Smart Homes – The View from Berlin (And some answers to Life’s Enigmas)

This blog was written by BSRIA's Henry Lawson

This blog was written by BSRIA’s Henry Lawson

For decades, mankind has agonised over such worrying conundrums as whether the fridge light goes out when the door is closed, or whether I need to drive 20 miles home to check that I really did turn the iron off. (I plead guilty to the latter).

If the 2016 IFA Messe in Berlin, which finished on 7th September, is anything to go by, then these dilemmas will soon be a thing of the past. Not only will I be able to log into my iron from the other side of the world, but a web cam will allow me to check the contents of my fridge, and potentially even the status of the food.

For a long time the idea of smart appliances has seemed almost whimsical, the domain of the geek or the obsessive with surplus money on their hands. The more serious message from IFA is firstly that most of the major quality appliance manufacturers, in both Europe and Asia Pacific are starting to make serious investments in smart appliances. Of course this investment does not prove that the demand will grow to match it. This will depend just as much on a second clear trend, namely that smart appliances are starting to interact with wider home management systems in a way that can potentially change the whole way that households operate, and revolutionise day to day domestic life.

To take a simple example; in the UK there is a lot of talk about shifting tasks that are not time-critical to off-peak times when energy is cheaper. But this mostly hangs upon smart meters. In Germany there has been a lot of resistance to smart meters (especially on data protection grounds), but the country is a world leader in domestically generated solar power. Several of the leading ‘white goods’ manufacturers, including Siemens, Miele and Bosch have partnered with SMA, the country’s leading supplier of residential solar power and storage systems. Your wash can now be kicked off automatically when there is enough solar power to drive it thus saving both  money and CO2 emissions.

From intelligent fridges to robots to keep an eye on grandma; the smart future is emerging

From intelligent fridges to robots to keep an eye on grandma; the smart future is emerging

Specialised smart systems are also increasingly being integrated into wider smart home systems, with a combination of open standards and a “best of breed” approach. This allows you not just to invest in one of the market-leading smart lighting systems, but also, for example to use it to changing the light settings to suggest that the building is occupied.  Home security is a huge theme in Germany, where burglary rates have actually been rising over the past couple of years. Another smart home system can use top of the range entertainment sound systems to mimic sounds like hoovering – with the added bonus that you can now also annoy the neighbours even when you are on holiday.

One flip-side of this is a degree of potential complexity, and many vendors are aware that systems that are complex to install, program and to manage are incompatible with a true mass market. Accordingly many now offer voice-command systems most commonly using Apple Siri or Amazon Alexa. Some suppliers also offer a degree of “machine learning” based on the behaviour both of typical users and of the actual householder.

Another key trend that BSRIA has also picked up over recent years is that much of the higher-end smart home market overlaps with the light-commercial market. A luxury home and a small office may have many similar requirements in terms of lighting security and energy requirements, and the owners may be willing to make the investment. KNX has a huge presence in this market.

On the other hand, the mass market will only be conquered by systems that are relatively low cost, and simple to install, either by the owners themselves or by an ordinary non specialist electrician. One supplier, Datastrom, makes use of mains electricity wiring to connect and control devices, so can be installed by an electrician. Others deploy low- power devices which can be battery powered and can communicate wirelessly using a low energy protocol such as Z-wave. This also makes the smart home relatively portable, which is an attraction in a country like Germany  where far more people rent their homes than do in the UK or the USA.

Smart technology - light in the tunnel, not just at the end of it.

Smart technology – light in the tunnel, not just at the end of it.

I came away from IFA with a confirmation that a dynamic smart home market is taking shape as part of the massive expansion in smart technology and the Internet of Things. There remain huge question-marks. While there is almost universal awareness that cybersecurity is an issue, and much is being invested in it, it is not yet clear that there is an effective way of keeping all devices secure at all times. In fact this concern could drive the move towards complete smart homes, as it is probably easier to monitor a network of IoT devices for ‘suspicious behaviour’ than to try to protect and update each one individually on a continual basis.

