[Smart Grid Market Research] Energy Management 3.0: Advanced Systems for Commercial and Industrial Users - Zpryme Smart Grid Insights

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SMARTGRIDRESEARCH.ORG INTELLIGENT RESEARCH FOR AN INTELLIGENT MARKETTMSMART GRID INSIGHTS

ENERGY MANAGEMENT 3.0:ADVANCED SYSTEMS FORCOMMERCIAL ANDINDUSTRIAL USERS

NOVEMBER 2012

1 [PREMIUM] ZPRYME SMART GRID INSIGHTS

Copyright © 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org

Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012

Table of Contents

Executive Summary ................................................................. 2

Energy Management System Market Transition ................ 5 Recommendations and Opportunities .................................. 6

Market Overview ..................................................................... 8

State of the Market ................................................................ 8 Technology Definition ............................................................ 8 Market Drivers ......................................................................... 9 Market Barriers....................................................................... 10 Technology Benefits and Segments .................................. 11 Service Delivery..................................................................... 11

Energy Management Market Transition .............................. 13

Energy Management Systems Today ............................... 13 Energy Management Systems in 3-5 years ....................... 14 Energy Management 3.0 (6 - 10 years) ............................. 15

Global Market Value Forecasts............................................ 16

Global Energy Management Systems Market Value

Forecast, 2012 – 2020 ........................................................... 16 Global Energy Management Systems Market Value by

Technology, 2012 – 2020 ..................................................... 16 Methodology ........................................................................ 17

Key Players and Solutions ..................................................... 18

Emerging Companies to Watch ........................................ 23 Major Government Initiatives ............................................... 26

Major Regional Projects ........................................................ 27

Keys to Entering the Energy Management Market ............ 30

Zpryme’s Market Outlook, 2012 - 2020 ................................ 31




Executive Summary

Commercial energy management systems (EMS) allow

firms to reach energy efficiency goals and control energy

consumption company-wide by using proven energy

control techniques to optimize their energy efficiency.

Commercial buildings are a large potential market for

energy efficiency programs, and this includes energy

management systems. To drive this adoption, federal

programs play a key role to encourage the technological

development of enterprise grade energy management

systems for commercial facilities.

Currently, EMS offerings are focused on energy

optimization based on company-specified goals and

preferences. However, in the future, EMS will also integrate

operations optimization, and will automatically adjust

settings for the highest levels of performance, in addition

to providing energy savings.

There are several segments of the EMS market, with each

having specific needs and being at a different stage of

development. As such, vendors will need to provide

solutions specifically suited to the requirements of each

customer. To address that, several small specialized firms

are currently offering customized products suited for the

different segments, and some large firms are also

leveraging their knowledge and market presence to

introduce additional EMS products.

Overall, we expect companies will begin adopting EMS

software in increasing numbers over the next 5 to 10 years,

especially solutions that not only optimize energy

efficiency, but also integrate with other business functions

to provide both energy efficiency and operations

optimization. These systems are an amalgamation of

building management systems and advanced software

solutions that assist in managing the building functions in a

more energy efficient way to provide demand response

controls when situations within the power grid demand it.

To do this, the EMS software measures the energy

consumption and utilization of all network-connected

devices and systems to provide visibility into power usage

across the enterprise. Typical components include work

management capabilities, enhanced demand-response

applications, and analytics and forecasting applications.

Energy management is an evolving market, but we see

several opportunities for growth. Key examples include the

rising significance of social responsibility and managing

climate change; focus on increasing demand efficiency

and operating cost savings; new product offerings;

compliance with energy efficiency regulations; and

increased use of renewable energy – all of these are

driving demand for energy management solutions.

This report has been developed by Zpryme‘s Smart Grid

Insights Research Team and Zpryme‘s Smart Grid Advisory

Board.

http://zpryme.com/practices/smart-grid-insights/smart-grid-advisory-board

http://zpryme.com/practices/smart-grid-insights/smart-grid-advisory-board




Key Takeaways by the Numbers

The global energy management system market is

projected to reach $1.70 billion in 2012. By 2020, the global

market is projected to reach $9.98 billion. The market is

projected to grow at a compound annual growth rate

(CAGR) of 25%.

In 2012, North America (40%) and Europe (30%) will

account for about 70% of the global EMS market. Asia

Pacific will account for 15% of the market in 2012. By 2020,

North America and Europe will each account for 30% of

the market, while Asia Pacific will account for 26% of the

market.

North America: From 2012 to 2020, the region will

grow by 21% annually, from $0.67 billion to $3.01

billion.

South America: From 2012 to 2020, the region will

also grow by 21% annually, from $0.09 billion to $0.39

billion.

Europe: From 2012 to 2020, the region will grow by

25% annually, from $0.51 billion to $2.96 billion.

Asia Pacific: From 2012 to 2020, the region will grow

by 34% annually, from $0.25 billion to $2.55 billion.

Rest of the World (ROW): From 2012 to 2020, the

ROW will also grow by 25% annually, from $0.18

billion to $1.07 billion.

Technology Segmentation

From a system technology perspective, communication

networks represent the largest market segment in 2012,

accounting for 20% of the global market. In 2020,

communication networks will account for 18% of the

market. This equates to a projected global market value of

$0.34 billion in 2012 and $1.80 billion in 2020 (23% CAGR).

By 2020, control systems will be the largest technology

segment, accounting for 21% of the global market (vs. 19%

in 2012). This equates to a projected global market value

of $0.32 billion in 2012 and $2.10 billion in 2020 (26% CAGR).

In 2012, field equipment (15%), hardware (13%), software

(10%), and sensors (8%) will account for a total of 46% of

the global market. By 2020, these four technologies will

account for 44% of the market.

Among the six core energy management system

technologies, sensors and software are projected to grow

the fastest (30% CAGR).




$1.70 $2.06 $2.50

$3.05 $3.72

$4.54

$5.89

$7.66

$9.98

$0

$2

$4

$6

$8

$10

$12

2012 2013 2014 2015 2016 2017 2018 2019 2020

Global EMS Market Value Forecast

CAGR = 25%

2012 to 2020 (in U.S. billions)

(figure 1, source: Zpryme)

Field

Equipment, 15%

Hardware, 13%

Sensors, 8%

Software, 10%

Other , 15%

Comm.

Networks, 20%

Control System,

19%

Global EMS Market Segmentation by Technology

2012 - % of Global Market


40% 38% 37% 35% 34% 32% 32% 31% 30%

5% 5% 5% 5% 5% 5% 4% 4% 4%

30% 30% 30% 30% 30% 30% 30% 30% 30%

15% 16% 17% 18% 19% 20% 22% 24% 26%

11% 11% 11% 12% 12% 12% 12% 11% 11%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2012 2013 2014 2015 2016 2017 2018 2019 2020

Global EMS Regional Market Segmentation

2012 to 2020 - % of Global Market


ROW

Asia

Pacific

Europe

South

America

North

America

Field

Equipment, 9%

Hardware, 10%

Sensors, 11%

Software, 14%

Other , 17%

Comm.

Networks, 18%

Control System,

21%

Global EMS Market Segmentation by Technology

2020 - % of Global Market





Energy Management System Market Transition

(table 1, source: Zpryme) Energy

Management

Systems

Description Primary End-use Sectors Type of Solution Providers

(% of market served)

Key System

Features/Characteristics

Today

EMS mainly employed in large

buildings and facilities to decrease

energy costs by controlling,

monitoring and assessing the

energy use of lighting, HVAC,

machinery, thermostats, and other

areas that use large amounts of

energy.

Large commercial and

industrial customers

Multinational corporations

Large commercial building

and real estate owners and

managers

Federal and State

Governments

Multinational corporations (75%)

Niche solution providers (25%)

Cloud based

Preventive analytic

modeling functions

Control hundreds of

devices across several

locations

Automatic device

start/stop functions

In 3 – 5 years*

The EMS will integrate energy

efficiency with business processes,

management and operations.

This will enable integration and

control by department,

appliance, equipment, IT

infrastructure, human resources,

etc.

Mid-sized manufacturing

facilities*

Large retail operations*

Mid-sized corporate offices*

Healthcare/Hospitals*

Multi-unit apartments*



Start-ups (5%)

Utilities (5%)

Full energy profile

visualization

Customized to user needs

Micro-level device control

M2M communication

Advanced demand

response capabilities

In 6 – 10

years**

(Energy

Management

3.0)

The EMS will allow businesses to

align energy efficiency with

business goals, and be able to

integrate and communicate with

energy aggregators, utilities,

distributed energy resources, and

whole sale electricity markets.

