The race is on to demonstrate that your integrated building energy management platform will drive Smart Buildings. Headlines are popping up every day announcing new ways to increase energy efficiency, drive down electricity consumption, or effectively participate in demand response programs. Will we see integrated energy management platforms promote smart buildings that can shrink the sector's energy consumption from 40% of the US energy pie?
Here are some announcements from this week alone: IBM announced that it is coordinating with Schneider Electric to provide building management systems that can shed up to 30% of a buildings energy costs; Carrier Corp. announced its new AdvanTE3C Solutions Center housing a new division of experts poised to leverage the company's HVAC expertise to provide "energy efficient and custom-engineered building solutions; and even Eaton - a power management company traditionally focused on electrical components, announced a slew of energy efficient building solutions.
So experts from HVAC to IT are entering the arena of Smart Buildings. A logical market shift when you think of the scale of opportunity in the building sector, but why is there such a flurry of activity today? It's possible the tide is changing and companies are noticing. While we have little hope for a comprehensive climate or energy policy to mandate change in energy consumption, there are sufficient drivers for investment in energy efficiency and demand response technologies.
Demand Response programs are proving to be effective mechanisms for shaving peak demand. And policymakers are taking note. In Pennsylvania, Act 129 mandates a reduction in electricity consumption of 3% and a 4.5% reduction in peak demand by May 2013. This means over one thousand megawatts of electricity will be eliminated from peak demand (along with a reduction of 4.4 million MWh). That's a significant opportunity for providers of demand response and energy efficiency technologies from only one state's regulation.
The White House is getting in on the act too. President Obama's Executive Order 13514 mandates leadership in sustainability from the Federal Government and includes provisions for sustainable buildings. The Federal government owns about 445,000 buildings covering over 3 billion square feet of space. These buildings consume approximately 24 million MWh of electricity; and every one of them must establish a building performance target. Energy efficiency is a proven, cost-effective mechanism for reducing electricity demand; therefore, this Executive Order presents enormous opportunity in the public sector alone.
So while there is not one singular Federal mandate for Smart Buildings, there are effective incentives for employing integrated energy management systems including energy efficiency and demand response technologies. The private sector is taking note, and jumping into this space we are calling Smart Buildings. Do you think the fragmented set of drivers will push investment in Smart Building technologies?