2012 ZPRYME RESEARCH & CONSULTING, LLC. ALL RIGHTS RESERVED. SMARTGRIDRESEARCH.ORG INTELLIGENT RESEARCH FOR AN INTELLIGENT MARKET TM SMART GRID INSIGHTS ENERGY MANAGEMENT 3.0: ADVANCED SYSTEMS FOR COMMERCIAL AND INDUSTRIAL USERS NOVEMBER 2012
1 [PREMIUM] ZPRYME SMART GRID INSIGHTS
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012 Table of Contents
Executive Summary ................................................................. 2 Energy Management System Market Transition ................ 5 Recommendations and Opportunities .................................. 6 Market Overview ..................................................................... 8 State of the Market ................................................................ 8 Technology Definition ............................................................ 8 Market Drivers ......................................................................... 9 Market Barriers....................................................................... 10 Technology Benefits and Segments .................................. 11 Service Delivery..................................................................... 11 Energy Management Market Transition .............................. 13 Energy Management Systems Today ............................... 13 Energy Management Systems in 3-5 years ....................... 14 Energy Management 3.0 (6 - 10 years) ............................. 15 Global Market Value Forecasts............................................ 16 Global Energy Management Systems Market Value Forecast, 2012 2020 ........................................................... 16 Global Energy Management Systems Market Value by Technology, 2012 2020 ..................................................... 16 Methodology ........................................................................ 17 Key Players and Solutions ..................................................... 18 Emerging Companies to Watch ........................................ 23 Major Government Initiatives ............................................... 26 Major Regional Projects ........................................................ 27 Keys to Entering the Energy Management Market ............ 30 Zprymes Market Outlook, 2012 - 2020 ................................ 31
2 [PREMIUM] ZPRYME SMART GRID INSIGHTS
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012 Executive Summary
Commercial energy management systems (EMS) allow firms to reach energy efficiency goals and control energy consumption company-wide by using proven energy control techniques to optimize their energy efficiency.
Commercial buildings are a large potential market for energy efficiency programs, and this includes energy management systems. To drive this adoption, federal programs play a key role to encourage the technological development of enterprise grade energy management systems for commercial facilities.
Currently, EMS offerings are focused on energy optimization based on company-specified goals and preferences. However, in the future, EMS will also integrate operations optimization, and will automatically adjust settings for the highest levels of performance, in addition to providing energy savings.
There are several segments of the EMS market, with each having specific needs and being at a different stage of development. As such, vendors will need to provide solutions specifically suited to the requirements of each customer. To address that, several small specialized firms are currently offering customized products suited for the different segments, and some large firms are also leveraging their knowledge and market presence to introduce additional EMS products.
Overall, we expect companies will begin adopting EMS software in increasing numbers over the next 5 to 10 years, especially solutions that not only optimize energy efficiency, but also integrate with other business functions to provide both energy efficiency and operations optimization. These systems are an amalgamation of building management systems and advanced software solutions that assist in managing the building functions in a more energy efficient way to provide demand response controls when situations within the power grid demand it.
To do this, the EMS software measures the energy consumption and utilization of all network-connected devices and systems to provide visibility into power usage across the enterprise. Typical components include work management capabilities, enhanced demand-response applications, and analytics and forecasting applications.
Energy management is an evolving market, but we see several opportunities for growth. Key examples include the rising significance of social responsibility and managing climate change; focus on increasing demand efficiency and operating cost savings; new product offerings; compliance with energy efficiency regulations; and increased use of renewable energy all of these are driving demand for energy management solutions.
This report has been developed by Zprymes Smart Grid Insights Research Team and Zprymes Smart Grid Advisory Board.
3 [PREMIUM] ZPRYME SMART GRID INSIGHTS
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012 Key Takeaways by the Numbers
The global energy management system market is projected to reach $1.70 billion in 2012. By 2020, the global market is projected to reach $9.98 billion. The market is projected to grow at a compound annual growth rate (CAGR) of 25%.
In 2012, North America (40%) and Europe (30%) will account for about 70% of the global EMS market. Asia Pacific will account for 15% of the market in 2012. By 2020, North America and Europe will each account for 30% of the market, while Asia Pacific will account for 26% of the market.
North America: From 2012 to 2020, the region will grow by 21% annually, from $0.67 billion to $3.01 billion.
South America: From 2012 to 2020, the region will also grow by 21% annually, from $0.09 billion to $0.39 billion.
Europe: From 2012 to 2020, the region will grow by 25% annually, from $0.51 billion to $2.96 billion.
Asia Pacific: From 2012 to 2020, the region will grow by 34% annually, from $0.25 billion to $2.55 billion.
Rest of the World (ROW): From 2012 to 2020, the ROW will also grow by 25% annually, from $0.18 billion to $1.07 billion.
Technology Segmentation
From a system technology perspective, communication networks represent the largest market segment in 2012, accounting for 20% of the global market. In 2020, communication networks will account for 18% of the market. This equates to a projected global market value of $0.34 billion in 2012 and $1.80 billion in 2020 (23% CAGR).
By 2020, control systems will be the largest technology segment, accounting for 21% of the global market (vs. 19% in 2012). This equates to a projected global market value of $0.32 billion in 2012 and $2.10 billion in 2020 (26% CAGR).
In 2012, field equipment (15%), hardware (13%), software (10%), and sensors (8%) will account for a total of 46% of the global market. By 2020, these four technologies will account for 44% of the market.
Among the six core energy management system technologies, sensors and software are projected to grow the fastest (30% CAGR).
4 [PREMIUM] ZPRYME SMART GRID INSIGHTS
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012
$1.70 $2.06 $2.50 $3.05 $3.72 $4.54 $5.89 $7.66 $9.98 $0 $2 $4 $6 $8 $10 $12 2012 2013 2014 2015 2016 2017 2018 2019 2020 Global EMS Market Value Forecast CAGR = 25% 2012 to 2020 (in U.S. billions) (figure 1, source: Zpryme) Field Equipment, 15% Hardware, 13% Sensors, 8% Software, 10% Other , 15% Comm. Networks, 20% Control System, 19% Global EMS Market Segmentation by Technology 2012 - % of Global Market (figure 3, source: Zpryme) 40% 38% 37% 35% 34% 32% 32% 31% 30% 5% 5% 5% 5% 5% 5% 4% 4% 4% 30% 30% 30% 30% 30% 30% 30% 30% 30% 15% 16% 17% 18% 19% 20% 22% 24% 26% 11% 11% 11% 12% 12% 12% 12% 11% 11% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2012 2013 2014 2015 2016 2017 2018 2019 2020 Global EMS Regional Market Segmentation 2012 to 2020 - % of Global Market (figure 2, source: Zpryme) ROW Asia Pacific Europe South America North America Field Equipment, 9% Hardware, 10% Sensors, 11% Software, 14% Other , 17% Comm. Networks, 18% Control System, 21% Global EMS Market Segmentation by Technology 2020 - % of Global Market (figure 4, source: Zpryme)
5 [PREMIUM] ZPRYME SMART GRID INSIGHTS
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012
Energy Management System Market Transition (table 1, source: Zpryme) Energy Management Systems Description Primary End-use Sectors Type of Solution Providers (% of market served) Key System Features/Characteristics Today EMS mainly employed in large buildings and facilities to decrease energy costs by controlling, monitoring and assessing the energy use of lighting, HVAC, machinery, thermostats, and other areas that use large amounts of energy. Large commercial and industrial customers
Multinational corporations
Large commercial building and real estate owners and managers
Federal and State Governments Multinational corporations (75%)
Niche solution providers (25%) Cloud based
Preventive analytic modeling functions
Control hundreds of devices across several locations
Automatic device start/stop functions In 3 5 years* The EMS will integrate energy efficiency with business processes, management and operations. This will enable integration and control by department, appliance, equipment, IT infrastructure, human resources, etc.