Small manufacturing

facilities**

Small and medium retail

operations**

Small offices**



Start-ups (10%)

Utilities (15%)

Plug-n-play

Highly interoperable

Energy-management-as-a-

service (EMaaS)

Control thousands of

devices across multiple

locations

*In addition to the functions, features, and sectors mentioned in ‗Today‘

**In addition to the functions, features, and sectors mentioned in ‗Today‘ and ‗in 3 – 5 years‘




Recommendations and Opportunities

Recommendations

1. Vendors looking to enter the EMS market need to

take a long-term view of the opportunity. The

current global market is only $1.7 billion, but will

grow to $10 billion by 2020. They must also

understand the regional nature of EMS, with 70% of

current expenditures being in either North America

or Europe.

2. EMS solutions consist of several components, namely

hardware, software, sensors and control systems. To

get early traction, vendors need to be

interoperable, plug-and-play, and compatible with

the customer‘s communications network.

3. Vendors must also be careful in targeting the right

types of customers. EMS offers the most immediate

value to large consumers of energy, such as

industrial or commercial facilities and campuses.

While small businesses represent the largest number

of physical sites, the ROI is more difficult to gauge,

and this end of the market will develop later as EMS

costs come down and the track record is more

proven.

4. Utilities need to view the value proposition of EMS

beyond ROI. In the U.S., smart meter stimulus

funding, the Better Building Initiative and the ISO

50001 certification are examples of how

government and industry bodies are working to

promote solutions that make businesses more

environmentally responsible and better global

corporate citizens. These are key value drivers that

utilities can use to get their customers to see benefits

beyond cost savings for EMS.

Opportunities

1. North America and Europe provide the most

immediate opportunities for vendors in the energy

management space, and combined, currently

account for 70% of the market.

2. By region, the U.S., Canada, U.K., and Germany are

four countries that have adopted these

technologies at the highest rate over the past few

years, and are expected to continue leading the

market.

3. While North America and Europe drive short-term

demand, the long-term growth opportunity includes

Asia. During the forecast period, North America‘s

market share will decline, Europe‘s will remain

constant, but Asia will steadily grow from 15% share

to 26% of the global market by 2020.

4. In Asia, the most immediate opportunity is Japan,

where industries have been charged with reducing

their energy consumption as a result of the

Fukushima disaster that happened in 2011.

5. Advanced energy management systems will

become more attractive financially when they

enable individual customers to sell power back to

the grid. This capability will emerge as smart meter




deployments reach critical mass, and as

communications networks become more integrated

with the smart grid.

6. Companies with multiple locations stand to benefit

from advanced EMS deployments in terms of

aggregated billing capabilities. Not only will

advanced analytics help optimize power

consumption across all sites, but they will streamline

the data management, making the billing process

simpler and more accurate.

7. On a more granular level, EMS will provide real time

visibility into energy consumption with the ability to

control the usage of any endpoint connected to

the data network. This will provide businesses with

unprecedented capability to proactively manage

energy use, and allow utilities to make better use of

dynamic pricing with customers, which will help

align energy supply with real time demand

conditions.




Market Overview

State of the Market

Deployment of the Smart Grid and smart meters enable

business management to understand their consumption,

as well as take measures to lower consumption and

energy costs. To date, energy management systems have

been adopted primarily in large industrial facilities,

however use in other business settings is increasing as

executives become more aware of the benefits they

produce. In addition, technological advances will drive

adoption by reducing prices and creating products that

will not only optimize energy efficiency, but also optimize

operations. Finally, economic recovery will further propel

adoption, as firms will have greater ability to make

investments in energy efficiency.

Commercial buildings currently consume approximately

40% of all energy or $400 billion per year in the United

States, making them the largest sector of the energy

market. Given the size of the market, reducing

consumption in the commercial market will significantly

increase overall grid reliability.

Technology Definition

One way that a building is able to decrease its overall

consumption is through the deployment of an energy

management system (EMS). It does this through utilizing a

number of proven energy efficiency programs, such as

load shifting, duty cycling, optimal start and end time,

thermal heat utilization, energy storage, response to

weather changes, time of day scheduling, demand

limiting, and renewable energy generation management.1

The business specifies preferences and goals that govern

automation activities and create cost savings. In addition,

advanced analytics allow management to make more

cost effective and energy efficient decisions.

For the purposes of this report, the term ‗commercial‘

refers to both commercial and industrial businesses. Commercial Energy Management Systems (EMS) are a

suite of applications and technologies that enable users to

monitor, control, and optimize their use of energy. The

typical energy management system is comprised of the

core components described below.

EMS Core Components (table 2, source: Zpryme)

EMS Component Description

Field equipment

Measurement devices installed in a facility, building, or

business. Examples include sub-meters, cameras, power

analyzers, and media gateways

Software

Proprietary software needed to integrate EMS with user

operations/ systems. This includes software that enables

additional functionality to an existing EMS.

Control system

(user interface)

Main system interface that manages, controls, and

communicates with the entire EMS. Users optimize and

program the EMS with the control system.

Hardware

Physical equipment used to integrate EMS such as servers,

user work stations, backup power suppliers, and mobile

monitoring devices such as tablets.

Communications

network

Communication equipment and architecture that

connects and enables the transmission of data and

information in the EMS.

Sensors

Wireless or wired sensors placed throughout an installation

to measure power and/or communicate device data.

Some devices or equipment may come installed with EMS

compatible sensors.

1 www.eisalliance.com/documents/EIS_A_CEMS_WP.pdf

http://eisalliance.com/documents/EIS_A_CEMS_WP.pdf




Typically, an EMS comprises of system placed in the

customer's premise, including hardware and software,

designed to control the operation of other energy devices

according to customer preferences and objectives such

as reducing energy costs, or maintaining comfort or

convenience. Controlled devices could include, but are

not limited to, security, thermostats, lighting, HVAC,

appliances, large pieces of equipment, and even IT

infrastructure such as servers, computers, and

communication networks. Among other control inputs, an

energy management system can accept energy pricing

signals from a utility or third party energy service provider.

The EMS of the future will further integrate energy

efficiency with strategic business goals. Because future

business energy management systems will control more

devices, from individual electrical outlets to the individual

lights and pieces of machinery, the EMS will go a step

further than current capabilities to both control energy

and optimize production efficiency.

It will utilize occupancy sensors and scheduling to turn off

individual outlets to reduce vampire energy, shift the

storage of information to maximize server use, while

leaving critical outlets protected and backed up by a

storage system to maintain constant operation. It will even

perform programmable functions like copying and

computer maintenance and updates during non-peak

times. By integrating operations with energy efficiency,

firms will be able to better maintain equipment, reduce

downtime, improve production and maximize overall

profitability.

Market Drivers

Energy management is an evolving market and end users

are investing selectively in energy management solutions.

However, the market provides several opportunities for

growth as new companies focused on the space emerge,

and longstanding IT companies and building

management system companies gravitate to this growing

market. Several factors are driving demand for energy

management solutions including rising significance of

social responsibility and climate change; focus on

increasing demand efficiency and operating cost savings;

new product offerings; compliance with energy efficiency

regulations; and increased use of renewable energy.

By using energy management solutions, firms are able to

respond to government regulations to reduce carbon

emissions; to employee, customer, and community

requests to operate in an environmentally friendly manner;

and to shareholder demands to decrease costs and

produce higher returns. There are several approaches to

reducing the carbon footprint, from promoting eco-

friendly practices to changing energy production methods

to establishing and enforcing carbon emissions limits.

While the U.S. has yet to enact federal carbon regulations

or pricing laws, other government regulations affect future

energy supply strategies. In Pennsylvania, for example, a

new law requires a 4.5 percent reduction in peak energy

demand by 2013. Moreover, by 2015, U.S. stimulus

spending promises to support an additional 50,000

megawatts of renewable energy sources. These types of

energy sources present intermittency challenges: The wind

does not always blow, and the sun does not always shine.




As a result of intermittency, energy management systems

must incorporate rapidly accessible response reserves for

use during power shortages. Furthermore, plug-in hybrid

and all-electric cars, such as the Nissan LEAF and Chevy

Volt, promise to help reduce both carbon emissions and

dependence on imported oil; however, they also lead to

an increase in demand for power. Thus, energy

management systems are required to assist in minimizing

the energy requirement of these vehicles.

The use of energy is the second-largest variable cost in the

manufacturing process after raw material costs. Energy

use changes from one hour to the next depending on

many influencing factors, such as outside temperatures.

Since energy needs can change abruptly, the energy

infrastructure must always have the capability of meeting

the peak demand. Newer, informed demand-response

technologies help shape energy demand, predict

available load, and then precisely shape that load. In

particular, informed demand response enables distributed

intelligence end-points, verifiable results, accountability

and measurement, and comprehensive data analysis.

