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Intro to-energy-mgmt-systems

  1. 1. an introduction to ENERGYMANAGEMENT SYSTEMS By Tom Machinchick
  2. 2. Table of contents An Introduction to Energy Management Systems Chapter 3: 14 The Decision Chapter 1: 5 Process: What is Energy Energy Management Management? Systems CHAPTER 4: Chapter 2: Energy 2 Functionality of an Energy Management System 9 Management Systems: Company/ Building size ? Chapter 7: CHAPTER 5: Building 20 25 What Can Be Drift: Measured by Don’t rest on an Energy your laurels Management 23 System? CHAPTER 6: CHAPTER 8: Extracting Value The Benefits 17 from and Building Energy Management of an Organizational Energy Management System Initiative
  3. 3. EnergyIntroduction to Manage ment T he global economic the built environment for solutions. Why? environment over the past Commercial and Residential Building 4 years has been a difficult Energy Use one for many businesses The US Environmental Protection Agency and industries. Countries claims that we spend upwards of 90% of our in the developed world are time indoors. Buildings and residences have struggling to maintain their become our “natural habitat”, but spending levels of growth and economic stability, but time indoors consumes energy. According the are facing significant headwinds brought on US Department of Energy (DOE), commercial by years of growth that was fueled by debt. buildings consume almost 20% of the energy The developing world is complicating the produced in the US, while both commercial economic mix with high growth rates and a seemingly insatiable demand for energy and and residential buildings produce about 38% other natural resources. Many global leaders of the greenhouse gas emissions. Additionally, are faced with navigating this complex buildings consume over 70% of the electricity economic environment in the desire to assure produced in the United States (Source: US a prosperous future for their countries. Energy Information Administration). With such large consumption and pollution rates, making The world is also faced with the fact that at global buildings more efficient represents a current consumption rates, natural resources significant opportunity to contribute to a less are becoming depleted, and the use of carbon wasteful energy future, as well as one with less producing fuel sources is causing significant environmental impact. Energy management harm to the environment. With these facts in is one of the many tools that can be used to mind, increasing attention has been placed on operate buildings more efficiently. 1
  4. 4. ? CHAPTER 1 ENERGY WHAT IS MANAGE MENT?E nergy management can (in offices or dwellings) and the production mean a variety of things to rates (in factories) are maintained. Saving different types of energy energy can be extremely easy if we just shut users or even to energy things down, but that is impractical. The producers. Obviously, in the important thing to remember about energy case of energy producers (i.e. management is that comfort and production utilities), energy management levels remain somewhat the same as beforeis a matter of managing energy generation any energy was conserved.and energy supply, and efficiently meetingthe demands of the energy users who are To make an efficient use of the energy, actionstheir customers. For energy users, Energy can be focused on a variety of different areasManagement can be described as the sum and approaches including energy conservation,of measures planned and carried out to energy recovery, and energy substitution. Briefachieve the objective of using the minimum definitions of these actions are described on thepossible energy while the comfort levels next page. 2
  5. 5. Energy Conservation basic activity, a dialog about energy can beEfforts that are made to reduce energy initiated within the organization, which mayconsumption through economy, elimination of spur ideas of where energy can be saved.waste, or more rational use. If, however, the energy bill never leaves the accounting office, there is really nothing to beEnergy Recovery gained. The organization leaves itself exposedThe reuse of a byproduct of one system for use to unexpected and unplanned-for expenses,as input energy for another system. An example which can add significant business risk toof this is taking waste heat generated from a many organizations, especially in less-than-manufacturing process and using it for another favorable economic conditions. Further, unlesspurpose such as heating water. this increased awareness initiates change withinEnergy Substitution the organization, no sustained benefits will beThe substitution of one energy source or fuel realized.type for a more economical or less polluting Energy Management as anenergy source or fuel type. Organizational Competency The US DOE’s Office of Energy Efficiency andEnergy Management for commercial Renewable Energy (EERE) defines Corporatebuildings mainly focuses in the area of energy Energy Management (CEM) as an “integrated,conservation measures or programs. Energy company-wide effort that involves makingrecovery is largely implemented in industrial business decisions about commercial andsettings, however there are innovative solutions industrial equipment, establishing proceduresfor commercial buildings such as air-to-air that ensure greater energy and processheat exchangers on the HVAC system. Energy efficiency, and encouraging behaviors that savesubstitution can be done in a commercial energy and money.” The main point to note inbuilding by selecting renewable sources of this definition is that energy management is aenergy through a retail electricity supplier (if company wide effort, and requires sustainedavailable), or by implementing some form management “buy in” or support at the highestof renewable energy to supply power to the levels of the organization. Without this support,building itself. a company is destined to fumble around with haphazard or ad hoc efforts that will mostEnergy management can be a difficult likely not produce sustained results. Withoutproposition without having a more detailed sufficient time and resources allocated to theseunderstanding of how and where energy is energy related projects or activities, the effortsbeing used within an organization. Although generally die out to other “more important”the situation is improving both nationally and or more “worthy” business related activitiesglobally, many organizations still resort to an that add to the top line. The fallacy of this is“after the fact” understanding of energy use that there are also many monetary and otherby checking and comparing energy bills that benefits that go along with a corporate energyare received from the utility. At the most basic management program that can help add to bothlevel this is a start, and serves to at least raise a business’s top line (i.e. increased revenues)awareness of the energy being consumed as well as its bottom line (i.e. reduced costs,by the company or organization. From this increased profitability). 3
