Frost & Sullivan: The Rise of Smart Buildings in Europe

Building Automation: The Rise of Smart

Buildings in Europe

How Building Automation Can Make Europe Smarter

Neetha Jayanth, Senior Research Analyst

Building Technology

24th May, 2012

© 2012 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of

Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.

2

Focus Points

Smart Buildings: The Need for Intelligence

Smart Concepts and the Key Enablers for Growth

Smart Buildings: Progression towards Smart Buildings

Smart Buildings: Key Trend over the decade 2010-2020

Smart Buildings: Major Drivers and Restraints

Smart Buildings: Key Market Segments

Mega Trend Drivers for Smart Buildings

Building Automation Systems Revenue Forecast

Integrated Industry – Single Platform for Smart Technology

Key Players – Convergence is the way forward

The Last Word

Next Steps

3

Poll Question

Which sector do you believe will see maximum penetration of smart technology by 2020?

• Office Complexes

• Residential Homes

• Multi-Dwelling Units

• Retail & Hospitality Sector

• Public buildings (like malls)

Source: Frost & Sullivan analysis.

4

Smart Buildings: The need for intelligence

With electricity demand growing faster

than supply, there is an opportunity for

integrating ‘intelligence’ into buildings.

Energy efficiency drivers are combining

with the need to modernise electricity

supply networks. Smart technology

brings an opportunity to marry energy

management with digital communication

technology.

Smart technology is changing the way

users interact with buildings and the

way they interact with each other. With

the planned EU Directives, it will receive

the required impetus

Opportunities are emerging in all

sectors as savings in operational costs

will be encouraged in the economic

recovery phase

Outlook for Smart Technologies

Scandinavia

Spain Italy

Maturity Development Growth

Eastern

Europe Central

Europe

Energy

Demand Environment

Energy

Supply

and Costs Construction

Activity & Regulations

Connectivity

& Integration

System

Intelligence

Smart Buildings Market: Regional Life Cycle Analysis (Europe), 2012

Smart Buildings Market: Key Interlocking Issues (Europe), 2012

Alpine & Benelux

France

Germany

The United Kingdom


Smart Buildings

6

Smart Concepts and the Key Enablers for Growth

Building

Utility

System

Cities • Fully automated

‘digital’ buildings

• Continuous 2-way

communication

• Micro-generation

• Demand response

• Smart materials

• Fully integrated

building controls

Key Features

• Open architecture

• Advanced building

design

• Software tools

• Analysis & reporting

• Connectivity of

devices

• Networks of

ubiquitous sensors

Growth Enablers

Smart Building

Smart Grid

Smart

City

• Inter-connectivity

between buildings and

communities

• Virtual consumers

• Shared efficiency

gains

• Smart service

delivery (safety,

health, education etc.)

Key Features

• IP networks and

affordable broadband

• Real-time network

visualisation

• Inter-connected

advanced metering

infrastructure

• Buy-in from city

leaders

Growth Enablers

• Optimised use of

capacity

• Advanced metering

infrastructure

• Integrating renewables

• Digital intelligence

• Remote control

• Micro grids

• Virtual power plants

Key Features

• Smart metering

• Drive from utilities

• Regulation

• Energy price signals

• Energy storage

• Integrated

communications

• Sensing &

measurement

Growth Enablers

1

2

3


7

Progression towards Smart Buildings

1980 2000 1990

Evolution of

Building

Technology

Markets

2010 2020

Systems

Integration

Building

Management

and Control

Building

Automation

Green

Buildings

IT

Convergence Functional

Controllers

Home

Automation

Building

Control

Building

Automation

Smart

Buildings

Energy

Control

Construction

and

Operational

Efficiency

Building

Performance

Integrated

Networking

Energy

Management

Enhanced

Management

Intelligent

Buildings HVAC Control

Intelligent

Green

Buildings Security

Convergence

Smart

Cities Low Energy

Lighting

Micro-

Renewables

Micro-

Generation

Smart

Grids

Smart

Homes

2000 2010 2020

Emergence of

Smart and

Intelligent

Technology Advanced

Metering

Infrastructure (AMI)

Smart

Metering Power

Line

Carriers

Smart

Cities/Towns

Virtual

Power

Plants

Automated

Meter

Reading

(AMR) Home

Area

Network

(HAN)