Organizations require enterprise-level reporting for

hundreds of thousands of devices across their highly

distributed offices and data centers worldwide. Therefore,

there is an increasing demand from global enterprises for

more depth and breadth to their energy management

solutions. This allows them to seamlessly scale to and

support multiple locations around the world. Rapid energy

modeling, app stores, energy kiosks, cloud computing, big

data, online communities, and continuous optimization

are now required in the vocabulary of market players.

In the U.S., for example, BuildingIQ (an energy

management software company) and Schneider Electric

(a global specialist in energy management) announced in

April 2012 that they were collaborating to provide

commercial building owners with a next generation

solution for energy management. This partnership provides

customers with a cloud-based energy management

system that automatically and continually reduces

Heating, Ventilation, and Air-Conditioning (HVAC) energy

use and connects commercial buildings to the Smart Grid.

Market Barriers

Getting consumers to understand that the use of energy

management systems can empower them to do

something about their energy costs is the biggest market

barrier for the energy management system market. Most

companies and customers realize there are means to

reduce energy costs, but they lack information about

what is happening within their energy systems. Energy

management systems can provide a window of how the

equipment in their buildings is operating, monitor

performance, and identify areas of potential savings.

Financing installations is a problem. Vendor providers can‘t

provide up-front costs, and equity leasing firms are not

interested in entering the market. If they would, it‘s

predicted that the applications would explode.

Last, a burdensome regulatory environment, a lack of

standards, and acceptance of modern communications

networks are also holding back the potential of the energy

management systems market.




Technology Benefits and Segments

Businesses that deploy an EMS first benefit from reduced

energy consumption, which leads to reduced energy

costs, reduced GHG emissions, and reduced pollution.

Our research finds that peak energy demand (load) can

be reduced 10% to 20% through the use of advanced

energy management systems. In addition, the firm will be

more knowledgeable about consumption and better able

to identify the high consumption areas, as well as plan for

the future. Modeling also lets the firm try out decisions

before they are implemented, allowing the firm to

determine the optimum settings and prevent potential

problems.

Any areas performing out of range can be quickly and

automatically scheduled for maintenance. In addition,

energy optimization can increase the utilization of

equipment, and coordinate energy efficiency programs

across multiple locations, thus reducing overall energy

costs for a business. The EMS market has several segments. First, the large

industrial, commercial, and government segment has

been implementing EMS for some time as energy

accounts for a significant portion of their operating costs.

In the near future, the large industrial market will

implement improvements, especially as technology

enables further integration with operations management. The Mid/Medium commercial segment includes retail

facilities, manufacturing facilities, and hospital and

medical buildings. These mid-sized facilities are not as

dependent on energy consumption as large facilities and

are more affected by the cost of the energy

management system. Although there is considerable

interest in energy management systems, widespread

adoption will not be possible until the cost decreases and

the size becomes more scalable and customized. The office business market is the largest segment of the

commercial building market. Offices have very specific

needs and critical equipment, such as servers, that must

be continually on. Energy waste can be significantly

reduced through implementation of an energy

management system. The segment is poised for

widespread adoption, however the cost must be reduced

and the energy management system must control all

devices, while insuring the continued operation of others. Finally, small businesses (those with under 500 employees)

represent a huge portion of the commercial market. In

2009, there were nearly 27.5 million small businesses in the

United States, representing 99.9% of all businesses. In 2008,

21.4 million firms had no employees. The size of the market

is enormous, however facilities and capital are very

limited, and ROI is extremely important. For that reason,

energy management systems for small businesses must be

relatively inexpensive and extremely customizable.

Service Delivery

Initially advanced energy managed systems and services

will be provided and managed by technology vendors,

third-party aggregators, and eventually utilities.

Management of these systems will take place under one

of the three scenarios below.




Vendor or third-party managed: The solution provider

will manage the user‘s system from a central location

(off-site). They are typically the least expensive solution,

as they have the lowest capital investment and a

monthly management fee. This EMS is cloud-based

and business executives can link remotely to modify

preferences.

User managed: In this case, a building or company will

manage the solution on site or from a central location.

The executives directly input preferences and

parameters, and staff monitors the system to perform

overrides or manual operations. These systems typically

have a significant initial capital investment, and require

continued maintenance costs. In addition, human

resources are also utilized to manage the EMS.

Utility managed: The utility will manage the

solution/service for the user (commercial/residential

building or facilities). However, it is extremely costly due

to extensive deployment costs and could lead to

significant problems, such as customer equipment

failure due to duty cycling. In addition, the utility would

manage numerous clients, decreasing customization

by businesses and preventing individual efficiency.

Prices for advanced energy management services vary

significantly. Companies that work with smaller entities

such as residential homes, grocery stores, hotels, and

telecom applications charge as little as $1,500 for

upgrades of existing customers, $5,000 - $7,000 for most

installations, and up to $50,000 to $100,000 for large

customers. The average ROI time frame is 2 – 4 years for

such systems. In addition, customers are normally charged

a monthly subscription fee that is determined by the

overall size and number of locations each customer has.

Initially, utilities will not be interested in providing these

services unless they are reasonably progressive. Due to the

regulatory landscape, utility decision-makers are keen on

keeping the status quo due to potential liabilities. They are

ultra-cautious and hesitant to engage in programs and

services that might disrupt their operations.

They are open to looking at utility rebates but won‘t be

openly receptive to discussing the alternatives being

offered by these companies until they can demonstrate

critical mass, which is normally considered to be a

successfully installed base of at least 300 units.

Overall, next generation services will be delivered and

managed through the Internet cloud. However,

progressive utilities seeking new revenue streams will

eventually enter the market.




Energy Management Market Transition

As energy management systems become more

advanced, they will go through a series of changes. First,

the users that utilize energy management systems will

expand to comprise a larger section of the small to

medium sized business market. In addition, as adoption of

energy management systems increase, benefits to users

and the overall electric grid will also increase. Next, the

technology will advance significantly, enabling the

potential to control thousands of devices across multiple

of locations. Finally, seamless integration with the electric

grid, distribute generation resources, and whole sale

electric markets will become a key feature of the energy

management systems of the future.

Energy Management Systems Today

Currently business scale energy management systems are

employed in facilities large enough to consume a very

high amount of energy, operate many pieces of high

consumption equipment, coordinate multiple buildings, or

where energy availability, reliability, and security are a

priority. Industrial facilities frequently utilize energy

management systems because they employ a number of

very high energy consuming devices. Large automotive,

food production, and other energy intensive industries also

utilize energy management systems. Universities frequently

utilize energy management systems to manage energy

consumption in multiple buildings across their entire

campus. Finally, government facilities also employ

enterprise energy management systems, both due to the

size of their facilities, and their security and efficiency

requirements.

Several benefits of employing corporate energy

management systems are being experienced by its users.

The primary benefit of utilizing an energy management

system is reducing energy consumption. Reducing energy

consumption provides a number of secondary energy

benefits including reducing the energy cost, reducing

greenhouse gas emissions, and reducing the carbon

footprint for the firm. Because the firm would reduce

energy consumption, it would require less energy from the

grid, thus creating a more reliable grid. Another benefit

firms experience is increased knowledge about its energy

consumption. Finally, this increased knowledge also

improves documentation and compliance of

environmental and other regulatory requirements.

Several key pieces of technology enables business energy

management systems to integrate disparate systems to

offer energy reduction for the firm. Energy sensors can be

attached to energy consuming equipment, allowing the

energy management system to monitor and control the

devices. These sensors are becoming integrated with new

equipment, as in smart appliances, such as air

conditioners, water heaters, and security systems. In fact,

the motion sensors employed by security systems become

more important as they provide valuable information

about occupancy and feedback about facility use. The

more devices that can be connected to the energy

management system, the more valuable the system

becomes for the firm. Energy management system

software is exceedingly important, as it takes the

information obtained from the multitude of devices and

sensors and analyzes it to monitor and manage energy

facility-wide. Also, additional features are being added,




such as GIS integration, modeling and renewable energy

integration. Of course, renewable energy integration

includes solar panels, wind turbines, and all other

equipment associated with renewable energy generation.

Finally, energy management systems require a dedicated

computer terminal or control center to manage its

network of connected devices. Increasingly, cloud based

systems are being deployed to allow remote monitoring,

control, and utilization.

Energy Management Systems in 3-5 years

In 3-5 years the enterprise grade energy management

system will have expanded beyond the large industrial,

manufacturing, government, and university market. At this

time it will have expanded to offices, large retail stores,

global conglomerates, building and apartment operators,

and the primary education sector. In addition, hospitals

and medical buildings will also begin to utilize facility

energy management systems, as they are highly

dependent on energy reliability, especially during

emergency situations.

