The Global Market for Smart Building (BEMS) to Smart Grid Software Interfaces
It is not politically or economically acceptable at this time, in any developed country in the world, to invest all the capital required for Smart Grid and Renewable Power because it could jeopardize economic growth; particularly in the present fragile economic climate.
However, the fact remains that to meet the mandatory or proposed CO2 emission standards in the Central Power Generating and Distribution network, fundamental changes need to be made; and this will require major investment.
There is a solution that can deliver a very significant contribution to meeting the needs of the low carbon economy well within the second decade of the 21st century and it can be achieved at a fraction of the cost of a fully operational Smart Grid.
It can be achieved by interfacing Smart Buildings with the present “Smart Grid” and provide Demand Response and Distributed Energy capability through a combination of using advanced Buildings Energy Management Systems (BEMS) and Enterprise Energy Management systems (EEM).
This has been practiced for some time but until recently only on a semi-automated basis. However as our report shows, fully automated systems have only just started to get off the ground, despite the fact that the technical potential demand over the next 20 years amounts to $30 billion and could reach $1.7 billion by 2017.
This is therefore a sizeable business but is made much more attractive by the fact that by far the biggest component is the latent potential waiting to be realized in existing Smart Building stock. It may be a smaller market than Smart Grid but it delivers a solution now, to a problem that has to be solved. It does not have to wait for Smart Grid to be in place or Smart Buildings to have incorporated a fully comprehensive EEM.
By far the biggest share of this business will be spent by the owners and operators of Smart Buildings and this puts the BEMS companies in pole position followed by ESCO’s. These companies include Johnson Controls, Honeywell, Schneider, Siemens and ABB. They are the world’s leading suppliers across both businesses and the last four are also leading international suppliers of Smart Grid products and services. They are in daily contact with the owners of Smart Buildings who are existing clients both through installing their BEMS and also taking their ESCO service. This gives them a massive heritage estate to work on.
EEM suppliers will have to take this into account when developing their business models, if they are to make an impact on this business. They will need to form alliances with the BEMS and ESCO companies or their System Integrators. This is particularly true for smaller EEM companies where they will need to target the priority markets.
This is a very fragmented market with hundreds of thousands of Smart Buildings and identifying the buying influence will not be an easy task. It is a different matter for the major EEM companies because most of their clients will be owners of very large Smart Building real estates and they will have contact with sources that will influence the buying decision on EEM purchases.
Connecting BEMS in Smart Buildings to Smart Grid to deliver DR and DE is a niche market that is needed now. It could be provided through Smart Buildings installing fully comprehensive EEM now; or we could wait 10 to 20 years before ADR is fully operational within Smart Grid in the developed countries of the world.
The cost of installing it could be less than 1% of the investment required to deliver a fully Smart Grid. The return on the investment is attractive and it is of significant to utility companies, among others, as it will help reduce CO2 emissions.
This article was abstracted from Memoori’s report The Market for Connecting Smart Grid with Building Energy Management Systems 2013 to 2017. It is a definitive resource for Smart Grid to BEMS Interface Market Research & Investment Analysis; combining Market Sizing Statistics with Analysis of Mergers, Acquisitions and Investments.
Jim McHale founded Memoori in 2008, a consultancy company based in London that provides market research, business intelligence and financial deal tracking services to clients across several industries. Prior to Memoori, Jim worked as a Business Analyst for i&i Proplan researching international building controls markets. He has several years experience researching and analyzing b2b industrial markets, providing assistance to client’s strategic marketing and acquisition decisions. He has managed and delivered research projects to numerous blue chip clients including Siemens, Honeywell, 3i and Morgan Stanley.
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