Advanced demand response capabilities In 6 10 years** (Energy Management 3.0) The EMS will allow businesses to align energy efficiency with business goals, and be able to integrate and communicate with energy aggregators, utilities, distributed energy resources, and whole sale electricity markets. Small manufacturing facilities**
Small and medium retail operations**
Small offices** Multinational corporations (50%)
Niche solution providers (25%)
Start-ups (10%)
Utilities (15%) Plug-n-play
Highly interoperable
Energy-management-as-a- service (EMaaS)
Control thousands of devices across multiple locations
*In addition to the functions, features, and sectors mentioned in Today **In addition to the functions, features, and sectors mentioned in Today and in 3 5 years
6 [PREMIUM] ZPRYME SMART GRID INSIGHTS
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012 Recommendations and Opportunities
Recommendations
1. Vendors looking to enter the EMS market need to take a long-term view of the opportunity. The current global market is only $1.7 billion, but will grow to $10 billion by 2020. They must also understand the regional nature of EMS, with 70% of current expenditures being in either North America or Europe.
2. EMS solutions consist of several components, namely hardware, software, sensors and control systems. To get early traction, vendors need to be interoperable, plug-and-play, and compatible with the customers communications network.
3. Vendors must also be careful in targeting the right types of customers. EMS offers the most immediate value to large consumers of energy, such as industrial or commercial facilities and campuses. While small businesses represent the largest number of physical sites, the ROI is more difficult to gauge, and this end of the market will develop later as EMS costs come down and the track record is more proven.
4. Utilities need to view the value proposition of EMS beyond ROI. In the U.S., smart meter stimulus funding, the Better Building Initiative and the ISO 50001 certification are examples of how government and industry bodies are working to promote solutions that make businesses more environmentally responsible and better global corporate citizens. These are key value drivers that utilities can use to get their customers to see benefits beyond cost savings for EMS.
Opportunities
1. North America and Europe provide the most immediate opportunities for vendors in the energy management space, and combined, currently account for 70% of the market.
2. By region, the U.S., Canada, U.K., and Germany are four countries that have adopted these technologies at the highest rate over the past few years, and are expected to continue leading the market.
3. While North America and Europe drive short-term demand, the long-term growth opportunity includes Asia. During the forecast period, North Americas market share will decline, Europes will remain constant, but Asia will steadily grow from 15% share to 26% of the global market by 2020.
4. In Asia, the most immediate opportunity is Japan, where industries have been charged with reducing their energy consumption as a result of the Fukushima disaster that happened in 2011.
5. Advanced energy management systems will become more attractive financially when they enable individual customers to sell power back to the grid. This capability will emerge as smart meter
7 [PREMIUM] ZPRYME SMART GRID INSIGHTS
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012 deployments reach critical mass, and as communications networks become more integrated with the smart grid.
6. Companies with multiple locations stand to benefit from advanced EMS deployments in terms of aggregated billing capabilities. Not only will advanced analytics help optimize power consumption across all sites, but they will streamline the data management, making the billing process simpler and more accurate.
7. On a more granular level, EMS will provide real time visibility into energy consumption with the ability to control the usage of any endpoint connected to the data network. This will provide businesses with unprecedented capability to proactively manage energy use, and allow utilities to make better use of dynamic pricing with customers, which will help align energy supply with real time demand conditions.
8 [PREMIUM] ZPRYME SMART GRID INSIGHTS
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012 Market Overview
State of the Market
Deployment of the Smart Grid and smart meters enable business management to understand their consumption, as well as take measures to lower consumption and energy costs. To date, energy management systems have been adopted primarily in large industrial facilities, however use in other business settings is increasing as executives become more aware of the benefits they produce. In addition, technological advances will drive adoption by reducing prices and creating products that will not only optimize energy efficiency, but also optimize operations. Finally, economic recovery will further propel adoption, as firms will have greater ability to make investments in energy efficiency.
Commercial buildings currently consume approximately 40% of all energy or $400 billion per year in the United States, making them the largest sector of the energy market. Given the size of the market, reducing consumption in the commercial market will significantly increase overall grid reliability.
Technology Definition
One way that a building is able to decrease its overall consumption is through the deployment of an energy management system (EMS). It does this through utilizing a number of proven energy efficiency programs, such as load shifting, duty cycling, optimal start and end time, thermal heat utilization, energy storage, response to weather changes, time of day scheduling, demand limiting, and renewable energy generation management. 1
The business specifies preferences and goals that govern automation activities and create cost savings. In addition, advanced analytics allow management to make more cost effective and energy efficient decisions.
For the purposes of this report, the term commercial refers to both commercial and industrial businesses.
Commercial Energy Management Systems (EMS) are a suite of applications and technologies that enable users to monitor, control, and optimize their use of energy. The typical energy management system is comprised of the core components described below.
EMS Core Components (table 2, source: Zpryme) EMS Component Description Field equipment Measurement devices installed in a facility, building, or business. Examples include sub-meters, cameras, power analyzers, and media gateways Software Proprietary software needed to integrate EMS with user operations/ systems. This includes software that enables additional functionality to an existing EMS. Control system (user interface) Main system interface that manages, controls, and communicates with the entire EMS. Users optimize and program the EMS with the control system. Hardware Physical equipment used to integrate EMS such as servers, user work stations, backup power suppliers, and mobile monitoring devices such as tablets. Communications network Communication equipment and architecture that connects and enables the transmission of data and information in the EMS. Sensors Wireless or wired sensors placed throughout an installation to measure power and/or communicate device data. Some devices or equipment may come installed with EMS compatible sensors.
1 www.eisalliance.com/documents/EIS_A_CEMS_WP.pdf
9 [PREMIUM] ZPRYME SMART GRID INSIGHTS
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012 Typically, an EMS comprises of system placed in the customer's premise, including hardware and software, designed to control the operation of other energy devices according to customer preferences and objectives such as reducing energy costs, or maintaining comfort or convenience. Controlled devices could include, but are not limited to, security, thermostats, lighting, HVAC, appliances, large pieces of equipment, and even IT infrastructure such as servers, computers, and communication networks. Among other control inputs, an energy management system can accept energy pricing signals from a utility or third party energy service provider.
The EMS of the future will further integrate energy efficiency with strategic business goals. Because future business energy management systems will control more devices, from individual electrical outlets to the individual lights and pieces of machinery, the EMS will go a step further than current capabilities to both control energy and optimize production efficiency.
It will utilize occupancy sensors and scheduling to turn off individual outlets to reduce vampire energy, shift the storage of information to maximize server use, while leaving critical outlets protected and backed up by a storage system to maintain constant operation. It will even perform programmable functions like copying and computer maintenance and updates during non-peak times. By integrating operations with energy efficiency, firms will be able to better maintain equipment, reduce downtime, improve production and maximize overall profitability.
Market Drivers
Energy management is an evolving market and end users are investing selectively in energy management solutions. However, the market provides several opportunities for growth as new companies focused on the space emerge, and longstanding IT companies and building management system companies gravitate to this growing market. Several factors are driving demand for energy management solutions including rising significance of social responsibility and climate change; focus on increasing demand efficiency and operating cost savings; new product offerings; compliance with energy efficiency regulations; and increased use of renewable energy.
By using energy management solutions, firms are able to respond to government regulations to reduce carbon emissions; to employee, customer, and community requests to operate in an environmentally friendly manner; and to shareholder demands to decrease costs and produce higher returns. There are several approaches to reducing the carbon footprint, from promoting eco- friendly practices to changing energy production methods to establishing and enforcing carbon emissions limits.
While the U.S. has yet to enact federal carbon regulations or pricing laws, other government regulations affect future energy supply strategies. In Pennsylvania, for example, a new law requires a 4.5 percent reduction in peak energy demand by 2013. Moreover, by 2015, U.S. stimulus spending promises to support an additional 50,000 megawatts of renewable energy sources. These types of energy sources present intermittency challenges: The wind does not always blow, and the sun does not always shine.
10 [PREMIUM] ZPRYME SMART GRID INSIGHTS
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012 As a result of intermittency, energy management systems must incorporate rapidly accessible response reserves for use during power shortages. Furthermore, plug-in hybrid and all-electric cars, such as the Nissan LEAF and Chevy Volt, promise to help reduce both carbon emissions and dependence on imported oil; however, they also lead to an increase in demand for power. Thus, energy management systems are required to assist in minimizing the energy requirement of these vehicles.