In addition to benefits currently experienced by firms

utilizing energy management systems, numerous other

benefits will be experienced. The energy management

systems will be controllable to the individual device level.

In addition, systems will be able to suggest opportunities

for additional savings, such as opening windows, and

cycling the air conditioner. This will provide additional

energy efficiency and cost savings, further lowering

operational costs, increasing profits, and increasing cash

flow. These energy management systems will also offer

integration with natural gas, water and cable systems,

creating an integrated total energy management system

capable of optimizing all resources. Automation will also

be key, as firms will receive automatic notifications of any

equipment performing outside the normal range, and the

energy management system will also schedule

maintenance and repairs, thus automatically reducing

downtime and increasing production. This will also

increase the lifetime of the equipment and minimize

equipment failures. The main focus of energy

management systems in 3-5 years will be integrated

energy efficiency with business management and

operations. The firm will benefit from being able to

prioritize devices, thus maintaining consistent operation of

critical systems while minimizing energy costs, such as

moving data to one server while shutting down a

secondary server when it is not needed.

The energy management systems will evolve to integrate

business information by department, appliance,

equipment, IT infrastructure, human resources, etc. The

system will use advanced analytics and modeling to make

predictions, detect patterns, and manage systems based

on this information. Because the firm will be able to

control energy to the individual device level, most new

building and office equipment will have to be produced

with sensors allowing control by the energy management

system. Next, commercially produced sensors will be

available to integrate with older appliances, such as

computers, copiers, fax machines, phones, etc. Finally,

advanced weather devices will also integrate with

renewable energy generation and modeling technology

to optimize the load profile of business users. Examples of

this weather technology include thermostats, barometers,

and hygrometers. In conclusion, technological




advancements integrating all areas of business

information, advanced analytics, sensors, storage, and

weather devices will enable both manufacturing firms and

large office and retail facilities to experience the

numerous benefits of utilizing business energy

management systems.

Energy Management 3.0 (6 - 10 years)

Within the next 10 years, small businesses will realize the

potential benefits of employing an energy management

system and will look for suitable options to meet their

needs. The use of energy management systems will

expand to include small to medium size businesses such as

small retail facilities, restaurants, and small offices. These

systems will be smaller, inexpensive, and highly

customizable.

The benefits firms experience by employing a business

energy management system will be based on

customization and integration. Again, business operations

will be of primary focus, and will allow businesses to align

energy efficiency with business goals. One way the

energy management system achieves this benefit is

through the ability to prioritize energy functions by business

impact. The energy management system will evolve to

the extent that the operational goals can be input into the

energy management system and the system will be able

to discern patterns, and make predictions to guide energy

management efforts. This will result in the energy

management system warming up equipment, turning off

outlets to reduce vampire energy, and optimize staff

deployment. In addition, the energy management system

will extend the life of equipment by detecting irregularities,

utilize the most efficient equipment first, and even perform

routine maintenance automatically. In addition, the

system will be able to integrate and communicate with

energy aggregators, utilities, distributed energy resources,

whole sale electricity markets, and across thousands

devices located at different locations.

For these benefits to be realized, technology must be

enabled. First the energy management system will

become scalable with customization features that allow

both pre-set programs and a high level of individualization.

The energy management system will also develop plug-

and-play capabilities that offer the ease of set-up for all

users. One key development in the energy management

system will be the ability to integrate data from every

business segment, including inventory, purchasing, human

resources, billing, IT, maintenance, etc. Another

technological step will be the ability to enter operational

goals and then translate those goals into an appropriate

and optimum course of action. The software will be able

to utilize real-time data to make instantaneous corrections

to meet said goals and optimize energy. The software will

also be able to offer different options to obtain the goals,

as well as suggest improvements to achieve better results

across systems or departments.




Global Market Value Forecasts

Global Energy Management Systems Market Value Forecast, 2012 – 2020

(table 3, source: Zpryme, in U.S. billions)

Region 2012 2013 2014 2015 2016 2017 2018 2019 2020 CAGR

North America $0.67 $0.78 $0.92 $1.07 $1.26 $1.47 $1.87 $2.37 $3.01 21%

South America $0.09 $0.10 $0.12 $0.15 $0.18 $0.21 $0.26 $0.32 $0.39 21%

Europe $0.51 $0.62 $0.76 $0.93 $1.13 $1.38 $1.78 $2.29 $2.96 25%

Asia - Pacific $0.25 $0.33 $0.42 $0.55 $0.71 $0.93 $1.30 $1.82 $2.55 34%

ROW $0.18 $0.23 $0.28 $0.35 $0.44 $0.55 $0.69 $0.86 $1.07 25%

Total $1.70 $2.06 $2.50 $3.05 $3.72 $4.54 $5.89 $7.66 $9.98 25%

Global Energy Management Systems Market Value by Technology, 2012 – 2020

(table 4, source: Zpryme, in U.S. billions)

Technology 2012 2013 2014 2015 2016 2017 2018 2019 2020 CAGR

Field Equipment $0.25 $0.28 $0.35 $0.39 $0.43 $0.47 $0.59 $0.77 $0.90 17%

Hardware $0.22 $0.27 $0.30 $0.34 $0.41 $0.45 $0.59 $0.77 $1.00 21%

Software $0.17 $0.23 $0.28 $0.37 $0.45 $0.59 $0.77 $1.00 $1.40 30%

Communication Networks $0.34 $0.41 $0.50 $0.58 $0.71 $0.86 $1.06 $1.38 $1.80 23%

Control System $0.32 $0.39 $0.50 $0.64 $0.78 $1.00 $1.30 $1.61 $2.10 26%

Sensors $0.14 $0.16 $0.23 $0.27 $0.33 $0.45 $0.59 $0.77 $1.10 30%

Other $0.25 $0.31 $0.35 $0.46 $0.61 $0.71 $1.00 $1.38 $1.70 27%

Total $1.70 $2.06 $2.50 $3.05 $3.72 $4.54 $5.89 $7.66 $9.98 25%




Methodology Zpryme utilized secondary research sources, publicly

available sources, government announced plans, and

Smart City, Smart Grid, and Building Efficiency plans to

analyze the Energy Management Systems (EMS) Market for

commercial and industrial users. In-depth industry

interviews were also conducted to better understand the

market drivers, demand, and opportunities. Qualitative

assessments were made by Zpryme‘s research team that

take into account both the primary research

(meetings/interviews) and secondary research findings to

assess the market segments of interest.

Finally, time series forecasting was used to project market

values from the baseline data obtained from primary and

secondary research methods. Other variables accounted

for in our models include but are not limited to:

Energy demand

Energy/fuel prices

Economic growth (GDP growth)

Government stimulus

Government goals

Renewable generation targets

Private sector capital investment.




Key Players and Solutions Currently, Energy Management Systems for businesses are

offered by a group of specialty firms, as well as

multinational firms offering a range of services. IBM: IBM has recently introduced its Smart Building and

Power Systems Energy Management Program. IBM

integrates a building's diverse systems including security,

lighting, doors and windows, CO2 sensors, and even

badge readers into an illustrative analytics program

capable of making predictions and modeling decisions.

The solution provides visualization of key benefits and goals

including reliability, efficiency, performance and

availability. IBM has been named one of the top four firms

leading the way in Enterprise Energy Management

Systems, and the firm's establishment in diverse sectors of

the energy industry makes IBM one of the most trusted

firms in the field and its product is suitable for large firms

already utilizing IBM products.2

Another solution offered by IBM is IBM TRIRIGA. IBM TRIRIGA

provides a single system to manage the life cycle of

facilities. It delivers business analytics, critical alerts and

automated processes to increase visibility, control &

automation of real estate management, capital projects,

space management, facility maintenance and energy

management. IBM TRIRIGA provides an integrated

workplace management system to increase operational,

financial and environmental performance of facilities.3

2 www-03.ibm.com/systems/power/software/energy/solutions.html 3 www-01.ibm.com/software/tivoli/products/ibmtrir/index.html

IBM® TRIRIGA® Energy Optimization combines real-time

systems monitoring with facilities and event management.

It helps analyze and optimize facilities operations, reduce

energy expense, and improve asset management and

reliability.

Smarter Rebuilding in New Orleans

Tulane University's School of Architecture, a program

distinguished by its focus on community engagement and

environmental sustainability, has turned to IBM Intelligent

Building Management and Johnson Controls to advance

its own smarter buildings evolution in the wake of

Hurricane Katrina's destruction six years ago. As the largest

private employer in the City of New Orleans, Tulane

University has made significant advances in rebuilding in

more environmentally sustainable ways.

