A modest proposal
One of the best things about addressing 60,000 readers, as I do every day, is that people talk back.
Among the bracing zingers I receive are nuggets I'd otherwise have to prospect for. And, having been a uranium prospector in the Rockies for a time, I've seen the light on obtaining nuggets via e-mail.
Mike Ebert wrote in yesterday and we chatted. Ebert is a principal research associate in the Center for Infrastructure Protection at George Mason University, Arlington, Va. He read my piece on smart meters and home area networks (HANs) and shared a couple points on smart grid implications for the commercial building sector.
(My colleague, Warren Causey, had mentioned Ebert's take on cost recovery and consumer uptake of smart grid technology in a column a few weeks ago. At the risk of turning Ebert into a celebrity, I offer his take on potential smart grid impacts on commercial buildings and the implications for jobs -- certainly a topic du jour for the president's State of the Union address.)
The commercial building sector is the leading electricity consumer among a triumvirate of users: commercial, residential and industrial, according to Ebert, who cites U.S. Department of Energy's (DOE) Energy Information Administration (EIA) data.
In Ebert's view, smart grid applications to the commercial area network (CAN) hold great promise because they would have the highest impact, could be relatively swiftly enacted and would provide jobs and career tracks for building engineers. Compared to the nation's 125 million existing homes, all of which will need smart meters and HANs and intelligent appliances, the commercial building sector nationally has a handful of major players (i.e., corporate landlords) with strong economic incentives to implement smart technology that saves them money. The electricity needed to operate a commercial building, on average, is about 40 percent of total operations costs, according to Ebert.
(In fact, EIA data shows 125 million residential electricity consumers in the United States, 17 million commercial users and about 775,000 industrial users.)
Shaving that percent back a few points over a few years will generate massive savings, he contended. Ebert suggested that regulatory and privacy issues inherent in making homes smart could be more easily finessed in the commercial building sector.
There's a hitch that Ebert thinks can be overcome. We're short on "KSAs" for this work -- knowledge, skills and abilities.
"In larger facilities, the engineering staff has the fundamentals on building operations," Ebert told me. "They can be quickly trained to deploy smart grid elements within their facilities, which isn't true in the residential space."
"GIS (geospatial information systems) increasingly is the prism through which utilities view massive amounts of data in tracking energy use and system assets," Ebert continued. "GIS can also be used by commercial building engineers, but many of them are without GIS proficiency."
So, what's the plan?
Turns out Ebert and George Mason University are connected to many players in the smart grid space and these partnerships are working to get a solution off the ground. The idea is to have certain universities designated as "centers of excellence" and partner with others, from K-12 education, community colleges and training institutes to make all this go.
Like a good team player, Ebert spread the credit for other participants who've worked at realizing this idea. The individuals are too numerous to mention, but the organizations include the GridWise Alliance, the IEEE - PES (Power and Energy Society), Howard University, the National Association of Power Engineers Educational Foundation, Portland State University and other "collaborators and co-conspirators," as Ebert put it.
The means for getting this done, and swiftly?
Can you spell s-t-i-m-u-l-u-s? George Mason University and some of its partners, individually and in partners (so I gather) have applied for stimulus funds, the latest round of which are scheduled to be awarded by the DOE in the near future. (There's $100 million available for "education, training and workforce development.")
"I see this as a growing employment need -- professional development for this generation and a career track for future engineers -- and if you meet that need, you can really make a dent in patterns of energy consumption," Ebert concluded. "To do this [smart grid] right, we have to have a good workforce. With our educational proposal, this could be done in a streamlined timeline, and that's an element missing from the current discussion of stimulus money."
Pie in the sky? Or are these folks onto something? Readers, let me know your thoughts.
Phil Carson
Editor-in-chief
Intelligent Utility Daily
pcarson@energycentral.com
303-228-4757
Comments
A modest proposal
Gary and Phil,
Thanks for your article and comments.
Gary,
In many regions of the country (not here in Stimulus City!), there are properties in surplus – and hence $$ is tight. I can relate to your Midwestern perspective, having grown up in Indiana and will most of my family still there, and your concerns have been front-and-center during our research team's internal deliberations. Yet the very fact that there is seemingly lack of interest and empty space creates additional incentives and rationales to become even more cost effective & competitive – if senior managements have the vision and the financing to make investments in workforce and smart grid. Future-thinking managers/owners also will realize that there is an intangible asset that can flow from doing this: positive business reputation enhancements if marketed appropriately.
Michael Ebert
Principal Research Associate
Center for Infrastructure Protection
George Mason University
(703) 993-2288 office
(202) 486-0661 blackberry
mebert@mgu.edu
mikeebert@his.com
A Modest Proposal
I spent several years working for a demand response aggregator and I can verify Gary's experience regarding capital investment. Some owners, especially Europeans, are willing to make capital investments in energy efficiency. Most won't hold an asset long enough to recoup their investment through higher rents and perceived increases in value. I believe the typical financial analysis requires a one to two year payback period for any capital expenditure.
However I also think most of the savings that could be realized by making commercial buildings "smarter" with respect to energy use have already been made. The big prize is air conditioning, and the 20-40% reductions in energy use that might be attainable here will require costly replacements of chillers, air handlers and ventilation controls. Where tariffs make it economical, thermal storage could yield sizable energy cost reductions as well. The fact that it's hard to make a compelling business case for these upgrades - absent subsidies - should tell policymakers something about electricity pricing policies.
Response to Jack C
You're so right about the need to have made a compelling business case to do these kinds of CAN smart grid activities, and that HVAC (and perhaps lighting?) is the grand prize. We might be able to settle for less than 20 to 40 percent reductions in HVAC energy consumption by retrofitting existing systems which have useful expected service life of ~ 5+ years or more with smarter digital/wireless controllers that communicate with the external AMI & utilities and internal building-power engineers in near real time or at least time of use. Your thoughts?
Michael Ebert
mebert@gmu.edu
A modest Proposal
In refernce to the article on training and installing smart meters in commercial buildings, I agree with the sentiments that the commercial building segment is probably more geared to accomplish this and the results will have a larger impact on the grid than the piece meal approach with other energy consumers. However, the biggest problem I see in moving this forward in the commercial building market is overcoming the culture of the industry. Don't get me wrong, I am an active proponent in this idea, the problem is getting owners of investment real estate to get off the fence and make things happen. In the midwest where I am located, owners of investment real estate have the over-riding opinion that "why should I do anything to save energy in my buildings when the tenants pay me for the utilities anyway? And why should I take money out of my pocket to save them money"?
OK, I know it sounds like an extremely short-sided and selfish comment, but trust me, I hear it all the time. Trying to get these people who are only looking at real estate as an investment vehicle, more often then not are not forward thinking enough to realize that an efficient office building will help their NOI and create a building that has more competitive lease rates than other buildings. So, how do we get building owners to buy into this idea? Short of legislative requirements, I'm not sure.
Any ideas?
You've made a start
Gary,
Perhaps you've made a start with the rationale, when you wrote "an efficient office building will help their NOI (net operating income) and create a building that has more competitive lease rates than other buildings."
Hasn't the current recession taken a toll on commercial real estate leasing? Perhaps your insight, delivered to the nation's top commercial lessors, would have impact?
Anyone?
Phil Carson