  6. 6. What Energy Management is Not Energy monitoring is far more beneficial thanBuilding Management Systems (BMS) and a traditional energy audit, but it doesn’t goEnergy Management Systems (EMS) have far enough. An energy management system,been around since the 1970’s. The terms and on the other hand, collects data from ‘legacy’are often misused to describe older control and/or new sources, centralizes it, analyzes it,systems that adjust thermostats in response and presents it to decision-makers to enableto temperature, humidity, and airflow, aswell as timers. These systems are usually informed decisions about immediate energy-monitoring environmental parameters and may saving potential as well as future investments innot be measuring energy use at all. They’re larger energy saving projects.actually temperature control systems, but theterminology has been in place for years. There Beyond simply monitoring, aare dozens of vendors who supply energy comprehensive energy managementmonitoring software. Most systems will perform system should provide multiplecomplex functions including collecting large additional capabilities, including:amounts of data, centralizing it, analyzing itand re-presenting it in the form of graphs, • Gathering data from ALL availablecharts and reports. This has enormous value in sources, whether old, new,providing real operational numbers to facilities standalone or integrated.managers and general management, especiallyfor trending analysis, but energy monitoring is • Analyzing single-variable data ornot the same as energy management. multi-variable data to help identify problems and trends. Some of the limitations of these • Clearly identifying waste and energy-monitoring systems include: recommending fixes, allowing • Difficulty in integrating with, or easy payback/IRR calculations. using data from, legacy systems • Providing alerts if energy that still may be in use. consumption exceeds user-set • Difficulty with historical data parameters. acquisition for comparison • Providing ‘early-warning’ of purposes against current mechanical or electrical failures. performance. • Integrating with control systems • Difficulty in overlaying or to automate responses to input comparing data from separate data. systems such as electrical, water, gas, occupancy, security and • Benchmarking a facility’s energy others. use against others in similar climates. • The systems can’t automatically adjust data for outside temperatures – i.e. degree-days. • The systems can’t benchmark data against similar buildings in similar geographies. 4
  7. 7. CHAPTER 2 ENERGY FUNCTIONALITY OF MANAGE MENT SYSTEMST here are as many different number of systems or components measured types of energy management (if any at all), and a host of other factors. Not systems as there are every energy management system is right companies providing them. or applicable to every business, industry, or That being said, building building. The following is a comprehensive energy management systems list of the functions that commercial building from different vendors can energy management systems can include.have multiple common functions due to thenature of energy management in general. Further discussion of the applicability ofDifferences of these functions can vary by these functions to various different businessimplementation (e.g. the interface), depth of sizes will be included in a following sectiondetail, timing (e.g. real time vs. after the fact), on the next page. 5
  8. 8. L ist of Energy Management System FunctionalityAdvanced Building AutoDRAnalytics Automated Demand Response Behavioral andThe analysis of a building’s (AutoDR) allows automated Educational Energyperformance using more in control of a buildings Saving Suggestionsdepth data from sub-meters, components or systems so Basic energy relatedbuilding components, and that energy consumption can suggestions and tipsoutside sources including be automatically curtailed designed to teach buildingweather data. Advanced during peak load events (e.g. a occupants how to easily andanalytics can include real hot summer afternoon). inexpensively conserve energytime data acquisition and through modified behaviorsprocessing to automatically Automated Building (e.g., turn out the lights whendetect and correct building Control you leave a room).performance issues, patterns, The ability of a buildingand faults. Advanced energy management system Benchmarkinganalytic solutions may also be to actively interact with a Comparison of an entity’sintegrated with other systems building’s components and historical and current energyin an organization to provide systems. consumption with itself (overan enterprise wide view of time) and other similar entitiesenergy related spending Basic Energy (e.g. by size and geographicincluding maintenance, Information Portal location). Benchmarkingpreventative maintenance, A web site or standalone is generally the first step incarbon emissions, and ROI. terminal in a publicly understanding the relative and accessible place (e.g. on-going performance of aAMI Data Analysis building lobby) that displays building.Advanced Metering basic energy consumptionInfrastructure (AMI) data is information for a property. It Building Optimizationacquired from a utility at can include educational and Functionality that enables thecertain time intervals (e.g. other energy savings tips and building energy management15 minutes) to allow for a suggestions. system to interact with themore granular understanding building’s systems, optimizingof a building’s energy Basic Retrofit their integrated performanceconsumption. Programs within the building on a real Generally low cost equipment time, or near real time basis. replacement programs designed to make a business more energy efficient (e.g. light bulb replacement). 6
  9. 9. Continuous Demand ResponseCommissioning The reduction of end use Enterprise IntegrationOngoing analysis of a electrical consumption in Integration of buildingbuilding’s performance to response to high electricity energy management systemassure that it is operating as prices, system resource data and information withdesigned. capacity needs, or system other enterprise level IT reliability events. This systems so that theseContinuous reduction can be achieved systems can interact forOptimization through curtailment (e.g. additional organization-Automated building controls turning off lights) or self- level understanding andthat continually adjust a generation (e.g. turning on coordination.building’s components and backup generators). Somesettings so that it operates in energy management systems Historical Billing Dataan integrated manner at the have integrated demand Trendshighest efficiency levels. response functionality to Basic energy analysis manage demand response performed using historicalDeeper Retrofit events. billing data.ProgramsReplacement of a building’s Energy Dashboard Incentive Availabilityoperational (or other) A virtual and visual A building energycomponents to make the representation of an entity’s management systembuilding operate more energy consumption data capability that identifies theefficiently. Deeper retrofit intended to turn the data availability of utility demandprograms are often more into information that can be management or energycapital, time, and resource understood relatively quickly. efficiency programs for aintensive, and require specific entity in a specificreplacement of some of Energy Kiosk location.the main components of a A publicly placed energybuilding, such as the HVAC information portal for a site or Maintenancesystem, windows, insulation, group of sites intended to give Managementand/or the building envelope. building occupants visibility Automation of a building’s into the energy consumption maintenance and preventative of the site or group of sites. maintenance schedule. Energy Monitoring The regular collection of energy related data so that energy consumption can be understood, and anomalies can be investigated. 7
