Buildings Get Smarter: How the IoT is Redefining Energy Management Solution Strategies By Dagoberto Mata and Mariana Azaola

Today, most plant operators and building managers have limited ability to analyze energy consumption and use insights from that analysis to optimize energy resources. Management efforts typically focus on “keeping the lights on,” resulting in a missed opportunity to drive significant cost savings and generate revenue. Increasingly, however, ongoing innovation in Internet of Things (IoT) and smart building capabilities are raising the bar of how an Energy Management Solution (EMS) can provide actionable insight to drive continuous improvement in efficiency and reliability. An IoT-enabled EMS can drive cost savings and business benefits for organizations managing a variety of large plants, facilities and buildings. By leveraging networks of intelligent devices that collect, share and analyze data, an EMS can monitor and measure energy, delivering insights that allow a business to proactively implement measures to reduce consumption, manage resources more efficiently and reduce the risk of outages and breakdowns. Moreover, an EMS provides a network of intelligent, connected devices that continually collect, analyze and share data. This network can provide the foundation for a broader IoT strategy aimed at optimizing manufacturing operations and supply chain processes, enhancing security and improving warehouse management.

A Growing Priority

Energy Management Solutions (EMS) that monitor and analyze energy consumption are becoming a bottom-line business priority. One area of focus is preventing the equipment failures responsible for nearly a third of power outages – outages that represent a total annual cost of $150 billion in the U.S. market. Another concern is procuring adequate resources in a market of finite supply: Over the next several decades, total global energy consumption is expected to increase by 28 percent, with industrial users accounting for approximately half of consumption.

Government regulations must also be considered. Many states have defined Energy Efficiency Resource Standards (EERS) around energy consumption. While the measures at present are largely voluntary, the targets tend to increase over time; political pressure, moreover, may gradually force a shift towards mandatory statutes.

The Internet of Things and Energy Management

In this environment, Energy Service Companies (ESCOs) – the commercial and non-profit entities that develop and implement energy solutions – and the customers they serve are exploring how emerging technology can more effectively manage energy consumption to reduce costs, mitigate risk and address environmental concerns.

Specifically, interest is growing in how the Internet of Things (IoT) can be leveraged to improve energy management. By deploying networks of smart, connected assets and devices that continually collect, analyze and share data, the IoT can deliver deep insights into how large facilities, factories, utilities and buildings consume energy. These insights, in turn, can enable EMS strategies that drive resource optimization and increasingly autonomic improvement.

Key Questions

Questions being explored by enterprises seeking to develop IoT-enabled EMS strategies include:

How can we use IoT tools to identify causes of power outages before they cause a failure?

The foundational elements of an EMS include the placement of smart, connected sensors across the energy infrastructure. In the case of an electrical system, that includes circuits, transformers and transmission lines. These sensors have the capability to monitor and measure critical information such as pressure, temperature and heat – all factors that contribute significantly to component failure.

More importantly, the data collection, sharing and analytical functionality of EMS assets provide an integrated, big picture perspective of how a specific electrical component (such as a transformer) might impact the grid as a whole – this perspective is essential to enable the predictive analytics and proactive intervention that prevents power outages.

At present, most utilities lack this holistic vision of energy operations, and at best are able to collect bits and pieces of data in a discrete manner. To appreciate the implications of this limited view, consider the recent power outage at Atlanta’s Hartsfield Airport, which was caused by the failure of key substations damaged by an underground fire – a fire that heat-sensitive sensors may well have detected early on. The 11-hour outage impacted approximately 30,000 traveleras, and, according to industry experts, is likely to cost airlines at least $100 million in lost revenue and other expenses.

How can IoT tools help an Energy Management Solution collect and analyze data on energy consumption?

In addition to monitoring equipment to improve maintenance and prevent failures, EMS tools that measure usage and the flow of energy through a network provide insight that can improve the efficiency of energy consumption in a number of ways.

Again, the holistic perspective provided by networks of smart, connected devices is key. By monitoring HVAC equipment, as well as temperatures in different buildings, floors and rooms, an EMS can help an office park optimize temperature variations during extreme heat or cold, and adjust temperatures based on occupancy. A utility, meanwhile, can gauge usage among its various customers to align energy production with peaks and valleys in demand.

How can we leverage Energy Management Solutions and multi-device integration?

From the standpoint of developing an overarching IoT strategy, an EMS provides a foundational building block to support a wide range of initiatives. Specifically, the intelligent devices, assets and databases comprising as EMS can be integrated with myriad other devices, assets and databases to create the “system of systems” underpinning the IoT.

