“Work done addressing Smart Grid has been central to the last decade’s most significant technology developments; from Internet of Things to Web services and Building Automation to Big Data Energy Analytics,” said John “Jack” McGowan, CEM Principal at The McGowan Group.

In an article for Automated Buildings, McGowan points out that too much of the electricity discussion is focused on the utilities business and especially on electricity generation. That discussion is lost on real estate and facility managers, despite the fact that 40% of all electricity consumption comes from buildings. “Electric utilities are important,” McGowen says, “but facility managers often ask why should I care?”

The focus for facility managers is making their buildings attractive for tenants, then keeping those tenants happy. The business of electric utilities are only so interesting in that lower energy bills make happier tenants. However, a number of factors have disrupted the electricity business to the building owner’s and user’s benefit, not least the energy saving technology of the internet of things.

The rapid drop in the cost of solar panels and the increasing influence of the climate change debate on the electricity sector have come about alongside the merging of IT with modern building trends. In contrast, utility companies have been slow to recognise the implications of the transformation and adapt their own business models and strategies.

Utilities have operated for several decades in an environment that does not reward innovation, we highlighted last year in an article entitled Adapt or Die. In the past 20 years, R&D investment by utilities has declined rapidly. Utilities are finally waking up to the fact that they will need to balance new investments and experimentation with tracking results in a cost-conscious environment.

“Utility technology was lacking because the grid design was; power goes one way and money the other when customers pay their bills, but two-way (energy and information) transactions were needed. Two-way transactions would create a new energy marketplace and saving money on customer bills was critical,” explains McGowen. “Yet the full cost optimization potential was limited because policy and antiquated business practices locked savings behind the utility’s one-way business model.”

However, it all comes back to the smart grid, and not just for energy, in what McGowen calls ‘the confluence’. Performance, comfort, maintenance and energy in buildings depend on a smarter grid, as depicted in a graphic he created to illustrate this new order. Fault detection and diagnostics, for example, is no longer the only form of building analytics. Big data has made analytics pervasive across the smart building, from equipment operations to comfort and energy optimization, to asset sustainability.

“Asset Sustainability is critical because it’s at the intersection of Predictive Life Cycle forecasts and energy conservation initiatives. As buildings age, so do the building systems supporting them. If aging infrastructure goes unattended, Deferred Maintenance backlogs can place buildings at risk,” says Tim Dettlaff, Sr. VP & General Manager at Ameresco. “Big Data must include life cycle costs and models of all energy, AND non-energy related systems. Since systems work together harmoniously, analytics and life cycle costing help prove business cases for capital investments.”

Today the smart grid is as much about data exchange as it is about electricity. However, difficulties arise because the rapidly evolving world of smart technology and the internet of things is dependant on the slow-to-adapt utility companies keeping pace. Standards have tried, with varying success, to bring peace to the battle between building systems and the electricity grid. Thankfully, this essential element of infrastructure in our modern world is starting to show signs of synchronicity.

“The Harmonization of the Energy & Buildings Markets has begun,” declares our comprehensive report on the topic, entitled Smart Buildings Meet the Smart Grid. “Energy and buildings markets are beginning the tricky process of harmonization as major global firms look to capitalise on opportunities surrounding smart grids and distributed energy.”

As we strive to curtail an impending energy crisis, demand side measures such as reducing energy consumption is key. With 40% of total energy consumption coming from buildings, their harmonization with the grid cannot come soon enough. The fact is that energy is no longer just about electricity; data has now become fundamental to the power system and so much more.

Darrell Smith, former Microsoft Director of Facilities and Energy, put it well, "give me a little data, and I’ll tell you a little. Give me a lot of data, and I’ll save the world."

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