  10. 10. Measurement and Predictive Analytics Trouble TicketVerification The use of algorithms or data ManagementThe process associated with processing functionality to Automation and tracking ofensuring a particular energy anticipate optimal building maintenance and repair actionefficiency measure or system settings for upcoming items, at times coordinatedimprovement is producing events that will affect with outside maintenancethe expected results. M&V building performance (e.g. a a critical component of weather event such as a hotdetermining the success and afternoon).return on investment (ROI) ofa particular energy efficiency Preventativeproject or EMS. Maintenance Some EMS’s have theNOC Availability capability to detect whenA Network Operations Center building components are(NOC) (similar to a call center) drifting from their idealallows BEMS clients access to settings or performance. Inbuilding efficiency personnel these situations, the EMSand expertise for general can identify preventativeproblem resolution. Some maintenance actions thatvendor NOC’s provide 24/7 will bring the componentmonitoring of a building’s or building back in so that alerts and In general, preventativeproblems can be dealt with maintenance is less costlyappropriately and immediately than a “break/fix” approach toif necessary. maintenance, and it may also prevent significant businessNotifications and disruption (e.g. tenant comfortAlerts on a hot summer day if theBEMS functionality that HVAC is broken).notifies a building owner/operator of building Retro-commissioningmaintenance needs, faulty The application of theequipment, or operational set commissioning process to anpoints that need adjustment. existing building. 8
  11. 11. CHAPTER 3 ENERGY THE DECISION PROCESS MANAGE MENT SYSTEMSI t may be human nature to desire all be in acceptable ranges for the company the bells and whistles when it comes making the decision. For example, if the to technology related matters. When energy management system costs $20,000 dealing with energy management to install with additional expenditures on a system acquisition, however, a more monthly basis for a software subscription, practical approach should be taken. but the energy spend of the company on an The first gauge of the type of EMS thatshould be chosen is the energy spend of the annual basis is $10,000 with an optimisticfacility or facilities in question. Ultimately, potential savings of $2,000 (20%), theenergy spend will determine the return on payback period and ROI for this system isinvestment that is possible, and this must simply not worth the expense. 9
  12. 12. DECISION INPUT Considerations Building Size Building size determines a host of details of an energy management system’s usefulness and appropriateness. The size of a building generally can determine the overall energy spend, the types of equipment that is installed to heat and cool the building, the number of occupants, etc. Generally, the larger the building, the more sophisticated the EMS can be. Energy Spend The monthly or annual energy spend of a company or building is one of the first determinants of selecting an EMS. Sophisticated and expensive systems are not appropriate for small buildings that use little energy. The savings from the EMS can’t overcome the initial and ongoing costs, and ROI and payback won’t meet acceptable levels. The greater the energy spend, the more sophisticated (and expensive) the EMS can be as the savings created by the EMS will produce a more acceptable ROI and payback period.Geographic Location Geographic location generally determines climate related effects on energy consumption. For example, the extremes of hot summers in southern locations and cold winters in northern locations significantly affect a building’s energy spend. In any case, an EMS that can effectively deal with weather related energy effects on a building (including demand response, where applicable) should be a consideration for certain size properties. Number of Sites Having an EMS for one building is different than procuring one for a campus or portfolio of buildings. When more than one building is involved, it should be a consideration that the EMS can “roll up” and summarize the data from all sites as well as make comparisons of individual buildings. 10
  13. 13. Geographic If there is more than one building, the dispersion of those Dispersion of the buildings is an important consideration. Campuses of Buildings buildings can be located relatively close to one another, while national chains can be widely dispersed. The main consideration here is if the EMS in question can acquire and manage data from a number of buildings based on their proximity to each other. Other considerations for widely dispersed buildings can be the availability of utility incentives in numerous locations. Utility programs can vary widely. It may be beneficial to acquire an EMS that can handle the identification of utility programs in multiple areas. Building Use(s) Building use can determine the requirements for an EMS. A warehouse has different requirements than an office building which must consider things like occupant comfort. Data centers have different needs than office buildings, hospitals, or schools…and so on. Occupancy Occupancy is a factor in a building’s energy consumption. Occupant comfort while still managing energy is one of the most important considerations for selecting an EMS. Un-occupied spaces can create misleading information regarding a building (e.g. less energy use than “normal”), so the EMS should be able to normalize energy spend based on occupancy, or determine the energy intensity of the building.Intended Use of the Intended EMS use affects the choice of system in many System ways. This should be discussed at length prior to making the EMS choice. Some companies may just want better visibility into their energy consumption while not needing the sophistication and capabilities that some EMS’s contain. Other businesses may face situations where an EMS is a critical component of their business…such as a laboratory or hospital where the inside environment of the building may be critical for safety reasons. 11
  14. 14. Type of Building Older buildings are different than new buildings. There are a host of considerations to be made based on the building type including the equipment that is installed, insulation, windows, lighting, digital capability vs. pneumatic, etc.Intended Use of the Intended EMS use affects the choice of system in many System ways. This should be discussed at length prior to making the EMS choice. Some companies may just want better visibility into their energy consumption while not needing the sophistication and capabilities that some EMS’s contain. Other businesses may face situations where an EMS is a critical component of their business…such as a laboratory or hospital where the inside environment of the building may be critical for safety reasons. Business Risk Some businesses have more business risk related to energy supply and consumption than others. Examples of this include hospitals and data centers versus a warehouse or even office buildings. Data centers rely on stable power supply and also effective and precise temperature control within the center. Critical data system failures can occur if the HVAC system is not operating correctly. In these situations, an EMS that has precise control and even predictive analytics may be necessary to support the mission critical systems of the business. Responsibility An EMS must actually be used to be worth anything to a company or building owner. Resources must be available and assigned to utilize the system to its full capabilities. Additionally, EMS’s generally can make recommendations for repairs or preventative maintenance procedures. Resources must be available to schedule and perform this work, or to call a service company to have the recommendation addressed. It is not uncommon in today’s economic environment to see EMS’s go unused or underused. Responsibilities should be assigned or understood prior to making an EMS decision. 12
