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The Importance of Grid-interactive Buildings

Grid-interactive buildings are the key to a decarbonised new energy future.

Mike Barker
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A district of grid-interactive commercial and industrial buildings is the key to a decarbonised new energy future. The decentralised nature of these microgrid enabled buildings is a vital distribution feeder asset especially when they can be harnessed by a smart grid.  Where managed correctly, no utility should fear the introduction of either C&I rooftop PV nor will microgrids - their energy flexibility in terms of local loads play an important part in the stability of the grid.

The building and construction sectors combined are responsible for 36% of global final energy consumption and nearly 40% of total CO2 emissions, according to the IEA. Building sector electrical energy demand is growing at ~5% per annum, and once buildings become home to charging stations for electric vehicles, demand may increase by a further 15 to 20% per annum. Therefore an added incentive to decarbonising a nation’s building stock by means of local generation is the economic benefit derived by individual building as they can then support the grid with services like voltage regulation, frequency response, and soon even synthetic inertia. 

The true value of a distributed energy resource (DER), however, is about a more resilient energy future, where building owners and utilities profit from the self-consumption of locally available and affordable clean energy. Any discussion about the energy consumption of the world’s building stock must, therefore, seek to understand better the stance taken by the property owners themselves. As holders of the world’s largest asset class, property owners are cognisant that:

Resilience afforded by distributed energy resources

The sustainable building movement, for example, the US Green Building Council (USGBC) and non-profit research group, Urban Land Institute, promote the concepts of self-reliance and resilience. This approach can be summarised as follows:

Then – our future is at risk, mitigate to improve the future

Now – our future is arriving, adapt for the worst impacts

Property owners are demanding that their investments factor in these new risks. The Multihazard Mitigation Council places energy continuity at the top of its list. The USGBC recognises efforts to design a building that has an element of “passive survivability and functionality.” Such a building must maintain liveable winter and summer temperatures during a seven-day power outage, meaning the temperature must not exceed the 14 SET °C to 28 SET °C range.

IRENA’s 2019 report on Corporate Sourcing of Renewables notes that 50% of 2,400 large companies analysed are voluntarily and actively procuring or investing in on-site self-generation of renewable electricity for their operations.

Corporates, according to IRENA, have identified the benefits of self-generation as:

Further, Navigant’s Global DER Overview Report sees the market for DER enabling technologies growing to the value of $192B by 2027, and every indication is that business continuity is top of most the boardroom agendas. The expanding investment in DER at the market edge comes at a time when an issue like the Californian Public Safety Power Shutoff (PSPS) de-energisation of feeders is making the news.

A major shift away from the centralized one-way electrical grid is an opportunity for the massive real estate industry to explore the profitability of new business models, with the emerging grid-interactive and efficient building leading the way.

The reality vs. the ideal world of DER

Mostly based on Building-integrated Photovoltaics ( BIPV ), DER in the urban environment is a game-changer for utilities and building owners. The sustainable building movement has recognised a particular level of self-generation and then defined it as a “net-zero” building - meaning one that has an annual zero net energy consumption. This simply means the total amount of energy used by the building on an annual basis is roughly equal to the amount of renewable energy created on the site. In theory, this can also mean the energy bill for a net-zero building is zero.

Net-zero buildings, in effect, use the electrical grid for energy storage, which has caused concern. In an ideal world, a magical grid will have infinite capacity and be run by a benevolent charity willing to take the meagre amounts of self-generated energy at a moment’s notice and with fabulous reward (Feed-in-Tariff) – or, at the very least, in equal exchange for electricity whenever the building needed it in the next 12 months (Net Metering).

In the real world, a neighbourhood full of buildings festooned with PV that produce excess energy in the middle of the day may find the grid unwilling to pay for that energy. More so, the ill-timed contribution from such buildings could be turned away, and any self-generated excess will, therefore, have no value.

Jaume Salom of the Institut de Recerca en Energia de Catalunya notes, however, that while the net-zero concept is a convenient sales tool, it is “insufficient to describe the energy performance of a building and its potential role as an active element in the energy network.” He also warns that “if the building-grid interaction at smaller timescales is not considered, net-zero buildings could have a detrimental impact on the performance of the grid at high penetration levels.”

Salom suggests that the performance of net-zero buildings will in future be measured by two related dynamic metrics: the interplay between on-site generation and the building’s demand called Load Matching; and the resulting bi-directional flow of energy with the grid, commonly called Grid Interaction.

As rooftop PV starts to reach high penetration levels on local feeders, Load Matching  and Grid Interaction will be of concern to the utilites – and not only because of the loss of income. Unintended consequences of net-zero buildings on the utility side include steep ramp rates as cloud fronts move across the neighbourhood and possible mid-day curtailment when the aggregated neighbourhood PV installations are overproducing.

Given these issues, there is a demand that buildings now need to behave as good grid citizens, and that building owners should seek beneficial coexistence with the local grid.

Will a grid-integrated building act as a good grid citizen?