BSRIA will be shortly be publishing a series of studies on each of the Smart Homes and Light Commercial markets in Germany, France, UK, the Netherlands  and on North America, which will explore all this, and much more.

For more information please feel free to contact me, Henry.Lawson@bsria.co.uk – +44 (0)1344 465 590

Should Building Managers worry about scary movies?

threatsBuilding managers thinking of films to see this winter may give some thought to a previously little known comedy largely set in North Korea.

The successful cyber-attacks on Sony, one of the world’s best known corporations, and which lives and breathes digital technology, resulted in the release of reams of sensitive information, and led  Sony to delay the opening of the film. All this may on the face of it have little to do with the nuts and bolts of building automation, but it does fire another warning shot across the industry’s bows.

We have known for some time that buildings are vulnerable to cyber-attack. Not only can they be major targets in themselves, but they often offer an easy “back” door” into an organisation’s wider IT network. The successful attack on Target stores in the USA gained access via the company’s HVAC system which in turn allowed them into the more lucrative customer data records. BSRIA research shows that, in the USA for example, over 90% of all larger buildings (i.e. those with more than half a million square feet of space – or c. 50,000 m2) have some kind of building automation and control system (BACS), and many are to some degree at risk.

What is striking is that in so many successful attacks on buildings or infrastructure the problem had less to do with the cyber-protection systems in place than with the way in which they were being maintained and operated. At Target, alerts were generated but not acted on until after much of the damage was done. The earlier attack on Google’s Australian offices in Sydney were linked to the fact that an older version of the Tridium platform was still in use.

Many organisations lack effective processes and procedures, which in turn is linked to the fact that, even within the same organisation, building services and IT tend still to work in separate, parallel worlds.

All of this is compounded by the fact that BACS systems increasingly have at least one foot in the Cloud, and often several. Almost all major suppliers of BACS and Building Energy Management Systems (BEMS) offer at least the option of cloud based analytics, and the ability to access and manage multiple buildings remotely is seen as almost a “must-have” – outside of industries which have traditionally been hypersensitive about security. The cloud brings huge technical, social and financial benefits, but also greatly increases risk, as does the general spread of IT based functionality through buildings and devices, a process that the ‘internet of things’ is set to expand exponentially.

Major suppliers of BACS systems are talking publically about ways of addressing the challenge, and companies like Lynxspring are establishing a reputation in this area. In the UK the Institute of Engineering and Technology (IET) issued a Code of Practice for Cyber Security in the Built Environment in November 2014.

This blog was written by BSRIA's Henry Lawson

This blog was written by BSRIA’s Henry Lawson

Cyber-attacks tend to be motivated by political, ideological, or financial motives, or by a combination of mischief and malice. On all these scores, major buildings remain vulnerable especially when they are associated with prominent organisations, whether private or public.

In the latest edition of BSRIA’s market briefing Threats / Opportunities for Building Automation Systems, we look further at the cyber threat and what is being done to counter it. The study also looks at other major trends that are changing the profile and prospects of building automation. These include the development of more intelligent HVAC systems, (whether Direct Expansion or VRF based), the growth of ‘smart homes’ solution which are also snapping at the heels of the BACS market at the “lower end” of commercial buildings, the growing importance of building analytics and big data, and the rise of potential new global players, especially in countries like China and India.

We will be following these and other emerging trends through the course of 2015. It should be as exciting anything that Hollywood has to offer, for rest assured: The cyber threat (and much else) is coming to a building near you soon.