  15. 15. Knowledge Base Not only must there be resources to operate the system, these resources must have the capability to understand how to use it and determine what the EMS is actually saying. For some of the simpler EMS’s on the market, this may not be an issue. For larger and more sophisticated buildings and EMS’s, appropriate personnel must be trained or assigned to work with the EMS.Organizational An EMS is a technology-based system (in one definition), Maturity but it is also an organizational competency. Immature organizations (with regard to structured processes and procedures) may find themselves disorganized and working in an ad hoc manner regarding energy management initiatives. This can be detrimental to the overall effectiveness of the EMS resulting in less energy savings and reduced ROI/payback. More mature organizations will necessarily have repeatable processes in place to afford the most effective use of the EMS and the energy management program that is in place. Financial Although many of the above EMS considerations areConsiderations deemed important to the decision process, the reality is that the selection process ultimately boils down to the numbers. Does this EMS make financial sense to the company? What is the return on investment that this EMS will provide, and how long will it take to pay back the initial and ongoing costs related to the system. Generally, the EMS vendor can help with determining this with or for the company, but caution and due diligence must be performed on these numbers. It is easy to show savings with an EMS if it just turns equipment off…but what is the effect on things like operations and tenant comfort? Many companies will perform their own analysis of the financial considerations of an EMS in a way that is comfortable to them and justifiable to the ultimate decision makers. 13
  16. 16. CHAPTER 4 ENERGY BUILDING SIZE COMPANY/ MANAGE MENT SYSTEMSN ot all companies will In general, the larger the company, building, need to go through an or energy spend the more advanced the EMS extensive process for can be, and the more realistic it is for the acquiring an EMS. Small company to utilize the EMS’s full capabilities, companies do not have while earning an acceptable ROI. This the resources, skill levels, has limitations as well depending on the or need to operate asophisticated EMS, nor do they have the resources and skill levels that exist within theresources necessary to pay for one of the particular facility. Nonetheless, a variety ofadvanced systems. Still, they can find a solutions exist for most any situation as willsystem that is appropriate for their situation. be described in later sections of this book. 14
  17. 17. Appropriate Energy Management Features Based on Business Size and Energy Related Sophistication large companies Advanced Building Analytics Building Optimization Common feature Predictive Analytics Dashboards Demand Response Continuous Optimization Measurement and Verification medium sized companies Automated Building Control Benchmarking AMI Data Analysis Enterprise Integration Energy Monitoring AutoDR Retro-commissioning Continuous Commissioning Retrofit Programs Notifications and Alerts NOC Availability Maintenance Management Trouble Ticket Management small companies Basic Energy Information Portal Historical Billing Analysis Behavioral Suggestions Educational Suggestions Energy Kiosk Incentive Availability Basic Retrofit SuggestionsThe following figure is a graphical depiction of utilize functions listed as appropriate forthe relevant capabilities that are appropriate for large companies. Common features thatvarious sized businesses and buildings. The generally apply across the board because theyfunctions identified in the figure match the list are basic to energy management include aof EMS functions described previously. Once visual dashboard of energy consumption andagain, one size does not fit all, and the graphic use patterns, measurement and verificationis not intended to be carved in stone. Items functionality that helps to verify the energylisted as appropriate for small companies savings, and benchmarking which is criticalmay also apply to some less sophisticated to establish a history of energy use andmedium sized companies and some medium performance comparison to other similarsized companies may be able to effectively buildings. 15
  18. 18. Small Companies/Buildings or portfolio of buildings. These includeSmall companies (<25,000 sq.ft.,<100 commissioning and retro-commissioningemployees) can essentially be treated functionality, more granular energy consumptionin much the same manner as residential data (either AMI or sub-meter data), problemelectricity users. In this size and price alerts, call center availability, and maintenancerange, behavioral suggestions, education management tracking. Because of thisconcerning electricity use, and simple energy increased functionality, increased savings canconsumption information are as valuable as also be realized – generally in the range of 7%more sophisticated techniques. Other valuable - 15%.EMS functions include finding utility incentives Large Companies/Buildingsand programs such as light bulb replacement Many large companies (>150,000sq.ft., 500+or rebates for purchasing more efficient employees) have the energy spend andequipment. Small companies don’t have the resources that make acquiring an EMS almosttime, resources or training to perform anything an imperative. Significant savings can bebut the most basic energy efficiency tasks, and achieved in larger buildings, and these savingsgenerally, their energy spend doesn’t warrant can positively and some times dramaticallymuch more than that anyway. affect the bottom line of the business. LargeMedium Sized Companies/Buildings buildings can still fail to achieve the full potentialMedium sized companies (25,000 – 150,000 sq. of an EMS if the energy efficiency initiativeft., 100 – 500 employees) may still have limited is not organized, planned, and resourcedresources to work very deeply with energy appropriately. In this category of EMS user,initiatives, but others may be as sophisticated the buildings can be more sophisticated,and have enough available resources to but that too is not always the case. Largeutilize more advanced EMS technology. companies can be widely dispersed nationallyEach company must go through a process and internationally, and that can pose problemsto determine which system is appropriate for the company and EMS vendor in acquiringfor their needs, resources, and financial and rolling up data fro all of the locations (ifposition. It is not enough to have a system required). The most promising way to proceedthat meshes well with the building components is to address the energy efficiency initiative into provide more detailed energy consumption a holistic manner. Many times in a portfolio ofinformation. Resources must also be available buildings there is a variety of different buildingto address issues identified by the particular components (HVAC etc.) with varying levels ofEMS. For certain sized buildings, this may be a available data and different types of buildingdedicated task for one or more trained or skilled communication protocols. It is also possibleindividuals – and these are not minimum wage that there are already different EMS installedpositions. in the buildings. To attain a comprehensive solution, the acquiring company must look at allIf appropriate personnel are available and the of these factors, again working with the chosenfinancial considerations work for the company, set of EMS vendors, to assure that the solutionmuch more detailed energy management meets the needs and goals of the overallinformation can be obtained for the building initiative. 16
