Rising costs, energy mandates, electrification trends and more prevalent power disruptions — as seen recently in California and Texas — are all trends putting the energy transition at the forefront of business stakeholder priorities. More energy demand due to mass electrification collides with needs to decarbonize existing buildings as much as possible. Commercial businesses will be disproportionately burdened by the costs and forced to adapt to these quickly changing trends in order to adhere to oncoming government mandates along with sustainable practices more commonly expected by consumers. As energy demand increases so will energy costs, which are especially taxing to retail and restaurant sectors where keeping the lights on and maintaining a comfortable temperature are critical to the customer experience and business operations in general.
Nearly 40% of global CO2 emissions come from buildings. While energy efficiency isn’t a new concept for retailers or restaurants, most efforts to turn buildings grid-interactive and create a more dynamic relationship between energy producers and consumers have been focused on the residential sector, through smart thermostats, or on larger buildings through heavy controls systems and manual demand response. This leaves millions of small- to mid-sized commercial buildings, like many retail and restaurant locations, largely overlooked and left with a one-way connection to the grid. According to the Energy Information Administration, there are over 5.9 million commercial buildings across the U.S., and 90% of those have a footprint under 50,000 square feet — creating a massive opportunity for reducing carbon emissions and energy costs, thus, ensuring a sustainable energy future.
Being proactive about an energy strategy isn’t just best practice, it’s becoming increasingly required for power reliability and business continuity. We are finally at the tipping point where business and grid priorities are beginning to converge. By transitioning operations to be more efficient and enabling grid-interactivity, businesses can benefit both their bottom line and the grid at the same time.
What Does This Mean for Your Facilities Team?
Changing the way energy is used within buildings presents the most cost-effective opportunity to reduce carbon today. Facility teams are often the first line of defense when disaster strikes and will play a huge role in evaluating and deploying technologies designed to make facility portfolios more sustainable and efficient. Emerging technologies, like battery storage and EV charging, will also fall on facility teams because of the major impact they can have on operations and energy costs.
Grid-interactive technologies can help facility managers better understand the energy profile at their locations, helping to drive more informed decisions, uncover inefficiencies, optimize energy use and enable participation in revenue generating utility programs like demand response. As a result, grid-interactive technologies will ultimately increase the value of each site and future-proof buildings against business interruption and rising costs as the energy transition unfolds.
Why the Future is Connected, Grid-Interactive Buildings
Grid-interactive technology connects buildings with the energy grid and other distributed energy resources, enabling bi-directional communication and a more dynamic relationship between producers and consumers of energy in order to quickly balance supply and demand. For utilities, it means ample on-demand capacity that can be called on within minutes to stabilize the grid during emergencies or times of peak demand. For businesses, it means lower energy and operational costs and more resilient buildings ready to withstand long term energy infrastructure changes.
Grid-interactive buildings orchestrate energy-consuming assets together to reduce energy demand at a given time without impacting operations. For example, Walgreens has committed to reducing its carbon footprint across more than 9,000 locations and offers a look at how this is already working. Since 2009, Walgreens has reduced emissions by over 80 million kWh annually and participates in demand response programs across various geographies while keeping essential zones, like the pharmacy, functioning normally during the height of the pandemic. Walgreens receives incentives from the utility for locations enrolled in demand response and further reduces energy costs by altering their energy demand to avoid peak pricing. However, the true value of these grid-interactive locations was demonstrated in August 2020 when extreme heat and high energy demand caused rolling blackouts across California. Because Walgreens already had a demand response process in place, the energy load was managed quickly and voluntarily at locations in impacted geographies, helping to stabilize the grid and avoid further power disruptions.
Making Your Buildings Grid-Interactive
Retailers and restaurants need solutions that reduce complexity and costs. Investing in capital-intensive technology and limited internal bandwidth have been core challenges; however, as-a-service pricing subscriptions, increased utility incentives and automation are removing barriers, making it easier than ever to deploy grid-interactive technology.
To become grid-interactive your buildings need technology that does three things:
- It must have hardware inside the building to capture real-time data and enable building controls.
Every building profile is different, and capturing the right data for each building is essential. This means equipment-level data — from HVAC/lighting/refrigeration, overall building performance data, historical data, weather information and utility grid status — are all key pieces of intelligence needed to provide visibility into complex building operations in order to continuously optimize the site and drive whole-building decarbonization.
- It must enable automated, bi-directional communication with your utility through demand response.
Automation is key here. A pre-established strategy combined with automated building controls is required to adjust assets quickly in response to utility signals with minimal oversight.
- It must integrate with existing and emerging distributed energy resources (DERs) for increased long term value.
Maybe your business is looking into deploying EV chargers for customer use or onsite battery storage. These integrations make DERs and existing assets in a building work together as grid resources without impacting comfort (temperature, etc.) or business operations (lights, etc.). As more DERs become commercially practical, this technology can serve as a cost-effective approach.
As the transition to cleaner power sources and electrification continues, more automated virtual capacity will be needed on-demand to avoid costly and dangerous power disruptions. By deploying grid-interactive technology, retailers and restaurants can achieve energy and cost reduction goals, unlock new revenue streams through grid services, deploy new building assets like EV chargers cost-effectively and support grid stability, all while creating a foundation that can be built upon and integrated with newer, cleaner technologies as they continue to emerge. A sustainable future is not possible without first making the existing built environment more efficient and grid-interactive, and restaurant and retail locations are uniquely positioned to accelerate the energy transition today.