Cisco and Google, started to beat the drum on the benefits of being able to manage electricity in more sophisticated ways. Instead of producing power in big old clunky power plants and “broadcasting” the energy down very old “asynchronous” (one way) power lines, the idea has emerged of a “networked”, very smart, easy to manage electrical infrastructure that connects both your refrigerator to the network as well as the solar panel or wind turbine that you have in your backyard or the roof of your office building. The idea is big, the benefits are big, the issues are big, and so are the challenges. While the marketing of many of these large smart grid companies would lead you to believe that the technology is in place and everything has been figured out, there are a mountain of questions ranging from privacy issues to standards and everything in between.

One of those big issues to be figured out is how to we “connect” a smart building to the smart grid and what if we’re starting with a building that is not so smart. One of the most basic questions that need to be answered is “who in a building takes charge of this issue.” Buildings have many number of different tenant landlord relationships, from owner occupied to multi-tenant. The relationship in many cases will influence who takes the lead on this important topic. Once the “business” side of the equation is figured out, then you move to the building technology and ultimately the relationship with the smart grid. These are very big questions and in many respects are the primary reasons that so many building owners have not initiated an energy plan. The other major reasons for slow response to this issue is the maturity of the technology (still evolving) and the regulatory role of local, and national government agencies.

If you break the smart grid into three distinct categories it is a little easier to understand.

We have the:

1) “middle infrastructure” i.e. the transmission lines, sub-stations etc.,

2) the power plants – both traditional as well as the emerging technologies, and

3) the end user, which in our world translates to the building.

These make up the major components of the smart grid. When we isolate the building’s role it’s easy to understand why this is such a complex issue. It’s not only the connectivity of the building to the smart grid, but also the internal infrastructure of the building that needs to be automated in order to create a completely digital, transparent connection. Connecting a building to the smart grid without considering the tenant space will leave you with less than desired results. The topic gets even more complex when you consider all the other building technologies that need to be considered for integration into the building network such as security, tenant communications etc. at the same time you are trying to figure out the connectivity into the smart grid for the purpose energy management and conservation.

The benefits of the smart grid begin to get very interesting when you start talking about how a commercial building owner could gain financially from this concept. Just imagine you’re at 30,000 feet looking down on a major city and picture all the buildings being turned into individual solar and other renewable energy source power plants that could sell unused energy back to utilities via smart grid technologies. There are some who have speculated that this could be a significant income stream for owners and operators once the idea is adequately developed.


The bottom line is that the idea of smart buildings connecting to the smart grid is an idea whose time has come. Whether adoption is fueled by financial opportunities or by strict legislation, this idea is not going away. In the early stages, as with all new technologies and ideas, there are more questions than answers. However, last week’s announcement by the US Obama administration on their 3.2 billion dollar commitment to the smart grid is sure to advance the topic and produce real results.


The question remains how will BUILDINGS CONNECT to the SMART GRID, with technology companies developing products and exploring this new major industry (as it will become). Which company will become the brand leader, but even more important is which real estate owners will become the  known  to champion this technology, and get an competitive edge on its rivals.