The first IBM project is helping to transform the home of

Tulane's School of Architecture, the century-old

Richardson Memorial Hall, into a "smarter building living

laboratory," using IBM Intelligent Building Management

while maintaining respect for its historic status. The school

aims to arm a new generation of architects with

techniques that will allow historic buildings to be more

efficiently adapted for modern use.

The IBM project will bring together building technology for

heating, cooling, lighting and water to act in a more

holistic fashion for better results. The building will have

intelligence to monitor itself and communicate how it

should be most efficiently operated, significantly reducing

the natural resources it currently uses.4

4 www-03.ibm.com/press/us/en/pressrelease/34694.wss

http://www-03.ibm.com/systems/power/software/energy/solutions.html




IBM to Monitor 50 Federal Buildings

IBM has won a contract to develop and install smart

building technology in 50 of the U.S. federal government‘s

most energy-consuming buildings, and the resulting data

could help reduce operating costs across the General

Service Administration‘s entire inventory of nearly 182

million square feet.

The GSA says this initiative will save taxpayers up to $15

million annually by connecting building management

systems to a central cloud-based platform. In the first year,

50 buildings will be integrated on this building

management system. As additional federal buildings are

constructed and other facilities are upgraded, the

platform will manage those buildings, too.

Under the terms of the contract, IBM will develop a system

to monitor building performance nationwide and stream

data to a central facility. The technology will link major

building controls, and when the system is fully integrated,

tenants will be able to view the performance of their

buildings on dashboards with real-time metrics on energy

savings. They will also see recommendations on how to

further increase efficiencies.

GSA says it will then use the data and analytics to save

energy and reduce costs across its entire fleet of buildings.

The contract is part of GSA‘s larger smart building strategy

to reduce energy use. The agency‘s plan to meet the

requirements of President Obama‘s Executive Order 13514

goal of reducing energy consumption in federal buildings

by 30 percent by 2015, using fiscal year 2008 as a baseline.

Emerson: Emerson Process Management, an Emerson

business, is a leader in helping businesses automate their

production, processing and distribution in the chemical, oil

and gas, refining, pulp and paper, power, water and

wastewater treatment, mining and metals, food and

beverage, life sciences and other industries. The company

combines products and technology with industry-specific

engineering, consulting, project management and

maintenance services. Its brands include PlantWeb™,

Syncade™, DeltaV™, Fisher®, Micro Motion®, Rosemount®,

Daniel™, and AMS suite.

Emerson‘s Ovation system with SCADA technology

integrates all processes, not only the control of

mechanical equipment such as turbines, boilers, pumps

and mills, but also the control of electrical equipment, all

performed from a common platform. The Ovation

controller combines technologies and Ethernet networking

which enables an interface with multivendor equipment in

the low and medium voltage arenas. It includes

capabilities for the automation, monitoring and control of

actuators, variable speed drives, automatic voltage

regulation, transformers and generator protection.

Ovation also supports specific protocols designed for the

power industry for data exchange between generating

facilities and dispatch centers, and can be installed in new

or existing enclosures. Emerson also provides a CSI 6500

Machinery Health Monitor which combines protection and

prediction, with real-time performance monitoring and

process automation. Integrated with Ovation, it provides

the enterprise-wide information needed for real-time

decision making.




Barking Power LTD., one of the largest independently

owned generation plants in the UK, successfully installed

Emerson‘s Rosemount wireless acoustic transmitters to

identify failed steam traps, leaking valves, and boiler tube

leaks to improve the efficiency of its Combined Cycle Gas

Turbine Power Station in London. Using the wireless

networks already in place, additional devices can be

added at a much lower cost than if they had to be wired-

in individually.

Johnson Controls: Johnson Controls provides equipment,

controls and services for heating, ventilation, air

conditioning, refrigeration and security systems to increase

energy efficiency and lower operating costs in buildings.

Their Metasys© building management system, with IT-

based infrastructure, software and wireless capabilities,

provides monitoring and control of all building systems,

including comfort controls for temperature and humidity,

lighting, fire safety, and security equipment. In addition,

one of their strategies is to play a significant role in the

growing market for demand response services by enabling

smart buildings to interface seamlessly into the grid.

To enhance their position in this market, the company

acquired EnergyConnect Group, Inc. to create a new

level of building intelligence. EnergyConnect‘s demand

response technology and service platform provides

energy managers and facility operators with real-time

energy information and access to energy markets to

manage their energy use.

Johnson Controls engineered a $3.8 million facilities

upgrade for Pioneers Memorial Hospital in Brawley,

California to improve operational efficiency by reducing

the cost of natural gas, electricity and water that will pay

for itself in 10 years. The upgrades included low-flow

fixtures to conserve water, enhanced lighting, retrofitted

heating, ventilation and cooling systems, and a new 630

panel photovoltaic system, all linked by the Metasys©

building management system to monitor and control the

performance of Pioneers‘ facilities.

Siemens: Siemen‘s Totally Integrated Automation (TIE)

concept for energy management offers the integration of

all types of products and solutions, including the

manufacturing systems of other vendors. Their product

spectrum extends from automation and drive

technologies to system integration using industrial software

to technology-based customers. Their products allow

companies to digitally plan and simulate entire production

plans and manufacturing processes to optimize them prior

to commissioning.

Their SPPA-M3000 is an energy management suite of

modules for power plants and fleets which provides

precise detection analysis along the entire workflow

processes. The suite consists of five modules: Plant

Management, Early Fault Warning, Generation Planning

and Monitoring, Business Performance Monitoring, and

Process Information Management.

Their ―b.data‖ Energy Management product creates

transparency in infrastructure processes, making

heterogeneous system landscapes easier to navigate, due

to the provision of a source-related energy cost allocation

and the ability to transfer data into an accounting system.




Schneider Electric: Schneider Electric provides a product

called StruxureWare which is comprised of platform of

applications and software suites that allows companies

visibility into energy, other resource usage and business

needs across buildings, industrial plants, and data centers.

Each suite delivers seamless integration with third-party

offers and legacy systems, as well as a scalable platform.

Their Resource Advisor module is an online carbon and

energy reporting portal. This enterprise level software-as-a-

service (SaaS) tool allows end-users to visualize energy cost

and resource usage data, capture and report carbon

emissions accurately, and manage all energy efficiency

projects in one location.

The Energy Operation module is also a SaaS tool which

transforms data into essential energy information to

identify areas of continuous improvement to reduce

operating expenses. The Building Operation module

provides integrated monitoring, control and management

of energy, lighting, fire safety, security and HVAC.

The Power SCADA Expert module is a real-time monitoring

and control software solution for large facility and critical

infrastructure operations. It provides real-time data

intelligence for power distribution through alarming and

graphical interface functions. The Process Expert module is

the software that integrates the control application, the

supervision, and the field devices in a single environment.

In the fourth quarter of this year, Schneider Electric will

release the Security Expert module to encompass video,

access control and building management, as well as the

release of an Asset Operation module in 2013.

Honeywell: Honeywell provides energy and emission

management solutions to help manufacturers monitor,

report, analyze, and reduce greenhouse emissions.

Honeywell experts combine their knowledge of radio

frequency fundamentals and wireless networks with their

experience in process control networks and cyber security

to provide the most secure and high performance wireless

network for a facility.

Their Energy Dashboard product provides a complete

integration with the overall information and work

processes of a manufacturing facility.

Their SentientSystem is an integrated suite of modules

specifically designed to address boiler, boiler cleaning,

turbine cycle and unit optimization to provide asset

management to utility companies.

Honeywell‘s Experion PKS transforms process control

beyond traditional DCS functionality by unifying people

with process variables, business requirements and asset

management. Integrated with the Experion PKS, their

Digital Video Manager (DVM) product presents video as

the next generation process sensor to automate the

detection of events and improve the speed and accuracy

of operator response to process upsets.

Honeywell also provides a highly scalable, integrated,

multi-server SCADA solution that incorporates applications

for human machine interface (HMI) to address complex

remote automation requirements. They also provide a

specialty quality control solution, the HC900, for the pulp,

paper and rubber industries.




In the latter regard, Honeywell was selected on May 16,

2012, by Mitsubishi HiTec Paper Europe GmbH, a leading

European specialty paper manufacturer, to replace its

current quality control systems with Experion MX at its

production facility in Bielefeld, Germany.

