Three key points are made in the document: 1) Higher electricity prices, more complex energy systems, and bigger risks to power supply are making data, software and analytics more critical for effective energy strategies. 2) The necessary technology enablers and services capabilities are increasingly in place to implement data-driven energy strategies, though some challenges remain around data collection and integration. 3) Remaining blockers to deploying energy management strategies include competing priorities for funding within organizations and a lack of understanding around business cases and creative financing approaches, though pushing a stronger value proposition may help overcome these barriers.

1. Software Can Transform Energy
Strategies
...But Will It Happen?
David Metcalfe
CEO
Verdantix

2. Software Can Transform Energy Strategies – But Will It Happen?
David Metcalfe, CEO
November 10, 2015

3. About Verdantix
• Independent research and consulting firm
• Expertise in EH&S, sustainability and energy
• Founded in 2008 and 100% employee owned
• More than 250 research clients worldwide
• Delivered research and consulting for 17% of the Fortune 500
75 Farringdon Road
London
UK
175 Varick Street
New York City
USA
• Benchmarking
• Best Practices
• Market Size & Forecast
• Scenario Analysis
• Product & Service Assessments
• Thought Leadership

4. Theme
Our ecosystem still needs to
overcome blockers to investment in
data-driven energy management
strategies – let’s make it happen

5. Agenda
• Which market drivers have the biggest impact on investments in data-driven
energy management strategies?
• Are the technology enablers and services capabilities in place to make data-
driven energy strategies work?
• How can we collectively overcome the remaining blockers to implementing
strategies that combine energy data, software and analytics?

6. Agenda
• Which market drivers have the biggest impact on investments in data-
driven energy management strategies?
• Are the technology enablers and services capabilities in place to make data-
driven energy strategies work?
• How can we collectively overcome the remaining blockers to implementing
strategies that combine energy data, software and analytics?

7. Three Macro Trends Make Data, Software and Analytics More Critical for Energy Strategies
Higher electricity prices
More complex energy systems
Bigger risks to power supply

8. Three Macro Trends Make Data, Software And Analytics More Critical For Energy Strategies
8
Higher electricity prices

9. Increasing Energy Costs Will Always Be The Primary Driver of Invest in Energy Management
N =131
Source: Verdantix “10 Steps To Help Industrial Firms Realize Energy Saving Opportunities”, November 2015

10. And That Translates into Investments in Energy Data and Energy Software
Source: Verdantix Green Quadrant Building Energy Management Software 2015, October 2015
N = 17

11. 52% of Firms Expect They Will Spend More on Electricity and Natural Gas Next Year
N = 285
Source: Verdantix Global Energy Leaders Survey: Budgets & Priorities, June 2015

12. What are Price Elasticities for Energy Use in Buildings in the US?
Source: US EIA “Price Elasticities For Energy Use in Buildings In the US”, October 2014
If a fuel input cost was increased each year by 1%, by
how much would a building owner reduce consumption
of that fuel the next year and the year after?
The Answer Is?

13. We Need to Acknowledge a Big Challenge in This Market – US Electricity Prices Have Not
Increased Rapidly
Source: Verdantix, EIA Jan 2015

14. Electricity Prices Will Drive Faster Adoption of Energy Data Management in Other Markets
Source: Verdantix Where Next For UK Energy Services, January 2015

15. Three Macro Trends Make Data, Software and Analytics More Critical for Energy Strategies
Higher electricity prices
More complex energy systems

16. Energy Systems Are Becoming More Complex and Interdependent as the Cheap, Centralized
Power Gen Model Slowly Gives Way to Alternative Models
Single-Site
Real Estate
Single-Site
Decentralized
Generation
Multi-Site
Real Estate
Data Centers
& Telecom
Towers
Large Scale
Residential
Urban Zone
Industrial Zone Municipality Smart Grid

17. For Utility Bill Management, Small Firms Lack Resources, Large Firms Face Increased
Complexity
Source: Verdantix Urjanet Supports Growth of Energy Management Ecosystem, April 2015
Utilitybilldatamanagement
complexity

18. That’s Why 57% of Energy Managers Currently Outsource or Plan to Outsource Energy Data
Management (n=285)
Source: Verdantix Global Energy Leaders Survey: Budgets & Priorities, June 2015
N = 285

19. Empire State Building $20M Retrofit – Business Case Predicated on Tenant-Level Billing Data

20. You Need Billing, Usage & Generation Data to Sell Power Back to The Grid

21. Participants in Demand Response Programs Need Rock Solid Utility Bill And Energy
Consumption Data to Participate
Source: Suffolk University

