Like other casinos in Las Vegas, free drinks and a comfortable temperature are mandatory requirements no matter how hot it gets outside of the M Resort.
Until recently, that would have made the casino and hotel an unlikely participant in a utility demand response program, where it would have to shed electrical load on the hottest days of summer.
Because of the premium that M Resort and others in the service industry place on comfort, Las Vegas utility NV Energy has had trouble wrangling some of its largest energy users into demand response programs. But when efficiency and comfort became the key selling points of its commercial demand response program, things changed.
Last year, NV Energy chose BuildingIQ to offer its cloud-based software to large commercial customers in exchange for their participation in demand response. BuildingIQ’s algorithm fine-tunes commercial air conditioning to save customers about 10 percent to 18 percent on baseline HVAC use without anyone noticing the difference.
“By burying [demand response] into energy efficiency, everybody really participates,” said Michael Nark, president and CEO of BuildingIQ.
The program is still in a pilot phase. Nark said that there's about 3 million square feet with a load of about 1.2 megawatts in the program. That figure will rise to 10 megawatts by the time the demand response season kicks off next year, with a goal of 75 megawatts by 2016.
For the first year of the pilot, participants had about a 12 percent to 20 percent drop in HVAC use during demand response days, with a similar drop on a daily basis by using BuildingIQ’s software-as-a-service. BuildingIQ’s system is integrated with NV Energy’s Alstom demand response management system.
Companies using the software don’t even necessarily notice the difference on demand response days. “We look at the demand event as just another input into our optimizer,” said Nark. The pilot exceeded expectations of load reduction by about 3 percent to 4 percent.
By offering an energy efficiency product that runs in the background as casinos and hotels go about their business of entertaining guests, NV Energy has been able to entice large customers that previously had not been interested. Nark said it has allowed the utility to de-emphasize the demand response component and emphasize the steady savings that the mPowered Optimization program offers.
Nark has said the conversation about merging energy efficiency and demand response has intensified as utilities look to further demand response programs, but have already tapped the low-hanging fruit of large commercial or industrial customers. NV Energy is also using EcoFactor, a software-as-a-service that fine-tunes residential HVAC, to meet its goals for residential demand response.
NV Energy may be one of the largest utilities to offer a constant commissioning energy efficiency product as leverage for its demand response program, but the trend is growing. EnerNOC, Constellation Energy and Viridity are just some of the players that have energy efficiency offerings that go beyond traditional demand response. EnerNOC recently reported that about 25 percent of its second-quarter revenues came from “energy intelligence systems,” including efficiency.
BuildingIQ raised $9 million earlier this year to scale up sales and invest in partner integration. Investors for the new round included Aster Capital, a firm backed by Schneider Electric, Alstom, and Solvay, and the venture capital unit of Siemens Financial Services, as well as venture firm Paladin Capital Group. The company, which was founded in Australia, has raised about $15 million to date.