Billing information is the most common form of data businesses have today on their utility consumption and costs for electrical, gas and water. Utility billing information is typically available 45-60 days post-consumption, making it far too late for a company to respond to the unintended consequences of an unusually high bill. Worse, most bills are only seen by those who pay them, the accounts payable team, versus someone who could potentially use the information to manage the business better. With over 56 million facilities in the United States alone, over 70 percent of the energy consumption is attributable to the residential, commercial or industrial facility segments. That's huge and points to the best location for making a wide-spread impact on our national energy consumption.
In the commercial and industrial sectors, corporate sustainability, facilities management and production operations teams (for industrial) are the primary people concerned about utility consumption. Electricity often dominates, but water is on the rise, and gas can become the highest cost for certain manufacturing profiles, with energy cost representing as much as 30% or more of a building's total operating cost. The sustainability teams tend to look at carbon footprint and work hard to achieve a net-zero impact on the environment. The operations teams are more focused on cost savings and keeping operations running and are typically confined to projects that improve efficiency only when the capital investment has a clear return on investment or tangible production impact.
Given all the hype that's out there around the Internet of Things in the form of smart grid technology, it only seams reasonable that utility companies should empower their clients with the real-time data they have. For some reason the consumption information is not readily shared or available. While triggers for demand response do exist when the entire grid load is high, simple information on interval data per facility is still difficult to obtain. This leaves clients uninformed and susceptible to overages and unplanned peak demand charges. This effect is similar to the situation of receiving your child's cell phone bill at the end of every month, when it's too much and it's too late to do anything about it. Seems like a real lack of information sharing, depending on your perspective and which side of the meter you're standing on, as the provider or the consumer.
All that said, it still doesn't tell a consumer much about their overall building performance. Clients are beginning to look inward toward the energy consumption profile within the building to better understand how it is related to operational impact, employee comfort and overall cost. A typical starting point is the building management system, which controls the environmental comfort schedule and keeps everyone inside happy and productive. Not every building has one, and some facilities have more primitive controls depending on size and age of the facility. These systems often become sub-optimized over time because no one returns to re-check and re-optimize the schedule. However, they are a source of information and can be a starting point, especially when it comes to heating and air conditioning performance. This space is experiencing digital disruption, similar to many other building innovations, where artificial intelligence and machine learning make building management systems smarter, thereby changing new and existing facilities into smarter facilities.
Beyond the building management system, an entirely new approach is emerging, one looking to implement low-cost sensors and meters to better monitor and capture richer and deeper data about energy consumption. This approach can be applied to individual buildings and can scale, allowing aggregate information from thousands of facilities in a given real-estate portfolio. This approach marks the advent of sub-metering, to allow isolation around energy load for heating, cooling, lighting and plug-load, and relating it to multi-use space types like office space, common space, retail space, lab space and data center space, all within a single facility. The ability to invest in sensors and gateways has dropped below the $200 per-unit cost, and monthly monitoring and device connectivity services have dropped to below $200 per month per facility, with multi-points of measurement included.
The importance of this shift toward looking within the facility, versus just the main meter value for the whole facility, is the granular information it captures on the overall behavior of the building energy footprint. The energy signature within the building allows owners to have real-time insights that enable them to be more responsive when things are not right. They can make changes faster and in ways that can have a material impact on energy consumption well before the bill comes in at the end of the month. At Hitachi, we call this actionable insights, where the application of a simple layer of analytics on top of real-time sensor data flow from within each facility can be leveraged to continuously benchmark and trigger events, allowing course corrections that stay on top of energy savings, unplanned maintenance, operational productivity and sustainability concerns.
Smart buildings, intelligent facilities - whatever you want to call it - the ability to capture more data without adding overwhelming operation costs, is enabling new layers of information to become available. When the cost point of this technology is right, it becomes disruptive, insightful and desirable. This is an innovative technology space, and we are seeing an increased desire by clients to capture and converge facility data and forge new insights and operational performance indicators, allowing them to achieve new levels of operational efficiency.
In the not-so-distant future, we will be able to combine data sources from utility bills, building usage, occupancy and weather normalization with heating and cooling days, and even employee comfort. The convergence of this data correlates to even more relevant business goals of employee productivity or production line output. All of this seeks to lower overall building operational costs and, in the case of industrial manufacturing, produce goods in a way that makes them more sustainable. The more you know and understand your energy performance, the greater of a lasting impact you can have on the environment.
A major retail chain energy manager once said "we observed that by simply turning off our building automation systems, our energy bill doubled. We now measure everything and look for anomalies proactively to ensure client comfort is always maximized in our stores."