Power Measurement Limited: The company has been

awarded a $3 million grant from the Government of

Canada to participate in a pilot project at the British

Columbia Institute of Technology. The company installed

Ion Enterprise, an enterprise energy management system

with advanced forecasting, emergency power systems,

functionality allowing load side management and robust

security. Total consumption is forecasted to decrease

energy 10-25%, and illustrate the extent in which business

customers will decrease consumption based on energy

management system usage, as well as the ability of

integration with dynamic pricing models, and is a suitable

option for multi-building facilities, such as universities.5 JouleX: JouleX offers the JouleX Energy Manager that

offers a scalable solution for businesses. The sensorless

system integrates office equipment including VOIP

phones, copiers, servers, as well as distributed facilities into

a central system. Through cloud computing, the product

offers remote management, real-time feedback, demand

response, and green initiative support. Their primary

customers are large office buildings.6

C3 Energy: C3 Energy offers its Energy and Emissions

Management Software as a part of a portfolio of services

for business clients. C3 Energy's product ―monitors,

5 www.nrcan.gc.ca/energy/science/programs-funding/2050 6 www.joulex.net/enterprise-energy-management/

analyze, visualize, and benchmark energy consumption

across operations, including offices, data centers, plants,

equipment, and other assets‖.7 The product offers

advanced analytics and modeling features, as well as

offering real-time interaction and facility-wide analysis. C3

has won numerous awards, including Company of the

Year from Going Green Global 200 and Platts Global

Energy Award's Award of Excellence.8 CA Technologies: CA Technologies offers the CA Enterprise

Energy and Sustainability program to help firms manage

and track their energy consumption to meet company

goals, including sustainability, carbon footprint, resource

management, government compliance, water usage,

and waste generation. One key feature is the CA

ecoDesktop, which reduces the energy consumed by

computers. The product is scalable and able to identify

consumption from the entire firm to the smallest asset,

relying on advanced metrics and analytics to make

predictions. CA Technologies has also won numerous

awards, including being named one of the four leaders in

the Enterprise-Scale Energy Management System field. Carbon Systems: Carbon Systems has also been named

one of the top four leaders in the Energy Management

System field, deploying their Enterprise Sustainability

Platform in over 45,000 locations worldwide. The web-

based platform analyzes and reports information on

energy, environmental, and carbon consumption as well

as progress on social responsibility goals. In addition, it

provides detailed information on return on investment and

energy cost reduction.

7 www.c3energy.com 8 Ibid.

http://www.nrcan.gc.ca/energy/science/programs-funding/2050

http://www.joulex.net/enterprise-energy-management/




Verisae: Verisae offers its Energy Information System to

enable upgrades and support firms that are already

involved in energy management and have already

experienced the cost savings that basic, low cost

improvements bring. The second level of improvements

focus on energy supply and demand, and optimization of

energy projects, as it suggests opportunities for

improvement and potential energy savings. ―The energy

solutions primary components include utility bill processing

and meter data management for energy spend analysis,

energy alerting and review through flagging data

anomalies, energy analytics, executive dashboards for

reporting and performance scoring, and energy validation

for exception management.‖9 Their solution is uniquely

suited for the large scale industrial customers that have

implemented previous improvements, thus looking for

upgrades to existing systems within the next 10 years. Emerging Companies to Watch

Retroficiency: Retroficiency is a start-up firm founded from

MIT. They focus on expanding the capabilities of the

energy management for businesses, including managing

several buildings from one location. The on-site program

allows access to every energy consuming area, and

partners with utilities to not only strengthen business energy

management, but also the Smart Grid as a whole. The

solution is best suited for firms with many locations.10

eCurv: eCurv is a privately-held start-up company based

in Cambridge, Massachusetts. The company focuses on

9 www.verisae.com/energy-information-systems/Energy-Systems-Overview/ 10 energy.aol.com/2012/07/23/building-energy-efficiency-options-in-a-dynamic-

environment/

niche industries, but primarily mobile telecom operators

with cellular shelters. Their patent-pending IP-based system

optimizes peak and non-peak power consumption by

using proprietary algorithms. eCurv reports utility cost

reductions in excess of 11% without the costs or impact of

a major infrastructure overhaul, and savings of over

$2,000/month for each megawatt under their

management. The company has future plans to market to

commercial customers with large footprints and large

fleets of appliances, including hotels, hospitals,

government buildings, universities, institutional buildings,

and eventually, EV‘s.

OutSmart Power Systems: OutSmart, based in Natick,

Massachusetts, is the latest company launched by

Manifold, a firm that spins off tech start-ups to

commercialize products developed by outside investors

and its own engineers. It consists of a network, including

hardware and software that monitors energy usage,

building occupancy, and other activities in each room of

commercial properties. The network includes nodes

designed for installation in electrical breakers, outlets, and

switches. The nodes are equipped with electronics that

calculate electricity consumption and use existing wires in

a building to feed that information into a controller. The

controllers are linked to servers, where the information can

be accessed and viewed over the Internet. The company

also plans to sell sensors that connect with the existing

electrical infrastructure in buildings to detect motion,

temperature, and other conditions. In addition to owner

occupied commercial properties, their current marketing

and sales efforts focus on the domestic food vertical

markets including grocery stores, cold storage and

http://www.verisae.com/energy-information-systems/Energy-Systems-Overview/

http://energy.aol.com/2012/07/23/building-energy-efficiency-options-in-a-dynamic-environment/

http://energy.aol.com/2012/07/23/building-energy-efficiency-options-in-a-dynamic-environment/




distribution facilities, data centers, and pharmaceutical

laboratories.

Powerhouse Dynamics: Powerhouse Dynamics, based in

Newton, Massachusetts, is the developer of the eMonitor,

a hardware solution that provides circuit level monitoring

of all uses and sources of energy while controlling energy

intensive equipment by way of a cloud-based user

interface to provide energy management systems for

small commercial entities such as schools, restaurants,

food and convenience stores, and residential homes. On

August 6, 2012 it was announced that Ingersoll Rand has

made a strategic investment in Power Dynamics. The

integration of Power Dynamic‘s eMontior into Ingersoll

Rand‘s Nexia Home Intelligence that leverages the

advanced technologies of Trane and Schlage will

enhance customers‘ ability to control their energy usage.

VCharge: VCharge, founded in 2009 and headquartered

in Cranston, Rhode Island, provides high-efficiency, low-

cost heating with its SmartBricks Thermal Storage

technology. The SmartBricks system connects electric

thermal storage heaters to local electricity markets,

transforming the thermal storage into a resource for

renewable energy integration. Their mission is to prepare

for 70-80% wind, nuclear, and solar generation through

economic improvements in managing Transactive Loads.

VCharge uses decentralized, market-based principles to

enable residential electric thermal storage heaters, EV‘s,

and other Transactive Loads to respond dynamically to

grid conditions and demand response. The company is

currently active in the energy and ancillary services

markets in New England, the Mid-Atlantic, with a special

focus on serving retail customers in Pennsylvania.

In May of 2012, Pennsylvania‘s Public Utilities Commission

approved an application from VCharge to become an

Electric Generator Supplier (EGS) within PPL‘s service area,

allowing VCharge to provide electricity to up to 250

customers in PPL territory.

Zome Energy Networks (Changing name to ColorPower):

Zome Energy Networks, based in Cambridge,

Massachusetts, provides a software and hardware

platform for utilities and energy suppliers to forecast,

simulate, monitor and ultimately control real-time energy

demand and supply conditions on the distribution network.

Zome‘s product offerings utilize algorithms which operate

under a framework known as ―engineered self-

organization‖ computing which uses distributed,

probabilistic, and spatial computing paradigm (―Proto-

amorphous‖) to achieve response times a fraction of

today‘s Demand Response systems, while simultaneously

reducing Automated Metering Infrastructure (AMI)

network traffic by an order of magnitude. The algorithms

and computing framework together serve as the optimum

energy applications, such as Demand Response, EVs, and

distributed storage and generation integration, layer for

use over constrained smart metering infrastructures

SCIenergy, Inc: SCItrack is a cloud-based energy

management solution that provides real-time actionable

insights into building performance through benchmarking,

automated monitoring and targeting, data visualization,

and reporting. Building operators and owners can

leverage SCItrack to capture energy data across

disparate metering technologies to visualize and

demonstrate building and portfolio performance.

Customers often achieve up to 5% energy savings simply




by gaining clarity into building performance and working

hand-in-hand with a dedicated energy analyst.

GridNavigator: GridNavigator Energy Management

System (EMS) is a highly sophisticated metering and

modularized control system designed to help monitor,

analyze and control facilities to optimize efficiency and

minimize cost. The cloud based platform consists of a

combination of real-time benchmark alerts, dynamic

reports and control capabilities, connecting different

facilities and multi-site energy endpoints for continuous

energy savings opportunities. The typical payback period

for most GridNavigator customers is within 18 to 24 months,

resulting in operational savings of 20% or more annually.

