02/02/21 – Clay Nesler, Vice President, Global Energy and Sustainability, Johnson Controls 

This blog was cross-posted from a blog at the National Electrical Manufacturers Association. 

Smart Buildings: A Key Element of Smart Energy and Climate Policy

With the inclusion of the Energy Act of 2020 in the recent federal omnibus package, smart buildings are finally making their debut in clean energy and climate policy. Section 1007 of the bill, titled “Smart Building Acceleration,” directs the Department of Energy (DOE) in consultation with the General Services Administrator (GSA), to establish a “Federal Smart Building Program” to implement smart building technology and demonstrate the costs and benefits of smart buildings.

The Smart Building Acceleration Act defines a “smart building” as a building, or collection of buildings, with an energy system that is flexible and automated; has extensive operational monitoring and communication connectivity, allowing remote monitoring and analysis of all building functions; and takes a systems-based approach integrating the overall building operations for control of energy generation, consumption, and storage. A smart building also communicates with utilities and other third-party commercial entities; protects the health and safety of occupants and workers; and incorporates cybersecurity best practices.

DOE will follow Federal Energy Management Program guidelines in evaluating which advanced building technologies are most cost-effective, show the most promise for increasing building energy savings, increase service performance, and reduce environmental impacts. The program will also survey privately-owned smart buildings throughout the U.S. and work with private-sector property owners through the Better Buildings Challenge to develop smart building accelerators. These accelerators will demonstrate innovative policies and approaches to speed the transition to smart buildings in the public, institutional, and commercial buildings sectors.  

The GSA Green Building Advisory Committee established a Data-Integrated Building Systems (DIBS) Task Group in 2019 to identify opportunities and challenges in leveraging DIBS to improve the performance of federal buildings; performance benefits include reduced energy use and enhanced indoor environmental quality, occupant health and performance, and organizational effectiveness. The task group found that federal implementation of DIBS is lagging due to procurement guidelines that favor standalone systems, risk aversion in the contracting chain, and cybersecurity concerns. Other significant challenges include the lack of training and education, interoperability standards, systems specification and procurement guidelines, and life-cycle cost and impact data.  

Fortunately, a number of the recommendations from the DIBS task group have been addressed by the Smart Building Acceleration Act. These include implementing demonstration projects in federal buildings to quantify the costs and benefits of smart building installations, supporting systems interoperability standards development and testing, investigating cybersecurity concerns, and providing guidance for system specification, maintenance, and security.

Despite the challenges in implementation, the market for smart building technology is increasing. In the 2020 Energy Efficiency Indicator study of U.S. facility and energy management executives, 56% of respondents said they planned to invest in building system integration in the next 12 months. Another 29% of organizations plan to invest in the integration of building technology systems with the utility grid in 2021, up from 13% in 2020. One of the key drivers of this market demand is the importance of reducing energy use and carbon emission reductions in buildings.  

A recent study in Europe estimates that smart building technology can save up to 23% of energy use in office buildings. In another study, integrated building systems including HVAC, lighting and plug-loads were estimated to save 8-18%. In the Better Buildings Smart Energy Analytics Campaign, Energy Information Systems achieved a median 3% in energy cost savings across 100 organizations. Fault Detection and Diagnostic applications saved an additional 9% of energy costs, resulting in a combined two-year payback on investment. Another study evaluated 58 smart building measures and predicted over 25% annual energy and maintenance savings from measures with less than a five-year payback.

In response to the increased market demand for smart buildings, NEMA has established a Connected Building Systems section that focuses on thought leadership and stakeholder outreach as well as the development of codes, standards and policy.  UL and TIA have just introduced the SPIRETM Smart Building evaluation and verification program which covers power and energy, health and safety, life and property safety, connectivity, cybersecurity and sustainability. Additionally, the Alliance to Save Energy’s Active Efficiency Collaborative is planning to explore policy, regulatory, and market mechanisms to accelerate interest and investment in smart buildings. 

These initiatives are an exciting first step in demonstrating that smart buildings are a critical element of emerging smart energy and climate policy.