When it comes to energy efficiency, downtown Chicago is a mess.
Back in the 1980s, several new skyscrapers were equipped with relatively inefficient electrical heating systems, according to Jim Lee, CEO of Cimetrics, a Boston based software developer/consultancy that manages energy consumption for large landowners. Electricity was "damn near cheap" then, but now those systems can add a few dollars per square foot to anyone leasing space.
"The way we heat and cool buildings in the U.S. is absolutely ridiculous," he said.
Simulation software and data mining have long been used by Wall Street analysts, marketers and oil and gas engineers to optimize profits. Now, expect to see tools like that increasingly used to optimize energy efficiency. Cimetrics counts the University of Michigan, Harvard Business Schools and several pharmaceutical companies as clients.
San Francisco's Tririga, meanwhile, says it has landed several accounts in the Fortune 100. (In a similar vein, Asset 4 has devised software for tracking carbon output and energy consumption, but it mostly sells its services to investors who want to estimate environmental risks in their portfolio.)
Because of the nature of commercial real estate, this sort of software right now is largely pitched at a subsegment of the market. Real estate investment trusts, which can flip buildings after a few years and don't have to pay the electrical bills of their tenants, don't have a strong incentive to buy these sorts of services.
Competition between landlords and a heightened awareness of energy costs between different buildings will likely change that in the future. Building operations, after all, consume around 39 percent of the power in the U.S. The Obama administration is expected to make efficiency a high priority, which could mean a combination of rebates and restrictions to goose this along.
In the meantime, there is a large number of owner/occupiers. Roughly 3,700 colleges exist in the U.S. and a large number have 1 to 15 million square feet of real estate spread among administrative offices, labs and classrooms. The state government of New York alone has 13.5 million square feet to worry about. Microsoft recently issued requests for information for automation services for its sprawling Redmond, Washington campus.
"If you have over a million square feet of real estate, you are a natural fit for us," said George Ahn, CEO of Tririga and an alum of IBM and PeopleSoft. The company, which also provides several other real estate services, is profitable, he said.
Like in other markets, the software touted by these companies essentially identifies potential problem spots, notifies facilities managers about needed repairs, and/or extrapolates the potential savings (or losses) that will occur by looking at the difference between what is, and what should be.
Cimetrics, for instance, monitors thousands of data points – carbon monoxide sensors, thermostats, etc. – at fifteen minute intervals. If something is not working right, it calculates the costs in additional power consumption over a given period of time. Both companies also extrapolate on the additional carbon dioxide output caused by a faulty air conditioner or savings that could accrue through systematic changes in operations. In many ways, the software is similar to the demand response/monitoring systems being deployed by utilities but tailored to a somewhat specific market.
"We get information out of the submeters and correlate it to what the mechanical systems are supposed to do," said Lee. "It is like data mining for buildings."
Commercial organizations typically can reduce their power consumption by 10 to 20 percent, he said. And that's just from improved efficiency and does not include gains made through installing new equipment or retrofits.
"With government and federal customers, we're finding 40 percent," he said.
Power consumption and efficiency can also be compared across different buildings and campuses, said Ahn. It can also be blended with data about actual and projected sales to help plan expansions.
The market is being driven largely by three factors. One, most corporate managers believe electricity prices will rise over time, making poor efficiency a drag on profits. Two, carbon trading or taxes have largely become inevitable.
"You are going to have to prove your baseline and it is not going to be simple" said Ahn. "If you can't prove it, you can't get credit."
Three, most large organizations have no idea what's going on inside, say both Lee and Ahn. Lee estimates that only around 15 percent of commercial buildings in the U.S. have digital control over their heating and air conditioning systems. An even smaller number have digital control over their lighting systems.
"It's like being on a diet, but not knowing what you weigh," said Ahn.