  19. 19. CHAPTER 5 ENERGY WHAT CAN BE MEASURED BY AN MANAGE MENT SYSTEMS?T echnology based energy include internal process or behavioral related management systems energy initiatives as an “energy management can range from simple to system”. Although a valid and sensible complex, and from “no definition, this article will focus more toward touch” systems, to systems the technology side of energy management that include an extensive systems. array of sub-meteredequipment with automated sensing and Energy management and energy managementcontrols. The qualifier “technology based” systems are not a new idea. Most of the existingwas used to categorize energy management building stock has some form of equipmentsystems because many in the industry installed that is used to control the building’s 17
  20. 20. operational equipment. In older buildings (pre- progress made into defining more open1980), these systems are mainly pneumatic, and standards for communication between systemsare used to control the heating ventilation and (e.g. BACnet) so that customers can choose theair conditioning (HVAC) system. These systems best and most appropriate equipment for theiruse pressurized gas or air as their mechanism particular situation.of control, and include a host of associatedregulators and actuators to make them work. The main issue that needs to be overcomeMany of the older buildings in the US have with regard to increasing the knowledge basethese types of systems, and until recently were of a building’s energy use is the granularity ofmostly excluded from the ability to digitally the information that can be gleaned from thecontrol them. Retrofitting a pneumatic system various building automation components. Thiscan be a costly and disruptive process due can be accomplished through the use of sub-to the nature of the physical aspects of the meters, or meters that are placed “inside” theinstalled system. Today, technology is available utility master meter so that individual pieces ofthat can convert pneumatic or analog systems equipment, buildings, facilities, or departmentsto digital data so that the benefits of digital can gauge their energy or resource can be realized. These new Meters can be placed on equipment to measuretechnologies also make the retrofit process the use of electricity, water, gas, or steam at aless costly since extensive demolition does more granular level than what a utility needsnot have to be performed. Conversion of these to measure - which is total energy used by thesystems also allows for the application of a facility. In essence, an energy managementmore sophisticated energy management system system that measures system performance atto be utilized to monitor and control a facility’s this more detailed level can be considered anoperations. enterprise level “smart grid”. This integrated network of meters and sub meters, software,The precursor to today’s vastly improved energy and hardware provide the tools to add visibilitymanagement systems was the shift to direct into energy consumption and enable decision-digital control (DDC) of a building or facility’s making and planning support to management.operational components. Digital systems During the beginning phases of an energycan allow full integration and automation of management implementation it is important toa building’s components and environmental establish a baseline of historical energy use ascharacteristics. When the shift to digital well as a comparison of that baseline to othersystems occurred, however, many vendors facilities or buildings of similar size and use.developed their own proprietary methods of Energy management tools can perform thesecommunicating with these devices which limited tasks relatively easily, and with the abundanceinteroperability with other makes of building of data that is available for comparison, thesystems. This may have been a strategic move results can be considered highly these vendors as it locked in customersor owners of a building to that particular In general, and depending on the nature of amanufacturer’s products. During the past business’s activity, the main building devicesdecade, however, there has been significant or components that are monitored and 18
  21. 21. controlled in a building or facility relate to the The advancement of technology in this areabuilding’s mechanical, electrical, and plumbing has allowed for a quickly evolving landscapesystems (MEP). These systems are composed of innovation. Traditional areas of applicationof lower level components such as sensors, are being broadened and deepened, andwhich measure critical data from the piece of are starting to include areas that could notequipment or elsewhere (temperature, humidity, be considered even a few years ago. Airoutside temperature, etc.), and controllers quality within a building can be monitoredthat manage or control the operation of the and managed which can enhance the qualityequipment. Some of the building components of the work environment as well as ensurethat are included in MEP systems include occupant safety in facilities that work with toxicchillers, boilers, roof top units, fan coil units, substances.heat pumps, variable air volume boxes, and airhandling units. IN addition to MEP systems, Weather data is now a major part of mostlighting monitoring and control is another area energy management systems, and is utilizedwhere significant savings can be realized. for anticipating cooling or heating requirementsAccording to the US EPA Energy Star Program, as well as a host of other energy relatedbetween 25% and 40% of the electricity used calculations and reporting capabilities. Demandin a commercial building goes toward lighting management and demand response actionsthe facility. Along with changing to more can be included in some energy managementefficient light bulbs and fixtures, simple lighting systems, and this helps to efficiently managemonitoring and management techniques, time of use impact to operations and canenabled by an energy management system, can even mean an additional revenue stream foradd up to large savings. the business. Exercises such as utility invoice reconciliation with actual energy use are nowMany studies have been performed on the much more straightforward to accomplish.efficiency of other operational systems in Operations with multiple facilities can nowcommercial and industrial settings. Some the integrate these facilities into one reportinglargest users of electricity include pumping system so that energy consumption acrosssystems, fan systems, compressed air facilities can be compared and managed withsystems, and other materials processing better detail, and prioritization of maintenancesystems. According to the Lawrence Berkeley and improvement projects can be initiatedNational Laboratory (LBNL), these motor with more certainty. For the enterprise, energysystems account for over 60% of the electricity can now become a variable cost that can beconsumed in the US industrial sector. An planned and managed similar to other businessenergy management system that is capable input.of measuring the energy consumption ofthese systems and intelligently controllingtheir operation can not only save a significantamount of energy, they can also improve thecost of maintaining the systems, improve overallreliability, and extend their useful life. 19
