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Cisco ups the ante on smart, green building implementation

Energy Management: The term “smart grid” is a big touch point for government and industry today. It’s being heralded as the way to a more prosperous, more energy efficient future. Where do you fit in that equation?

Rick Huijbregts: Let me take one mini-step back from that. Fixing the grid itself is not insignificant and it has to be done because it’s obsolete and can’t meet the new requireements that are expected of it. But to talk about the grid alone is really just scratching the surface. Yes, we can make the grid more productive and efficient. We can streamline a lot of processes around power delivery, everything from the fridge in a home to the light swtich in your office, to the generation in your plant. But if we don’t change work habits, if we don’t change behaviour, then at the end of the day nothing happens.

EM: People make the difference.

Huijbregts: Yes. We need to really empower the human network to drive transformation in this industry, and  that can’t come from the utilities companies alone. We’ve seen this in the poor adoption of smart metering, where the consumer actually says, “I don’t want the utility company coming into my house and telling me when I need to save money, or lower consumption.” We need to show the value of saving and make the value apparent — create awareness. This ties into connected real estate. We have the ability to make people in buildings, no matter if it’s a hospital or an office building, aware of their energy consumption at a great level of granularity. We don’t have to wait anymore for the utility bill to arrive. We can share with them how much they consume in real time, give them tips on how to change their behvaiour, and how they’ll lower greenhouse gas emissions in return. But what’s more important is that it makes the building more dynamic or organic in how it responds to the needs of the individual end user. The building doesn’t dictate what sort of performance you need to have but optimizes performance and significantly reduces carbon footprints.

EM: What needs to happen for this to become a reality?

Huijbregts: The answer is two fold. The Demand Response program needs to be improved. We have to make it easier for utility companies to compensate real estate owners so they benefit from turning their buildings into power plants. That’s kind of what DR is. But the real value comes from lighting up the building, using the same infrastructure and IT technology that already exists in those buildings — everything from enterprise networks and  IP telephony — alongside heating, cooling, and lighting controls so that they all speak in one uniform language, on one protocol. That’s where we come in. We have done this in computer language, making different systems talk to one another. We did it with voice and now we are ready to do it again with building controls — to basically have BACnet and Lon controls (and others) start talking to one another and creating opportunities and services that will meet the needs of individual consumers without affecting how we experience our environments.

EM: And Richards-Zeta gives you that ability.

Huijbregts: We acquired the company in January. They were one of the few privately held companies that had produced a gateway technology that bridges the technologies of the IT and building controls world. Now, with this technology, we can basically talk to any building controls system — from elevators to HVAC to lighting, anything that’s already in the building — and add it to our network and then add a building automation capability that gets a lot more value out of the systems as a whole compared to if we’d got them all individually. The whole is greater than the sum of its parts.  

This becomes an IP address that we can give to the utility company, and with the right rules and policies we can allow the utility companies top perform DR without any human intervention, all the way to the level of turning off LCD screens and powering down IP phones and laptops, reducing lighting and changing set points of heating and cooling. Anything that’s connected to the network is now controllable. Based on this policy, we can reach up to 30 per cent reduction in power use in a building.

EM: It’s great to have this sort of interactivity, but do you get building owners to buy that kind of connectivity?

Huijbregts: We see a few key triggers. Energy use is important. With such a system, measuring use is easier. Once you know what you are using, it’s easier to reduce that use. The second trigger is cost savings. Using such a system can actually reduce costs by $2-3 per square foot. About a 10-15 per cent reduction is what we’re looking at. Thirdly, safety and security is important. We see an increasing need, specifically in big enterprises — government, education and healthcare, particularly — the need to do a better job at protecting assets. In the loosest terms, that includes people, but also intellectual property and equipment. This means considering video surveillance, access control, RFID, asset location based asset tracking, and biometrics — all these things are IP based.

Each of these three have very hard ROI related to them. The proposition we offer is that using smarter building controls frees up funds to invest in resources that add value to the core business.

EM: But initially this must come with a substantial price tag — not something anyone wants to see today.

Huijbregts: Often real estate and energy are not core assets to a business, so with some of our partners, we have now created performance contracting concepts, or let’s energy-funded models, where we go in to a customer with a big building or a campus of buildings and say, “We’ll do an audit of how much energy you consume, we’ll then do an audit of how much IT you already have that we could leverage to reduce that energy use.” From that, maybe we’ll come up with strategies to improve upon some of the technology concepts to even further help the customer reduce energy. Then, we  get paid out of the savings, so we turn a capital expenditure — up front costs that almost no one has these days — into an operational expenditure savings. We get paid out of that, but you’ll still save more. Whatever you save on top of that you’ll be able to put back in your company. And the model is becoming more sophisticated, the partners we’re working with are becoming better equipped to deliver those services, and the story in terms of savings to invest in people is a story that resonates really well.

DR and tieing it to the smart grid is almost a byproduct, a nice to have extra advantage, but a building owner doesn’t really go through all of this just for a grid issue. They want to look at safer space, cost savings, better experience.

EM: Does this require a huge building overhaul?

Huijbregts: Not always. Customers may not be aware of how much of the investment is already made. If you look at an existing building, the amount of IT infrastructure that is already there to be leveraged is substantial — for data, elevators, building automation. The misconception is that you have to rip out systems and rewire the whole building. But with existing infrastructure and wireless technologies, we can probably, just by adding this middleware tech that we’ve been talking about, have almost immediate savings at a small, incremental cost.

From there, there’s a lot of different things we can do, so we can create a roadmap and, say, just focus on energy awareness, maybe saving on lighting so the incremental investment may be just a dollar per square foot. Then, if you save 70 cents per square foot, you have a payback period of a year and a half just for lighting. So much IT and IP in these buildings is underused.

This is not a one-size-fits all proposition, of course. It does require an audit to figure out where the buildings stand. But whatever the age of the building, it gives you the opportunity to rethink the space. That’s what happened with our work with the State of Missouri. They were actually able to offload a building because they were able to use other buildings more efficiently. And if you can offload one building, if you have a large portfolio, it may pay for your whole investment. So it’s like a snowball effect. It can have an impact on many parts of the business.

EM: In your presentation notes, you mention the role that government can play in improving the built environment. Could you elaborate?

Huijbregts: Governments have proven that they can set rules and standards, including with building codes. We would like government to step up and recognize that all the buildings being built in their communities are energy hogs, and that the technology and capability is available to significantly improve that. We would love to see ways to put that into the building code.

A good example of this is fire systems. Fire systems arguably can never be on an IP network because of security. In the U.S., with Honeywell, we have a code-developed solution which is an IP-enabled fire and alarm system, so technology-wise we know it can be done. We just need the political will. Secondly, governments often sit on the largest portfolio in town. By having a better understanding of how much energy they use and how they could operate in an optimal manner, they can lead by example by investing in new connectivity options. Government should take more of a leadership role.

It’s not just about smart grid, it’s about smart communities. We need different ways to work, we need smart users, we need to educate them and inform them so they can be smarter about how they use energy and space. And at the end of the day, without smart leadership, everyone is pointing fingers and no one is taking the first step. Big utilities, government and the big real estate companies, like the Bentalls and Brookfields, they all own and operate so much space that they should  leverage the technology that’s there, and turn this into a true business model. Many are working towards that, we’re in conversation with a variety of owners.

At the end of the day, smart and green buildings do not have to cost more. I think that’s still everyone’s big problem — they think it costs more. But that excuse is gone, we’ve seen it done. We can create these smart buildings for less.