The Future of Building Energy Management

Next Generation Solutions Driven by the Convergence of Technology and Competition: The Role of Smart Buildings

John Raspin, PartnerEnergy & Environment

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Today’s Presenter

• Over 15 years with Frost & Sullivan in Energy & Environment and related industries

• Multiple publications in the Building Technologies and Services industry, including energy efficiency, smart buildings, fire & safety and facility management

• Leadership of consulting engagements with global tier 1 players• Trusted advisor to many of the world’s leading Building Technologies and

Services firms

John Raspin, Partner, Frost & Sullivan

Follow me on: (Connect with social media)

http://www.linkedin.com/groups/Future-Energy-4727266?trk=myg_ugrp_ovr

Focus Points

• Growing Importance of Energy Management• Progression Towards Smart Solutions• Convergence of Technology, Services and Competition• Examples of Growth Markets• The Current Killer Questions• Key Conclusions• Three Big Predictions

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Energy & EnvironmentTop 10 Technologies and Markets to Watch for in 2020

Energy Recovery from Waste

Energy Efficiency and SMART Buildings

LED Lighting Revolution

Top 10 Markets

of the Future

Source: Frost & Sullivan

Advanced Batteries and Energy StorageSolar PV

Gas-Fired Power & Shale Gas Exploitation

Small Scale Distributed Generation

Smart Water Networks

Energy Harvesting SMART Grid &

SMART Energy

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A question for you to start with …..

Poll Question: Which of the following will have the biggest transforming impact on the building energy management industry in the next 5 years?

1. New business models and the role of FM companies in service delivery

2. Energy efficiency regulations and legislation

3. Advancements in software and data analytics

4. Advancements in control and automation technology

5. Convergence of BEM into overall business efficiency

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Building Energy ManagementProgression Towards Smart Solutions

1980 20001990

Evolution of Energy Management Markets

2010 2020

SystemsIntegration

BuildingManagement& Control

BuildingAutomation

GreenBuildings

ITConvergenceFunctional

Controllers

HomeAutomation

Building Control

Building Automation

Smart Buildings

EnergyControl

Construction& OperationalEfficiency

Building Performance

IntegratedNetworking

EnergyManagement

EnhancedManagement

IntelligentBuildingsHVAC Control

Energy Storage

SmartCitiesLow Energy

Lighting

Micro-Renewables

Micro-Generation

SmartGrids

SmartHomes

1980 20001990 2010 2020

Emergence of Smart & Intelligent Technology

AdvancedMeteringInfrastructure (AMI)

SmartMetering

PowerLine Carriers

Smart Cities/Towns

SystemsAutomation

Virtual power plants

EnergyManagement

Automated Meter Reading (AMR)

Source: Frost & Sullivan

Home Area Network (HAN)

VirtualConsumers

ITConvergence

Micro-Renewables

2013

HEMS & BEMS

Home Energy Monitoring

IndustrialAutomation

Growth in Renewables

Electric Vehicles Asset

Management Solutions

Active Energy Management

Big Data

Demand Response

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Smart Concepts and the Key Enablers for Growth

Building

UtilitySystem

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

SmartCity

• 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

Source: Frost & Sullivan

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Building Energy ManagementMultiple Convergence of Technology, Services and Competition

HEMS, BEMS &

FEMS

Asset Management

Software

Facility Management/ Performance Contracting

Building Automation Data Analytics

Micro-generation, renewable energy etc.

Smart Metering

Communication M2M etc.

Cloud Services

Building Energy Management

Source: Frost & Sullivan

Controls & Devices

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Building Energy Management Examples of growth in European Market Segments

Source: Frost & Sullivan

Performance Contracting• High growth market• Customer preferred business model• Partnerships and alliances are key trends

for offering end to end solution• FM companies see the opportunity to

lead

BEMS• Mid-range systems gaining momentum

and the market is rapidly heading toward mainstream commercialization

• Data interpretation rather than data analytics is a key priority for end users

• New business models are being introduced combining BEMs with EMS

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Building Energy Management Examples of growth in European Market Segments (Cont.)

Building Automation• Building automation systems (BAS) are

still the essential platform for managing performance of buildings

• Market is buoyant and large but is mature and growth is modest at 3% CAGR

• Open architecture and cloud based solutions are taking hold and likely to have a significant impact in the 2015 to 2020 timeframe

Smart Metering• Focus of utilities on smart grid

implementation is driving strong growth• Strong regulatory and legislative drivers• Meter companies, network companies,

M2M system vendors and key market participants work in partnerships to address interoperability challenges

• Competition becoming increasingly fierce

Source: Frost & Sullivan

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Building Energy Management Examples of growth in European Market Segments (Cont.)

Home Automation• Historically a luxury market, but mass

market segment is growing strongly• New entrants and acceleration of new

product launches following technology advancements in adjacent sectors

• Opportunity expanding with growth in smart devices (HVAC, windows, fridges, lighting etc.)

HEMS• Next generation solution after home

energy monitoring• Slow due to recession and poor

residential construction, but acceleration expected post-2014

• Future business models and channels to market will dictate success levels

Source: Frost & Sullivan

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The Current Killer Questions in the Market

For the Market:

1. What are the true benefits to the customer?

2. What are the long-term benefits to the energy supplier? What can they leverage to generate real added value?

3. What are customers really willing to pay for?

4. Does more data always mean more efficiency?

5. What is the winning business model for the next 10 years?

For Suppliers:

6. Who do you want to be your customer?

7. What is the winning value proposition?

8. How to leverage ICT infrastructure to generate a BEM offering?

9. What partnerships are required to integrate the offering?

10. Which geographies and verticals are the most attractive entry point?Source: Frost & Sullivan

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Key Conclusions

Source: Frost & Sullivan analysis.

2Green and smart are converging to deliver a new generation of solutions for both homes and commercial buildings

3Integration and connectivity are driving sustainability by allowing buildings to be managed by actionable data

4Successful suppliers will be those that combine green performance with smart functionality

5The key challenge for suppliers is to innovate with customer-centric business models

1Energy will never be cheap again. Energy efficiency will stay at the heart of building management

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Three Big Predictions

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Performance contracting will become customers’ preferred business model and suppliers will need to develop service capabilities or partner with FM companies or energy service providers in order to play in the most dynamic part of the market.

3

Smart buildings and homes will become a mainstream reality in 2 to 3 years, driven by the convergence of green and smart technology and the arrival of a wave of new market entrants. Cloud-based services with a strong focus on data interpretation will be the key enablers for a new generation of intelligent buildings.

1Rising energy costs and an increasing focus on environmental performance of buildings will combine to make energy management the most dynamic segment of the building technologies and services industry.

Source: Frost & Sullivan analysis.

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For Additional Information

Chiara CarellaCorporate Communications+44 20 7343 8314 chiara.carella@frost.com

John RaspinPartnerEnergy & Environment+44 20 7915 7814john.raspin@frost.com