Integrated Building Optimization:

Transcription

1 Integrated Building Optimization: A Crucial Convergence of Demand-side and Supply-side Energy Management Strategies usa.siemens.com/buildingtechnologies sie_buildingperformance_bro_12.indd 3 6/19/14 9:46 AM

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3 Converging Energy Conservation, Energy Procurement, & Sustainability Today s business environment includes a wide variety of challenges that affect overall operations and performance, and the way your buildings use energy is one of those challenges. In fact, buildings today consume 41% of all energy worldwide and produce 21%* of the world s carbon emissions. When considered at the individual building level, energy consumption represents 32% of a building s total lifecycle cost. Today s organizations are realizing energy and sustainability initiatives are integrated with a building s performance. In order to make truly meaningful improvements in energy management and sustainability, the decision making processes surrounding energy conservation and energy procurement must converge with each other, as well as with sustainability initiatives. With these decision making processes aligned, organizations will begin to look at their building assets holistically; this approach allows for creative strategies that will improve building performance: energy efficiency, optimized energy supply, and enhanced operational sustainability. This type of strategy will also contribute to improved building and occupant comfort, system reliability, and overall building performance. The most effective way to improve building performance is through a comprehensive program intended to improve energy efficiency, optimize energy supply, and enhance operational sustainability. A multiphased program that emphasizes thorough planning and evaluation will maximize the chances of successfully setting the right targets and subsequently achieving those targets through a coordinated effort to implement improvement actions that last over time and take advantage of extensive on-going service and measurement. 3

4 What is a Comprehensive Energy & Sustainability Strategy? A comprehensive energy and sustainability strategy is one that helps organizations determine energy savings and business sustainability goals, identify and implement the necessary energy conservation measures to achieve those goals, and continuously improve the process through datadriven action plans that include ongoing service and key performance indicator (KPI) monitoring. This integrated approach to energy and sustainability relies on a combination of people, processes, and technologies and leads to progress on all three fronts: energy conservation, energy procurement, and sustainability. A comprehensive energy and sustainability strategy can be organized into the following five phases: Strategy and Planning Phase Organizations will develop a plan with three core objectives: 1) maximize operational efficiency and reduce energy consumption through energy benchmarking, demand-side energy planning, and infrastructure planning; 2) optimize energy supply and mitigate the risks of fluctuating energy prices through budgeting, price forecasting, and load forecasting; and 3) enhance sustainability performance, including green building strategies, greenhouse gas (GHG) reduction strategies, and external reporting commitments. This phase will also identify ROI and funding requirements, as well as create transparency for achieving overall business, energy, and sustainability goals. Evaluation and Assessment Phase Through a series of audits, surveys, inventory analyses, and other services related to building performance analysis, three outcomes are achieved in the Evaluation and Assessment phase of an energy strategy: 1) identify opportunities to improve resource efficiency through energy and resource auditing; 2) reduce risks and costs related to energy procurement through supply analysis, delivery risk assessments, and renewable energy assessments; and 3) identify opportunities to increase sustainability through such actions as GHG emissions inventories, green building certification assessments, and in-door environmental quality surveys. This phase is a crucial step in determining which capital-intensive solutions and services will help to cost-effectively achieve overall goals; it should also define financial options and available utility incentives, as well as calculate necessary metrics. Program Implementation Phase Using the roadmap developed during the Evaluation and Assessment phase, the Program Implementation phase involves the execution of energy efficiency, energy supply, and sustainability improvement actions. This phase typically involves hands-on work and/or applied expertise, and can generate substantial improvements in building performance. 4

