Smart Grid Initiative: Financial Benefits for Building Owners

July 30, 2018

Smart buildings that can interact with the electrical grid stand to profit as more utilities embrace smart grid solutions. A new rating system will standardize the adoption of smart grid technologies and strategies.

Face it. It’s challenging to find significant ways to cut energy costs throughout your facility. But there are demand response programs that can be a profitable proposition for building owners and managers.

New GridOptimal rating system for smart grid technology. Photo: crydo 

New Smart Grid Initiative

The specifics tend to vary because demand response programs are the products of individual utilities rather than a nationwide effort. However, a new smart grid initiative by the New Buildings Institute (NBI) and USGBC aims to go beyond the individual demand response structure.

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GridOptimal, a rating system for grid-interactive buildings, will recognize facilities that are capable of taking some of the stress off of the local electrical grid during peak usage times. The new rating system will develop metrics to judge which buildings are good candidates for demand response and provide tools and guidance for building owners and utility operators.

The ultimate goal is to improve interactions between buildings and the grid in a measured, standardized way rather than asking individual utilities to puzzle out the intricacies of setting up demand response programs.

“Building efficiency, advanced controls, onsite photovoltaics and battery storage are all contributing to a fundamental shift in building energy loads and in some areas creating challenges for balancing the energy grid. GridOptimal is about defining and measuring what makes buildings good ‘grid citizens’ so that those aspects of the building are optimized to support a healthy electricity system,” says Alexi Miller, NBI senior project manager. “This kind of a metric has the potential to open many doors. In the near-term, it will help utilities avoid costly investment in new generation resources. In time, the measurement will mean higher valuation for a building and even offer owners opportunities to be paid for the grid support their buildings provide.”

The Financial Benefits of the Smart Grid

Building owners would do well to prioritize grid integration because the financial benefits for smart grid technology are significant.

A wider rollout of demand-responsive devices allows utilities to avoid building new generation and transmission infrastructure, thus reducing their need to pass infrastructure costs on to customers. You’re also likely to see more direct benefits in the form of lower peak demand charges, as well as the financial incentives that typically accompany demand response programs.

Existing demand response initatives typically reward buildings that can shed loads or switch to stored energy during peak demand. Buildings with favorable GridOptimal ratings would immediately establish themselves as being ready and eager to participate in this kind of program.

Read also: How Smart Building Technology is Changing Facilities Management

But you don’t have to wait for GridOptimal to establish your building as demand response-ready. In fact, the sooner you embrace smart grid technology, the more resilient and efficient your building will be.

These technologies will both prepare you for becoming grid-interactive and save you money (and headaches) in the meantime:

  • Battery storage that buildings can draw from during peak demand times, allowing the building to avoid costly demand charges
  • Thermal energy storage that can supplement mechanical heating and cooling
  • Smart electric vehicle charging
  • Smart controls and appliances, such as grid-interactive water heaters, programmable thermostats and controls for high-thermal mass buildings
  • Passive HVAC and lighting systems to lower the building’s energy demand
  • Renewable energy generation to constantly top up the energy storage and supplement grid electricity
  • Peak load management
  • Smart metering that enables buildings and the utility to communicate back and forth

Implementing these initiatives above ensures an ultra-efficient smart grid building that’s capable of communicating with the utility when a demand response program becomes available in your area.

Until then, you can enjoy these financial benefits:

  • Reduced peak demand charges from drawing on energy storage, resulting in a direct savings on your utility bills starting immediately
  • Reduced energy consumption from the use of renewables, stored energy and efficient building systems
  • Avoided overcharges from more accurate smart meters
  • Increased resilience and avoiding the costs of power interruption during peak demand periods, storms and other common causes of outages

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About the Author

Janelle Penny | Editor-in-Chief at BUILDINGS

Janelle Penny has more than a decade of experience in journalism, with a special emphasis on covering facilities management. She aims to deliver practical, actionable content for facilities professionals.

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