Facing increasing demands for electrical power, as well as new constraints both economic and political as to how best to produce it, electric utilities are the hub of efforts to better distribute and manage electrical power.
New networking and wireless sensor technology, along with open standards for their development, is playing a growing role in building a smarter grid for the 21st century, as was discussed in Part 1 of this series.
Here in Part 2, Triple Pundit continues its interview with Ron Bernstein, executive director of Lonmark International, an international trade organization that by developing open, multi-vendor standards and certification processes is helping industry, property owners, developers and others build automated energy demand response capabilities into intergrated facilities management control systems.
3rd Party Aggregators
“Open systems adoption is still very small, maybe 10% [of buildings] have an intelligent control system; maybe less than 10% of those have an open system. That’s the problem and the challenge,” Bernstein told Triple Pundit.
The economics for large industrial, commercial and residential property owners seems compelling. Putting an energy efficiency program in place that includes an open contro system can result in a 20%-30% reduction in energy costs per annum. For a property owner/facilities manager facing a $1 million per year energy bill – a university campus, for example, the costs savings are significant.
Faced with increasing demand, more expenisve production costs and tight supply-demand conditions electric utilities are turning to third-party aggregators in an effort to spur adoption of automated demand response systems in existing commerical and residiential buildings, Bernstein explained.
“The market in general now is capturing this idea but they’re asking, ‚ÄòHow do I pay for that?’ Well, third-party companies come in and will pay them to implement these controls, then take a small percentage of that $200,000-300,000 per year savings on a $1million dollar energy bill off the top and sell it…It’s an annuity for the life of the contract.
The consumer winds up working with the utility to implement the system and work out a contractual agreement to fix pricing terms and conditions. In this way, “the utility doesn’t have to go to each individual building…
“The utility participates in the implementation of the program…Utilities can share and pass along some of the savings they expect and reduce strains on the system…avoid firing up a reserve generator or having to buy power in the spot market, which can get very expenisve…Anything that can reduce the strain on the grid,” Bernstein commented.
Retrofitting Existing Buildings
Designing and building integrated facilities control and management systems requires bringing together various systems – HVAC and communications as well as power – that have up until recently been managed using disparte, isolated systems.
Moreover, it’s getting the vast population of existing building owners and facilities managers – the retrofit market – on board that poses the greatest challenge. Both of these are focal points for Lonmark International’s efforts.
“If you start looking at the market in terms of total usage, the retrofit market is by far the largest piece. What we’re seeing is that people looking at installing need good, reliable information about interoperable products and services. Lonmark enables manufacturers and integrators from multiple sources to carry out an open systems control retrofit.”
Lonmark has established international guidelines, testing and certification procedures and certified more than 750 certfified products. “Lonmark is a worldwide organization – we have a standard in Europe, a very strong presence in Asia, in China…Everything we do is designed to be interoperable worldwide,” Bernstein commented.
Providing Access to Standard, Interoperable Products & Services
Bernstein related one instance where Lonmark was invited to Kuwait to offer input and resources to assist the government in carrying out a plan to build an open systems grid architecture.
“They happened to choose a company in Korea that happened to fit their model perfectly, then chose a company in Boston to implement the solution. As it turned out, the product is manufactured in China…That’s the power of open standards backed by a worldwide association.”
Lonmark takes its mission and membership’s needs seriously. “We did a SWOT (Strength-Weaknesses-Opportunities-Threats) analysis on where were at yesterday,” Bernstein related. “Brand adoption is there; we’re very pleased with that.
“What we’re not pleased with is the knowledge level of the people who are trying to do this. So we’re stepping up our education and training programs…We started a year ago to enhance those programs and offerings. That’s one of the reasons we did our recent educational tour.”
Begun last spring and concluding this one, Lonmark’s educational tour included visiting 54 cities “roughly 13 cities in Asia…We had roughly 4000 people registered for the events total, averaging 50-100 people per event,” Bernstein recounted. “It’s a monumental task. The advantage that we have is our membership, who enable us to undertake and carry this out.”