By offering integrated software and hardware solutions,

they allow clients to create smart electricity networks that

can monitor and control anything from heavy-load

machinery to a single light switch. They also offer remote

facility management services, and can monitor

consumption levels at the individual appliance level to

guarantee clients maintain optimal energy performance

and undergo minimal expenditures at all times.

The GridNavigator integration server (GridXchange Server)

is a turn-key solution for real-time read and write from

BACnet data points. This approach eliminates the

unnecessary sub-metering endpoints that are already

monitored by the Building Management System (BMS) and

lowers the overall metering and monitoring cost.

Telkonet: Telkonet‘s EcoSmart offers a product suite

capable of creating an in-room energy management

network that can be configured to meet the requirements

of most building environments. Telkonet can provide and

install any combination of intelligent thermostats,

occupancy sensors, door contacts, and plug load control

devices. All products can be networked to enhance

energy efficiency and provide remote monitoring

capability.11

Panoramic Power: Panoramic Power‘s P3E energy

management system provides users with real-time

granular, asset-level energy measurement, anomaly

detection, and failure prediction through customized

alerts.12 The solution combines miniature, wireless sensor

technology with a powerful cloud-based analytics

platform, offering complete visibility regarding the energy

consumption of individual assets. The solution detects

hidden inefficiencies and waste, and identifies problems

and risks early, before they lead to high energy costs and

unexpected equipment failures.

Panoramic Power has partnered with AtSite, which will use

Panoramic Power‘s P3E to provide its clients — including

the U.S. Green Building Council‘s headquarters in

Washington, DC — with real-time energy usage feedback.

AtSite says it has deployed the EMS at restaurants,

supermarkets and retailer facilities. Its clients include

Adventist HealthCare, which AtSite says is on target to

reduce its expenses by $2.9 million by 2014, while reducing

its carbon footprint by 16 percent, by collecting and

analyzing energy data streams.13

11 www.telkonet.com/datasheets/EcoSmart-Quicksheet.pdf 12 www.panpwr.com/company.php?nodeID=10 13 www.environmentalleader.com/2012/06/13/panoramic-and-atsite-monitor-us-green-

building-council-buildingiq-and-nv-energy-trial-commercial-hvac-efficiency/




Major Government Initiatives

Fuji Electric Co., Ltd., DENSO Corporation, Toyota Tsusho

Corporation, FamilyMart Co., Ltd., Takamiya Corporation,

and Yamato Transport Co., Ltd. have collaborated to

conduct a demonstration test in Kita Kyushu City, Fukuoka,

Japan. The project focuses on the development of a

Building Energy Management System (BEMS), which will

help realize ―smart stores‖ that will contribute to leveling

regional electric load, creating a low-carbon society, and

using energy more effectively. The demonstration test was

planned to start in June 2012 and end in December 2014.

In Japan, Kita Kyushu City is designated as an

experimental city for next-generation energy sources and

social systems. The program is being promoted by Japan‘s

Ministry of Economy, Trade and Industry since April 2010.14

In 2010, it was announced that Power Measurement Ltd., a

subsidiary of Schneider Electric, will receive up to $3 million

through the Government of Canada‘s Clean Energy Fund,

to demonstrate a Smart Grid electricity system. The energy

management business intelligence platform will determine

the ability of a Smart Grid electricity system to optimize

energy resources, including renewables, in an institutional

building complex at the British Columbia Institute of

Technology (BCIT). The project will also determine the

ability of commercial customers, at sites in Calgary and

Toronto, to voluntarily reduce their demand based on real-

time price signals.15

In February 2012, under a strategic alliance, Siemens and

Boeing, together with a team of partners, were awarded a

14 DENSO Europe 15 NRCAN

project funded by the U.S. Department of Defense (DOD)

under its Environmental Security Technology Certification

Program (ESTCP). Using Siemens and Boeing's cyber-secure

energy savings technology, the DOD will realize up to 40

percent savings in energy costs at this one installation. The

team, which also includes the University of California at

Berkeley and KEMA Services Inc., will implement intelligent

energy-management solutions that include integrated

controls for cooling and heating systems, lighting,

ventilation and plug loads. The upgrades will help improve

DOD infrastructure energy security and reduce its facility

energy costs. Siemens and Boeing have formed a

strategic alliance for DOD energy modernization. Under

the alliance, the companies will develop and market

"Smart Grid" technologies to improve energy surety and

security for U.S. military installations.16

In the U.S., President Obama created the Better Building

Initiative, which encourages companies to reduce energy

consumption by 20% by 2020.17 Also, the U.S. D.O.E. has

encouraged business to participate in the ISO 50001

certification program, internationally established standards

that serve as best practices and aim to benchmark

energy efficiency of commercial facilities. In addition, the

mandatory California's Energy Efficiency and Co-Benefits

Assessment Regulation has encouraged the performance

of an energy audit, as well as the identification of high

energy consumption areas, and includes the possible

installation of energy management systems.18

16 www.prnewswire.com/news-releases/siemens-and-boeing-strategic-alliance-secures-

dod-contract-140536583.html 17 www.whitehouse.gov/sites/default/files/bbi_factsheet_final_clean_12-1-2011.pdf 18 enhesa.wordpress.com/2011/08/18/from-voluntary-to-mandatory-energy-

management-systems-in-the-united-states/

http://denso-europe.com/fuji-electric-denso-toyota-tsusho-familymart-takamiya-and-yamato-transport-to-conduct-demonstration-test-of-energy-management-systems-for-commercial-facilities-in-fukuoka-japan/

http://www.nrcan.gc.ca/energy/science/programs-funding/2050

http://www.whitehouse.gov/sites/default/files/bbi_factsheet_final_clean_12-1-2011.pdf

http://enhesa.wordpress.com/2011/08/18/from-voluntary-to-mandatory-energy-management-systems-in-the-united-states/

http://enhesa.wordpress.com/2011/08/18/from-voluntary-to-mandatory-energy-management-systems-in-the-united-states/




Major Regional Projects

Governments and businesses are focused on finding and

implementing energy management solutions that can

reduce energy usage and the amount of carbon dioxide

in the atmosphere. Following are some of the projects

have been undertaken in this regard:

North America

In May 2012, nine Japanese companies – Shimizu

Corporation, Toshiba Corporation, Sharp Corporation,

Meidensha Corporation, Tokyo Gas Co., Ltd., Mitsubishi

Heavy Industries, Ltd., Fuji Electric Co., Ltd., Furukawa

Electric Co., Ltd. and The Furukawa Battery Co., Ltd. –

launched a demonstration study for the Albuquerque

Business District Smart Grid Demonstration Project. This

project was consigned to them by the New Energy and

Industrial Technology Development Organization (NEDO),

to be carried out as part of its Japan-U.S. Collaborative

Smart Grid Demonstration Project. The project will be

completed by March 2014. Shimizu Corporation will focus

on providing a building energy management system

(BEMS). Toshiba Corporation will also work on the design,

establishment, and performance verification of a Smart

Grid energy management system (utility side).19

In 2010, BuildingIQ, an energy management software

company, announced its first Predictive Energy

Optimization pilot project in the U.S. at the U.S.

Department of Energy's (DOE) Argonne National

Laboratory. The BuildingIQ pilot installation, together with

19 Shimizu Corporation

Argonne's expertise in optimization and modeling, is

expected to improve energy performance at Argonne's

Theory and Computing Sciences (TCS) building as well as

enable the further collaboration and development of

sustainable innovative technologies between BuildingIQ

and leading researchers at the facility.20

The Menlo Business Park project in the U.S. is focused on

creating both energy savings and reducing greenhouse

gas emissions. Several companies (such as Pacific Gas

and Electric Company, EnerNOC, Global Energy Partners

and Progressive Lighting & Energy Solutions) have

collaborated to make the building energy efficient

through automation and integration of lighting control, the

building management system, data collection capabilities

with HVAC systems and demand response solutions.21

Menlo Business Park is managed by Tarlton Properties Inc.

of Menlo Park, CA in the U.S.

Asia

As one of the largest cities in Japan, Yokohama aims to

build a smart city model that maximizes CO2 reduction.

On completion of the project, the Yokohama-model

solutions will be exported to cities overseas. A community

energy management system will be installed at the site to

absorb power output fluctuation from renewable energy

sources by integrating stationary battery with the Home

Energy Management System (HEMS) and the Building

Energy Management System (BEMS). BEMS will be used to

ensure optimum energy management at each business

20 www.reuters.com/article/2010/09/21/idUS137012+21-Sep-2010+BW20100921 21 www.businesswire.com/news/home/20120327006509/en/500000-square-foot-

Advanced-Lighting-Control-Installation

http://www.shimz.co.jp/english/news_release/2012/2012005.html




building, and CO2 emissions will be reduced through the

efficient use of energy. Buildings will also be grouped

together and optimum energy management will be

conducted for each group of buildings.22

As a consortium partner of KEPCO (Korea Electronic Power

Corporation), Nuri Telecom will be providing energy

management systems for the Smart Grid test-bed project

in Jeju Island, a self-governing province of South Korea.

