A Seat at the VERGE Roundtable
A Seat at the VERGE Roundtable
Author's note: GreenBiz.com editors Jonathan Bardelline, Leslie Guevarra and Tilde Herrera contributed reporting to this article.
During the third and final session of our just-concluded VERGE event, more than four dozen top executives from organizations that are leading the push for a clean economy gathered to share insights into the future of buildings, energy, IT and vehicles.
The panel discussion, convened by GreenBiz.com at the Autodesk Gallery in San Francisco, looked at how the four technologies that are quickly coming together offer nothing less than a reinvention of the way business and society operate.
"This convergence is happening whether we like it or not, it's happening organically, and the result of innovations built on other innovations, the natural progression of technology advances," Joel Makower, executive editor of GreenBiz.com, explained to the audience.
Makower described four areas that VERGE technologies are already creating:
• Autonomous vehicles that can drive themselves.
• Hyperefficient buildings that are intelligently controlled to maximize comfort and energy use.
• Intelligent cities that can, among other things, reduce emission and enhance safety of residents through smarter management of resources from parking to lighting.
• Platooning technologies that let (autonomous) vehicles travel in close range and at high speeds, eliminated traffic jams and making unproductive work commutes a thing of the past.
"These are all trillion-dollar markets -- this is a massive business opportunity," Makower said. "This is going to transform how companies operate."
What followed was a look at not just what is coming in the VERGE economy, but how we get there.
Kicking off the three-hour session was a look at the information component of VERGE. Arguably, technology is the backbone of the revolution, because IT will be responsible for both generating and analyzing the massive amounts of data that come out of connected buildings, grids and vehicles.
And while there is no shortage of big-picture, medium-term ideas about what the converged world will look like -- or, as Stephan Dolezalek, Managing Director at VantagePoint Venture Partners, put it during his brief opening presentation, "how the movie will end" -- there is still a huge obstacle in terms of getting there.
Google's autonomous vehicle is one that has already made an appearance in the world --
"Things have to happen in a certain order -- if i'd come up for the idea of Facebook in 1980 and envisioned it exactly as it is today, what would it have cost me and what would it have taken me to build Facebook in 1980?" Dolezalek asked. "A lot more and a lot longer" is the simple answer.
But there's a flip side to the bad news that it will take a lot of effort for us to get where we know we're going: We often overestimate just how much more and how much longer it will take.
Dolezalek said that he talked to America's Big Three automakers in 2004 and 2005 to find out how long they thought it would take them to get an electric vehicle on the road. They each expected it to take at least 15 years -- EVs by 2020 -- Dolezalek said.
"And yet today virtually every major manufacturer has an EV on the road, or will have one in the next five years," he added. From the Chevy Volt to the Ford Focus to Chrysler's minivan -- not to mention the Nissan Leaf or the steady evolution of the Toyota Prius into an all-electric vehicle -- EVs are coming to market in a big way.
"One of the big things behind this is Tesla [the electric vehicle pioneer], in some ways it's a breakthrough, but in some ways it's just taking off-the-shelf parts and concepts and combining them," Dolezalek said.
And this example lights the path ahead for all of the newly converged technologies, he added: "We can use the parts bin from other technologies to move products forward."
There are multiple layers in what Rodrigo Prudencio, partner at Nth Power, called the concept of the "open electron," and out of those layers, the greatest innovation potential lies in software and applications.
"Building control systems I think are the most exciting place and the most confusing place right now," he said. A decade ago, buildings were all working on closed platforms, but now many are adopting open networks and platforms, with 20 percent of the building stock using direct digital controls.
Software, which makes up the application layer of the "open electron," is built on top of the commodity and network layers. The commodity and material layers is least interesting to venture capitalists and is tough to win in, while the network and connection layer is seeing more barriers come down and transitioning to be more open.
When dealing with energy related to buildings, one of the largest hindrances is the extensive supply chain involved in building, said Phil Williams, vice president of sustainability and systems engineering at Webcor. "We understand that (building) supply chain, and it's an ugly supply chain," he said, referring to everything involved not just with building products, but with getting buildings made, such as codes, cities, manufacturing and labor. "The complexity of that supply chain prevents those right products from ever entering the marketplace."
One of the bigger issues with energy is the speed, or lack of speed, at which changes are happening and how few things that could be connected in a smart grid are separate, said Anthony Ravitz, Google's Green Team lead for real estate and workplace services.
"Right now it's too expensive and too many black boxes don't talk to each other," he said. "We're working in the stone ages ... We've made a lot of progress but we don't have much to brag about."
A wealth of data is available in buildings to make them more energy-efficient, cheaper to operate and less of a load on the environment -- if businesses seize the opportunity to tap into the information and put it to good use.
That was the consensus of speakers on the topic of buildings and building technology at the VERGE conference sessions this week.
"We like to joke that the buildings are talking to us, but no one is listening," quipped Jim Fletcher, chief architect for Smarter Buildings at IBM, on Tuesday during the VERGE session based in London.
Kidding aside, there are companies that are taking a carpe diem approach to building and resource management as part of corporate sustainability strategies, This morning at the VERGE session in San Francisco, IBM's Jim Crosskey highlighted ways that his company is helping firms and cities apply building, energy, information and vehicle and transportation technology -- the four pillars of VERGE -- to improve their built environment.