The use of energy is the second-largest variable cost in the manufacturing process after raw material costs. Energy use changes from one hour to the next depending on many influencing factors, such as outside temperatures. Since energy needs can change abruptly, the energy infrastructure must always have the capability of meeting the peak demand. Newer, informed demand-response technologies help shape energy demand, predict available load, and then precisely shape that load. In particular, informed demand response enables distributed intelligence end-points, verifiable results, accountability and measurement, and comprehensive data analysis.
Organizations require enterprise-level reporting for hundreds of thousands of devices across their highly distributed offices and data centers worldwide. Therefore, there is an increasing demand from global enterprises for more depth and breadth to their energy management solutions. This allows them to seamlessly scale to and support multiple locations around the world. Rapid energy modeling, app stores, energy kiosks, cloud computing, big data, online communities, and continuous optimization are now required in the vocabulary of market players.
In the U.S., for example, BuildingIQ (an energy management software company) and Schneider Electric (a global specialist in energy management) announced in April 2012 that they were collaborating to provide commercial building owners with a next generation solution for energy management. This partnership provides customers with a cloud-based energy management system that automatically and continually reduces Heating, Ventilation, and Air-Conditioning (HVAC) energy use and connects commercial buildings to the Smart Grid.
Market Barriers
Getting consumers to understand that the use of energy management systems can empower them to do something about their energy costs is the biggest market barrier for the energy management system market. Most companies and customers realize there are means to reduce energy costs, but they lack information about what is happening within their energy systems. Energy management systems can provide a window of how the equipment in their buildings is operating, monitor performance, and identify areas of potential savings.
Financing installations is a problem. Vendor providers cant provide up-front costs, and equity leasing firms are not interested in entering the market. If they would, its predicted that the applications would explode.
Last, a burdensome regulatory environment, a lack of standards, and acceptance of modern communications networks are also holding back the potential of the energy management systems market.
11 [PREMIUM] ZPRYME SMART GRID INSIGHTS
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012 Technology Benefits and Segments
Businesses that deploy an EMS first benefit from reduced energy consumption, which leads to reduced energy costs, reduced GHG emissions, and reduced pollution. Our research finds that peak energy demand (load) can be reduced 10% to 20% through the use of advanced energy management systems. In addition, the firm will be more knowledgeable about consumption and better able to identify the high consumption areas, as well as plan for the future. Modeling also lets the firm try out decisions before they are implemented, allowing the firm to determine the optimum settings and prevent potential problems.
Any areas performing out of range can be quickly and automatically scheduled for maintenance. In addition, energy optimization can increase the utilization of equipment, and coordinate energy efficiency programs across multiple locations, thus reducing overall energy costs for a business.
The EMS market has several segments. First, the large industrial, commercial, and government segment has been implementing EMS for some time as energy accounts for a significant portion of their operating costs. In the near future, the large industrial market will implement improvements, especially as technology enables further integration with operations management.
The Mid/Medium commercial segment includes retail facilities, manufacturing facilities, and hospital and medical buildings. These mid-sized facilities are not as dependent on energy consumption as large facilities and are more affected by the cost of the energy management system. Although there is considerable interest in energy management systems, widespread adoption will not be possible until the cost decreases and the size becomes more scalable and customized.
The office business market is the largest segment of the commercial building market. Offices have very specific needs and critical equipment, such as servers, that must be continually on. Energy waste can be significantly reduced through implementation of an energy management system. The segment is poised for widespread adoption, however the cost must be reduced and the energy management system must control all devices, while insuring the continued operation of others. Finally, small businesses (those with under 500 employees) represent a huge portion of the commercial market. In 2009, there were nearly 27.5 million small businesses in the United States, representing 99.9% of all businesses. In 2008, 21.4 million firms had no employees. The size of the market is enormous, however facilities and capital are very limited, and ROI is extremely important. For that reason, energy management systems for small businesses must be relatively inexpensive and extremely customizable.
Service Delivery
Initially advanced energy managed systems and services will be provided and managed by technology vendors, third-party aggregators, and eventually utilities. Management of these systems will take place under one of the three scenarios below.
12 [PREMIUM] ZPRYME SMART GRID INSIGHTS
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012 Vendor or third-party managed: The solution provider will manage the users system from a central location (off-site). They are typically the least expensive solution, as they have the lowest capital investment and a monthly management fee. This EMS is cloud-based and business executives can link remotely to modify preferences.
User managed: In this case, a building or company will manage the solution on site or from a central location. The executives directly input preferences and parameters, and staff monitors the system to perform overrides or manual operations. These systems typically have a significant initial capital investment, and require continued maintenance costs. In addition, human resources are also utilized to manage the EMS.
Utility managed: The utility will manage the solution/service for the user (commercial/residential building or facilities). However, it is extremely costly due to extensive deployment costs and could lead to significant problems, such as customer equipment failure due to duty cycling. In addition, the utility would manage numerous clients, decreasing customization by businesses and preventing individual efficiency.
Prices for advanced energy management services vary significantly. Companies that work with smaller entities such as residential homes, grocery stores, hotels, and telecom applications charge as little as $1,500 for upgrades of existing customers, $5,000 - $7,000 for most installations, and up to $50,000 to $100,000 for large customers. The average ROI time frame is 2 4 years for such systems. In addition, customers are normally charged a monthly subscription fee that is determined by the overall size and number of locations each customer has. Initially, utilities will not be interested in providing these services unless they are reasonably progressive. Due to the regulatory landscape, utility decision-makers are keen on keeping the status quo due to potential liabilities. They are ultra-cautious and hesitant to engage in programs and services that might disrupt their operations.
They are open to looking at utility rebates but wont be openly receptive to discussing the alternatives being offered by these companies until they can demonstrate critical mass, which is normally considered to be a successfully installed base of at least 300 units.
Overall, next generation services will be delivered and managed through the Internet cloud. However, progressive utilities seeking new revenue streams will eventually enter the market.
13 [PREMIUM] ZPRYME SMART GRID INSIGHTS
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012 Energy Management Market Transition
As energy management systems become more advanced, they will go through a series of changes. First, the users that utilize energy management systems will expand to comprise a larger section of the small to medium sized business market. In addition, as adoption of energy management systems increase, benefits to users and the overall electric grid will also increase. Next, the technology will advance significantly, enabling the potential to control thousands of devices across multiple of locations. Finally, seamless integration with the electric grid, distribute generation resources, and whole sale electric markets will become a key feature of the energy management systems of the future.
Energy Management Systems Today
Currently business scale energy management systems are employed in facilities large enough to consume a very high amount of energy, operate many pieces of high consumption equipment, coordinate multiple buildings, or where energy availability, reliability, and security are a priority. Industrial facilities frequently utilize energy management systems because they employ a number of very high energy consuming devices. Large automotive, food production, and other energy intensive industries also utilize energy management systems. Universities frequently utilize energy management systems to manage energy consumption in multiple buildings across their entire campus. Finally, government facilities also employ enterprise energy management systems, both due to the size of their facilities, and their security and efficiency requirements.
Several benefits of employing corporate energy management systems are being experienced by its users. The primary benefit of utilizing an energy management system is reducing energy consumption. Reducing energy consumption provides a number of secondary energy benefits including reducing the energy cost, reducing greenhouse gas emissions, and reducing the carbon footprint for the firm. Because the firm would reduce energy consumption, it would require less energy from the grid, thus creating a more reliable grid. Another benefit firms experience is increased knowledge about its energy consumption. Finally, this increased knowledge also improves documentation and compliance of environmental and other regulatory requirements.
Several key pieces of technology enables business energy management systems to integrate disparate systems to offer energy reduction for the firm. Energy sensors can be attached to energy consuming equipment, allowing the energy management system to monitor and control the devices. These sensors are becoming integrated with new equipment, as in smart appliances, such as air conditioners, water heaters, and security systems. In fact, the motion sensors employed by security systems become more important as they provide valuable information about occupancy and feedback about facility use. The more devices that can be connected to the energy management system, the more valuable the system becomes for the firm. Energy management system software is exceedingly important, as it takes the information obtained from the multitude of devices and sensors and analyzes it to monitor and manage energy facility-wide. Also, additional features are being added,
14 [PREMIUM] ZPRYME SMART GRID INSIGHTS
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012 such as GIS integration, modeling and renewable energy integration. Of course, renewable energy integration includes solar panels, wind turbines, and all other equipment associated with renewable energy generation. Finally, energy management systems require a dedicated computer terminal or control center to manage its network of connected devices. Increasingly, cloud based systems are being deployed to allow remote monitoring, control, and utilization.