The Jeju Island Smart Grid project is a $58 million (64.5

billion KRW) Korean government initiative to build a Smart

Grid community to test and demonstrate the viability of

the Smart Grid.23

Australia

In August 2010, BuildingIQ, an energy management

software company, successfully completed its Demand

Response (DR) application trial with Western Power, an

Australian utility, and the City of Perth (a local government

area and body, within the Perth metropolitan area, which

is the capital of Western Australia). BuildingIQ‘s DRiQ

application was also installed in Perth‘s historic Council

House building. The system uses Predictive Energy

Optimization for Demand Response events. The trial with

Western Power and the City of Perth was run at the end of

its successful pilot of the BuildingIQ system in Perth Council

House, and reduced peak energy loads by up to 30

percent during event days.24

22 Yokohama 23 Nuri Telecom 24 www.businesswire.com/news/home/20100831006031/en/BuildingIQ-Completes-

World%E2%80%99s-Optimized-Demand-Response-Trial

In 2011, it was announced that the Queensland

Government is investing $1.5 million to support the

development of a $7.75 million solar photovoltaic project

(1.2 megawatt MW) at the University of Queensland. The

project is considered the largest roof top solar power

panel installation in Australia. The solar project will be built

at the University‘s St Lucia Campus, and will save around

1,750 tonnes of greenhouse gas emissions annually. The

projects will help research into new solar power

breakthroughs, by providing researchers with real life data

on energy management and the impact of solar on the

electricity network.25

Europe

In October 2011, it was announced that Siemens together

with a number of European companies and universities is

participating in an EcoGrid EU demonstration project.

Within the framework of the EU-sponsored project, a

prototype Smart Grid will be installed and put into

operation on the Danish island of Bornholm in the Baltic

Sea. The project will run until 2015. Siemens will contribute

an intelligent control system for energy loads in domestic

and commercial applications. A solution for smart

utilization of electrical energy will be implemented through

the networking of the decentralized energy management

system (DEMS) and components from the Siemens building

technologies portfolio.26

European project KnoholEM is a knowledge-based energy

management project for public buildings through holistic

information modeling and 3D visualization. KnoholEM

includes five demonstration projects in Spain and the

25 GBCA 26 Siemens

http://www.city.yokohama.lg.jp/ondan/english/pdf/initiatives/master-plan-of-yscp.pdf

http://www.nuritelecom.com/news/spotlight/jeju_smart_grid.html

http://www.gbca.org.au/advocacy/states-and-territories/queensland/3--demonstration-projects/1983.htm

http://www.siemens.com/press/en/pressrelease/?press=/en/pressrelease/2011/smart-grid/icsg201110002.htm




Netherlands. The objective of the project is to test an

intelligent energy management solution for energy

efficient buildings and spaces of public use. The solution

will considerably reduce energy consumption, both by

systematically avoiding energy wasting in buildings and by

knowledge-based holistic optimization of energy

consumption. It will be applicable and configurable for a

broad range of building types from any EU region.

KnoholEM is co-financed by the European Commission

within the scope of the 7th Framework Programme. The

project began in 2011 and is expected to be completed

by 2014.27

In May 2012, it was announced that twenty six partners of

the Smart Energy Collective (one of the largest sector-

transcending initiatives in Europe for the concrete

development of Smart Grids and services) have signed a

renewed cooperation agreement for the approval of the

second phase of its Smart Grid initiative, which involves the

development of five large-scale Smart Grid demonstration

projects in the Netherlands. The projects will be

implemented at Schiphol airport, in a few offices of ABB

and Siemens, and in residential districts in Gorinchem,

Heerhugowaard, and Goes. The demonstration projects in

the offices will primarily investigate how the flexibility in the

energy demand of these offices can be exploited by

energy management systems, and the introduction of

commercial generating sets with a complete portfolio of

offices.28

27 Steinbeis Europe 28 www.prnewswire.co.uk/news-releases/the-smart-energy-collective-initiates-design-of-

five-smart-grid-projects-151091715.html

Schneider Electric has collaborated with Cisco Systems to

provide energy management solutions at the Cisco House

in UK. Through its role at the Cisco House, Schneider

Electric is helping to demonstrate how energy costs can

be reduced by implementing simple solutions and new

business models across the entire energy lifecycle. The fully

integrated building and energy management systems

provided and installed by Schneider Electric allow the

Cisco House teams to make better decisions with regard

to the energy consumption of sub-systems providing for

more sustainable operations and an improved visitor

experience.29

In December 2011, it was announced that Toshiba

Corporation and Toshiba Solutions Corporation were

selected by Japan's New Energy and Industrial Technology

Development Organization (NEDO) as lead contractors for

a Smart Community demonstration project in central Lyon,

France's second largest city. The project was to start in

January 2012 and run through to the end of March 2016.

The companies will supply Building Energy Management

Systems (BEMS) and Home Energy Management Systems

(HEMS) for the project.30

29 Energy Management 30 CLN

http://www.steinbeis-europa.de/knoholem_en.html

http://www.connectingindustry.com/EnergyManagement/showcasing-the-future-of-sustainable-cities.aspx

http://cln-online.org/index.php?option=com_content&view=article&id=2278:lyon-eco-project&catid=37:green&Itemid=136




Keys to Entering the Energy Management Market

1. Vendors must recognize that conventional utilities

make investment decisions that best serve their true

customer – PUCs – rather than paying customers

who consume their power. Initially, EMS may appeal

more to market-driven utilities who are prepared to

try new solutions that help customers save money

and reduce energy consumption. Conventional

utilities are more likely to deploy EMS for regulatory

compliance purposes and in that regard they will

behave like followers rather than leaders.

2. Over time, the delivery model for EMS will evolve,

and vendors need to develop solutions that reflect

where the market is going. Essentially, EMS will move

towards the cloud, in which case costs come down

but remain flexible enough for customers to

customize around which endpoints they want a

centralized system to control. In terms of

components, this means solutions will be based less

on hardware and costly field equipment, and more

on software and sensors that provide real time

connectivity between endpoints and the

communications network driving EMS.

3. Both utilities and vendors need to understand the

preferences of customers for EMS deployments.

Larger businesses will want to own and manage the

solution. They have the resources to do that, and in

return they maintain full control over setting

preferences to manage energy usage. Smaller

businesses will prefer either a utility-managed or a

vendor-managed solution, which will be less costly

but also less flexible in terms control and

customization. This is also where cloud-based EMS

will find a home, likely managed by a third party

vendor with expertise in providing hosted solutions.

4. Given the regional nature of this market, it will be

important for vendors to understand local initiatives

that drive the need for EMS. The regulatory climate

and public policy priorities will vary by region, with

some initiatives being focused on reducing

consumption and promoting energy independence,

while others will be driven more by environmental

considerations such as global warming, renewable

energy or sustainable growth.




Zpryme’s Market Outlook, 2012 - 2020

Over the next five to eight years, the advanced energy

management system market will mature to the point

where large customers – industrial facilities, commercial

sites, campuses, etc. – realize energy consumption

reductions in the range of 10%-20% on a consistent basis.

During this timeframe, we expect that smart meter

deployments will be widely adopted and sensors

affordable enough to enable customers to capture and

sell excess capacity back to utilities to make EMS a more

complete solution. This will also allow them to more

accurately predict peak load times, and from there take

precise actions to scale back power consumption, as well

as tap into renewable and distributed energy sources

when weather conditions are favorable.

As communications networks become upgraded to

support end-to-end smart grid capabilities, we also expect

the role of EMS will expand beyond electricity to integrate

with other utility modes, namely gas and water. This would

create a complete resource management system for

businesses to run in a centralized manner.

By 2020 we anticipate that EMS solutions will largely be

cloud-based, setting the stage for mass-market adoption

that is both affordable but also flexible enough for

businesses to easily customize for their specific energy

needs. This model will likely be essential to support the

millions of small businesses that simply do not consume

enough energy to warrant investing in their own systems.

For this end of the market, the potential savings are

incremental, but collectively this represents a substantial

opportunity for utilities to reduce their overall demand

load.

By this time, the Asia EMS opportunity will be on par with

both the U.S. and Europe. This opens up new markets for

Western vendors to serve, but it also means that Asian EMS

vendors will likely become global players. We see this

coming about as they gain valuable deployment

experience with the underlying technologies as well as

gaining economies of scale by serving customers in their

fast-growing home markets.




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