 

Additional Sources:

http://techcrunch.com/2014/08/05/smart-buildings-expose-companies-to-a-new-kind-of-cyber-attack/

The Institute of Engineering and Technology (IET) guidelines.

http://www.theiet.org/resources/standards/cyber-cop.cfm

Global BEMS Market set to Approach $7 billion by 2020

This blog was written by BSRIA's Henry Lawson

This blog was written by BSRIA’s Henry Lawson

If I could point to a market which is already worth some $3.5 billion, or 3 billion Euros, and which is growing globally at well over 10% per annum, at a time when growth in building automation is a fraction of that, I suspect that many investors and industrialists would bite my hand off. This is the industry that we explore in BSRIA’s newly updated report BEMS Opportunities.

Even Europe, which currently accounts for almost half the current Building Energy Management Systems (BEMS) market, is growing at around 10%, while North America has been growing faster, and the rest of the world substantially faster still.

BSRIA forecasts that the global BEMS market will almost double, to more than $6.8 billion by the year 2020. This impressive growth is set to occur in spite of numerous obstacles and uncertainties. This is partly because the factors driving this growth differ from one region to another.

In Western Europe, gas prices almost doubled between 2005 and 2013, while at the same time major economies like Germany became increasingly dependent on import of gas from politically sensitive countries like Russia and the Gulf states, raising the spectre of uncertain supplies.

While the rise in electricity prices has been less dramatic, Germany faces the huge task of fulfilling its commitment to

henry dec2shut down all nuclear power generation by 2022, and the UK faces similar challenges as its ageing, coal-consuming and CO2-spewing power stations reach the ends of their lives, with the ghost of Christmas back-outs rising like a Dickensian spectre to haunt the business and political worlds.

This, and increasingly aggressive environmental targets, at national and EU level, mean that even a Europe which has been in or near recession for more than five years continues to invest in energy efficiency. At the same time, there are signs that organisations at all levels are beginning to understand the full potential of BEMS to save money while meeting obligations and improving the brand.

In North America, the pressure of energy prices has been less relentless, especially since fracking of shale gas has got underway. The movement towards environmental regulation has also been patchier – often varying at local and state level, and has faced more opposition. At the same time, the proportion of energy consumed by office buildings has been rising inexorably at a time when energy used in such areas as transport, industry and homes has been either stable or falling, placing office buildings firmly in the sights of those wishing to make savings. North America also benefits from the plethora of firms developing innovative energy management solutions in both the USA and Canada.

In the rest of the world the picture is extremely varied, from developed countries like Japan and Australia with widespread adoption of BEMS, to major emerging economies like China, where energy has hitherto been seen as rather less of a problem but where the pollution associated with fossil fuels is becoming more pressing.

This growth presents huge business opportunities but also as many gauntlets thrown down. The mainstream building automation suppliers are all active, unsurprisingly, given that the two are so genetically interlinked that building automation was originally widely referred to as building energy management. They can offer the benefit of relatively easy integration of energy management into the building’s wider functioning.

Against this, as virtually every device, appliance and component of a building becomes capable of generating and communicating data, the advent of big building data has opened huge opportunities both to enterprise data and IT suppliers and to an army of smaller newer suppliers of advanced analytics, allowing building managers to predict and pre-empt problems that degrade a building’s energy performance.

Some of these new entrants will fall by the wayside, especially given the level of overlap between many of the offerings, others will be ripe for take-over, but a few are likely to emerge as major disruptive players. In our report we identify the leaders and challengers, along with the niche players and some of the most likely acquisitions. As always, there is an implicit conflict between the move towards integration on the one hand and the desire for innovation on the other, and we look at some of the standards that are emerging to address this.

The prize is most likely to go to companies that can combine innovation in new technologies, and understanding of how a building’s occupants interact with the building, with a deep-seated understanding of how buildings function. This report should help to shine a light on who will be left holding a torch for others to follow if and when the lights really do threaten to go out.

This is the industry that we explore in BSRIA’s newly updated report BEMS Opportunities.