  22. 22. CHAPTER 6 ENERGY Extracting Value from MANAGE MENT SYSTEMSA building energy Laboratory (LBNL) released a study on the management system is energy management systems that were just that – a management installed in commercial buildings, and system. Left unmanaged included statistics on how they were being or incorrectly managed used. The study showed some startling they offer limited benefit. numbers. More than half of the respondents Although there have been to this survey reported that they actuallysignificant advancements and innovations in used the energy management systemthe technology that operates a commercial less than once per month. The Institutebuilding, the question remains as to the for Building Efficiency’s annual Energytrue value that this technology is providing. Efficiency Indicator survey has backed upIn 2010, the Lawrence Berkeley National these numbers until just this year where the 20
  23. 23. statistics say that 56% of respondents now in the financial and other industries, complexmonitor their energy consumption at least data analysis and algorithm development hasweekly. This is an improvement, but taken become a highly desirable skill set for manywith other statistics provided in the report, it vendors in the production of their tools andcan be surmised that there is still a long way technology. Technology alone, however, is notto go for buildings to become as efficient as always the most effective, or only solution tothey can be. the problem. Focusing on technology more than delivered value is misguided at best. One canThere is an abundance of technology, products find many examples of IT projects that failedand components available for managing a smart because they threw a bucket load of advancedbuilding, and adoption rates of these systems technology at a “problem” only to find that ithave been relatively strong. It is the proper either didn’t solve the original problem, createdand cost effective integration, implementation additional problems, and didn’t result in moreand management of those products and productive work. In fact, it may be the definitionservices that is lacking in the current building of the “problem” that has potentially led to theenvironment today. The misunderstanding and development of tools and technology that arelack of knowledge on how to effectively utilize less useful than they can and should be.what is currently available is limiting the efficientoperation of a building as well as the return on Some buildings or properties are fortunateinvestment of these installed systems. Correct enough to have the necessary numbers andbuilding management requires knowledge and skill levels of personnel managing and operatingan understanding of how to interpret a wide the buildings. In this case the technologyrange of building data. There must also be and its output can be understood and utilizedan understanding of how controlling various appropriately. In many cases today, however,aspects of operation affects both comfort and building management and operation hasenergy use. Unless properties that utilize EMS devolved into a “break/fix” mentality. Withsystems have in-house technical expertise, the lack of resources that many properties arewhich can be very expensive, it is likely they experiencing, there is just not the time or thedo not gain the benefit of the system as it was expertise to schedule efficiency initiatives orintended. Recent economic conditions have projects with any regularity or effectiveness.compounded the ineffective use of technology All of the focus of the building maintenancewithin a building. Although one of the main staff is spent on ad hoc activities necessaryconsiderations for the purchase or use of an to keep the building operational. The break/EMS is cost savings, interest in cost savings fix maintenance process increases the risk thathas also driven cutbacks in the numbers and a catastrophic and disruptive failure will occurskill levels of the personnel who are managing a that can compromise tenant comfort, security,building on a day-to-day basis. and safety.Vendors in the energy management market tout Several movements are being seen in thethe many benefits and the sophistication of market for building energy managementtheir systems. Similar to what has happened systems that are the result of some of the 21
  24. 24. issues mentioned above. The first is the or involve a time-consuming procurementincreasing popularity of energy as a managed process. As in other competitive industriesservice. A managed service offering essentially there will be the similar market forces drivingoutsources the energy management activities the cost of these tools down to the point whereof a smart building to a third party. Managed many will be available for free…a process whichservice providers have personnel with deep is well underway.knowledge and experience with commercialbuildings and their operation, as well as thetoolsets and components installed within abuilding. In general, managed service providershave a network operations centers (NOC)staffed with these experts that monitor client’sbuildings around the clock. For a relativelymodest monthly fee, building owners caneffectively extend their building’s operationalstaff eliminating the expense of building thiscapability themselves. It is expected thatmanaged services will become an increasinglymore popular solution to managing buildingefficiency, taking market share from standaloneenergy management offerings over the nextdecade.The second recognizable movement in theenergy management market is the move towardnetworks of individuals and communities wherelearning, sharing of knowledge, best practices,and experts can come together to provide ordevelop solutions to the needs of businesses orthe community at large. Outdated hierarchicalmodels of organization can be replaced withcollaborative co-creation of solutions that aretailored to specific individual problems, onlyto be re-organized or re-created as problems,situations, and experience levels evolve. For amajority of the buildings that are experiencingdifficulties with knowledge of how to managetheir energy consumption and energy initiatives,simple solutions can be the best place to start.Access to sophisticated tools and expert adviceis no longer something that needs to be costly 22
  25. 25. CHAPTER 7 DON’T Building drift REST ON YOUR LAURELSS o, now that you have National Laboratory]. Standard maintenance identified and fixed some practice in many cases amounts to physical areas of your building that observation - or if the building’s occupants were less than efficient, complain, hardware system alarms go off, you can sit back and enjoy or through routine maintenance. This is not years of energy savings. enough to maintain the efficient operation Not so fast! Beware of a building, and in most cases problemsthe dreaded building drift. Even the most are found after much energy and money aresophisticated buildings experience drift in wasted.efficiency over time…as much as 10% -30% over the course of just a year or two Commercial buildings are complex organismsof normal operation [Lawrence Berkeley involving electrical and mechanical systems 23
