Get Smart
The Business Case for Grid Interactive, Efficient Buildings
Get Smart: The Business Case for Grid-Interactive, Efficient Buildings. With buildings accounting for 39 percent of global emissions, and vast real estate assets facing climate-related risks, there’s a pressing need to improve performance of new and existing buildings. Key to this need is the integration of grid interactivity and energy efficiency into the real estate sector priorities. Get Smart: The Business Case for Grid-Interactive, Efficient Buildings addresses the imperative for constructing and retrofitting buildings to enhance their resilience, responsiveness to grid conditions, and energy efficiency.
Get Smart presents four key imperatives:
- Shape loads to respond to tariffs,
- Shift to cleanest-available sources of electricity and move consumption to the cleanest time of day,
- Shed load through traditional demand response, and
- Shimmy with fast-acting ancillary services such as battery storage.
The report then explores the business case for grid-interactive, efficient buildings, including reduced carbon emissions and utility costs, sustained business operations, bolstered asset resilience, enhanced comfort for occupants, and maintained long-term asset value. It presents a deep dive into factors affecting implementation, including physical design, automation, stakeholder engagement, climate resilience, cybersecurity, and scalability. In addition, the report presents case studies showcasing successful examples of grid interactivity and efficiency in buildings.
Key Takeaways:
Grid interactivity is valuable because it
- Lowers utility bill costs,
- Promotes business continuity and asset resilience,
- Improves occupant comfort,
- Contributes to decarbonization objectives, and
- Enhances long-term asset viability.
Grid interactivity is an emerging imperative and some key challenges need to be addressed to get from imperative to implementation:
- Physical features of structures permitting increased control over energy consumption and generation
- Automation of building systems’ response to internal and external environmental factors
- Operational priorities and occupant expectations in balancing human needs with new, connected building systems
- Climate resilience of assets and grid infrastructure for utility providers and building owners
- Asset and grid resilience against cybersecurity threats
The Business Case for Grid Interactivity
Utility Bill Cost Reduction
When building owners invest in grid interactivity, owners and tenants benefit from lower operating costs stemming from reduced utility bills. Cost-saving utility benefits include baseline savings from reduced demand, incentive programs for participation in demand response, and revenue from purchase of surplus power generated on site.
Business Continuity and Asset Resilience
From cooking dinner to conducting normal business operations, tenants rely on reliable service availability across real estate asset classes. As damage caused by climate disasters increases from year to year, grid interactivity and energy-efficient structures ensure that tenants are still able to access critical amenities at both the site and community levels.
Improved Occupant Comfort
There is a common misconception that grid-interactive, efficient buildings sacrifice comfort for efficiency. With more sophisticated technology being deployed to manage building systems, and many emerging options for zonal controls, occupants have more control than ever over their immediate environments, benefitting both operations and maintenance staff and tenants.
Carbon Reduction
Firms are able to manage emissions, and better comply with new climate risk reporting regulations and voluntary commitments as tenants and owners of buildings that conserve resources and integrate with grid infrastructure. These buildings tend to draw from cleaner energy sources and consume less power overall.
Long-Term Asset Viability
Current global trends in voluntary and compulsory carbon reporting are creating impetus for the adoption of grid interactivity. Given current trends in climate and regulation, alongside growing support for achieving net zero emissions in the real estate sector, the imperative for transitioning building stock from grid isolated to grid interactive is greater than ever.
Considerations for Implementation
Physical features of structures permitting increased control over energy consumption and generation
Ensuring connectivity of physical features including on-site renewables, smart sensors, or internet of things (IoT) devices is the foundation of grid interactivity. Scoping for interactivity and efficiency and retrofitting buildings to get the most out of connected equipment, however, is a task that must be prioritized and carefully coordinated throughout the project life cycle from procurement, installation, and connection of onsite renewables to negotiation of green lease agreements to support operations improvements and recommissioning. Owners should be prepared to address
- High upfront costs associated with the installation of renewable energy generation systems, deployment of advanced metering systems, energy storage, and other smart grid technologies
Owners and developers may leverage government and utility incentives such as tax credits, subsidies, or grants. Green loans, green bonds, and PACE financing may also help assuage concerns over high upfront costs.
- Inconsistent and inflexible regulatory and policy environments
To overcome barriers to innovation and uptake of new technology as well as barriers to scaling of solutions across portfolios, it’s important to establish long-term renewable energy goals and engage with utility providers, governing authorities, and other key stakeholder to collaborate on policy formation and address specific concerns.
- Technical challenges that arise in the course of integrating structures into the electrical grid
Some solutions to these technical challenges include investment in grid modernization, prioritization of development of community microgrids, and build-out of on-site energy storage capacity to compensate for intermittency.
- Cultural and organizational misalignment brought on by system changes and imposing new demands on and among large, complex organizations or in smaller entities, where change comes with high costs
Getting buy-in from and providing training to staff can help to address these challenges, as can collaborative pilot projects with utilities and civic institutions. (See "operational priorities and occupant expectations” below.)