Energy Management Systems in 3-5 years
In 3-5 years the enterprise grade energy management system will have expanded beyond the large industrial, manufacturing, government, and university market. At this time it will have expanded to offices, large retail stores, global conglomerates, building and apartment operators, and the primary education sector. In addition, hospitals and medical buildings will also begin to utilize facility energy management systems, as they are highly dependent on energy reliability, especially during emergency situations.
In addition to benefits currently experienced by firms utilizing energy management systems, numerous other benefits will be experienced. The energy management systems will be controllable to the individual device level. In addition, systems will be able to suggest opportunities for additional savings, such as opening windows, and cycling the air conditioner. This will provide additional energy efficiency and cost savings, further lowering operational costs, increasing profits, and increasing cash flow. These energy management systems will also offer integration with natural gas, water and cable systems, creating an integrated total energy management system capable of optimizing all resources. Automation will also be key, as firms will receive automatic notifications of any equipment performing outside the normal range, and the energy management system will also schedule maintenance and repairs, thus automatically reducing downtime and increasing production. This will also increase the lifetime of the equipment and minimize equipment failures. The main focus of energy management systems in 3-5 years will be integrated energy efficiency with business management and operations. The firm will benefit from being able to prioritize devices, thus maintaining consistent operation of critical systems while minimizing energy costs, such as moving data to one server while shutting down a secondary server when it is not needed.
The energy management systems will evolve to integrate business information by department, appliance, equipment, IT infrastructure, human resources, etc. The system will use advanced analytics and modeling to make predictions, detect patterns, and manage systems based on this information. Because the firm will be able to control energy to the individual device level, most new building and office equipment will have to be produced with sensors allowing control by the energy management system. Next, commercially produced sensors will be available to integrate with older appliances, such as computers, copiers, fax machines, phones, etc. Finally, advanced weather devices will also integrate with renewable energy generation and modeling technology to optimize the load profile of business users. Examples of this weather technology include thermostats, barometers, and hygrometers. In conclusion, technological
15 [PREMIUM] ZPRYME SMART GRID INSIGHTS
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012 advancements integrating all areas of business information, advanced analytics, sensors, storage, and weather devices will enable both manufacturing firms and large office and retail facilities to experience the numerous benefits of utilizing business energy management systems.
Energy Management 3.0 (6 - 10 years)
Within the next 10 years, small businesses will realize the potential benefits of employing an energy management system and will look for suitable options to meet their needs. The use of energy management systems will expand to include small to medium size businesses such as small retail facilities, restaurants, and small offices. These systems will be smaller, inexpensive, and highly customizable.
The benefits firms experience by employing a business energy management system will be based on customization and integration. Again, business operations will be of primary focus, and will allow businesses to align energy efficiency with business goals. One way the energy management system achieves this benefit is through the ability to prioritize energy functions by business impact. The energy management system will evolve to the extent that the operational goals can be input into the energy management system and the system will be able to discern patterns, and make predictions to guide energy management efforts. This will result in the energy management system warming up equipment, turning off outlets to reduce vampire energy, and optimize staff deployment. In addition, the energy management system will extend the life of equipment by detecting irregularities, utilize the most efficient equipment first, and even perform routine maintenance automatically. In addition, the system will be able to integrate and communicate with energy aggregators, utilities, distributed energy resources, whole sale electricity markets, and across thousands devices located at different locations.
For these benefits to be realized, technology must be enabled. First the energy management system will become scalable with customization features that allow both pre-set programs and a high level of individualization. The energy management system will also develop plug- and-play capabilities that offer the ease of set-up for all users. One key development in the energy management system will be the ability to integrate data from every business segment, including inventory, purchasing, human resources, billing, IT, maintenance, etc. Another technological step will be the ability to enter operational goals and then translate those goals into an appropriate and optimum course of action. The software will be able to utilize real-time data to make instantaneous corrections to meet said goals and optimize energy. The software will also be able to offer different options to obtain the goals, as well as suggest improvements to achieve better results across systems or departments.
16 [PREMIUM] ZPRYME SMART GRID INSIGHTS
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012 Global Market Value Forecasts
Global Energy Management Systems Market Value Forecast, 2012 2020 (table 3, source: Zpryme, in U.S. billions)
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012 Methodology
Zpryme utilized secondary research sources, publicly available sources, government announced plans, and Smart City, Smart Grid, and Building Efficiency plans to analyze the Energy Management Systems (EMS) Market for commercial and industrial users. In-depth industry interviews were also conducted to better understand the market drivers, demand, and opportunities. Qualitative assessments were made by Zprymes research team that take into account both the primary research (meetings/interviews) and secondary research findings to assess the market segments of interest.
Finally, time series forecasting was used to project market values from the baseline data obtained from primary and secondary research methods. Other variables accounted for in our models include but are not limited to:
Energy demand Energy/fuel prices Economic growth (GDP growth) Government stimulus Government goals Renewable generation targets Private sector capital investment.
18 [PREMIUM] ZPRYME SMART GRID INSIGHTS
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012 Key Players and Solutions
Currently, Energy Management Systems for businesses are offered by a group of specialty firms, as well as multinational firms offering a range of services.
IBM: IBM has recently introduced its Smart Building and Power Systems Energy Management Program. IBM integrates a building's diverse systems including security, lighting, doors and windows, CO2 sensors, and even badge readers into an illustrative analytics program capable of making predictions and modeling decisions. The solution provides visualization of key benefits and goals including reliability, efficiency, performance and availability. IBM has been named one of the top four firms leading the way in Enterprise Energy Management Systems, and the firm's establishment in diverse sectors of the energy industry makes IBM one of the most trusted firms in the field and its product is suitable for large firms already utilizing IBM products. 2
Another solution offered by IBM is IBM TRIRIGA. IBM TRIRIGA provides a single system to manage the life cycle of facilities. It delivers business analytics, critical alerts and automated processes to increase visibility, control & automation of real estate management, capital projects, space management, facility maintenance and energy management. IBM TRIRIGA provides an integrated workplace management system to increase operational, financial and environmental performance of facilities. 3
2 www-03.ibm.com/systems/power/software/energy/solutions.html 3 www-01.ibm.com/software/tivoli/products/ibmtrir/index.html IBM TRIRIGA Energy Optimization combines real-time systems monitoring with facilities and event management. It helps analyze and optimize facilities operations, reduce energy expense, and improve asset management and reliability.
Smarter Rebuilding in New Orleans
Tulane University's School of Architecture, a program distinguished by its focus on community engagement and environmental sustainability, has turned to IBM Intelligent Building Management and Johnson Controls to advance its own smarter buildings evolution in the wake of Hurricane Katrina's destruction six years ago. As the largest private employer in the City of New Orleans, Tulane University has made significant advances in rebuilding in more environmentally sustainable ways.
The first IBM project is helping to transform the home of Tulane's School of Architecture, the century-old Richardson Memorial Hall, into a "smarter building living laboratory," using IBM Intelligent Building Management while maintaining respect for its historic status. The school aims to arm a new generation of architects with techniques that will allow historic buildings to be more efficiently adapted for modern use.
The IBM project will bring together building technology for heating, cooling, lighting and water to act in a more holistic fashion for better results. The building will have intelligence to monitor itself and communicate how it should be most efficiently operated, significantly reducing the natural resources it currently uses. 4
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012 IBM to Monitor 50 Federal Buildings
IBM has won a contract to develop and install smart building technology in 50 of the U.S. federal governments most energy-consuming buildings, and the resulting data could help reduce operating costs across the General Service Administrations entire inventory of nearly 182 million square feet.
The GSA says this initiative will save taxpayers up to $15 million annually by connecting building management systems to a central cloud-based platform. In the first year, 50 buildings will be integrated on this building management system. As additional federal buildings are constructed and other facilities are upgraded, the platform will manage those buildings, too.