Enter the grid-integrated and energy-efficient building – seen as a profitable opportunity for building owners, Independent System Operator (ISO), and Distribution System Operators (DSOs) to play on the same team by improving load matching especially where buildings use a range of energy storage technologies from thermal to electrical storage (including occasionally connected Electric Vehicle batteries).

Grid-integrated buildings are simply buildings with microgrids. They have a mix of energy efficiency measures, energy storage, and energy generation in the form of rooftop PV, and importantly, a range of flexible loads controlled by on-premises computing. This approach results in a lower and often more level energy load profile, which in turn delivers a more resilient and profitable building, that has access to new revenue streams too.

Figure 1 shows the typical daily load profiles for an office building with increased HVAC consumption at midday (1st profile). The 2nd profile shows the benefit of energy efficiency equipment that reduces total consumption and the maximum demand too. In the 3rd profile, on-site PV generation is introduced, and, in the case of a somewhat grid-unfriendly net-zero building, shows the attempt to push energy back into the gird.


Figure 1 : Typical office building daily load profiles. Source : Rocky Mountain Institute

The 4th profile, that of what a well-behaved building may want to present to the grid, shows a blend of energy efficiency, on-site PV, energy storage, and load flexibility, which delivers a much lower and flatter load profile. A microgrid with electric energy storage, coupled with smart controls and inverters (IEEE 1547:2018 Standard for Interconnecting Distributed Energy Resources with Electric Power Systems), allows the building to respond to grid signals too. This can provide demand management revenue potential as mentioned: voltage regulation, frequency response, and synthetic inertia. 

Another benefit is the ability to shape the load profile according to future tariff rate structures, giving the building the flexibility to continue to provide grid benefits and financial returns to owners no matter how energy and power are procured in the future.

This flexibility is part of a new initiative called Transactive Energy and defined by IEEE P825 – Guide for Interoperability of Transactive Energy Systems with Electric Power Infrastructure. The guide brings together a broad set of grid interoperability standards that will use the underlying IEEE 1547 interconnection ability as an integration platform.

Control Solutions, Inc The integration of smart grids and building's Microgrid is likely to be the responsibility of the building services engineer, who will have to design and specify control systems to oversee the supply of electricity in such developments. They will need an understanding of the relationship between the building and the national grid. Technical requirements of a microgrid include ensuring stability, effecting black starts (restarting systems after an accidental shutdown) and automatic islanding (the automatic disconnection and reconnection of a microgrid)

ASHRAE had the foresight to develop a leading guideline and international standard in the form of ISO 17800 – Facility Smart Grid Information Model (FSGIM). ISO 17800 provides the data model and information exchange mechanisms between building control systems and end-user devices (IoT Devices) found in buildings. It provides a basis for electrical energy consumers to describe, manage, and communicate about a building’s consumption and forecasts.

Are building able to be both a power station and a gas station?

Buildings are the natural homes of vehicles – think of garages and parking basements – which make them the most convenient location for the charging of EVs. The rapidly growing body of knowledge on vehicle-to-building-to-grid (V2B and V2G) technology seeks to optimise a range of benefits for all parties.

The availability of these mobile batteries in the form of EVs allows the building to store and supply energy in volumes unheard of, and at no capital cost to the building owner. EVs, in combination with the buildings’ PV resources and microgrid, are an unimagined addition to the local municipal feeders.

Owners will grow to accept that self-generation is mostly about self-consumption, and will commission microgrids to ensure that the balance between self-generated and externally procured grid power is profitable. But there will be no half measures. For a start, the building itself must be efficient, well-designed with flexible loads and energy storage, and well-managed – there is no point in wasting your own electricity.

A few decades ago, a top-quality building had marble tiles and a piano in the foyer. After that, a top-quality building had high-speed internet access. Now a building will need to have a microgrid with its own energy generation and energy storage resources. Prospective tenants will ask the landlord: “Are batteries included?”

In summary, grid integrated buildings represent a long-sought opportunity for building owners and the utilities to play on the same team and share the benefits of an opportunity where all parties can benefit. Buildings can indeed be both a power station and a gas station.

About the Author

Mike Barker is a Consulting Electrical Engineer and Building Services Specialist with over 30 years’ experience in control and communication systems for the built environment. He holds a BSc Electrical Engineering from the University of KwaZulu-Natal.

Barker has worked on many of Southern and East Africa’s sustainable buildings including the Durban International Convention Centre, stadiums, and the Valpré LEED Gold Office in Heidelberg. He works with overseas organization on extensive and ongoing research into the design and operation of Highly Services Buildings, including the new generation of smart buildings and smart cities (  ISO 17800, EN 51232,  IEEE PES TC - Smart Buildings, Loads, and Customer Systems )

In addition to his building services experience, he consults on Sustainable Buildings and Energy Efficient campuses. He is a USGBC LEED AP, and has over seen the certification and energy modelling of Africa’s first LEED Silver Factory in Gauteng. Barker is an active member of ASHRAE, IBPSA, and the IEEE


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