What's IBM strategy? "We're trying to use existing technologies -- we want to leverage those for making buildings more energy-efficient, for powering the smart grid," Crosskey said during a discussion of energy. For IBM, the question of "how do we take those enterprise software assets that we've built up and how can we leverage them" underlies much of the company's work in the arena.
"Also, very importantly, we're partnering with those companies that have been in that (building controls) market for some time -- Johnson Controls, Schneider Electric, Eaton," Crosskey said.
Rodrigo Prudencio, a partner at Nth Power noted that 20 percent of the commercial building stock currently has digital controls in place to oversee systems such as lighting, heating, ventilation and air conditioning, and security.
Crosskey built on that comment during the discussion he led. With such systems in place, he said, there are "thousands of points of data that we can take advantage of in buildings."
With the firm's business partners, Crosskey said, "we're working with a number of companies to provide the web-services based systems" that capture a massive amount of data, analyze it and present it in ways that help companies and cities:
• Make better use of the energy, water, other resources they consume and infrastructure;
• Monitor and maintain the systems that channel resources
• Identify potential trouble spots or times when systems might undergo stress to prevent problems;
• Swiftly respond when emergencies occur.
IBM also eats its own cooking. Crosskey pointed to IBM's facility in Rochester, Minn.: 35 interconnected buildings that comprise a 3.2-million-square-foot manufacturing and development complex. The facility has undergone several efficiency improvements since opening in 1956. Yet within two months of installing its new Intelligent Building Management system, the company saw a further 8 percent reduction in energy use.
The example illustrated two things: how newer, more robust data collection and analytics can produce greater savings, and existing buildings, which by far out-number newly constructed ones, are the sweet spot for VERGE technology.
Considering that buildings are responsible for about 40 percent of energy consumption in the United States and about the same percentage of the country's carbon footprint -- and that as much as 80 of the commercial building stock hasn't deployed digital controls, that's a vast opportunity to make the built environment smarter and greener.
So when buildings talk, what do they say? "Pay attention to me," according to VERGE participants.
Of the four domains covered by VERGE, vehicles may be the toughest nut to crack.
"It has the most chicken-egg kind of dynamic," according to GreenBiz.com's Joel Makower. "But also it's the one that is most involves human change and personal choices. We're so embedded in the way we do things."
That's where information technology can play a role, according to Rachel Finson, project manager with the Transportation Sustainability Research Center at the University of California, Berkeley. Information technology, she said, holds the potential to get us to a place where "one size doesn't fit all" when it comes to transportation.
"We're all reliant on the internal combustion gasoline engine," she said. "Maybe it's a variety of technologies and fuels, not just one. How do we begin to use information technology to increase that mode variability and really break away from what we currently have: a one-size-fits-all transportation system?"
Finson cautioned against only thinking about clean or electric vehicles when considering transportation systems.
"We're missing something if we focus just on the current situation and use information technologies that way," she said. "When we think about transportation, we're looking at how every one of us gets from point A to point B, multiple times a day."
The infrastructure needed to support electric vehicles and supply the power must also be considered, said Wilhelm, managing director of GE Energy Consulting and Smart Grid Strategy.
"If you look at a typical gas station and decide you want to put charging in there, you may increase the amount of demand that station has on the grid by a factor of 3 or 4," Wilhelm said.
GE has examined a representative system with a 10 percent penetration of EVs and home charging.
"If you don't put the information structure or communications structure in to charge those vehicles intelligently, it can cost 24 percent more for a utility to serve that load than a uniform load growth," he said. "If you put in an intelligent charging infrastructure, it can cost 18 percent less for a utility to serve that load than a uniform load growth. It turns out when you crunch the numbers, you can enable several percent more wind generation just by virtue of the fact that you're charging at a time when you have excess wind. This again argues for the need for a structure that knits everything together -- this information component and this communications component."
Already, cities are becoming the testing ground for some information technology-enabled transportation programs. Contra Costa County, east of San Francisco, is one example, developing a dynamic ride-sharing project where residents can use a smart phone to arrange a ride with someone from their Facebook group or workplace.
"Simply call in and say, 'I have to get from point A to point B' and the cloud will arrange a ride for you," said Martin Englemann, deputy executive director of the Contra Costa Transportation Authority. "Your colleague or friend will pick you up at that point and take you to point B, and there will be a cash exchange. We're not making many changes to the vehicle but we're using information technology to essentially improve vehicle occupancy and save parking costs."
Another example is San Francisco's SFPark program, which gives residents information on parking conditions near their destination, based on sensors installed on tens of thousands of parking spaces in garages and on the streets.
"You can download an application on your phone and say, 'I'm going to SOMA, are there any places to park?" said Johanna Partin, director of climate protection initiatives for the city of San Francisco. "It will show you how many spots are available currently in that neighborhood. You may see there are no spots and think it may be better to take public transportation, or to bike or to walk."
The VERGE events -- in Shanghai, London and San Francisco, are all archived for free viewing until September 22, 2011. You can register for free and watch all the roundtable discussions, as well as the three hour-long webcasts, at GreenBiz.com/VERGE11.