Under the terms of the contract, IBM will develop a system to monitor building performance nationwide and stream data to a central facility. The technology will link major building controls, and when the system is fully integrated, tenants will be able to view the performance of their buildings on dashboards with real-time metrics on energy savings. They will also see recommendations on how to further increase efficiencies.
GSA says it will then use the data and analytics to save energy and reduce costs across its entire fleet of buildings.
The contract is part of GSAs larger smart building strategy to reduce energy use. The agencys plan to meet the requirements of President Obamas Executive Order 13514 goal of reducing energy consumption in federal buildings by 30 percent by 2015, using fiscal year 2008 as a baseline. Emerson: Emerson Process Management, an Emerson business, is a leader in helping businesses automate their production, processing and distribution in the chemical, oil and gas, refining, pulp and paper, power, water and wastewater treatment, mining and metals, food and beverage, life sciences and other industries. The company combines products and technology with industry-specific engineering, consulting, project management and maintenance services. Its brands include PlantWeb
, Syncade
, DeltaV
, Fisher
, Micro Motion
, Rosemount
, Daniel
, and AMS suite.
Emersons Ovation system with SCADA technology integrates all processes, not only the control of mechanical equipment such as turbines, boilers, pumps and mills, but also the control of electrical equipment, all performed from a common platform. The Ovation controller combines technologies and Ethernet networking which enables an interface with multivendor equipment in the low and medium voltage arenas. It includes capabilities for the automation, monitoring and control of actuators, variable speed drives, automatic voltage regulation, transformers and generator protection.
Ovation also supports specific protocols designed for the power industry for data exchange between generating facilities and dispatch centers, and can be installed in new or existing enclosures. Emerson also provides a CSI 6500 Machinery Health Monitor which combines protection and prediction, with real-time performance monitoring and process automation. Integrated with Ovation, it provides the enterprise-wide information needed for real-time decision making.
20 [PREMIUM] ZPRYME SMART GRID INSIGHTS
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012 Barking Power LTD., one of the largest independently owned generation plants in the UK, successfully installed Emersons Rosemount wireless acoustic transmitters to identify failed steam traps, leaking valves, and boiler tube leaks to improve the efficiency of its Combined Cycle Gas Turbine Power Station in London. Using the wireless networks already in place, additional devices can be added at a much lower cost than if they had to be wired- in individually.
Johnson Controls: Johnson Controls provides equipment, controls and services for heating, ventilation, air conditioning, refrigeration and security systems to increase energy efficiency and lower operating costs in buildings. Their Metasys building management system, with IT- based infrastructure, software and wireless capabilities, provides monitoring and control of all building systems, including comfort controls for temperature and humidity, lighting, fire safety, and security equipment. In addition, one of their strategies is to play a significant role in the growing market for demand response services by enabling smart buildings to interface seamlessly into the grid.
To enhance their position in this market, the company acquired EnergyConnect Group, Inc. to create a new level of building intelligence. EnergyConnects demand response technology and service platform provides energy managers and facility operators with real-time energy information and access to energy markets to manage their energy use.
Johnson Controls engineered a $3.8 million facilities upgrade for Pioneers Memorial Hospital in Brawley, California to improve operational efficiency by reducing the cost of natural gas, electricity and water that will pay for itself in 10 years. The upgrades included low-flow fixtures to conserve water, enhanced lighting, retrofitted heating, ventilation and cooling systems, and a new 630 panel photovoltaic system, all linked by the Metasys building management system to monitor and control the performance of Pioneers facilities.
Siemens: Siemens Totally Integrated Automation (TIE) concept for energy management offers the integration of all types of products and solutions, including the manufacturing systems of other vendors. Their product spectrum extends from automation and drive technologies to system integration using industrial software to technology-based customers. Their products allow companies to digitally plan and simulate entire production plans and manufacturing processes to optimize them prior to commissioning.
Their SPPA-M3000 is an energy management suite of modules for power plants and fleets which provides precise detection analysis along the entire workflow processes. The suite consists of five modules: Plant Management, Early Fault Warning, Generation Planning and Monitoring, Business Performance Monitoring, and Process Information Management.
Their b.data Energy Management product creates transparency in infrastructure processes, making heterogeneous system landscapes easier to navigate, due to the provision of a source-related energy cost allocation and the ability to transfer data into an accounting system.
21 [PREMIUM] ZPRYME SMART GRID INSIGHTS
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012 Schneider Electric: Schneider Electric provides a product called StruxureWare which is comprised of platform of applications and software suites that allows companies visibility into energy, other resource usage and business needs across buildings, industrial plants, and data centers. Each suite delivers seamless integration with third-party offers and legacy systems, as well as a scalable platform.
Their Resource Advisor module is an online carbon and energy reporting portal. This enterprise level software-as-a- service (SaaS) tool allows end-users to visualize energy cost and resource usage data, capture and report carbon emissions accurately, and manage all energy efficiency projects in one location.
The Energy Operation module is also a SaaS tool which transforms data into essential energy information to identify areas of continuous improvement to reduce operating expenses. The Building Operation module provides integrated monitoring, control and management of energy, lighting, fire safety, security and HVAC.
The Power SCADA Expert module is a real-time monitoring and control software solution for large facility and critical infrastructure operations. It provides real-time data intelligence for power distribution through alarming and graphical interface functions. The Process Expert module is the software that integrates the control application, the supervision, and the field devices in a single environment. In the fourth quarter of this year, Schneider Electric will release the Security Expert module to encompass video, access control and building management, as well as the release of an Asset Operation module in 2013.
Honeywell: Honeywell provides energy and emission management solutions to help manufacturers monitor, report, analyze, and reduce greenhouse emissions. Honeywell experts combine their knowledge of radio frequency fundamentals and wireless networks with their experience in process control networks and cyber security to provide the most secure and high performance wireless network for a facility.
Their Energy Dashboard product provides a complete integration with the overall information and work processes of a manufacturing facility.
Their SentientSystem is an integrated suite of modules specifically designed to address boiler, boiler cleaning, turbine cycle and unit optimization to provide asset management to utility companies.
Honeywells Experion PKS transforms process control beyond traditional DCS functionality by unifying people with process variables, business requirements and asset management. Integrated with the Experion PKS, their Digital Video Manager (DVM) product presents video as the next generation process sensor to automate the detection of events and improve the speed and accuracy of operator response to process upsets.
Honeywell also provides a highly scalable, integrated, multi-server SCADA solution that incorporates applications for human machine interface (HMI) to address complex remote automation requirements. They also provide a specialty quality control solution, the HC900, for the pulp, paper and rubber industries.
22 [PREMIUM] ZPRYME SMART GRID INSIGHTS
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012 In the latter regard, Honeywell was selected on May 16, 2012, by Mitsubishi HiTec Paper Europe GmbH, a leading European specialty paper manufacturer, to replace its current quality control systems with Experion MX at its production facility in Bielefeld, Germany.
Power Measurement Limited: The company has been awarded a $3 million grant from the Government of Canada to participate in a pilot project at the British Columbia Institute of Technology. The company installed Ion Enterprise, an enterprise energy management system with advanced forecasting, emergency power systems, functionality allowing load side management and robust security. Total consumption is forecasted to decrease energy 10-25%, and illustrate the extent in which business customers will decrease consumption based on energy management system usage, as well as the ability of integration with dynamic pricing models, and is a suitable option for multi-building facilities, such as universities. 5
JouleX: JouleX offers the JouleX Energy Manager that offers a scalable solution for businesses. The sensorless system integrates office equipment including VOIP phones, copiers, servers, as well as distributed facilities into a central system. Through cloud computing, the product offers remote management, real-time feedback, demand response, and green initiative support. Their primary customers are large office buildings. 6
C3 Energy: C3 Energy offers its Energy and Emissions Management Software as a part of a portfolio of services for business clients. C3 Energy's product monitors,
5 www.nrcan.gc.ca/energy/science/programs-funding/2050 6 www.joulex.net/enterprise-energy-management/ analyze, visualize, and benchmark energy consumption across operations, including offices, data centers, plants, equipment, and other assets. 7 The product offers advanced analytics and modeling features, as well as offering real-time interaction and facility-wide analysis. C3 has won numerous awards, including Company of the Year from Going Green Global 200 and Platts Global Energy Award's Award of Excellence. 8
CA Technologies: CA Technologies offers the CA Enterprise Energy and Sustainability program to help firms manage and track their energy consumption to meet company goals, including sustainability, carbon footprint, resource management, government compliance, water usage, and waste generation. One key feature is the CA ecoDesktop, which reduces the energy consumed by computers. The product is scalable and able to identify consumption from the entire firm to the smallest asset, relying on advanced metrics and analytics to make predictions. CA Technologies has also won numerous awards, including being named one of the four leaders in the Enterprise-Scale Energy Management System field.