Glossary
Report Summary: Get Smart: The Business Case for Grid-Interactive, Efficient Buildings. With buildings accounting for 39 percent of global emissions, and vast real estate assets facing climate-related risks, there’s a pressing need to improve performance of new and existing buildings. Key to this need is the integration of grid interactivity and energy efficiency into the real estate sector priorities. Get Smart: The Business Case for Grid-Interactive, Efficient Buildings addresses the imperative for constructing and retrofitting buildings to enhance their resilience, responsiveness to grid conditions, and energy efficiency.
Get Smart presents four key imperatives:
- Shape loads to respond to tariffs,
- Shift to cleanest-available sources of electricity and move consumption to the cleanest time of day,
- Shed load through traditional demand response, and
- Shimmy with fast-acting ancillary services such as battery storage.
The report then explores the business case for grid-interactive, efficient buildings, including reduced carbon emissions and utility costs, sustained business operations, bolstered asset resilience, enhanced comfort for occupants, and maintained long-term asset value. It presents a deep dive into factors affecting implementation, including physical design, automation, stakeholder engagement, climate resilience, cybersecurity, and scalability. In addition, the report presents case studies showcasing successful examples of grid interactivity and efficiency in buildings.
Key Takeaways:
Grid interactivity is valuable because it
- Lowers utility bill costs,
- Promotes business continuity and asset resilience,
- Improves occupant comfort,
- Contributes to decarbonization objectives, and
- Enhances long-term asset viability.
Grid interactivity is an emerging imperative and some key challenges need to be addressed to get from imperative to implementation:
- Physical features of structures permitting increased control over energy consumption and generation
- Automation of building systems’ response to internal and external environmental factors
- Operational priorities and occupant expectations in balancing human needs with new, connected building systems
- Climate resilience of assets and grid infrastructure for utility providers and building owners
- Asset and grid resilience against cybersecurity threats
The Business Case for Grid Interactivity
Utility Bill Cost Reduction
When building owners invest in grid interactivity, owners and tenants benefit from lower operating costs stemming from reduced utility bills. Cost-saving utility benefits include baseline savings from reduced demand, incentive programs for participation in demand response, and revenue from purchase of surplus power generated on site.
Business Continuity and Asset Resilience
From cooking dinner to conducting normal business operations, tenants rely on reliable service availability across real estate asset classes. As damage caused by climate disasters increases from year to year, grid interactivity and energy-efficient structures ensure that tenants are still able to access critical amenities at both the site and community levels.
Improved Occupant Comfort
There is a common misconception that grid-interactive, efficient buildings sacrifice comfort for efficiency. With more sophisticated technology being deployed to manage building systems, and many emerging options for zonal controls, occupants have more control than ever over their immediate environments, benefitting both operations and maintenance staff and tenants.
Carbon Reduction
Firms are able to manage emissions, and better comply with new climate risk reporting regulations and voluntary commitments as tenants and owners of buildings that conserve resources and integrate with grid infrastructure. These buildings tend to draw from cleaner energy sources and consume less power overall.
Long-Term Asset Viability
Current global trends in voluntary and compulsory carbon reporting are creating impetus for the adoption of grid interactivity. Given current trends in climate and regulation, alongside growing support for achieving net zero emissions in the real estate sector, the imperative for transitioning building stock from grid isolated to grid interactive is greater than ever.
Considerations for Implementation
Physical features of structures permitting increased control over energy consumption and generation
Ensuring connectivity of physical features including on-site renewables, smart sensors, or internet of things (IoT) devices is the foundation of grid interactivity. Scoping for interactivity and efficiency and retrofitting buildings to get the most out of connected equipment, however, is a task that must be prioritized and carefully coordinated throughout the project life cycle from procurement, installation, and connection of onsite renewables to negotiation of green lease agreements to support operations improvements and recommissioning. Owners should be prepared to address
- High upfront costs associated with the installation of renewable energy generation systems, deployment of advanced metering systems, energy storage, and other smart grid technologies
Owners and developers may leverage government and utility incentives such as tax credits, subsidies, or grants. Green loans, green bonds, and PACE financing may also help assuage concerns over high upfront costs.
- Inconsistent and inflexible regulatory and policy environments
To overcome barriers to innovation and uptake of new technology as well as barriers to scaling of solutions across portfolios, it’s important to establish long-term renewable energy goals and engage with utility providers, governing authorities, and other key stakeholder to collaborate on policy formation and address specific concerns.
- Technical challenges that arise in the course of integrating structures into the electrical grid
Some solutions to these technical challenges include investment in grid modernization, prioritization of development of community microgrids, and build-out of on-site energy storage capacity to compensate for intermittency.
- Cultural and organizational misalignment brought on by system changes and imposing new demands on and among large, complex organizations or in smaller entities, where change comes with high costs
Getting buy-in from and providing training to staff can help to address these challenges, as can collaborative pilot projects with utilities and civic institutions. (See "operational priorities and occupant expectations” below.)