Smart buildings: Optimizing energy efficiency, costs with IoT

Smart buildings: Optimizing energy efficiency, costs with IoT

Feature articles |
By Rich Pell

Studies on the matter have shown that by 2020 the global smart building market is expected to grow to US$36 billion – a substantial increase from the US$ 7 billion valuation in 2014. 

Smart buildings are hugely beneficial in supporting facilities management. By incorporating smart technologies into their building, business managers can drastically cut down on energy use and subsequently save on costs.

This is corroborated by recent statistics released by Intel around IoT device deployment for HVAC systems, lighting systems, and some types of electrical loads. In a 75,000 sq foot building with energy bills averaging $2.32 per sq foot per year, companies can potentially save anywhere between $15,000 and $50,000 annually.

Additionally, real estate owners can command a $5-10 per sq/ft premium for their tenanted space if the technology, sensors and digital services, exist to provide the occupant with a premium building and user experience at an optimized cost. An example of this could be to access the building using a smart phone and use the same app to book meeting rooms.

If presence is not detected in the meeting room then HVAC and lighting can switch off. This same smart building technology can be re-used to change cleaning patterns linked to which areas of the building are being over and under used, reducing cleaning costs with the same data that is reducing energy consumption.

The growing importance of energy efficiency
The recent introduction of new laws and regulations has meant that buildings must strive to be as efficient as possible when it comes to energy consumption. The 2015 Energy Efficiency regulations state that new leases cannot be granted to either residential or commercial property with an EPC rating of less than ‘E’ in England and Wales after the 1st of April 2018.

Let’s look at how smart technologies can help properties become more energy efficient. One option is smart lighting. If designers integrate lighting into a building’s energy management system, the lighting can be switched on and off or adjusted based on occupancy.

The amount of energy used by the building falls considerably, and a key step is taken towards a better EPC rating. Crucially, this pattern between occupany and energy use is not limited to lighting. Air conditioning within a building also can be altered when there are fewer people inside – resulting in a better chance of businesses meeting the 2015 Eneregy Efficiency regulations. And just as importantly, there are also financial benefits.

Smart technologies possess the capability to transform a building itself into an important asset for a company, reducing equipment operational hours, energy consumption and therefore extending the life of HVAC equipment. By cutting energy costs, operational capital is freed up for use elsewhere.   

Cutting energy costs with the cloud
Smart buildings generate an extraordinary amount of data, and the cloud provides the network of servers required to store, manage, and process it, however data and cloud is not enough to create value. Directing this data in an understandable way to building experts that can with the help of algorithms and visualisation software detect anomalies ahead of time to then recommend and implement improvements.

This information from IoT and expertise blend helps to quickly identify any areas where key improvements in energy efficiencies can be made. Companies are able to merge different sets of data within the same cloud space, for example HVAC data and space utilisation data. This can reveal which areas within a building are presently occupied and which are not. HVAC equipment usage can subsequently be managed accordingly through building owners optimising set points and schedules.

As a result, energy usage is cut and unlike in a more traditional building, asset life is actually extended. This shows up on the customer’s balance sheet, providing them with a competitive advantage as well as a greater return for their shareholders simply by working smarter, not harder. 

Virgin Money – Turning to the cloud
Virgin Money’s 40,000 sqm head office complex in Newcastle-upon-Tyne is a prime example of how a building design, with energy efficient measures incorporated, can transform properties into strategic assets providing valuable insights into building performance. In this instance, energy usage was minimised through IoT technologies.

A cloud-enabled building management service, capable of tapping into real-time analytics and a network of expert technicians, was included in the building’s framework. The service links building connectivity and sensors with the aim of ensuring that building equipment is performing at the best possible level. It uses the data collected from HVAC equipment to detect issues before comfort conditions or equipment becomes compromised. This has resulted in customer driven reactive calls being reduced by over 20% and comfort condition targets improving from 65% to over 90%, all the while reducing energy consumption.

With the use of web-based performance dashboards, these metrics can be seen by the facility manager from anywhere in the world which is helping them reduce reactive call volumes, administration effort whilst extending asset life, reducing energy costs and improving the experience of building users.

The value of energy performance contracting
IoT technologies are not the only solution for better energy management. In 2013, Peterborough City Council set out to identify the ways in which it could design and implement appropriate energy efficiency programmes with the aim of maximising energy saving benefits. This was important given its substantial property portfolio, including 23 schools, three swimming pools, a sports centre, a library and a town hall.

With such a wide range of properties under examination, the council found the best solution in Energy Performance Contracting (EPC) – a partnership between a customer and a contractor to manage measures that can be taken to guarantee energy savings.  The EPC solution provided the council with the flexibility to accommodate the best individual strategies for each piece of property.

As part of Peterborough City Council’s plan, each facility was subject to an extensive energy performance analysis. As a result of gathering these insights, the council was able to introduce several energy conservation measures.

Building control platforms were either upgraded or replaced with superior alternatives, while air handling units, lighting systems, and pool filtration systems were offered the same treatment. With these changes in place, Peterborough City Council has reported 1,794 tonnes of CO2 savings and a £2.0 million net profit from this programme, achieved largely through a reduction in energy bills and carbon tax.

Considering the recent changes in energy efficiency regulations, and the financial and environmental benefits of cutting energy usage, achieving maximum efficiency should be seen as paramount by design engineers and technical managers. Moreover, hospitals, retailers, airports, and commercial properties can all enhance performance and cut spending through solutions such as connected services or an EPC framework. With more solutions available than ever before, there certainly isn’t a shortage of options.

About the author:
Paul Mason is ‎European Digital Services Leader at Honeywell Building Solutions –

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