Carbon Systems: Carbon Systems has also been named one of the top four leaders in the Energy Management System field, deploying their Enterprise Sustainability Platform in over 45,000 locations worldwide. The web- based platform analyzes and reports information on energy, environmental, and carbon consumption as well as progress on social responsibility goals. In addition, it provides detailed information on return on investment and energy cost reduction.
7 www.c3energy.com 8 Ibid.
23 [PREMIUM] ZPRYME SMART GRID INSIGHTS
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012 Verisae: Verisae offers its Energy Information System to enable upgrades and support firms that are already involved in energy management and have already experienced the cost savings that basic, low cost improvements bring. The second level of improvements focus on energy supply and demand, and optimization of energy projects, as it suggests opportunities for improvement and potential energy savings. The energy solutions primary components include utility bill processing and meter data management for energy spend analysis, energy alerting and review through flagging data anomalies, energy analytics, executive dashboards for reporting and performance scoring, and energy validation for exception management. 9 Their solution is uniquely suited for the large scale industrial customers that have implemented previous improvements, thus looking for upgrades to existing systems within the next 10 years.
Emerging Companies to Watch
Retroficiency: Retroficiency is a start-up firm founded from MIT. They focus on expanding the capabilities of the energy management for businesses, including managing several buildings from one location. The on-site program allows access to every energy consuming area, and partners with utilities to not only strengthen business energy management, but also the Smart Grid as a whole. The solution is best suited for firms with many locations. 10
eCurv: eCurv is a privately-held start-up company based in Cambridge, Massachusetts. The company focuses on
9 www.verisae.com/energy-information-systems/Energy-Systems-Overview/ 10 energy.aol.com/2012/07/23/building-energy-efficiency-options-in-a-dynamic- environment/ niche industries, but primarily mobile telecom operators with cellular shelters. Their patent-pending IP-based system optimizes peak and non-peak power consumption by using proprietary algorithms. eCurv reports utility cost reductions in excess of 11% without the costs or impact of a major infrastructure overhaul, and savings of over $2,000/month for each megawatt under their management. The company has future plans to market to commercial customers with large footprints and large fleets of appliances, including hotels, hospitals, government buildings, universities, institutional buildings, and eventually, EVs.
OutSmart Power Systems: OutSmart, based in Natick, Massachusetts, is the latest company launched by Manifold, a firm that spins off tech start-ups to commercialize products developed by outside investors and its own engineers. It consists of a network, including hardware and software that monitors energy usage, building occupancy, and other activities in each room of commercial properties. The network includes nodes designed for installation in electrical breakers, outlets, and switches. The nodes are equipped with electronics that calculate electricity consumption and use existing wires in a building to feed that information into a controller. The controllers are linked to servers, where the information can be accessed and viewed over the Internet. The company also plans to sell sensors that connect with the existing electrical infrastructure in buildings to detect motion, temperature, and other conditions. In addition to owner occupied commercial properties, their current marketing and sales efforts focus on the domestic food vertical markets including grocery stores, cold storage and
24 [PREMIUM] ZPRYME SMART GRID INSIGHTS
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012 distribution facilities, data centers, and pharmaceutical laboratories.
Powerhouse Dynamics: Powerhouse Dynamics, based in Newton, Massachusetts, is the developer of the eMonitor, a hardware solution that provides circuit level monitoring of all uses and sources of energy while controlling energy intensive equipment by way of a cloud-based user interface to provide energy management systems for small commercial entities such as schools, restaurants, food and convenience stores, and residential homes. On August 6, 2012 it was announced that Ingersoll Rand has made a strategic investment in Power Dynamics. The integration of Power Dynamics eMontior into Ingersoll Rands Nexia Home Intelligence that leverages the advanced technologies of Trane and Schlage will enhance customers ability to control their energy usage.
VCharge: VCharge, founded in 2009 and headquartered in Cranston, Rhode Island, provides high-efficiency, low- cost heating with its SmartBricks Thermal Storage technology. The SmartBricks system connects electric thermal storage heaters to local electricity markets, transforming the thermal storage into a resource for renewable energy integration. Their mission is to prepare for 70-80% wind, nuclear, and solar generation through economic improvements in managing Transactive Loads. VCharge uses decentralized, market-based principles to enable residential electric thermal storage heaters, EVs, and other Transactive Loads to respond dynamically to grid conditions and demand response. The company is currently active in the energy and ancillary services markets in New England, the Mid-Atlantic, with a special focus on serving retail customers in Pennsylvania. In May of 2012, Pennsylvanias Public Utilities Commission approved an application from VCharge to become an Electric Generator Supplier (EGS) within PPLs service area, allowing VCharge to provide electricity to up to 250 customers in PPL territory.
Zome Energy Networks (Changing name to ColorPower): Zome Energy Networks, based in Cambridge, Massachusetts, provides a software and hardware platform for utilities and energy suppliers to forecast, simulate, monitor and ultimately control real-time energy demand and supply conditions on the distribution network. Zomes product offerings utilize algorithms which operate under a framework known as engineered self- organization computing which uses distributed, probabilistic, and spatial computing paradigm (Proto- amorphous) to achieve response times a fraction of todays Demand Response systems, while simultaneously reducing Automated Metering Infrastructure (AMI) network traffic by an order of magnitude. The algorithms and computing framework together serve as the optimum energy applications, such as Demand Response, EVs, and distributed storage and generation integration, layer for use over constrained smart metering infrastructures
SCIenergy, Inc: SCItrack is a cloud-based energy management solution that provides real-time actionable insights into building performance through benchmarking, automated monitoring and targeting, data visualization, and reporting. Building operators and owners can leverage SCItrack to capture energy data across disparate metering technologies to visualize and demonstrate building and portfolio performance. Customers often achieve up to 5% energy savings simply
25 [PREMIUM] ZPRYME SMART GRID INSIGHTS
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012 by gaining clarity into building performance and working hand-in-hand with a dedicated energy analyst.
GridNavigator: GridNavigator Energy Management System (EMS) is a highly sophisticated metering and modularized control system designed to help monitor, analyze and control facilities to optimize efficiency and minimize cost. The cloud based platform consists of a combination of real-time benchmark alerts, dynamic reports and control capabilities, connecting different facilities and multi-site energy endpoints for continuous energy savings opportunities. The typical payback period for most GridNavigator customers is within 18 to 24 months, resulting in operational savings of 20% or more annually.
By offering integrated software and hardware solutions, they allow clients to create smart electricity networks that can monitor and control anything from heavy-load machinery to a single light switch. They also offer remote facility management services, and can monitor consumption levels at the individual appliance level to guarantee clients maintain optimal energy performance and undergo minimal expenditures at all times.
The GridNavigator integration server (GridXchange Server) is a turn-key solution for real-time read and write from BACnet data points. This approach eliminates the unnecessary sub-metering endpoints that are already monitored by the Building Management System (BMS) and lowers the overall metering and monitoring cost.
Telkonet: Telkonets EcoSmart offers a product suite capable of creating an in-room energy management network that can be configured to meet the requirements of most building environments. Telkonet can provide and install any combination of intelligent thermostats, occupancy sensors, door contacts, and plug load control devices. All products can be networked to enhance energy efficiency and provide remote monitoring capability. 11
Panoramic Power: Panoramic Powers P3E energy management system provides users with real-time granular, asset-level energy measurement, anomaly detection, and failure prediction through customized alerts. 12 The solution combines miniature, wireless sensor technology with a powerful cloud-based analytics platform, offering complete visibility regarding the energy consumption of individual assets. The solution detects hidden inefficiencies and waste, and identifies problems and risks early, before they lead to high energy costs and unexpected equipment failures.
