September 2006

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The 4th Utility
Unifying building operations using information

  John J. "Jack" Mc Gowan, CEM
Energy Control Inc
Contributing Editor

Published in
Energy & Power Management

August Issue

In recent years there have been a number of technology trends that have evolved in the energy and buildings space. Many have been covered in these pages using words like intelligent buildings, convergence and GridWise. Each of these trends, at first glance, may appear to be independent and unrelated. Yet truly these are only of few examples of how information technology is transforming the energy space, and at the same time in buildings as well.

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There have been a myriad of independent and unrelated technology based systems applied in these arenas. With the evolution of standards for computer communications including BACnet™, Ethernet and TCP/IP, the language of the Internet, it has become more evident that it is possible to unify these technologies and offer new services. Cisco Systems Inc., the dominant computer networking company in the information technology (IT) space, is beginning to unify these technologies in a very interesting way. They have begun to call information the fourth (4th) utility, after electric, gas and water. What becomes very interesting is that information in this context is not limited to voice and data in the typical IT context. Information includes all of the systems in a building or an enterprise, such as a business, university campus or even a utility grid. Cisco has formalized this idea; specifically focusing on office buildings, in a white paper entitled Cisco Connected Real Estate. The paper may be downloaded at:, and is very interesting reading for everyone in the energy space.

With the evolution of standards for computer communications it has become more evident that it is possible to unify these technologies and offer new services.

At BuilConn 2006, which was co-located with the GridWise Expo, Cisco won a Buildy Award for best new initiative. The award press release states that Cisco Connected Real Estate (CCRE) “is a framework that promotes the convergence of IT and building systems producing the next generation of intelligent environments where people work, live, play, and learn. The Connected Real Estate framework supports real estate stakeholders in the transformation of how they design, build, operate, and use the physical built environment. Connected Real Estate suggests an IP infrastructure or building information network as the fourth utility in buildings. This new technology foundation allows for the connection and integration of communications, security, and building automation technologies within one facility, as well as with those of other facilities around the world (within one or multiple portfolios).”

The Cisco initiative is important because it highlights how people outside the energy and buildings industries see a huge potential for leveraging technology to provide more value. Initiatives like this lend even more credibility to the significant amount of activity that has been discussed in this column over the past several years. It was quite unique at the BuilConn conference to have utilities, system integrators and IT companies comparing notes on future trends for the enterprise and the Grid. The surprise might have been the amount of general agreement among these various entities on the future, and the role that technology will play. In the building automation world, integration was traditionally defined as the process of making Heating, Ventilating and Air Conditioning controls talk to fire alarms and security systems. It evolved to mean making disparate Building Automation Systems share information and coordinate rudimentary control. The exciting trend now is to go far beyond these tasks to Enterprise Energy Management, after hours tenant billing, optimizing building performance and reducing downtime and risk. This idea ultimately focuses on using technology along with these and other functions to improve the way business is done. It just makes common sense to wring more value out of the numerous IT, computer and special purpose systems applied throughout the enterprise today.

contemporary The word enterprise is not used lightly here, because the intent is to view systems in much broader terms. This is not unlike retail department stores using radio frequency identification (RFID) to serve customers better by stocking the right products, in the right stores, at the right times. Companies who see how “system intelligence” can deliver value and create sustainable competitive advantage are moving to capitalize on this opportunity. Tridium has made a major investment in the energy space with the Vykon Energy Suite product offering, and the company saw sales of this technology quadruple last year. The “C” level management team; these typically include Chief Executive Officer (CEO), Chief Financial Officer (CFO) and Chief Operations Officer (COO), of companies are much more interested in energy right now that at any time in the last two decades. According to Chris Greenwell, Director of Business Development for Tridium, Vykon is the ideal tool for C level managers to use if they really want to understand the impact of energy on their business operations and profitability. The latest generation of the Vykon has very sophisticated capabilities to do regression analysis on a variety of variables. This means that C level managers can access data from a variety of sources and use the tool to evaluate the cost of energy as a function of weather, production and a host of other variables. Tridium has been very supportive of the GridWise initiative as well through sponsorship of the GridWise Constitutional Convention and the GridWise Expo.

This column has discussed before the idea that new “Energy and Building Killer Aps” are on the horizon. We hear about killer aps in the IT world all the time. In IT everyone is in search of the next killer ap, like the spreadsheet. Applications that can help C level managers to leverage information technology to run their businesses better, while at the same time positively impacting profitability will true fit the definition of a killer ap. In many ways information technology is becoming the new “energy management system” and it will enable the C level to manage both the supply side and the demand side. The next two decades hold many surprises, challenges and opportunities. At the head of that list is to take the term integration to a new level by learning how to leverage the full power of all the systems in buildings and on the grid today.

About the Author

Mc Gowan is President of Energy Control Inc., an Energy Service Company and System Integrator. He is an author and has published 5 books including “Direct Digital Control” on Fairmont Press. The Association of Energy Engineers named him “International Energy Professional of the Year” in 1997 and admitted him to the “International Energy Managers Hall of Fame in 2003. Mc Gowan sits on the Energy User News Technical Advisory Board, the GridWise Architecture Council and is a Contributing Editor with 


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