The Smart Response to Managing Buildings’ Energy Problems

This blog was written by BSRIA's Henry Lawson

This blog was written by BSRIA’s Henry Lawson

Issues around energy continue to dominate many of the news headlines in the UK, and are seldom far from the forefront in other developed countries. While much of the focus has been on rising domestic energy price- tariffs, the way that buildings use, and all too often waste, energy remains a huge concern. This is hardly surprising given that in both Europe and North America, buildings account for a whopping 40% of all energy consumed.

One thorny problem is the high cost of improving building energy performance, especially in a country like the UK where the building stock, especially  the residential building stock, tends to date back to an era when the principles of energy conservation were much less well understood, let alone acted on, and where the cost of improvements and renovation can be high, and the ROI correspondingly long – a daunting prospect when governments, companies and consumers are all still hurting from the financial hangover following the worst recession in decades.

All of this means that institutions, companies and households need to look at smarter ways of coping with high-cost energy in buildings that are often not ‘designed’ to be energy- efficient.  Here at BSRIA we have just completed a regular update of our report into Building Energy Management in Europe and North America, which has given us the chance to review some of the key current developments. As part of this, we looked at 17 of the leading suppliers to this market.

One immediately striking conclusion is that all of the leaders incorporate a level of analytics, in some cases as part of a wider portfolio, in others as their central specialised offering.  In one sense this is not surprising. If you want to improve a building’s performance then you can either take a direct physical approach– for example more energy-efficient construction or insulation, or cheaper or more environmentally friendly energy sources – or you can take steps to change the way the building uses that energy, which means interacting with its occupants and their requirements in an intelligent way, which in turn requires that you have all relevant information to hand. We can expect these analytics to become increasingly sophisticated, with buildings “learning” based on usage and performance over time.

This also helps to explain another striking finding:  that most of the suppliers in this sector now offer some level of on-going commissioning. Improving building energy performance is a continuous undertaking – reflecting the fact that buildings’ usage patterns and the behaviour of their occupants will themselves change over time, as processes and equipment become more, or less, efficient. In providing or supporting an on-going service, companies become less like suppliers in the “traditional” sense, and more like partners, providing consultancy as well as software or hardware. In some cases the service supports the actual procurement of energy and management of energy suppliers.

Another capability which is fast becoming a “must have” is the ability to offer a Software as a Service (SaaS) model, with all of the advantages in terms of cost model, maintenance, accessibility and flexibility.

wmi-thermostatAs buildings become increasingly integrated into the wider “smart world”, Demand Response, already well-established in parts of the USA is being taken up more seriously in Europe as well, with an increasing number of BEMS suppliers supporting  the move to automated demand response.

While the problems faced by large commercial buildings clearly differ in important ways from the light commercial sector and from residential buildings, there are likely here as elsewhere, to be important elements of crossover. Some suppliers are also providing differently scaled BEMS solutions and energy management is already one of the central elements of most “smart home” solutions.

Barring a sudden surge in cheap, readily available and environmentally friendly energy, which still sounds like a dream scenario, we can expect BEMS to continue its rapid advance in importance, increasingly integrated into related areas of Building Automation, and of Smart Grids.

To find out more about BSRIA’s updated study “BEMS Market 2013 Q4 : Developments in Europe and the USA”, please contact Steve Turner on +44 (0)1344 465610 (Steve.Turner@bsria.co.uk)

Is this the Real Answer for Cheap Green Energy?

Ever since the first serious concerns were raised about man-made climate change a generation ago the world has been caught on the horns of a dilemma. The choice has too often seemed to be between securing the kind of short-term economic growth which the developed world expects and the developing world desperately needs  on the one hand, and paying more now in order to secure the future of our world on the other.

It is small wonder that green energy solutions are still seen as something of a luxury accessory, perhaps affordable in times of prosperity, but pushed into the background at times of world recession, when achieving growth and combatting fuel poverty becomes an even bigger concern.