Panoramic Power has partnered with AtSite, which will use Panoramic Powers P3E to provide its clients including the U.S. Green Building Councils headquarters in Washington, DC with real-time energy usage feedback.
AtSite says it has deployed the EMS at restaurants, supermarkets and retailer facilities. Its clients include Adventist HealthCare, which AtSite says is on target to reduce its expenses by $2.9 million by 2014, while reducing its carbon footprint by 16 percent, by collecting and analyzing energy data streams. 13
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012 Major Government Initiatives
Fuji Electric Co., Ltd., DENSO Corporation, Toyota Tsusho Corporation, FamilyMart Co., Ltd., Takamiya Corporation, and Yamato Transport Co., Ltd. have collaborated to conduct a demonstration test in Kita Kyushu City, Fukuoka, Japan. The project focuses on the development of a Building Energy Management System (BEMS), which will help realize smart stores that will contribute to leveling regional electric load, creating a low-carbon society, and using energy more effectively. The demonstration test was planned to start in June 2012 and end in December 2014. In Japan, Kita Kyushu City is designated as an experimental city for next-generation energy sources and social systems. The program is being promoted by Japans Ministry of Economy, Trade and Industry since April 2010. 14
In 2010, it was announced that Power Measurement Ltd., a subsidiary of Schneider Electric, will receive up to $3 million through the Government of Canadas Clean Energy Fund, to demonstrate a Smart Grid electricity system. The energy management business intelligence platform will determine the ability of a Smart Grid electricity system to optimize energy resources, including renewables, in an institutional building complex at the British Columbia Institute of Technology (BCIT). The project will also determine the ability of commercial customers, at sites in Calgary and Toronto, to voluntarily reduce their demand based on real- time price signals. 15
In February 2012, under a strategic alliance, Siemens and Boeing, together with a team of partners, were awarded a
14 DENSO Europe 15 NRCAN project funded by the U.S. Department of Defense (DOD) under its Environmental Security Technology Certification Program (ESTCP). Using Siemens and Boeing's cyber-secure energy savings technology, the DOD will realize up to 40 percent savings in energy costs at this one installation. The team, which also includes the University of California at Berkeley and KEMA Services Inc., will implement intelligent energy-management solutions that include integrated controls for cooling and heating systems, lighting, ventilation and plug loads. The upgrades will help improve DOD infrastructure energy security and reduce its facility energy costs. Siemens and Boeing have formed a strategic alliance for DOD energy modernization. Under the alliance, the companies will develop and market "Smart Grid" technologies to improve energy surety and security for U.S. military installations. 16
In the U.S., President Obama created the Better Building Initiative, which encourages companies to reduce energy consumption by 20% by 2020. 17 Also, the U.S. D.O.E. has encouraged business to participate in the ISO 50001 certification program, internationally established standards that serve as best practices and aim to benchmark energy efficiency of commercial facilities. In addition, the mandatory California's Energy Efficiency and Co-Benefits Assessment Regulation has encouraged the performance of an energy audit, as well as the identification of high energy consumption areas, and includes the possible installation of energy management systems. 18
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012 Major Regional Projects
Governments and businesses are focused on finding and implementing energy management solutions that can reduce energy usage and the amount of carbon dioxide in the atmosphere. Following are some of the projects have been undertaken in this regard:
North America
In May 2012, nine Japanese companies Shimizu Corporation, Toshiba Corporation, Sharp Corporation, Meidensha Corporation, Tokyo Gas Co., Ltd., Mitsubishi Heavy Industries, Ltd., Fuji Electric Co., Ltd., Furukawa Electric Co., Ltd. and The Furukawa Battery Co., Ltd. launched a demonstration study for the Albuquerque Business District Smart Grid Demonstration Project. This project was consigned to them by the New Energy and Industrial Technology Development Organization (NEDO), to be carried out as part of its Japan-U.S. Collaborative Smart Grid Demonstration Project. The project will be completed by March 2014. Shimizu Corporation will focus on providing a building energy management system (BEMS). Toshiba Corporation will also work on the design, establishment, and performance verification of a Smart Grid energy management system (utility side). 19
In 2010, BuildingIQ, an energy management software company, announced its first Predictive Energy Optimization pilot project in the U.S. at the U.S. Department of Energy's (DOE) Argonne National Laboratory. The BuildingIQ pilot installation, together with
19 Shimizu Corporation Argonne's expertise in optimization and modeling, is expected to improve energy performance at Argonne's Theory and Computing Sciences (TCS) building as well as enable the further collaboration and development of sustainable innovative technologies between BuildingIQ and leading researchers at the facility. 20
The Menlo Business Park project in the U.S. is focused on creating both energy savings and reducing greenhouse gas emissions. Several companies (such as Pacific Gas and Electric Company, EnerNOC, Global Energy Partners and Progressive Lighting & Energy Solutions) have collaborated to make the building energy efficient through automation and integration of lighting control, the building management system, data collection capabilities with HVAC systems and demand response solutions. 21
Menlo Business Park is managed by Tarlton Properties Inc. of Menlo Park, CA in the U.S.
Asia
As one of the largest cities in Japan, Yokohama aims to build a smart city model that maximizes CO2 reduction. On completion of the project, the Yokohama-model solutions will be exported to cities overseas. A community energy management system will be installed at the site to absorb power output fluctuation from renewable energy sources by integrating stationary battery with the Home Energy Management System (HEMS) and the Building Energy Management System (BEMS). BEMS will be used to ensure optimum energy management at each business
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012 building, and CO2 emissions will be reduced through the efficient use of energy. Buildings will also be grouped together and optimum energy management will be conducted for each group of buildings. 22
As a consortium partner of KEPCO (Korea Electronic Power Corporation), Nuri Telecom will be providing energy management systems for the Smart Grid test-bed project in Jeju Island, a self-governing province of South Korea. The Jeju Island Smart Grid project is a $58 million (64.5 billion KRW) Korean government initiative to build a Smart Grid community to test and demonstrate the viability of the Smart Grid. 23
Australia
In August 2010, BuildingIQ, an energy management software company, successfully completed its Demand Response (DR) application trial with Western Power, an Australian utility, and the City of Perth (a local government area and body, within the Perth metropolitan area, which is the capital of Western Australia). BuildingIQs DRiQ application was also installed in Perths historic Council House building. The system uses Predictive Energy Optimization for Demand Response events. The trial with Western Power and the City of Perth was run at the end of its successful pilot of the BuildingIQ system in Perth Council House, and reduced peak energy loads by up to 30 percent during event days. 24
22 Yokohama 23 Nuri Telecom 24 www.businesswire.com/news/home/20100831006031/en/BuildingIQ-Completes- World%E2%80%99s-Optimized-Demand-Response-Trial In 2011, it was announced that the Queensland Government is investing $1.5 million to support the development of a $7.75 million solar photovoltaic project (1.2 megawatt MW) at the University of Queensland. The project is considered the largest roof top solar power panel installation in Australia. The solar project will be built at the Universitys St Lucia Campus, and will save around 1,750 tonnes of greenhouse gas emissions annually. The projects will help research into new solar power breakthroughs, by providing researchers with real life data on energy management and the impact of solar on the electricity network. 25
Europe
In October 2011, it was announced that Siemens together with a number of European companies and universities is participating in an EcoGrid EU demonstration project. Within the framework of the EU-sponsored project, a prototype Smart Grid will be installed and put into operation on the Danish island of Bornholm in the Baltic Sea. The project will run until 2015. Siemens will contribute an intelligent control system for energy loads in domestic and commercial applications. A solution for smart utilization of electrical energy will be implemented through the networking of the decentralized energy management system (DEMS) and components from the Siemens building technologies portfolio. 26
European project KnoholEM is a knowledge-based energy management project for public buildings through holistic information modeling and 3D visualization. KnoholEM includes five demonstration projects in Spain and the
25 GBCA 26 Siemens
29 [PREMIUM] ZPRYME SMART GRID INSIGHTS
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012 Netherlands. The objective of the project is to test an intelligent energy management solution for energy efficient buildings and spaces of public use. The solution will considerably reduce energy consumption, both by systematically avoiding energy wasting in buildings and by knowledge-based holistic optimization of energy consumption. It will be applicable and configurable for a broad range of building types from any EU region. KnoholEM is co-financed by the European Commission within the scope of the 7th Framework Programme. The project began in 2011 and is expected to be completed by 2014. 27
In May 2012, it was announced that twenty six partners of the Smart Energy Collective (one of the largest sector- transcending initiatives in Europe for the concrete development of Smart Grids and services) have signed a renewed cooperation agreement for the approval of the second phase of its Smart Grid initiative, which involves the development of five large-scale Smart Grid demonstration projects in the Netherlands. The projects will be implemented at Schiphol airport, in a few offices of ABB and Siemens, and in residential districts in Gorinchem, Heerhugowaard, and Goes. The demonstration projects in the offices will primarily investigate how the flexibility in the energy demand of these offices can be exploited by energy management systems, and the introduction of commercial generating sets with a complete portfolio of offices. 28
27 Steinbeis Europe 28 www.prnewswire.co.uk/news-releases/the-smart-energy-collective-initiates-design-of- five-smart-grid-projects-151091715.html Schneider Electric has collaborated with Cisco Systems to provide energy management solutions at the Cisco House in UK. Through its role at the Cisco House, Schneider Electric is helping to demonstrate how energy costs can be reduced by implementing simple solutions and new business models across the entire energy lifecycle. The fully integrated building and energy management systems provided and installed by Schneider Electric allow the Cisco House teams to make better decisions with regard to the energy consumption of sub-systems providing for more sustainable operations and an improved visitor experience. 29
In December 2011, it was announced that Toshiba Corporation and Toshiba Solutions Corporation were selected by Japan's New Energy and Industrial Technology Development Organization (NEDO) as lead contractors for a Smart Community demonstration project in central Lyon, France's second largest city. The project was to start in January 2012 and run through to the end of March 2016. The companies will supply Building Energy Management Systems (BEMS) and Home Energy Management Systems (HEMS) for the project. 30
29 Energy Management 30 CLN
30 [PREMIUM] ZPRYME SMART GRID INSIGHTS
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012 Keys to Entering the Energy Management Market
1. Vendors must recognize that conventional utilities make investment decisions that best serve their true customer PUCs rather than paying customers who consume their power. Initially, EMS may appeal more to market-driven utilities who are prepared to try new solutions that help customers save money and reduce energy consumption. Conventional utilities are more likely to deploy EMS for regulatory compliance purposes and in that regard they will behave like followers rather than leaders.