5 O ngoing Services and Optimization Phase Implementing a comprehensive energy strategy requires ongoing service and optimization to maintain sustainable operations because buildings naturally become less efficient over time. This can result from outdated equipment, inconsistent routine maintenance, and not adhering to schedules. Implementing an improvement project will deliver results, but the impact is finite in time unless the improvements are monitored so deviations in performance can be noted and remedied. Through the Ongoing Services and Optimization phase, which often employs measurement and verification protocols, organizations can help ensure that energy and operational savings persist over time while delivering continuous building performance improvements. M easurement and Reporting Phase This phase provides feedback that ensures ongoing building performance improvements through data monitoring and reporting, measurement and verification, performance assurance, and metering & sub-metering. Measurement and reporting should also monitor energy markets and consumption to mitigate risk and reduce costs. Many building owners will rely on software applications and other technologies to deliver continued measurement and reporting. The sequence of this multi-phased approach offers a powerful strategy for addressing any operational problem, whether related to energy and sustainability or other aspects of business operations: gather information, create a plan, determine the metrics for success, implement the plan, maintain the improvements over time, and measure the plan s success. But multi-phased programs must be flexible and adaptable to each unique building and business; this flexibility will allow organizations to initiate a comprehensive energy plan at any phase and move through the cycle in a resource-appropriate way until a continuous improvement loop is created. Whether creating a comprehensive energy and sustainability strategy for a single building, a single campus, or an enterprise portfolio of buildings located across the nation or globe, progress is best achieved when key stakeholders for energy conservation, energy procurement, and sustainability are united in their efforts. Aligning Objectives Across Departments to Avoid Missed Opportunities According to the 2012 McGraw Hill Construction Report, Greening of Corporate America, the number of US firms that embrace sustainability as a part of corporate strategy has more than doubled. That is, Corporate America views sustainability and energy conservation as strategic imperatives, ones that equate sustainability with competitiveness and differentiation. Organizations are increasingly tuned into the need and opportunity to reduce the cost of business operations holistically. This awareness has been driving significant interest in efficiency within the built environment, from cost reduction initiatives, strategies to make operations leaner or more efficient, and procurement approaches that drive down the cost of energy. Sustainability programs are evolving, too; discussions among decision makers focus on the ways today s decisions and business activities will have an impact on profitability and operational efficiency in the long-term. 5 sie_buildingperformance_bro_12.indd 5 6/19/14 9:46 AM

6 In spite of the argument for a convergence of decision making processes, many organizations maintain a fragmented, department-level approach to doing business. That is, facility engineers focus on facilities concerns, procurement specialists drive cost out of the organization, and sustainability teams work to make the businesses more environmentally responsible. Consider a common business scenario: One organization s CEO and CFO tell their staff they need to reduce costs across the organization. Each manager will create a plan to achieve that corporate mandate: T he Director of Facilities engages his team in creating an energy efficiency program, and solicits proposals from potential energy service companies. These providers suggest a range of projects and improvement measures designed to make the building more resource efficient. For example, recommendations may include installing new, more efficient light fixtures; deploying low-flow plumbing fixtures that reduce water consumption; and HVAC improvements that create a more comfortable, healthy work environment while reducing utility consumption. These programs are highly effective at reducing the overall use of energy in the buildings achieving the cost reduction objective from the CEO and CFO. T he Sustainability Director engages her team in a series of programs that also make the organization more resource efficient. Awareness programs, or behavior modification programs, remind building occupants to turn off lights when they leave a room, put workstations into energy-saving modes, and use less paper then recycle it when it has served its purpose. She may also initiate an alternative energy program, seeking out ways to take advantage of wind, solar, biomass, and other alternative, more sustainable resources. These efforts combine to not only further reduce resource usage, but also to reduce the company s greenhouse gas (GHG) emissions and carbon footprint. T he Director of Procurement enlists his team in a variety of efforts that reduce the cost of energy coming into the building. The team will negotiate new utility contracts with lower rates per kilowatt hour (kwh) based on the building s existing energy consumption. These lower rates will generate cost savings over the life of the new utility contract. 6 sie_buildingperformance_bro_12.indd 6 6/19/14 9:46 AM