But could it be that a large part of the answer is beneath our feet, or that at least it might be: an answer that could have a huge impact on the UK as it already has had in similar countries. For once I am not  talking about fracking, but about something that has been around for a century, though the technology continues to evolve in exciting ways.

The heat network rests on the fundamentally simple idea of producing heat (or cooling) centrally, in the most efficient and environmentally friendly way, and then distributing this through highly insulated underground piping, to homes, offices, hospitals, factories and anywhere else that needs it. Often this simply taps into heat that would otherwise be pumped wastefully straight into the atmosphere.

Different measures could radically affect the growth of Heat Networks in the UK

Different measures could radically affect the growth of Heat Networks in the UK

 Such networks not only distribute heat but can store it, for hours or potentially  months, ironing out the wild and often unpredictable fluctuations in both and supply and demand and making it much more practicable to use ‘green’ power sources, such as wind or photovoltaic that are inherently unreliable, not to mention biofuels. Even where gas is still used there is scope for greater efficiencies, especially where the opportunity is taken to use generated combined heat and power (CHP)

 So why is it that this technology accounts for only about 1% of the UK’s current heating needs while in Denmark, with an only slightly colder climate, the figure is over 60%. In fact most European countries already make much greater use of this resource than the UK does, as do countries as diverse as China, Japan and the USA.

In fact the benefits of district energy are already recognised by many UK hospitals, universities and industrial plants and office complexes, frequently powered by CHP systems which offer added security of supply. So why has the residential sector been so slow up until now?

Part of the answer lies in how the UK population lives: predominantly in individual houses which are more expensive to connect, and in most cases owner occupied or privately rented, making it much harder to convert individual householders to heat networks. The relatively low rate of house building in recent decades hasn’t helped either. Gas prices that are low by international standards have also reduced incentives to innovate in this direction.

However the last few years have seen a sea-change, with far more new homes tapping into heat networks, especially new flats, spurred on partly by enhanced incentives from government and encouragement from local planners, but also by a growing Energy Services industry that is prepared to make substantial investments in order to make a long term return.

Here at BSRIA we have recognised this trend, and so decided that a fresh look at the UK district energy market was needed. The result is a report which examines the market, the main players and what has drawn them into the market. It also considers the main positive drivers along with the biggest barriers to future development, and what can be learned from experience outside of the UK.

Our research indicates that the UK District Energy market is already worth over £400 million annually (including capital investment), and that it is growing at the fastest rate in its history, so that we expect it to exceed £500 million by

This blog was written by BSRIA's Henry Lawson

This blog was written by BSRIA’s Henry Lawson

2015).

The overview takes in different possible initatives on the part of national, and local government, as well as the EU, which could speed up development or hinder it, and at the key changes in technology which are likely to make a difference in future.

If you want to know how big this market is likely to be in two or five years’ time and what the prospects are for the future, then this should be an indispensible read.

To find out more about the report or to purchase it contact our Worldwide Market Intelligence team on 01344 465610 or wmi@bsria.co.uk

Threats to the Building Automation and Control Systems Market – or Opportunities?

My smart technologies team within BSRIA’s Worldwide Market Intelligence division have been looking at the threats to the traditional building automation and control systems market. But of course, what is a threat to one is an opportunity to another and we are looking at both angles of the changes currently taking place. We will shortly be publishing our findings and conclusions in a new report to be launched later this month.

The global BACS market is currently worth more than $20 billion and is continuing to grow year on year, having pulled through a global recession quite robustly. Not surprisingly, this market has in recent years been attracting new entrants. Now, new technologies, innovations and novel business models are threatening to disrupt the traditional business.

New technologies that utilise the “Cloud”, developed by relative newcomers such as BuildingIQ and Mios, as well as established multinationals like Johnson Controls and Schneider Electric are providing energy management, self-diagnosis and adjustment functionality not previously available in a Building Automation and Control System (BACS). Suppliers are now faced with the reality “If I am not in the cloud, my competitors probably will be.” There is a growing assumption that all key services and solutions should be accessible via “the cloud” but there are concerns and these are explored in our report.

