Smart Grid research revelations

Building owners are looking forward to data-driven energy management opportunities, but need utilities to communicate a Smart Grid value proposition.


Ask an engineer or building owner about the Smart Grid, and you’re likely to get a variety of answers, ranging from, “Huh? What’s that?” to “Awesome! I can’t wait for the green grid to charge my car at home and improve the power reliability and quality of my facility.”

You might also get an answer that is informed, but dark, like, “Dude – think about it – buildings will be asked to modulate their energy usage in synch with utility pricing signals or control commands – and buildings can’t run properly off a constant thermostat set point.”

How do I know you’ll get these answers? Because I put the questions to 30 engineers, owners, and HVAC manufacturers in a study commissioned by Danfoss North America, which sought to shed light on the building industry’s perceptions of the Smart Grid and motivations for investing in their facilities to connect to it.

Among the key findings are that privacy and security assurances are a basic expectation--not a selling point. Environmental benefits, grid reliability, and deferred power plant construction are, generally, not selling points. Aside from lower energy bills, the chief benefit owners are expecting is energy-usage data they can use to better manage their facilities. On the other hand, facility equipment, controls, and staffs may not be able to take advantage of the data or work with utilities to establish and manage a Smart Grid program. And, HVAC and controls manufacturers are aggressively developing technologies for the Smart Grid that could revolutionize equipment controllers and building automation systems.

You can download a copy of the executive summary at The full report will be available in the future as well, so check the site often in the coming weeks.

Beyond the report, here are a few recommendations to the buildings industry for getting Smart Grid ready.

First, utilities need to do a much better job educating their customers about the Smart Grid, and they need to develop robust financial packages for their Smart Grid offerings. In this recessionary environment, owners are being very conservative about dollars, and are expecting rebates and other first-cost incentives, and lower energy bills and other operating cost reductions. Utitlies need to do the homework for tailoring pitches to commercial customers on an individual basis because of the variety of owners and facilities.

A sweet spot for utilities might be introducing Smart Grid features into commissioning and retrocommissioning programs, and including capital project incentives for controls and building automation systems upgrades and replacements. The energy savings are unpredictable (and therefore not bankable), but they’ll get facilities smart-grid compatible.

The national network of state and regional energy efficiency program developers, which advise utilities and regulators how to structure and rollout rebate programs and which often manage the programs, need to expand their mission to include the Smart Grid. This will help promote the renewable power and other sustainability outcomes of Smart Grid deployment.

Finally, engineers and commissioning providers need to get smart on peak-shaving and peak-shifting technologies and techniques, such as automated demand response, demand limiting, and thermal storage. They need to talk with HVAC and controls manufacturers to learn what they’re up to on Smart Grid offerings. And, if things go as I hope they do, get ready for a lot of controls retrofits and upgrades throughout the country.

Michael Ivanovich, The Ivanovich Group LLC, Oak Park, Ill.In closing, a special thanks to Danfoss for this this forward-looking research, to the industry professionals who took my phone calls and participated in the project, and to the reviewers and commenters on the report.

Ivanovich is the president of The Ivanovich Group LLC, which provides research, analysis, and consulting services to the buildings industry. Read his blog at

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