Office Buildings Have to Get on the Smart Grid

Back in the day, hot weather that overtaxed the power grid meant that office buildings had to turn down the air conditioning to save electricity.  Meanwhile, the employees would notice that their surroundings were getting appreciably warmer.  Today – because more buildings are connected to a smarter grid – fewer adjustments need to be made, one of those perhaps switching to a secondary power source that happens to be roof-mounted solar panels.

Writing in National Real Estate Investor magazine, Managing Editor Susan Piperato says that “Smart grids are digital networks connecting utilities, power-delivery systems and buildings.  Traditionally, when local energy grids become overtaxed, what’s referred to as a ‘demand event,’ a utility company must fire up additional power stations to meet increased demand or ask its biggest users to reduce power consumption.  If a building that isn’t connected to the smart grid receives notice of a demand event, the building engineer must manually reduce the building’s power usage in some way.  When the event is over, the engineer manually revs up the building’s energy consumption level again.  But by connecting to smart grids and utilizing demand response (DR) systems, a building can determine automatically through its building management system (BMS) how much electricity it needs at various times of day.

DR systems manage buildings’ consumption of electricity in response to supply conditions and respond to a utility company’s demand event by automatically reducing the amount of power being used or starting on-site power generation through, say, a solar panel array or wind turbine.”

Unfortunately, the majority of commercial owners are not using these highly beneficial advanced technologies.  A surprising finding of a preliminary CoR Advisors survey found that most commercial building owners and managers aren’t even thinking of connecting.

According to the survey, a mere 19 percent of buildings have some type of automated connection to the smart grid, while 32 percent are using DR systems.  CoR Advisors President and CEO Darlene Pope said that 68 percent of building owners are not planning to connect their buildings to automated smart grid systems within the next three to five years.  The survey, commissioned by Continental Automated Buildings Association and conducted by CoR Advisors, asked 25,000 commercial building owners and managers about “their attitude about smart buildings and the smart grid,” according to Pope.  The survey included approximately 12,000 buildings comprising approximately 1.2 billion SF.

A Federal Energy Regulatory Commission rule allows smart buildings in DR programs to recoup some of their investment by shedding load during times of non-peak demand and selling that excess capacity at spot pricing, Pope said.  “So if the price of electricity is $200 a kilowatt hour in Dallas in the middle of August because there’s such a demand for capacity…and you have a building in New Jersey that you want to shed load, and you want to sell it in Texas, you can do that.  While you might be paying 17 cents per kilowatt hour in New Jersey, you can sell it to people in Dallas for $200.”

Why don’t more building owners take advantage of these new technologies?  According to John Bredehorst, executive vice president with WSP Flack+Kurtz, his firm’s “more responsible clients” are already participating.  Additionally proactive clients are the exception and not the rule.  The smart grid is still nascent, and “No one wants to be a guinea pig.”  Many existing buildings lack the infrastructure to support the technology, meaning that their owners don’t have the ability to cut electrical consumption by switching to a secondary power source.

California is showing the most interest in smart-grid buildings, according to WSP Flack+Kurtz’s Clark Bisel, senior vice president.  He is managing the construction of 350 Mission Street in downtown San Francisco, which hopes to acquire LEED-Platinum status and will have smart grid connection and DR systems.  It’s a multifaceted project, but Bisel sees 350 Mission as “a very good idea from the building owner’s perspective.  Demand response is becoming more of a discussion topic,” he said, with the big electrical utilities directly approaching customers and offering competitive rates for DR programs.

“California is a hotbed for this,” Bisel said.  “Frankly, the utility crisis of 2000 is still in people’s minds, so that may be more of a reason why (smart grid and DR) is active out here.”  If there was more new construction, according to Bisel, the smart grid and DR would take off even faster.  With new construction, “You have architects, engineers, and developers all very engaged in the whole dialogue so when a utility company approaches, they find a very receptive audience.”  When it comes to existing buildings, operations are decentralized and owners are “more interested in making tenants comfortable.”

WSP Flack+Kurtz’s Bredehorst says it will take 10 years for the smart grid and DR to catch on.  With more smart buildings being constructed, he said, existing buildings will need to make alterations to stay competitive.  Additionally, utility companies need become more proactive: “They make it easy for building owners to be able to upgrade their building’s control system and tie it in with a utility,” he said.  “They need to make it so that it’ll be enough of an incentive for (buildings) to reduce their load, but also easy enough that (building owners) don’t have to tie (DR) in with their entire infrastructure and change out a lot of equipment.”