Virtual

Consumers

Micro-

Renewables

Home Energy

Management

Home

Energy

Monitoring

Smart

Windows

Sensors in

Building

Technology

Smart

Thermostats

Open

Protocol Facility

Management


8

Key Trends over the decade 2010-2020

The initiation to “smart”

in all buildings – homes, offices

and other buildings

Smart and Green

Lighting to electrical devices

– energy efficiency is key

Economy in efficiency -

Price sensitivity due to economic

crisis

Energy conservation

Payback periods become

shorter

Penetrating existing

buildings

The untapped potential

2010 2020

2012-13

2015

Growth of

renewable

energy

generation

Supply-side

convergence Smart Meter

roll-out and

advent of

Smart Grid

Management

of buildings

through

automation

and control


9

Major Drivers and Restraints

Development of technology

Need for energy efficiency in buildings

EU Directives

Return on investment

High initial investment

Economic situation

Risk averseness across the supply chain

Limited awareness

Dri

vers

R

estra

ints


10

Key Market Segments

• Large potential

• Slow penetration

• New construction is an important segment,

but retrofit applications have a growing

penetration in Western Europe

• High revenue segment

• Better rate of adoption than residential

• Slowdown in construction

• Existing buildings remain more difficult to

penetrate, while new construction projects

provide large revenue opportunities

• Home Automation

• Smart Meters

• Home Energy Management and

Monitoring Devices

• Energy Efficient Lighting

• Micro-renewable

• Building Automation

• Building Management Systems

• Fire Safety & Security

• Energy Efficient Lighting

• HVAC & Lighting Control Systems

Commercial Sector

Residential Sector Key Building Technologies

Key Building Technologies


11

Mega Trend Drivers for Smart Building

Key Building

Technologies

Mega

Cities

Smart

Cities

Beyond

BRIC Technology

Zero

Emission Infrastructure

Smart Meter

Building Automation

Home Automation

Energy Efficient

Lighting

Micro-renewables

Energy Management

Lighting Controls

Systems

Fire and Safety

Smart Buildings Market: Impact of Mega Trends on Key Building Technologies: Europe,

2011-2020

Note: Low Medium High Source: Frost & Sullivan analysis.

Building Automation

13

Building Automation Systems Revenue Forecast

The Building Automation Systems (BAS) market revenues was

estimated at $1.8 billion for the year 2011 and is expected to grow

with a CAGR of 2.6% over the period 2011-17

-10.0

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

0.0

1000.0

2000.0

3000.0

Gro

wth

Rate

(%

)

Reve

nu

e (

$ m

illi

on

)

Year

BAS Market: Revenue Forecasts (Europe), 2007-2017

Revenues ($ million) Revenue Growth Rate (%)

Note: All figures are rounded; the base year is 2010. Source: Frost & Sullivan Analysis

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Integrated Industry – Single Platform for Smart Technology

HVAC and Sanitation

Security and Alarm

Structural Systems

Energy Management

Fire and Life Safety

Integration of building systems on the consumer end

through BAS platforms

Integration of suppliers

to provide wider and

better product lines –

moving from products

and services to

solutions

Smart

Buildings

Bu

ildin

g T

ec

hn

olo

gie

s

HVAC & R

Lighting

Micro-generation

Control and automation

Fire Detection

Fire Suppression

Fire Alarms

Security Integration

Energy Efficiency

Fire & Safety


15

Key Players – Convergence is the way forward

Energy & Utilities

Building Technologies

ICT

IBM

Cisco

Google

O2

Oracle

BT

Microsoft

Itron

Landis+Gyr

Eaton

Alstom Sharp

Siemens

Honeywell Inc.

Schneider Electric

Johnson Controls Inc.

Philips

Lighting

Emerson Legrand Bosch ABB

GE


Smart Buildings Market: Key Participants

and the Convergence of Three Industries,

Europe, 2011

XYZ Key Participants

Note:

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The Last Word

Growth of the building technology industry will center around the integration of ICT in buildings – Smart technologies are the key demand segment for growth. Ten years hence, if it’s not smart, it may not have a market.

Smart buildings will imply integration of building services on a single platform – Building automation and home automation will provide this platform for non residential and residential buildings respectively

Consolidation and highly dynamic competitive scenario – The industry will evolve through mergers and acquisitions and other consolidation efforts as companies strive to build their expertise across product markets


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For Additional Information

Chiara Carella

Corporate Communications

Europe, Israel & Africa

[email protected]

Neetha Jayanth

Senior Research Analyst

Building Technologies

[email protected]

John Raspin

Research Director

Energy & Environment

[email protected]

Andrew Thorndyke

Sales Manager

Industry

[email protected]

Business

Frost & Sullivan: The Rise of Smart Buildings in Europe