5 ways Big Data can help rein in energy use

5 ways Big Data can help rein in energy use

Of all the fields where Big Data is being hyped as a potential game-changer, building energy management offers both big potential opportunities and obstacles.

From hospitality to high tech, buildings wired for energy efficiency are no longer a novelty.

What remains much more of a moving target, however, are all the sensors and Big Data software tools being built to help assess and manage energy use.

While advanced data analytics open new doors to identify areas of inefficiency and implement targeted energy-saving initiatives, tech tools in the field are changing fast and must be tailored to suit the goals — and available resources — of individual companies.

All told, the energy management systems market will be worth an estimated $38 billion by 2018. That includes everything from residential to retail energy monitoring and controls — fields that already have elicited product offerings from companies ranging from Google-owned smart thermostat company Nest to incumbent enterprise vendors such as GE, Siemens, Intel and Honeywell. 

The rush into energy management technology comes as companies, cities and ordinary people grapple with the potential implications of data gleaned from smart grids, which stands to generate energy cost savings of up to $2 trillion by 2030, according to the National Institute of Standards and Technology (PDF).

In the meantime, take MGM Resorts International as one example of a company working to better understand its energy use patterns and make adjustments that can save money and improve sustainability. The hospitality company oversees 17 properties around the world — which include a combined 90 million square-feet of restaurant space and 42,000 hotel rooms — with wildly varied energy footprints.

In total, the company uses about 1 billion kWhs of energy per year, Vice President of Corporate Sustainability Chris Brophy said in a GreenBiz webcast this week on Big Data and energy management. With everything from smart office lighting to smart thermostats on the market, the issue at the moment isn't so much getting new energy data, but rather making sense of it.

“The quantity is a little scary right now,” said Chris Magee, executive director of sustainable facility development for MGM. “Where do we put our toe in the water?”

Here are the lessons learned by Brophy, Magee and their peers at Siemens and Intel when it comes to decoding energy data, setting budgets for energy management and how smart energy fits into corporate sustainability targets:

1. Cost savings and sustainability go hand in hand

When it comes down to the financial and philosophical drivers of a company's investment in energy management, costs are still king.

A full 99 percent of respondents included in a new GreenBiz report on "Three Big Myths about Big Data and Energy Management" said that reducing operating costs is priority No. 1 for energy-savings measures, followed by increasing efficiency and meeting corporate sustainability targets.

But Bob Dixon, vice president of industry affairs for report co-author Siemens Building Technologies, contends that those goals are by no means mutually exclusive.

"If you address one, you start addressing the other," Dixon said.

energy management priorities

Operating cost reductions are still king when it comes to corporate goals related to energy management, but those in the field argue that cost-cutting inextricably is tied to corporate sustainability goals and increased efficiency.

2. Balance the micro and the macro

From measuring the amount of water used in obscure mechanical processes to quantifying a company's global energy use in a day, one challenge with emerging energy management systems is addressing both large- and small-scale efficiency issues.

Marty Sedler, director of global utilities and infrastructure for Intel Corp., said the company's 5 billion-kWh-per-year energy use has led to experimentation with Big Data tools to help manage energy use, as well as renewable energy and other energy-efficient technologies.

Sedler explained that the trick is often deciding whether to buy one of two types of systems. Some allow for high-level benchmarking, which may paint a helpful broad picture of energy use but provides less information about specific processes at a data center, for example. Others systems might provide insight on very niche manufacturing processes or other systems but lack big-picture metrics that can help add context.

“It’s really what you buy," Sedler said. "The problem is, how do you manage all that data, and what do you do with it?”

Expect those quagmires to only get murkier for the time being, as tech trends such as the Internet of Things bring new types of sensor-equipped devices online and provide ever-more opportunities to quantify energy use. 

3. Budget for more than just monitoring

Money is always front and center when it comes to implementing new corporate systems. That's especially true when it comes to energy management systems that aren't required by regulators.

“Money is always a huge issue,” Dixon said. “This stuff tends to take second burner. The alternative is doing nothing.”

Extracting real value out of Big Data related to energy use also requires more than an up-front investment to start monitoring power output.

Third-party funding mechanisms such as Property Assesed Clean Energy programs or comparable corporate financing options are one way to bridge a gap in available capital. Sedler said Intel also has found it helpful to budget an additional $30 million to $40 million per year to actually execute new energy programs based on data generated by the company's energy management systems.

“Unless you are able to find the capital to do projects, you’re giving up the lion’s share of the value," he said. "It doesn’t help to get the diagnosis if you don’t have money for the medicine.”

Part of the challenge also lies in determining the scope of what a company wants to measure, because businesses currently use energy management systems for a range of applications:

Building energy management variables

4. Utility bills don't tell the whole story

Just as energy management budgets might balloon past up-front costs for a new data dashboard, measuring the ROI on energy savings goes beyond the bottom line on a corporate utility bill.

Particularly for companies operating in multiple countries, energy cost calculations can span everything from leased equipment payments to varying government fees.

“You also have taxes," Sedler said. "Those vary. Then you may have infrastructure costs. How do you compare a rate versus what you actually pay?”

And then there are perennial struggles with electronic device lifecycles, which might require more frequent equipment upgrades — or at least more up-front research to pick the right product — than executives might like.

“It’s going to be kind of like your computer now," Sedler said. "You buy it now, and six months later there’s a better one. It’s frustrating."

5. Don’t forget about people

In the forest of data points available to companies seeking new ways to save energy, one obvious but often overlooked variable is the importance of people to help contextualize and implement new programs.

Employees working in offices who might buy into energy-saving measures with more education on the topic are one important demographic. Customers moving in and out of company facilities are another important group to address when it comes to maintaining comfortable environments with energy on things such as heating and cooling.

At the enterprise level, people are also invaluable for market analysis, Dixon said, because energy rates are constantly in flux.

“It moves every single day," he said. “In today’s world it’s a real operating component.”

Sedler added that even sophisticated data dashboards can't integrate market shifts in commodities, such as declining natural gas prices thanks to a new trend such as fracking.

"You could have made a decision a year ago that today would be the wrong decision," he said.