  26. 26. that are integrated to control the operation to help understand if a building’s componentsof a building. Facilities that have dedicated are operating in accordance with original plansstaff to consistently monitor a building’s and specifications. Once these services arecomponents can still experience building drift. complete, however, drift in efficiency will stillThe causes of drift can be many, and they are occur. However, if a baseline is established, anddifficult to detect or even realize from a causal the building’s performance can be monitoredstandpoint. Causes can include dirt in the around the clock, performance comparisonssystem components, temperature and time can be continuously performed to identify areasoverrides that are set incorrectly, improper that need attention or maintenance allowing forcontrol settings, seasonal changes, stress on a building that is in tune more often than not.aging mechanical systems, component failures,and malfunctioning components. Other causesinclude duct or valve leakage, improperlybalanced airflow, incorrectly sized equipment(e.g. HVAC), simultaneous heating and cooling,and still others. So, one can see that there aremany areas where building efficiency can becompromised, and the larger the property, themore difficult it will be to find the actual causes.Today’s building energy management systemscan provide some insightful relief of the problemof building drift. These systems allow forconstant monitoring of a building’s systems24/7/365. Once a baseline for a building isestablished, the energy management systemcan constantly and consistently monitor fordeviation from this baseline to see if thereis meaningful change. The EMS allows youto isolate and pinpoint specific componentsof a building that might be contributing tothe decay in performance so that problemscan be resolved before they become largerissues or catastrophic or disruptive failures.Determining errors in this fashion will also helpthe facilities personnel to prioritize work tasks,eliminating some of the ad hoc nature of themaintenance process and moving away from abreak/fix mode of operation. Commissioning,re-commissioning, and retro-commissioningare all valuable services that can be performed 24
  27. 27. CHAPTER 8 ORGANIZATIONAL ENERGY THE BENEFITS OF AN MANAGE MENT INITIATIVES ome of the benefits impact. Stakeholders consist of a varied of a corporate energy group of constituents which include management program other businesses, governments, tenants, include reduced operational building owners, employees, standards costs, increased organizations, environmental organizations, productivity, and more customers, suppliers, investors, students, efficient operations. patients, community members, and nationalBut, this is not all. Companies around the citizens to name a few. Not only can anworld are realizing more and more that the organization realize monetary benefitsstakeholders of a business are requiring through the consistent implementation ofresponsible actions with regard to the an energy management program, they canuse of resources and their environmental also realize an enhanced brand image. Many 25
  28. 28. organizations are realizing the benefits of established energy standards and programspublicly announcing energy management that serve a similar purpose, although they mayinitiatives, and progress made toward their lag the US in their development. The variety ofgoals. Additionally, leading suppliers and programs is expanding to serve most any typeretailers are requiring more responsible or size of business with localized assistance andbusiness actions, with severe restrictions incentive programs. Utilities have also joined inon B2B transactions if these requirements with demand side management programs thatare not met (e.g. Wal Mart). Finally, the are expanding and offering businesses financialemployees of an organization that is involved and other incentives for improved energywith energy management activities can efficiency.feel more empowered and satisfied in their EMS Value in Addition to Cost Savingsorganizational roles knowing that their Commercial building energy managementcompany is a good corporate citizen. systems provide building owners with the opportunity to understand and manage energyEnergy management initiatives provide consumption and reduce green house gascompanies with an opportunity to improve emissions. There are a wide variety of systemsbusiness performance, increase brand appeal, available on the market today with as manyand contribute to a smaller environmental differing characteristics. The market for energyfootprint. Employees will be more apt to feel management systems is highly competitive,connected to the business through a meaningful and this is a good thing for end users. Ascause, and clients and customers will feel system capabilities advance and evolve, so willmore connected to a brand that exhibits good pricing structures, simplicity of the systems, andcorporate citizenship. With dedication and a interoperability. When personal computers firstcommitment to improve its energy use profile, came to mass market, they were expensive andmost any company can realize the benefits of somewhat of a novelty for home users. Today,an internal energy management program. they are inexpensive, extremely useful, andEnergy Management Assistance part of the fabric of everyday life. CommercialPrograms energy management systems may follow aThere are many sources of assistance in similar course where capable systems will beestablishing a company-wide program and a standard part of every building’s operationalplan for more efficient resource utilization. components. The opportunity to save up toSome of these programs include the EPA/ 30% on building energy consumption for aDOE Energy Star, Save Energy Now LEADER, majority of the existing and new building stockand Better Building Initiative programs; the US will be a boon for building owners and operatorsCouncil for Energy Efficient Manufacturing’s as well as for the environment, national energy(US CEEM) Superior Energy Performance (SEP); security initiatives, and the general population.ISO 500001 (International Standard); and theUS Green Building Council’s LEED certification Many in the business world today areprogram. Some of these organizations have advocating the use of triple bottom lineglobal chapters for programs outside the US. accounting practices. Triple bottom line entailsMany other global governments have also taking into consideration not only business 26
  29. 29. profitability and results, but also including social are significant opportunities to reduce thisand environmental aspects. “People, planet, consumption, conserving valuable fuel sourcesprofit” is a term coined by John Elkington in and providing a measure of energy security1995 to succinctly describe the intentions of for the country. Aside from operational costsocially responsible business practices. The reduction, the benefits of reduced energy usebasic premise is that businesses need to take transfer to the environment and other areas.a more systemic view of how they operate in Water is an area that is critical to the planet’sthe world, taking into consideration all of the sustainability. Although two thirds of thestakeholders, and not just shareholders of a planet is covered by water, less than .5% ofbusiness. Stakeholders include employees, that water is fresh water. The rest is either incommunity members, the environment, and the form of seawater or locked up in icecapsall aspects of the world that may be affected or the soil. Buildings consume almost 14% ofby the businesses operations. Things like all potable water, or 15 trillion gallons per yearwaste management, water use, materials according to the US Geologic Survey. Watercomposition and decomposition, supply chain, efficiency efforts can decrease energy use bytransportation, emissions, safety, and comfort, up to 11%, provide cost savings of up to 12%,among others must be considered, understood and reduce water use by up to 15% [McGrawand managed when adopting a triple bottom Hill Construction]. Buildings are also highline strategy. In other words, what is the total users of raw materials – approximately 3 billionoverall footprint of the business all things tons annually or 40% of total raw materialsconsidered. used globally [Worldwatch Institute]. The EPA estimates that 170 Million tons of building-Energy management systems are mostly related construction and demolition (C&D)marketed to end users for their ability to debris were generated in the U.S. in 