7 Smart Technologies Engage Everyone in Energy Efficiency Discussions The state of building efficiency is evolving rapidly as innovations in the areas of smart building technology and energy management propel energy efficiency into the information age. Five years ago, software used for building management was limited to complex systems targeting sophisticated facility managers. Today s energy management platforms aim to engage a broader audience including everyone from individual building occupants to the CEO in the conversation around energy efficiency. These advances have come largely as the result of software-as-a-service (SaaS)-based platforms for energy management that can distill thousands of data points within a building into actionable information delivered via attractive user interfaces from any Web portal or mobile device connected to the Internet. The traditional approach to energy management via energy efficient building design and retrofits will continue to form the core of this business, but the whole offer will be enhanced by building energy management systems that squeeze additional value out of buildings. Companies active in the building efficiency market must take heed of these innovations and develop technologies and/or partnerships to meet the growing demand in the market. Eric Bloom, Senior Research Analyst Navigant Research These directors have all successfully created programs that will achieve the cost reduction objective, but by working on their own, they are not aware of each other s initiatives. The facilities team will learn that the new, lower energy costs negotiated by procurement extends the payback periods on the potential facility improvement project. With a longer payback period and lower guaranteed savings, the facility improvement proposal may get rejected because it doesn t achieve financial requirements. Similarly, if the project were underway prior to procurement negotiating the new rates, procurement may learn that their savings targets are no longer achievable because of the efforts made by the facilities and sustainability teams energy efficiency programs. The new energy supply contracts may have also overlooked and/or prevented the sustainability team s alternative energy program, which would have deployed a solar installation to generate clean, renewable energy onsite, and reduce the building s reliance on outside energy further improving the company s carbon footprint and GHG initiatives. These missed opportunities, however, can be avoided with a holistic approach to energy and sustainability. Together, an integrated approach to energy and sustainability will maximize energy efficiency, minimize utility expense, and enhance the sustainability of the business. Long-Term Planning Needed for Holistic Approach In many cases, organizations take a short-term view of comprehensive energy and sustainability planning for a variety of reasons. The business may be focused on getting some quick wins, and addressing energy efficiency and infrastructure needs on an ad hoc basis. In some cases, facility managers may call these the low-hanging fruit projects that require small, short-term investments yet yield promising, though short-term, results. In other cases, organizations may need those short-term wins in order to justify larger expenses of an overarching, more strategic program. Still other organizations may be affected by the tendency to look at performance goals only at year-end or during review cycles; short-term, quick projects fit into that cycle. The focus on short-term, quick projects is often tied to a lack of capital; that is, even when rebates, tax incentives, or utility incentives are available to pay for a portion of the project, facilities teams may not be able to secure the remaining capital required for a larger initiative. Thus, building owners may defer the projects until they become absolutely necessary. In these situations, preventing downtime becomes the focus, rather than long-term efficiency, and thus, a new, ineffective system emerges. Organizations and enterprises that take a longer-term view have a holistic, integrated approach to energy and sustainability, which has largely been driven by executive sponsorship and leadership of comprehensive energy and sustainability planning. This trend is particularly true for energy-intensive businesses that rely on predictable costs, usage, and supply. Where energy is not a core driver of the business, but is a strategic concern, a holistic approach to energy and sustainability may require a creative approach to financing. These approaches can uncover the necessary capital within company budgets and to research grants, rebates, and incentives to help fund projects. 7

