Buildings and Facilities Energy Efficiency Insights: Part 2
This is Part 2 of our conversation with energy and technology expert Kevin Klustner. Part 1 is available here. The second half of our discussion focuses on technology and innovations in buildings and facilities management as well as insights around executing successful energy optimization initiatives.
Kevin is the executive director of the University of Washington’s Center for Advanced Materials and Clean Energy Technologies (CAMCET). His past experience includes executive roles at a variety of companies in the technology and energy spaces. Prior to CAMCET, he was the CEO of Powerit Solutions, a cloud-based industrial energy efficiency platform, which was acquired by Customized Energy Solutions. Kevin has also served as CEO of Verdiem, an energy efficiency software company, and Chief Revenue Officer of Witz, a national construction company.
Kevin: For sure. Innovation [is important] in a lot of different ways, not just technological. It’s innovative business models that help pay for these things. The demand response programs that utilities have begun to implement are a good example.
Utilities are getting much more innovative in terms of how they manage their customer set when it comes to energy consumption, and that extends to incentives they’re offering for participation in demand response programs as well as other types of energy-saving initiatives. You are also seeing innovative models for delivering and sharing energy between customers and the grid. Implementations of District Energy initiatives in which micro-utility districts can share energy and sell back excess capacity back to the grid and utilities. So, we’re seeing not just technological innovation but innovation at the business level, too.
Kevin: Yes. While these energy management devices and systems present a ton of opportunity, obstacles remain. One such hurdle is the lack of a standard interface across different types of alternative sources of energy. As manufacturing facilities and buildings increasingly employ various combinations of emerging energy systems – like solar, wind, and battery storage – this issue becomes more acute.
The custom software needed to integrate these systems into a facility is the underlying issue. For example, connecting a battery system with a solar system so that it will release energy when it’s cloudy outside requires significant development work to close all the holes between the two systems. Understanding the extent of this work allows organizations to better assess whether it makes more sense to undertake in-house our outsource.
Kevin: I think there’s still a lot of opportunity to implement discrete products capable of managing certain parts of existing systems to correct specific energy usage inefficiencies. You don’t have to bite off the whole thing at once, so to speak. For instance, businesses still run into a lot of issues around how they plug in energy management controls, both to production systems internally and externally to the grid. Are they able to understand how much they’re spending on electricity costs in real time? Is their system smart enough to identify when the price of electricity coming in off the grid is cheaper or more expensive than it would be to utilize a battery inside the facility?
Solving those kinds of problems with smart products doesn’t necessarily require a full systems integration across all the energy supplies inside a facility. That level of holistic implementation is sort of the nirvana. But I think for the foreseeable future discrete products that address specific issues will represent the best opportunities. Eventually somebody will figure out a way to tie them all together into a comprehensive system.
Kevin: So, to be able to take advantage of this opportunity from an organizational standpoint, businesses have to focus on intentionally going about finding the right products and placing the right person(s) in charge of managing the overall process.
There needs to be a concerted effort to learn what’s possible, understand how that translates to the bottom line. And I think that’s where awareness of all these incentives really helps add to the overall ROI story.
Initially, that means there’s a lot of education required across an organization. Stakeholders must be on the same page in terms of what’s possible, reassured it won’t affect production, and set realistic ROI expectations. Businesses with that internal understanding and commitment can become smart about energy optimization.
And there’s opportunity to expand these initiatives as everyone gets more comfortable with the whole concept. Organizations that become really savvy in terms of how to manage their plant generally become more open to introducing new products into the facility to control and manage more energy systems. That willingness to explore new technology solutions can ultimately help businesses gain an advantage going forward.
Kevin: It’s critical to pay close attention to how systems will interact with one another. In the course of integrating new energy sources like solar and battery storage into a facility, businesses need to map out details like how they can manage systems to optimize usage and which source of energy should be used different situations. Consider a facility that’s already plugged into the grid and is now working to incorporate battery and solar into its energy management. They need to determine when to release energy from the battery, when to charge the battery, when to use solar, and when you just buy electricity off the grid.
I think that sort of optimization is a really big opportunity, but there’s no universal solution that can optimize these decisions across any facility. Every situation is unique, so it’s important to approach implementation in stages and configure solutions to the systems that are already in place. Enlisting consultative partners with the right expertise is one way companies can set themselves up to make the right choices for their specific operation.