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Longevity Partners USA
19 March 2019

Smart Grids can create a revolution in the building sector: Here’s how


The hierarchical, centrally controlled electricity grid that has characterised the 20thCentury is ill-suited to the needs of the present. Increased electricity demand combined with increasingly decentralised, variable generation requires a ‘smarter’, more efficient grid. This means enhanced efficiency and reliability through automated control, two way communication, sensing and metering technologies, and modern energy demand optimisation.

This new smart grid creates a fantastic opportunity for buildings to actively participate in the electricity market. The market for Building Performance Software in Smart Buildings is forecasted to rise to $18.78Bn by 2020. Longevity Partners have highlighted four critical requirements to create a smart building revolution:

  1. Smart metering

Automated metering is perhaps the fundamental building block of the smart grid. Smart meters collect crucial real-time information around power consumption, voltage, and current, and establish two-way communication with the grid. Smart meters have been used by commercial and industrial customers for decades, but only recently have prices come down sufficiently to enable wider deployment. Indeed as of November 2017, 8.6 million smart meters had been deployed across homes and business in the UK; up from 1.2 million in 2013.

Smart meters do not just alert the grid to power outages, and negate the need for manual meter reading. They lay the groundwork for sensor based approaches, which utilise machine learning techniques to infer the complex relationships between consumption and influencing variables such as weather, time of day, occupancy and previous consumption. These can be exploited to provide energy load forecasting, allowing building systems and HVAC equipment to be optimised accordingly. In the case of the Green Hospital Project, this led to a near 20% reduction in energy consumption.

  1. Interoperability

Interoperability refers to the ability of different networks and technologies to work together. There is currently a lack of internationally recognized communication standards, which means that there is no guarantee that different smart appliances will be able to work with one another. Consumers are therefore unable to freely choose between different brands of smart thermostats and other smart-grid technologies. That’s why the Department for Business, Energy and Industrial Strategy (BEIS) has launched a consultation on its plans to introduce mandatory standards for smart appliances in homes.

Interoperability is a major barrier to smart buildings, and the wider proliferation of the Internet of Things (IoT).  Longevity Partners supports BEIS’s research to standardize smart appliances to increase their uptake in the commercial property sector.

  1. Demand response

Demand response is a reduction in demand designed to reduce peak load, and is a much more cost-effective solution to meeting peak demand and occasional demand spikes than adding costly generation capacity.

However, it is not easy to get buildings to respond to real-time prices, peak power signals or direct load control. Indeed, it takes a careful balancing of the needs of the utility company, the building owner and the tenants to keep the building’s business running smoothly while shaving its energy use during peak times. That is why large consumers, for example Universities like Oxford Brookes, are entering into contracts with aggregators, rolling out demand response systems to water tanks and on-campus heaters, allowing the National Grid to tap into 700kW of flexible capacity. Exploiting this flexibility is vital to meeting our future demand, while integrating increasing levels of variable, renewable energy in the future. London alone is estimated to have over 1 GW of invisible flexibility that, if exploited, could negate the construction of a slew of new power plants.

  1. Distributed Energy Resources

Unlike conventional power plants, distributed energy resources (DERs) cannot easily be dispatched to meet demand. With the number of DERs on the rise, and with variable generation viewed by the grid as a source of uncertainty to be addressed in real time, DERs need to become more active members of the market. These problems have seen the emergence of Virtual Power Plants (VPPs), which aggregate DERs into a virtual power station, and thus enable them to cost-efficiently integrate into the market.

Aggregation could yield a step change in the way that the grid views DERs. From diesel generators to electric vehicles to thermal energy options, aggregators are hoovering up DERs and packaging them as vital sources of grid flexibility.

What can you do now?

Whether you are a property investor, a property manager, or a tenant, smart buildings represent an area of enormous potential for the built environment. If you want to know how to better understand your consumption, optimise your energy demand, or understand how you could be a proactive member of the energy market, get in touch with Longevity Partners at [email protected].