As building automation becomes more IT-based, software is growing in importance, within both targeted applications and in detailed analytics to identify areas where performance may be improved. BACS suppliers need to be proactive in this area or risk becoming more commoditised and marginalised.

Suppliers of variable refrigerant flow (VRF) and DX systems are also entering the BACS market with integrated controls and rudimentary energy management functions. The market for VRF based systems has overtaken chillers globally and VRF systems are gaining market share fastest where the markets are expanding most rapidly. We have looked at how the BACS equipped VRF systems in the $9bn VRF market are affecting the HVAC and BACS markets. We analyse whether they pose a great enough threat to change the BACS market altogether or whether they are a factor that could help the BACS market. Since VRF-based systems are becoming ever more ‘intelligent’ this changes the scope for building automation. Incumbents must be asking themselves, “how long until they start offering the same sort of capabilities as high level BACS?”

Residential smart home systems from the low-voltage electrical equipment suppliers such as Jung, Busch-Jaeger and Berker are being used in light commercial buildings; interestingly 60% of such systems sold in Germany are used in the light commercial market and demand is increasing. So here too, it is smart residential controls that are posing a threat to traditional commercial building solutions.

However, is the residential value add market at risk of be snatched away from the current players by the telecoms operators and utilities, bundling remote monitoring and energy management as just further services in their offerings? And could this be the way things will go in the non-residential market too?

Threats to BACS – or Opportunities?

Threats to BACS – or Opportunities?

However, opportunities exist in numerous areas, including in integration and convergence of diverse systems. BACS and in particular, building energy managements systems and services (BEMS) penetration in to the existing building stock is still very low and the opportunities for refurbishment are simply staggering. Perhaps the good news is that for the most part, these new markets remain highly fragmented. We are witnessing heightened activity in the areas of partnerships, mergers and acquisitions. This is enabling companies to broaden their scope of offering and to leverage their core skills and follow the rapid evolution of the market.

Our new report analyses these changes and provides information on how the BACS market is coping with the changes and the wider opportunity to expand “beyond BACS”. Supported by facts, figures and enlivened by charts and illustrations, it will be presented in an accessible PowerPoint format of some 60-70 slides. It draws on BSRIA’s long standing expertise in built environment.

Launching BSRIA Business

BSRIA open day, 1970

BSRIA membership open day, 1970

A resurgence of popular interest in the ’70s comes as no great surprise if you consider the ways in which the last double-dip recession resonates today. For example, deregulation and the boom in mortgage lending in the 1970s played no small part in the current volatile housing market.  

The BSRIA Statistics Bulletin has its roots in the 1970s, as we recognised at that time a need for better market intelligence to help businesses get the competitive edge. It’s still a tough market and members tell us that our data to inform future business strategy is valuable – but we’ve subsequently made many improvements to the publication. I’m pleased to say that this month we’re launching a new suite of business services for our members including the new Business Bulletin: 

Total consultants workload during last three months compared with the same period last year.

Total consultants workload during last three months compared with the same period last year.

New services:

  •  Business Bulletin (replacing the Statistics Bulletin) offering quarterly analysis and data on the economic outlook, construction market, M&E contracting and more. We also provide unique data from BSRIA’s Consultants’ Workload Survey. If you work for a consulting engineering  company and would like to contribute to our quarterly survey, please get in touch.
  • Business Network – register  for the launch of the first of a series of business networking opportunities on 11th September.
  • Monthly e-newsletter with the latest business information and technical resources – sign up here.
  • Online business resources on our members-only web pages www.bsria.co.uk/business.

The July issue of the Business Bulletin will be included in our quarterly members mailing (also look out for more information in the next issue of Delta T).

Do let me know if you have any further suggestions…and I’d like to hear a few stories about what it was like for your business in the ’70s…and some pictures please!

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