2003, withprovide cost savings through reduced energy 61% coming from nonresidential sources. Theconsumption. The question becomes, EPA also estimates that 209.7 million tons ofwhat other benefits – or triple bottom line municipal solid waste was generated in the U.S.considerations – are there to implementing an in a single year. The US Green Building Councilenergy management system or energy efficiency (USGBC) estimates that green building effortsprogram within a commercial building? Actually, can reduce energy use by 24 - 50%, CO2the triple bottom line benefits are many, and emissions by 33 - 39%, water use by 40%, andwell documented. The following paragraphs solid waste generation by 70%.will present some holistic considerations of a Profitcommercial energy management system and Cost savings of energy management and otherother efficiency or green building initiatives. efficiency and green building initiatives canPlanet go directly to the bottom line of a business.According to the US Energy Information Agency Other profit related factors come into play as(EIA), buildings represent 38.9% of U.S. primary well. For example, energy efficiency projectsenergy use (includes fuel input for production), generally entail improvements to lighting along38% of all greehouse gas emissions, and with heating, ventilation, and air conditioning72% of US electricity consumption. There performance. Studies have been performed 27
  30. 30. that show that energy efficient air and lighting 10.9% new construction and 6.8% existingcontribute to increased employee productivity, building projects; return on investment improvesreduce absenteeism, and also increase sales in 9.9% new construction and 19.2% existingretail environments. In a study by the California building projects; occupancy increases 6.4%Energy Commission, daylighting was positively for new construction and 2.5% for existingand significantly linked to higher retail sales — building projects; and rent increases 6.1% onas much as 40% higher, compared with a non- new construction and 1% on existing buildingdaylit store. projects.In a study performed for the NationalEnvironmental Education & Training Foundation, Finally, a series of studies by Innovest Strategicthe following statistics were generated to Value Advisors, a financial research firm, foundshow the financial benefits of reducing energy basis to conclude that stock performance ofconsumption. Energy use represents the single companies that were involved with energylargest operating expense in an office property. management activities outpaced that ofReducing energy use 30% is equivalent to companies that were laggards in this area.increasing net operating income and building For example, in the grocery sector, leadersasset value by 5%. Businesses that lead in outperformed laggards in stock price by 17%energy efficiency use about 30% less energy over a three year period, and also had betterthan their competitors. Reducing energy use financial measures such a price to earnings,30% lowers operating costs by $25,000 per price to book, return on assets, return on equity,year for every 50,000 square feet of typical and return on capital. Commercial real estateoffice space. U.S. hotels spend close to $4 companies who are leaders in energy initiativesbillion on energy every year. Reducing these outperformed others by 34% over a two yearcosts by just 10% is equivalent to a $0.62 period, and larger retailers outperformedaverage daily rate (ADR) increase for limited- laggards by an astonishing 71% over a five yearservice hotels and a $1.35 ADR increase for full period.service hotels. Every $1 a nonprofit healthcare Peopleorganization saves on energy is equivalent to The EPA estimates that people spend about$20 in new revenues for hospitals or $10 for 90% of their time indoors. They also estimatemedical offices. For-profit hospitals, medical that indoor pollutant levels can be up to tenoffices, and nursing homes can boost earnings times higher than outdoor levels. The indoorper share by a penny by reducing energy costs environment can have a dramatic effect onjust 5%. how we feel, as well as how productive and healthy we are. In an experiment conducted byIn a survey that was conducted by McGraw Applied Ergonomics, it was found that there isHill Construction, building owners identified a link between improved lighting design and athe following statistics about how green reduction of 27% in the incidence of headachesbuilding and efficiency practices affect their which can account for almost 1% of employeebusinesses: Operating costs decrease 13.6% health insurance cost and approximatelyfor new construction and 8.5% for existing $35 per employee annually. Additionally,building projects; building value increases improvements in indoor environments are 28
  31. 31. estimated to save between $17 and $48 billionin total health gains and $20 to $160 billion inworker performance [Annual Review of Healthand the Environment]. Students also haveshown increased performance with betterindoor environments, progressing 20% fasteron math related subjects, and 26% better onreading performance. Lawrence BerkeleyNational Laboratory also concluded that thereis significant correlation between low ventilationlevels and higher carbon dioxide concentrationswhich is a common symptom in facilities withsick building syndrome.With all of the above statistics in mind, it wouldseem to make sense that companies should payattention to their energy consumption, whichas a matter of course improves other aspectsof the overall work or building environment,not to mention the environment in general.Unfortunately, in today’s world, businessleaders are judged on short term performancewith hard financial numbers based on standardaccounting practices. If, however, they makedecisions based on a long term perspectiveas well as a more holistic view with regardto accounting practices, they would see thatenergy efficiency and sustainable practicesprovide benefits that significantly outweighactions taken with a more short-sightedviewpoint. The evidence is there, as are thetools and information necessary to implementa more sustainable footprint. The good newsis that increasingly, customers, suppliers,partners, investors, employees, and a host ofothers are changing the way that they thinkabout what is important to them – and alsochanging the landscape of doing business in amore sustainable way. 29
  32. 32. Tom Machinchick BioTom Machinchick is a freelance writer, industry analyst, content marketing specialist, and businessconsultant to startup and early stage businesses. His diverse background includes work, orwork assignments, in a variety of industries including IT, investment management, finance, hightechnology, energy, renewable energy, body care, retail, food and beverage, and market researchto name a few. Recognized by colleagues and clients alike for his ability to understand complexbusiness strategies, technologies, and market dynamics, Tom has been relied upon to write effectivecompany communications - from business plans and company financials to marketing materials andwhite papers. Over the course of his career, Tom has held operational and senior management rolesleading to his broad understanding of business and organizational dynamics. Tom’s most currentassignments include contract writing for Pike Research, a leading green technology market researchand consulting firm, as well authoring articles, blogs, and eBooks for Noesis Energy. His main areasof focus and expertise have been in the commercial and industrial energy management and buildinginformation modeling markets. Tom is also working with a few select clients in these markets todevelop content marketing strategies and publications. 30