22. Power Utilities Are Drowning in Data – For 64% Smart Meter Data is a Very Significant Driver of
IT Spending, 50% Grid Data Say The Same for Grid Data
Source: Verdantix Green Quadrant Power Utility IT Services (North America), February 2015

23. Power Utilities Are Seeking to Convert Their Investments in Data Systems Into Cash and Cost
Savings
“The focus of any IT project is about
how to take cost out of the business
by automating processes and creating
efficiencies. We are looking to use a
digital platform to automate the
dispatch of our mobile workforce.” -
Canadian Utility
“Having invested in smart meters, we
are looking to drive ‘meter-to-cash’.
We are looking at using smart meter
data to benefit the grid. In particular
we are looking at improving our
monitoring and forecasting of energy
consumption.” - US Utility
Source: Verdantix Green Quadrant Power Utility IT Services (North America), February 2015

24. Three Macro Trends Make Data, Software and Analytics More Critical for Energy Strategies
Higher electricity prices
More complex energy systems
Bigger risks to power supply

25. Lambeau Field – Where The Best NFL Team Plays – Couldn’t Function Without a Reliable
Energy Management System

26. What’s Wrong with This Picture?
Bad dataGood data

27. The Mets’ Daniel Murphy Didn’t Bat As Well As Expected in The World Series
27

28. The Mets’ Daniel Murphy Didn’t Bat As Well As Expected in The World Series
28

29. High Quality Energy Data is Critical to Inform Customers About Power Outages & Availability

30. Agenda
• Which market drivers have the biggest impact on investments in data-driven
energy management strategies?
• Are the technology enablers and services capabilities in place to make
data-driven energy strategies work?
• How can we collectively overcome the remaining blockers to implementing
strategies that combine energy data, software and analytics?

31. Energy Systems Are Becoming More Complex
Multiple energy domains linked together with
information technologies, electrical and
mechanical systems and system-wide
governance to improve operational
management and financial performance.

32. Software Applications That Can Leverage High Quality Energy Data Are Available in
Abundance

33. Some Building Energy Apps Have Rock Solid Data
Acquisition & Data Management Functionality

34. Building Energy Apps Offer Functionality That Responds To
Priority Customer Requirements

35. Energy Systems Are Built on a Foundation of High Quality Data
Strategy & Financing
Process & Equipment
Integration
Data Management,
Analytics & Field
Services
Data Collection & Translation
Software Workflow & Analytics
Network Monitoring
Strategy
Developer
Master
Planner
Program
Manager
IT Integrator
Engineering
Integrator
Technical Plans & Project
Coordination

36. Who Does What to Optimize an Energy System?

37. Energy Services Firms Are Building Out the Capabilities, Acquiring and Partnering To Better
Manage Entire Energy Systems

38. Benchmarking Energy Services Capabilities Identifies Strengths and Weaknesses

39. Data Collection Through Network Monitoring and Software Platforms Are a Constant in the
Energy Services Delivery Capability

40. We Are Heading Towards a Phase in Market Evolution Where Data and Software Tools Are
Designed for Energy and Facilities Providers

41. Agenda
• Which market drivers have the biggest impact on investments in data-driven
energy management strategies?
• Are the technology enablers and services capabilities in place to make data-
driven energy strategies work?
• How can we collectively overcome the remaining blockers to
implementing strategies that combine energy data, software and
analytics?

42. Hypothetical Model: Business Case for Implementing Energy Software
Source: Verdantix Business Case For Building Energy Management Software, March 2014

43. Our Analysis Indicates a Positive ROI and Payback Period of Just Over 2 Years
Source: Verdantix Business Case For Building Energy Management Software, March 2014

44. Hot Off the Press – No. 1 Challenge to Get Funding for Energy Projects is the Need to Compete
for Cash Within the Organization
Source: Verdantix “10 Steps To Help Industrial Firms Realize Energy Saving Opportunities”, November 2015
N =131

45. The Flux Capacitor Enables Us to Go Back in Time to….

46. A 2012 Survey We Conducted Which Had Exactly the Same Insight!
n = 210

47. If We Push a Bigger Value Proposition We Can Overcome the Barriers to Adoption
• Small scale business cases
• Payback hurdles limit project ambition
• Fragmented spending
• Siloed energy spend data
• Minimal understanding of creative
financing
• Weak governance structures
• Insufficient engineering talent to effect
change
• Lack of engagement from the CFO
• Energy costs squeezing out energy
management budgets

48. 48