8 Integration of Energy Demand with Energy Supply Critical to Success In the example on page 4, we examined a company that took a departmental, short-term approach to energy and sustainability. When building owners take a holistic approach to energy and sustainability, they integrate energy demand with energy supply. That is, energy demand focuses on the ways in which a building and its occupants consume energy lighting, HVAC, mechanical equipment, manufacturing equipment, and so on. Energy supply focuses on how building owner procure energy and secure its supply. When decisions are made on the demand side only, there is an impact on the baseline opportunity for energy savings on the supply side. The alternative is also true; supply-side decisions will impact the ability to drive demand-side cost reductions if every decision is made in a vacuum. By linking energy demand and energy supply through a multi-phased program, organizations will manage both the price of energy and the quantity of energy consumed in a comprehensive effort to manage the total cost of energy, which creates true business sustainability. Because organizations have a core competency for example, school districts and higher education institutions are in the business of educating students, healthcare organization are in the business of improving patient care and well-being, and financial institutions are in the business of managing wealth these core competencies rely on the continuous, reliable supply of energy at predictable costs. Managing energy supply or demand may distract executives from pertinent, profit-driving business activities. The most effective way to integrate energy and sustainability through comprehensive energy planning is to seek a partner that does maintain holistic energy planning as a core competency. Technological Implications for Integrated Energy & Sustainability The information age, which emerged from the 1970s through the 1990s, was built on a solid controls foundation: temperature sensors, comfort controls, and the like. Technological advances brought us to the information age, which enabled building management systems to generate vast amounts of data about every building. We are still gathering large amounts of information from our buildings, but the times are evolving; today, the knowledge age is upon us. This change means we are equipped with tools and resources to look at building systems and analyze information in new ways that uncover untapped energy efficiency opportunities. Technology plays a key role in any comprehensive energy and sustainability strategy by providing the performance assurance and continuous data analysis processes that are used through each of the five phases. And because the technologies we use to gather information are becoming continuously less expensive, the number of devices we see that are IP-enabled is growing quickly. The internet of things is transforming the way we gather and process data, and may one day lead to drywall with built-in sensors that provide even more infor-mation about what s happening within a building. By applying technology to the buildings around us, organizations and enterprises will have more information and knowledge to create more effective energy and sustainability strategies and then put the plans into action. Utility companies can apply technologies, can add devices to their distribution networks, and make better decisions about how to supply energy. 8 sie_buildingperformance_bro_12.indd 8 6/19/14 9:46 AM

9 As a result, organizations can meet savings and performance goals, identify continued improvement measures, and maintain the transparency necessary to perpetuate the process and projects. Combined with real-time, cloud-based, and mobile solutions that enable tremendous connectivity, knowledge-based buildings represent the new era of building systems. Today s buildings have extensive computing power more sensors, more processing capacity that have resulted from advances in digital computing. Analytics, the power of analyzing data and extracting knowledge, is the field that empowers integrated building performance and sustainability. Sustainability means the building has to be intelligent to begin with. The most sustainable ecosystem is nature, and by its most fundamental definition is intelligent. If a building is going to be sustainable, it has to manage its resources very well and sustainably just as nature has sustained its resources for billions of years. To provide that, organizations must integrate the complex technologies within the building. According to a recent study by Navigant Research, demand for Building Energy Management Systems (BEMS) that consolidate and analyze diverse energy-related data from buildings is expected to grow from $1.8 billion in 2012 to $5.6 billion in 2020 globally, at a compound annual growth rate (CAGR) of 15.3%. This growth will largely be driven by savvy corporations and building owners eager to implement smart technologies that enable strategic energy management. The portfolio of technologies of interest to organizations continues to expand with new innovations. Demand is on the rise for renewable, distributed energy generation systems such as solar thermal, geothermal, and groundsource heat pump technology, as well as small-scale wind turbines. Even the building envelope is starting to become more intelligent with smart windows that understand when to transmit sunlight into the building or when to block the light. That is, they change their property, or phase, automatically. Buildings operate using a delicate balance of complex technologies, and building owners expect to understand performance and drive performance improvement. By 2022, Navigant Research forecasts that annual sales of smart glass worldwide will reach nearly $900 million. These expectations are becoming more common specifications for new building projects and enterprise operations. The area of data analytics is one example of the benefits borne by smart building technologies; but no matter how sophisticated the building information system is, it s limited without human intervention. Humans are, by far, the best data analysts. We extract data from the environment every day and process that knowledge to make decisions. While continuous data analytics are an invaluable tool for comprehensive energy planning, these technologies require the right people (demand side as well as supply side expertise) and efficient, integrated processes and programs to take action and be effective. Using data analytics, some vendors are achieving energy and cost savings on the scale of 20-30%*, often with a payback period of less than two years. Managing the total cost of energy is an integral part of a sustainable business strategy. 9

