September 2007

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So what’s all the BUZZ about Automated Demand Response (ADR)?
So what’s all the BUZZ about Automated Demand Response (ADR)?

Ed Richards
President and CEO,
Richards-Zeta Building Intelligence, Inc

The concept of Demand Response (DR) is not new. Building owners and facility managers with large electrical loads have had the opportunity for several years to participate in DR programs. Traditionally, these programs provided incentives for shutting down electrical loads based upon a phone call from the electric utility company notifying the building operator to shut down loads and curtail energy use. So what has changed today?

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Could it be that Deregulation and subsequent re-regulation are finally settling in with some value add for building owners? Can buildings really be dynamically responsive based upon real time pricing of electricity? Will environmental conditions inside the building suffer? And finally, how will all of this affect our environment and our efforts to protect it?

These are all very big and important questions to ask.

Our next generation is focusing a keen eye towards the environment. In the past, balancing energy supply and demand has always resulted in the environment being the looser. Today, companies like Google, have embedded a mandatory requirement within the culture of the company to always keep the environment on the front burner in every single business decision they make. This is a new and much needed trend but we still have a long way to go.

Today, the supply side (utilities and energy service providers/ESP's) are now offering huge incentives for consumers to participate in DR programs. These incentives fund the technology infrastructure as well as very lucrative rate contracts. The funding of the technology infrastructure in some regions is excess of $250 per kW and with this infrastructure in place, very creative and lucrative Energy Rate contracts are available that can yield a net savings of 10% on annual bills. The more these solutions are automated and real time (this is ADR) the greater the incentives. These incentives won’t last forever, but will definitely seed the market. Now is the time to engage!!

There are several short sided technology solutions and providers available that focus only on a DR solution. These solutions are not automated and most importantly will end up as stranded assets (because they offer no further value adds) as either the incentive programs dry up or most importantly when the next steps of the building migration path and building systems ~ IT convergence are carried out.

The correct technology infrastructure needs to be implemented now in the name of DR (actually ADR). This allows for the next steps to evolve including demand side energy management (DSEM), automated fault detection and diagnostics (AFDD), further extending building systems and IT integration including Voice, Video, Data, Lighting, HVAC, IAQ, DG, Metering, Access Control, UPS management, etc. Not to mention the cross–functional collaboration and application integration that this technology infrastructure enables.

[an error occurred while processing this directive] The business and technical issues surrounding DR are some what complicated. Thankfully Clasma (founders of conferences like BuilConn) and Constellation New Energy (the leading Energy Service Provider) are leading the charge. The DR-Expo™ 2007 October 16th and 17th in Chicago is a must attend event for owners, energy managers, facility managers, technology provides, building automation contractors and integrators, energy service providers and anyone interested in gaining the business and technical knowledge of Demand Reponses.

We will see you in Chicago.

Richards-Zeta is a global leader in Intelligent Building Systems (IBS) that capitalize on the market dynamics involving the convergence of building systems and IT over IP and serve to help solve the world’s global dilemma of balancing our continuing thirst for energy with our newly acknowledged requirement to better our environment.

Richards-Zeta provides powerful, innovative, technology based solutions that integrate, elevate and advance building systems to global IT standards.

Richards-Zeta's full line of core building controls and advanced infrastructure offerings provide the ultimate in Intelligent Building Systems (IBS).

RZ provides a migration path to openness, as defined by the inarguable standards of IT-TCP/IP-XML. RZ's solutions allow the user to leverage existing building assets while simultaneously advancing these systems to the future.


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