July 2011

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Economic and Workplace Efficiency
from Intelligent Building Energy Management Systems
Peter M Tarca
Peter M. Tarca
General Manager,
Intelligent Buildings Business Unit

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Once just a “nice to have” in the corporate world, energy management solutions are quickly transitioning into a necessity. Companies that efficiently manage and reduce their energy consumption can achieve significant cost reductions and reduced carbon emissions—and do it with minimal risk.

Energy management solutions aren’t just beneficial to an organization’s public image, they're also good for the bottom line. They can help companies cut energy costs and benefit from tax incentives, and also help them comply with government mandates.

The ROI of Energy Management

Brandt Smith, vice president and senior energy consultant for Industrial Energy Audit Services, stated in an Industry Week article that energy management is “the process of monitoring, controlling, and conserving energy to maximize profits and minimize risk.” [http://www.industryweek.com/articles/growing_your_bottom_line_through_energy_management_24265.aspx?ShowAll=1]
Employing an energy management system can pay off big for an organization. In fact, companies have been able to cut their energy costs by 30 percent or more simply by monitoring and controlling how and when their energy is consumed.

Organizations often overlook the potential ROI from reducing their energy consumption, but, according to Smith, “using a simple payback (project cost/annual savings) these [sustainability] projects are extremely attractive.” He states that 80 percent of the projects pay for themselves in a year or less, 90 percent in less than 2 years, and 95 percent in less than 3 years.

The financial benefits are significant regardless of the economic climate. During a strong economy, sustainability projects enhance a company’s public image, while reducing the need for expansion, as they tend to increase real-estate utilization and efficiency. In trying times, energy management solutions help companies maximize profitability by helping to lower energy and other operational costs.

Complying with Government Regulations

Beyond cost-cutting, energy-management initiatives help companies abide by existing and forthcoming government laws and regulations regarding energy usage and carbon reduction. Governments are increasingly passing legislation that encourages organizations to gain better control over their energy consumption.

Another way that energy management can pay off is in the form of rebates and tax credits to businesses investing in relevant initiatives. Incentives vary by location, but they can provide significant savings. For example, the U.S.’s “Better Buildings Initiative” offers commercial building owners a tax deduction for energy-efficiency upgrades with the goal of making commercial buildings 20 percent more energy efficient over the next decade. [http://www.whitehouse.gov/the-press-office/2011/02/03/president-obama-s-plan-win-future-making-american-businesses-more-energy]

The U.S. Federal Government is also implementing changes within its own buildings to reduce energy consumption. On June 10, 2010, President Obama signed a Memorandum to dispose of unneeded federal real estate in hopes of increasing sales proceeds, cutting operating costs, and improving energy efficiency.

The main goal of the Memorandum is “to eliminate wasteful spending of taxpayer dollars, save energy and water, and further reduce greenhouse gas pollution.” It states that “in total, agency efforts required by this memorandum should produce no less than $3 billion in cost savings by the end of fiscal year 2012…This is in addition to the Department of Defense's Base Realignment and Closure efforts that are expected to achieve $9.8 billion in savings from fiscal year 2010 to fiscal year 2012, of which $5 billion is a direct result of reduced operating and maintenance from disposals or other consolidation efforts.”

States Get Into the Act

On a more local level, some state governments are requiring organizations to control their own carbon emissions. For example, California recently passed the Green Building Standards Code (CALGREEN), which requires all new buildings within the state of California to be more energy efficient and environmentally responsible with the goal to attain significant reductions in energy consumption, carbon emissions, and water use to create a greener California. [http://www.bsc.ca.gov/CALGreen/greencode.htm]

The CALGREEN codes, which include reducing water consumption by 20 percent and mandatory inspections of energy systems for nonresidential buildings over 10,000 square feet—to ensure that all are working at their maximum capacity and according to their design efficiencies—will be enforced in every new building constructed in the state.

On the other side of the country, Massachusetts plans to curb heat-trapping gases emitted by homes, cars and businesses in the state by being one of 10 states participating in the Regional Greenhouse Gas Initiative, a cap-and-trade system for electric utilities. [http://www.mass.gov/dep/air/climate/rggi.htm]

Measure and Visualize Energy Consumption

Energy management solutions offer the most efficient way for businesses to conform to the new sustainability standards. Implementing a system that shows when and where electricity and other energy sources are being excessively consumed enables them to set up systems to control when and how energy is being used. Not only does this help companies comply with federal and local government mandates, it rewards them with greater operational efficiency and significant cost-savings.

