SAN FRANCISCO — The climate is close to perfect for companies that provide affordable energy-efficiency management services, and there is no shortage of competitors looking to garner a share of the market.
Building owners and managers are under pressure from tenants — and in some cases government mandates — to lower energy consumption. But at the same time, property owners face pressure on earnings and limited capital in a difficult financial environment marred by low occupancy rates and a down market.
Meanwhile, companies such as BuildingIQ, SeriousEnergy and EnerNOC, that provide solutions to increase overall energy efficiency at reasonable costs, are optimistic about their products’ potential.
“There is a ton of pressure to improve energy performance,” says Mike Zimmerman, CEO of BuildingIQ, based in Rushcutters Bay, Australia. “But if you look at the sector of building owners, they are in terrible financial conditions, probably the worst they’ve been in for several decades. They’ve got this dilemma where they’ve got to improve energy performance and the typical way to do that is to shell out big bucks for upgrades and rebuilding, replace energy systems, or get some highly skilled people in to operate things better. But it is really hard for them to come up with the cash to do that because of the financial condition they are in.”
This scenario sets up the opportunity for a number of software companies to step in and develop Silicon Valley-type software models — termed “energy savings as a service” — that are more scaleable and cost-effective, and apply them in this sector to offer a more cost-effective way to provide energy efficiency.
Predictive Energy Optimization
BuildingIQ announced its first U.S.-based predictive energy optimization pilot project in September. The company is partnering with the U.S. Department of Energy’s Argonne National Laboratory in Argonne, Ill., to place its system in the 200,000-square-foot Theory and Computing Sciences building constructed last year.
Argonne is already on the forefront of research for the DOE on next-generation energy management, and will collaborate with BuildingIQ on future research and development for the DOE going forward.
BuildingIQ came about as the result of a partnership with the national labs in Australia, according to Zimmerman, and much of the original intellectual property the company utilizes was developed by those labs. The company was set up to commercialize the technology about a year ago. It’s core commercial product, also called BuildingIQ, is the same one being utilized at Argonne.
The predictive energy optimization system automatically learns a building’s thermal characteristics and then incorporates weather forecasts, electricity tariffs, demand response signals and other factors. It then continuously manages the building’s energy use to optimize cost, emissions and occupant comfort. ComfortIQ is a desktop software application component of that system that surveys tenant comfort and provides feedback back into the system, and the DRiQ system automates the end-to-end demand response process of taking a signal from the utility and automating it throughout the building without compromising tenant comfort.
BuilidngIQ charges on a month-to-month basis, based on the building’s square footage, with no start-up cost or upfront capital required.
“Pricing is meant to deliver a $1.50 to $2.00 in savings for every $1.00 you spend with us,” says Zimmerman. “For example, if you spent $40,000 for a system with us, you could expect to save $60,000 to $80,000.”
The company sees plenty of opportunity in the U.S.
“In addition to Argonne, we have other discussions going on with property owners, with government entities and with some of the potential partners that we would work with to take our product to market,” says Zimmerman. “By that I mean we would not necessarily go out and sell direct to everyone: We might use partnerships with either energy services companies, or building management firms, or the building controls vendors themselves.”
BuildingIQ’s system is already installed and running in a number of high profile locations in Australia, Zimmerman says.
“All our customers here are arms-length commercial customers,” he says. “They include two of the top property groups in Australia: Investa, a Morgan Stanley-backed property fund with $9 billion under management; and Lend Lease Group, an Australian-based, multi-national property management and investment company. The company might be looking at some partnerships to enter the China market next year.”
EnerNOC (acronym for Energy Network Operation Center) continues its growth in this sector. In October, the company contracted to provide its SiteSMART and DemandSMART applications at the Transamerica Pyramid Center in San Francisco. EnerNOC launched in 2001, started commercial business in late 2003 and went public on the NASDAQ in 2007. Today, it counts a staff of about 500 and nine offices and is actively seeking additional employees.
“We endeavor to deliver a minimum of 20 percent total energy bill savings to our commercial, institutional and industrial customers,” using the company’s four different platforms, says Gregg Dixon, senior vice president of marketing at the firm.
DemandSMART is the company’s benchmark application, a comprehensive demand response application that allows for the maximization of new revenue sources and participation in demand response programs. The demand response application has nearly 5,000 megawatts under management, says Dixon.
SiteSMART is a data-driven energy efficiency application and service program that combines software and managed services.
“We will guarantee we will deliver a certain amount of energy savings just by looking at the data coming out of the building management system and pulling that data back to our network operations center in real time,” says Dixon.
The SiteSMART software analyzes data in real-time and EnerNOC then delivers solutions for no-cost and low-cost operational savings, according to Dixon.
SupplySMART is an energy price and risk management application and service that assesses energy purchasing options and associated risks. Dixon says that plenty of potential energy suppliers compete for business, and the program allows customers to find the best terms and conditions on the supply side.
“It helps them understand it, navigate it, and make the right decision in line with their business,” says Dixon.
CarbonSMART is a carbon accounting solution that measures, tracks and manages greenhouse gases. The program automatically pulls that data into carbon accounting and reporting software to eliminate much of the manual work required to develop a carbon footprint.
“For our customers, 80 percent or more of their carbon footprint is directly associated with their consumption of electricity and natural gas,” Dixon says.
Serious about Energy Savings
SeriousEnergy stepped into the energy efficiency management market in September, the result of building materials manufacturer Serious Materials’ acquisition of Valence Energy earlier this year. It already counts about 60 clients in the U.S. and other countries, including India.
Serious Materials, based in Sunnyvale, Calif., is an eight-year-old, privately held company that strives to manufacture the most energy efficient building materials possible. It is a materials science company at its core, and also has divisions operating in the windows and glass segment.
“For years, given our work around energy efficiency, we have been doing a lot of sophisticated modeling,” says Mark Mitchell, senior vice president of Serious Materials and general manager of the SeriousEnergy business unit. “There really isn’t another building company, building materials manufacturer, that understands more about how to drive energy efficiency within buildings.”
“The SeriousEnergy Manager product is a world-class software service, highly secure platform that allows us to obtain, monitor and control systems within buildings,” claims Mitchell. “That’s not the rocket science. The rocket science is really in the data-based analytics.”
The software-as-a-service platform is web-based and provides continuous monitoring, analysis, optimization and control of overall energy usage in commercial buildings, resulting in expected energy savings in the range of 5-20 percent, Mitchell says.
“It truly gives not only the dashboard, but the steering wheel and the gear shifter and the gas and brake pedals to the facilities managers. They are the ones running the building, they should have the power,” says Mitchell.