Unlocking Energy Efficiency in Commercial Buildings

Pairing AI and building management systems to achieve HVAC efficiency gains

 

In the U.S., HVAC systems account for around 35% of the energy consumed by retail spaces, office blocks, manufacturing facilities, and other commercial and industrial buildings [1]. 30% of this energy is generally wasted [2]. With effective energy efficiency strategies, this waste could be reduced, saving building owners substantial amounts of money. 

This is not news. For decades, energy professionals have published reports on the energy inefficiency of the commercial and industrial buildings sector, which has gradually improved over time.

In fact, in the last 10 years, we have seen a notable improvement in energy efficiency due to government policies on emissions, increased environmental consciousness, and investments in clean technology. However, progress has been slower than anticipated mainly as a result of a sluggish uptick in demand and investment.

For example, in  its 2009  report, “Unlocking Energy Efficiency in the U.S. Economy[KES1] ”, McKinsey Global Energy and Materials estimated that, if the U.S. were to overcome significant obstacles to energy efficiency demand and invest $520 billion into the industry, it could expect to see savings within the range of $1.2 trillion by 2020, reducing greenhouse gases by up to 1.1 gigatons annually - the equivalent of powering almost every home in the US [3].

Deutsche Bank Climate Advisors proposed an even more optimistic scenario, in which a $279 billion investment could yield a savings of $1 trillion within 10 years [4].

However, a decade after these projections were made, an International Energy Agency (IEA) report reveals that, although energy efficiency has gradually increased over the years, its growth has not been as rapid as hoped [5].

This, according to Johnson Controls, could be due to several persistent factors:  

• A lack of awareness of energy saving opportunities within commercial buildings
• A lack of certainty that promised energy savings will be achieved
• Efficiency projects’ inability to meet an organization’s financial payback criteria
• The lack of available capital for investment in projects [6]

 
In part, these barriers are a function of how commercial properties are run. In many organizations, decisions about energy efficiency projects are made by various individuals (i.e., sustainability officers, facilities managers, and CFOs), who often hold contradictory positions on managing and operating their buildings and facilities. This discord can result in delays or poor decision-making about how to best implement crucial energy-saving measures [6].

Another key cause of these market constraints is a lack of understanding within organizations as to their buildings’ energy use. Without accurate information, it is difficult for any organization interested in achieving greater energy efficiency to a. identify initial energy savings opportunities, b. design and implement an efficiency project, and c. verify whether such projects are indeed saving energy [6].