The first step in any energy management initiative is determining how much energy is being consumed. According to Gartner analysts Stephen Stokes and Simon Mingay, “Some of the lowest of the low-hanging, energy-efficient fruit can be found in the energy footprint of buildings. It has been estimated that they are the single-largest consumer of electricity globally, and about 40 percent of this energy consumption can be removed by implementing existing and mature efficient technologies as well as operating and information technologies.” [Simon Mingay, Bettina Tratz-Ryan, and Stephen Stokes, “Hype Cycle for Sustainability and Greet IT, 2010” Gartner, Inc. July 29, 2010.]

Knowing when, where, and for how long energy is being consumed throughout an organization is key to getting a handle on usage. Using intuitive energy management dashboards, companies can capture, process, and visualize their energy consumption to uncover ways to significantly reduce energy costs.

Video Screen

Dashboards allow companies to identify what areas of the building are consuming the most energy, analyze how much energy is being consumed during a given time period, uncover trends in energy consumption, and pinpoint inefficiencies to help better control how the organization is managing its carbon output. They can also help companies benchmark actual consumption against targeted goals.

Controlling Energy Use

Gaining visibility into energy consumption is essential, but the big payoff comes when companies learn to manage energy more efficiently. Once they understand where, when, and how energy is being used, they can create policies and install systems to control usage and minimize waste.

[an error occurred while processing this directive]The U.S. Environmental Protection Agency has said that up to 30 percent of the energy consumed in commercial buildings is wasted. Real-estate experts assert that 30-40 percent of commercial real estate typically goes unused at any particular time. Gartner stated in its IWMS Magic Quadrant Report, “With buildings responsible for almost 50 percent of energy consumption and greenhouse gas emissions, establishing, managing and maintaining sustainability objectives is fast becoming a core driver for the deployment of IWMSs. Effective sustainability systems must include the comprehensive collection of accurate energy consumption and emissions data and the efficient analysis and evaluation of that data to facilitate informed triage decisions that optimize long-term sustainability.”

Advanced energy management solutions provide an automated way to manage the amount of energy that is consumed in almost any area of a facility. Integrating energy management solutions with building management systems (BMS) enables organizations to dictate the energy consumption of a meeting room, office, or other workspace based on the schedule for that space.

For example, rather than maintaining a consistent temperature in a conference room throughout the entire day, an energy management solution that is integrated with a BMS can automatically control the room climate based on when it is scheduled to be used. The room can be kept at energy-efficient levels when not in use, then, just prior to scheduled usage, the system can automatically trigger the BMS to adjust the temperature to a comfortable level. Once the meeting has concluded, the BMS can bring the temperature back to a more energy-efficient level. This simple integration can provide an organization with incredible cost-savings, without a big capital investment.

Win-Win from Energy Management

All over the world, companies are realizing significant benefits by implementing energy management solutions. Gartner predicts that “by 2015, improving sustainability [will] become a top five priority for 60 percent of major Western European and North American CEOs.” [Simon Mingay, Stephen Stokes, et al, “Predicts 2011: Sustainability Facing a Long Path to Fruition,” Gartner, Inc. November 18, 2010]

By leveraging these solutions and integrating them into the workplace framework, organizations can enhance their public image while complying with government regulations, and significantly improve workplace efficiency while cutting energy costs. That’s a win-win for the environment and the bottom line.


Peter Tarca is general manager, Intelligent Buildings Business Unit, for PeopleCube, a provider of workplace-, resource-, and energy-management technology that supports 8,000 customers and more than 2.7 million users in small, medium, and large enterprises around the world. A senior executive with broad experience in technology-based businesses, including more 10 years at the CEO level, he specializes in cleantech and energy efficiency, and has managed multi-disciplined teams delivering complex products worldwide. Prior to joining PeopleCube, he served in an executive capacity for several companies, including CEO of Proliphix and managing director of Astroc Systems. His affiliations include Clean Economy Network, CleanTech, Commercial Building Automation, Energy Efficiency Professionals, Energy Technology (ET) for Commercial Buildings, GreenBiz.com, Greener Buildings, Greening of Commercial Facilities, Intelligent Buildings Research and Innovation Network, OpenADR Alliance, Smart Buildings, and The Virtual Energy Forum.


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