Consider these examples:

  • In a retail setting, EMS sensors that monitor temperature and movement can link to a Smart Store’s analytics around customer sentiment to adjust lighting and sound to correspond to shoppers’ moods.
  • A Smart City initiative can similarly leverage EMS capabilities to share data with systems that monitor and re-route traffic to minimize congestion, alert police to unusual levels of noise or activity and keep passengers apprised of where buses are on their routes. In these instances, an EMS can ensure that adequate power is available for additional lighting and signage, as well as collect data for continual analysis.
  • In a manufacturing setting, an EMS can help show how energy use impacts its production costs at a granular level. By connecting devices on electricity and water meters, for example, a beer maker can precisely calculate the amount and cost of water and electricity needed to produce a bottle of beer. Those metrics can then be applied to a comparative analysis across the brewer’s global operations to identify best practices.
  • Ongoing data collectiona and analysis by networks of sensors can assess supply chain and inventory management processes in a warehouse setting and identify improvement opportunities.

Risks and Potential Pitfalls

Too Many Standards: A fundamental challenge confronting any IoT initiative is integrating myriad disparate devices, systems and platforms. At present, no commonly accepted standards exist for IoT platforms; as a result, achieving the critical functionality of connecting devices and seamlessly sharing data becomes a challenge. More specifically, enterprises developing an EMS face several risks:

  • Locking themselves into a solution that offers limited options
  • Ending up with a solution that offers limited functionality
  • Undertaking extensive customization to enable the required level of integration between assets

Paralysis by Analysis: When developing an EMS, or any IoT-related initiaitve, defining the scope of the project presents a challenge. Because “energy” comprises a such a broad and in many respects nebulous entity, identifying specific improvement targets or quantifiable goals can be difficult. As a result, teams charged with developing an EMS vision often lapse into “boil the ocean” approach and struggle to develop a compelling business case that demonstrates concrete benefits.

Keys to Success

Moving the needle: An effective EMS initiative focuses on converting real-time data into useful information that drive specific tactical improvements that yield measurable returns within a compressed timeframe. Benchmarking against industry standards as well as internal comparators can help chart progress. These tactical quick wins, moreover, can build momentum for a broader vision and strategy for how the EMS and, more broadly, the IoT as a whole, can benefit the business.

Minimum Viable Product Methodology: A Minimal Viable Product (MVP) methodology characterized by early release, adjustments based on testing and user feedback and quick capture of ROI is ideally suited to developing an EMS strategy. Continual feedback institutionalizes communication between IT and Operations, drives a focus on business outcomes and makes the task of data analysis more manageable – rather than seeking a needle of insight from a haystack of numbers, the model provides a window of perspective to expand upon.

For example, a MVP approach can be applied to develop a sensor that monitors a building’s temperature and occupancy, and adjusts heating and cooling to reduce energy usage in empty spaces. The initial rollout – which could be completed in 4 to 12 weeks – might measure energy and cost savings that result, while subsequent iterations could add enhanced data collection and analytical features. These could then be applied to automate the adjustment of energy flow and temperature control in response to occupancy levels.

Prioritize Connectivity: When seleting a platform for an EMS solution, the top priority should be connectivity and ease of integration, aimed at enabling data capture from assets in real time. Solutions that require extensive customization or building connectivity from scratch should be avoided. The goal should be to enable integration and data sharing between devices, leverage existing investments and connect pre-configured assets without extensive third-party intervention to develop interfaces. Ease of connectivity is also essential to an EMS cybersecurity profile, as extensive customization and reconfiguration of assets increases the number of potential entry points of threats.

Creating a New Business Model

The implementation of an EMS creates an opportunity to develop a new mindset that expands the traditional role of the IT organization. By driving ongoing communication and collaboration between IT and Operations, an EMS facilitates innovative thinking around business process redesign, the application of data to solve problems and the establishment of meaningful new efficiency metrics.

Through this process, the notion of energy’s role and its impact on the business is redefined, as is understanding of how IT can contribute to operational optimization. The potential outcome is a new business model that leverages the virtuous circle of ongoing data collection and analysis and continuous and increasingly autonomic improvement.

About the Authors

Mariana Azaola

Mariana Azaola leads Softtek’s Smart Cities and Sustainability IoT Solutions Practice. She has a background in energy efficiency, sustainable development and policy.

Dagoberto Mata

Dagoberto Mata is Global Vice President, Head of Industrial Internet U.S.A and Canada at Softtek. He has more than 16 years of experience in business consulting services, working with Global Fortune 1000 organizations to maximize technology investments, drive innovation and enable competitive advantage. Dagoberto is a Member of the Technology Association of Georgia, a world-class organization and an engine for economic development for the state of Georgia.