2. Over time, the delivery model for EMS will evolve, and vendors need to develop solutions that reflect where the market is going. Essentially, EMS will move towards the cloud, in which case costs come down but remain flexible enough for customers to customize around which endpoints they want a centralized system to control. In terms of components, this means solutions will be based less on hardware and costly field equipment, and more on software and sensors that provide real time connectivity between endpoints and the communications network driving EMS.
3. Both utilities and vendors need to understand the preferences of customers for EMS deployments. Larger businesses will want to own and manage the solution. They have the resources to do that, and in return they maintain full control over setting preferences to manage energy usage. Smaller businesses will prefer either a utility-managed or a vendor-managed solution, which will be less costly but also less flexible in terms control and customization. This is also where cloud-based EMS will find a home, likely managed by a third party vendor with expertise in providing hosted solutions.
4. Given the regional nature of this market, it will be important for vendors to understand local initiatives that drive the need for EMS. The regulatory climate and public policy priorities will vary by region, with some initiatives being focused on reducing consumption and promoting energy independence, while others will be driven more by environmental considerations such as global warming, renewable energy or sustainable growth.
31 [PREMIUM] ZPRYME SMART GRID INSIGHTS
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012 Zprymes Market Outlook, 2012 - 2020
Over the next five to eight years, the advanced energy management system market will mature to the point where large customers industrial facilities, commercial sites, campuses, etc. realize energy consumption reductions in the range of 10%-20% on a consistent basis.
During this timeframe, we expect that smart meter deployments will be widely adopted and sensors affordable enough to enable customers to capture and sell excess capacity back to utilities to make EMS a more complete solution. This will also allow them to more accurately predict peak load times, and from there take precise actions to scale back power consumption, as well as tap into renewable and distributed energy sources when weather conditions are favorable.
As communications networks become upgraded to support end-to-end smart grid capabilities, we also expect the role of EMS will expand beyond electricity to integrate with other utility modes, namely gas and water. This would create a complete resource management system for businesses to run in a centralized manner.
By 2020 we anticipate that EMS solutions will largely be cloud-based, setting the stage for mass-market adoption that is both affordable but also flexible enough for businesses to easily customize for their specific energy needs. This model will likely be essential to support the millions of small businesses that simply do not consume enough energy to warrant investing in their own systems. For this end of the market, the potential savings are incremental, but collectively this represents a substantial opportunity for utilities to reduce their overall demand load.
By this time, the Asia EMS opportunity will be on par with both the U.S. and Europe. This opens up new markets for Western vendors to serve, but it also means that Asian EMS vendors will likely become global players. We see this coming about as they gain valuable deployment experience with the underlying technologies as well as gaining economies of scale by serving customers in their fast-growing home markets.
32 [PREMIUM] ZPRYME SMART GRID INSIGHTS
Copyright 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org
Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012 About Zpryme Smart Grid Insights: Zpryme-powered Smart Grid Insights Publication, Practice and Advisory Board help organizations understand their business environment, engage consumers, inspire innovation, and take action. Zpryme Smart Grid Insights represents an evolution beyond traditional market research and consulting: combining sound fundamentals, innovative tools and methodologies, industry experience, and creative marketing savvy to supercharge clients success. At Zpryme, we dont produce tables and charts; we deliver opportunity-focused, actionable insight that is both engaging and easy-to-digest. For more information regarding our custom research, visit: www.zpryme.com.
Zpryme Smart Grid Insights Contact:
smart.grid@zpryme.com | +1 888.ZPRYME.1 (+1 888.977.9631) www.smartgridresearch.org (Zpryme Smart Grid Insights) Zpryme Credits: Managing Editor Jon Arnold* Sr. Research Analysts Nidhi Jolly Research Lead Stefan Trifonov Paula Smith Nivedita Wantamutte Megan Dean *Jon Arnold is also a member of Zprymes Smart Grid Advisory Board. Disclaimer: These materials and the information contained herein are provided by Zpryme Research & Consulting, LLC and are intended to provide general information on a particular subject or subjects and is not an exhaustive treatment of such subject(s). Accordingly, the information in these materials is not intended to constitute accounting, tax, legal, investment, consulting or other professional advice or services. The information is not intended to be relied upon as the sole basis for any decision which may affect you or your business. Before making any decision or taking any action that might affect your personal finances or business, you should consult a qualified professional adviser. These materials and the information contained herein is provided as is, and Zpryme Research & Consulting, LLC makes no express or implied representations or warranties regarding these materials and the information herein. Without limiting the foregoing, Zpryme Research & Consulting, LLC does not warrant that the materials or information contained herein will be error-free or will meet any particular criteria of performance or quality. Zpryme Research & Consulting, LLC expressly disclaims all implied warranties, including, without limitation, warranties of merchantability, title, fitness for a particular purpose, noninfringement, compatibility, security, and accuracy. Prediction of future events is inherently subject to both known and unknown risks, uncertainties and other factors that may cause actual results to vary materially. Your use of these and the information contained herein is at your own risk and you assume full responsibility and risk of loss resulting from the use thereof. Zpryme Research & Consulting, LLC will not be liable for any special, indirect, incidental, consequential, or punitive damages or any other damages whatsoever, whether in an action of contract, statute, tort (including, without limitation, negligence), or otherwise, relating to the use of these materials and the information contained herein. YEAR REPORTS DATASETS SMART GRID INSIGHTS SMARTGRIDRESEARCH.ORG / MEMBERSHIP INTELLIGENCE BY ZPRYME | ZPRYME.COM 2012 ZPRYME RESEARCH & CONSULTING, LLC. ALL RIGHTS RESERVED. SMARTGRIDRESEARCH.ORG SMART GRID INSIGHTS INTELLIGENT RESEARCH FOR AN INTELLIGENT MARKET