Smart Cities

ACEEE Describes the “Ideal Future Scenario” for Grid-Interactive Buildings

“In the ideal future scenario, grid-interactive efficient buildings (GEBs) will be the norm. They will help cities and jurisdictions meet their energy and climate goals, help maintain the security and stability of the grid, and help customers save money on their energy bills. Top-down policies will make grid-interactive buildings part of state, city, and jurisdiction plans,” reads a recent report from The American Council for an Energy-Efficient Economy (ACEEE). The report, Grid-Interactive Efficient Building Utility Programs: State of the Market, describes a future where regulators and utilities collaborate to make GEBs more accessible and where our power infrastructure provides customers with an accurate valuation of their grid services. It paints a picture of a robust market of contractors and aggregators that will support utilities and customers in delivering these services, where customers readily allow connections for the cost and societal benefits. This is not the current reality, however, as the report recognises. “Few policies encourage […]

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“In the ideal future scenario, grid-interactive efficient buildings (GEBs) will be the norm. They will help cities and jurisdictions meet their energy and climate goals, help maintain the security and stability of the grid, and help customers save money on their energy bills. Top-down policies will make grid-interactive buildings part of state, city, and jurisdiction plans,” reads a recent report from The American Council for an Energy-Efficient Economy (ACEEE).

The report, Grid-Interactive Efficient Building Utility Programs: State of the Market, describes a future where regulators and utilities collaborate to make GEBs more accessible and where our power infrastructure provides customers with an accurate valuation of their grid services. It paints a picture of a robust market of contractors and aggregators that will support utilities and customers in delivering these services, where customers readily allow connections for the cost and societal benefits. This is not the current reality, however, as the report recognises.

“Few policies encourage GEBs. Smart and connected technologies exist, but there is no standardized method for them to connect and interact with each other. No standardized method currently exists for valuing grid benefits, and even if it did, many utilities lack the infrastructure and IT expertise to benefit from the most valuable services. Within utilities, silos between the energy efficiency and demand-response teams means that these programs typically have their own goals and their own methods of developing programs,” the report continues.

The authors remain optimistic that a seamlessly-integrated future is something utilities and program administrators can work towards, but significant barriers will have to be overcome. Research manager on ACEEE’s buildings program and co-author of the report, Chris Perry, identifies the key barrier as building-grid interoperability.

“Ability to communicate back and forth between buildings, the grid and aggregators is all pretty nascent. There’s no real good language right now to talk to a utility or aggregator. This isn’t something we’ll see in a year or two. It’s years down the line,” says Perry, who sees US utilities at a range of different stages of development. Some are ahead of the curve, he says, “others are intrigued by buildings being a resource for them, but are in the early stages of investigating what programs would look like.”

For such a shift to take place, utilities need to take stock of the programs they have active and where they need to improve. Most US utilities run some kind of energy efficiency program but not enough have moved beyond pilots for demand-response, for example. The authors of the report also highlight smart technologies such as advanced metering and thermostats to lay the foundation for the widespread introduction of GEBs. However, this kind of “modernization” may require significant structural changes in these long-established organizations.

“If a utility has both energy efficiency and demand-response programs, it can create cross-functional teams to integrate program features and optimize for customer and grid value. It can also consider reorganizing departments to position energy efficiency and grid services together or at least begin the process of integrating the two groups so that in the future it will be easier to develop programs that can align their efforts toward common objectives.”

Upgrading IT departments is a must for utilities that haven’t done so already. The sheer increases in the flows of data demanded by true building-grid interaction would overwhelm many utilities’ IT set-ups. And then there’s cybersecurity, what Perry’s co-author Dan York, ACEEE senior fellow, called “the downside of all this interconnectivity.” For utilities to step up and play their part in this new cyber-vulnerable and data-driven building-grid relationship, they must get their IT skills in order, before addressing infrastructure and policy even.

“The utility business is different than it was even 10 years ago. It now involves a much more collaborative partnership where utilities seek to become trusted partners and reliable sources of information, and look out for customer interests,” says York, who remains pragmatic. “The grid-connected part is a big step but by no means a prerequisite, but it’s still very possible for building owners to have smart controls and highly efficient, high-performance buildings even in the presence of a utility not exploring these opportunities.”

Modernization is inevitable but the longer utilities wait, the more smart buildings they will find demanding interoperability and threatening microgrid separatism. It, therefore, is wise to prepare for that future before being forced into action.

It’s a lot for some of the more traditional utilities but by exploring these new opportunities and thinking out-of-the-box on how they might take advantage of them, they are likely to find a structure that works for them. Rather than incentivizing hardware, for example, many utilities may prefer as-a-Service model to directly monetize the value of their investments.

“Ultimately, utilities will also need to explore the question of valuation of demand flexibility, as well as how to integrate it into rate and market structures to align financial incentives with value to the grid. Utilities and program administrators should also keep an eye on current research and policy changes to enable grid-integrated buildings,” the report recommends.

For interoperability challenges, it highlights New York University’s investigation of connectivity between a commercial building’s EMIS and a distributed energy resource management system (Ergan 2019). While for policy, it predictably points west, towards California’s recently passed Senate Bill 49, aimed at helping to improve California’s flexible demand by prioritizing grid-interactive building appliances and equipment (California Senate 2019).

“GEBs can help utilities manage grid operations and lower system costs, and they deliver customer value in the form of reduced bills, improved worker productivity, and enhanced comfort. Energy savings from GEBs can also help meet state, municipal, and utility energy efficiency and emissions goals,” the report states confidently. “Using the framework we have laid out in this report, utilities and program administrators can begin developing programs that fall somewhere along the path to full-fledged GEB offerings.”

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