10 Finding the Right Partner for a Comprehensive Energy and Sustainability Strategy Organizations today have a wide range of options for a comprehensive, holistic approach to energy and sustainability. They can rely on their internal resources, such as facility managers, who know the building(s) but may be limited in their demand and supply side expertise; a number of third party consultants who provide effective technologies or programs that align with a single phase (e.g. strategy or implementation) or technology; or a partner who can provide a holistic approach, consultation, and technologies throughout a comprehensive, multi-phased program. Although each set of options brings its own set of advantages and disadvantages, organizations that combine energy conservation, energy procurement, and sustainability processes are looking for a partner that provides: Extensive subject matter expertise the right partner has decades of experience and thousands of completed projects that inform best practices. The partner s knowledge will not only extend to energy products and solutions, but also to the areas of energy supply, energy risk management, data analytics and technologies, and sustainability. Technology with existing building commissioning, monitoring-based commissioning, fault detection and diagnostics, organizations have a wide range of processes and technologies available to elevate a comprehensive energy strategy and make better, more effective business decisions. The right partner will have access to these technologies and the right experts to maximize their utilization. Product technologies are also extraordinarily important to this process, including lighting, HVAC, building management system, and energy management system technologies. Resources and operational capacity organizations often lack the energy demand, energy supply, engineering, and sustainability resources necessary to execute a holistic approach. That is, the business is often focused on managing day-to-day business operations, but finding the right partner means expanding building resources to take a broader, more strategic view. Passion for energy organizations are passionate about their businesses; the right partner will be passionate about energy and sustainability, and will understand the interdependent power of how these elements work together with the business s people and processes. 10

11 Investment methodologies because some comprehensive energy strategies may be hampered by a lack of capital, an understanding of investment methodologies that allows organizations to take advantage of structures that enable thorough program planning, evaluation, implementation, optimization, and monitoring. This focus moves beyond short-term ROI and shareholder reporting to include access to lower-interest funding, off-balancesheet solutions, and ownership models that shift the capital and risk to third parties. Global perspective particularly true for enterprise building owners, a global perspective facilitates a totally integrated process for an entire portfolio of buildings, regardless of geography. True partnership opportunities partnering with an energy and sustainability organization means finding one that s available to discuss any energy-related topic that arises; this availability may mean sitting in on board and/or staff meetings to gain a true understanding of the entire business operation. Sustainable, profitable business growth is critical for today s businesses. According to McGraw Hill Construction research, 90% of today s executives expect energy costs to decline as a result of organizational energy and sustainability intitiatives. This data suggests that executives believe that continued investments in energy and sustainability will yield continued returns, as measured by waste reduction and an improved total cost of energy. Finding the right partner for a comprehensive energy and sustainability strategy will create the business processes, minimize risks, and identify the right technologies to achieve that sustainable, profitable trajectory. Because the most effective way to improve building performance is through a comprehensive program intended to improve energy efficiency, optimize energy supply, and enhance sustainability, a multi-phased program maximizes the chances of successfully setting the right targets and subsequently achieving those targets through a coordinated effort. As we look toward the future, we will be equipped with the technologies, tools, and resources necessary to create a new era of building systems. 11

12 Siemens Industry, Inc. Building Technologies Division 1000 Deerfield Parkway Buffalo Grove, IL (847) /14 Printed in USA Part# 153-BPS Siemens Industry, Inc. All rights reserved. * Based on reviews of case studies by a range of data analytics software vendors.