[Smart Grid Market Research] Energy Management 3.0: Advanced Systems for Commercial and Industrial Users - Zpryme Smart Grid Insights

SMART GRID INSIGHTS
NOVEMBER 2012

SMARTGRIDRESEARCH.ORG
INTELLIGENT RESEARCH FOR AN INTELLIGENT MARKETTM

PREMIUM

ENERGY MANAGEMENT 3.0:
ADVANCED SYSTEMS FOR
COMMERCIAL AND
INTELLIGENCE BY ZPRYME | ZPRYME.COM
© 2012 ZPRYME RESEARCH & CONSULTING, LLC. ALL RIGHTS RESERVED. INDUSTRIAL USERS

Table of Contents

Executive Summary ................................................................. 2
Energy Management System Market Transition ................ 5
Recommendations and Opportunities .................................. 6
Market Overview ..................................................................... 8
State of the Market ................................................................ 8
Technology Definition ............................................................ 8
Market Drivers ......................................................................... 9
Market Barriers....................................................................... 10
Technology Benefits and Segments .................................. 11
Service Delivery..................................................................... 11
Energy Management Market Transition .............................. 13
Energy Management Systems Today ............................... 13
Energy Management Systems in 3-5 years ....................... 14
Energy Management 3.0 (6 - 10 years)............................. 15
Global Market Value Forecasts............................................ 16
Global Energy Management Systems Market Value
Forecast, 2012 – 2020 ........................................................... 16
Global Energy Management Systems Market Value by
Technology, 2012 – 2020 ..................................................... 16
Methodology ........................................................................ 17
Key Players and Solutions ..................................................... 18
Emerging Companies to Watch ........................................ 23
Major Government Initiatives ............................................... 26
Major Regional Projects ........................................................ 27
Keys to Entering the Energy Management Market ............ 30
Zpryme’s Market Outlook, 2012 - 2020 ................................ 31

1 [PREMIUM] ZPRYME SMART GRID INSIGHTS Energy Management 3.0: Advanced Systems for Commercial and Industrial Users | November 2012

Copyright © 2012 Zpryme Research & Consulting, LLC All rights reserved. www.zpryme.com | www.smartgridresearch.org

Executive Summary efficiency, but also integrate with other business functions
to provide both energy efficiency and operations
Commercial energy management systems (EMS) allow optimization. These systems are an amalgamation of
firms to reach energy efficiency goals and control energy building management systems and advanced software
consumption company-wide by using proven energy solutions that assist in managing the building functions in a
control techniques to optimize their energy efficiency. more energy efficient way to provide demand response
controls when situations within the power grid demand it.
Commercial buildings are a large potential market for
energy efficiency programs, and this includes energy To do this, the EMS software measures the energy
management systems. To drive this adoption, federal consumption and utilization of all network-connected
programs play a key role to encourage the technological devices and systems to provide visibility into power usage
development of enterprise grade energy management across the enterprise. Typical components include work
systems for commercial facilities. management capabilities, enhanced demand-response
applications, and analytics and forecasting applications.
Currently, EMS offerings are focused on energy
optimization based on company-specified goals and Energy management is an evolving market, but we see
preferences. However, in the future, EMS will also integrate several opportunities for growth. Key examples include the
operations optimization, and will automatically adjust rising significance of social responsibility and managing
settings for the highest levels of performance, in addition climate change; focus on increasing demand efficiency
to providing energy savings. and operating cost savings; new product offerings;
compliance with energy efficiency regulations; and
There are several segments of the EMS market, with each increased use of renewable energy – all of these are
having specific needs and being at a different stage of driving demand for energy management solutions.
development. As such, vendors will need to provide
solutions specifically suited to the requirements of each This report has been developed by Zpryme‘s Smart Grid
customer. To address that, several small specialized firms Insights Research Team and Zpryme‘s Smart Grid Advisory
are currently offering customized products suited for the Board.
different segments, and some large firms are also
leveraging their knowledge and market presence to
introduce additional EMS products.

Overall, we expect companies will begin adopting EMS
software in increasing numbers over the next 5 to 10 years,
especially solutions that not only optimize energy



Key Takeaways by the Numbers Technology Segmentation

The global energy management system market is From a system technology perspective, communication
projected to reach $1.70 billion in 2012. By 2020, the global networks represent the largest market segment in 2012,
market is projected to reach $9.98 billion. The market is accounting for 20% of the global market. In 2020,
projected to grow at a compound annual growth rate communication networks will account for 18% of the
(CAGR) of 25%. market. This equates to a projected global market value of
$0.34 billion in 2012 and $1.80 billion in 2020 (23% CAGR).
In 2012, North America (40%) and Europe (30%) will
account for about 70% of the global EMS market. Asia By 2020, control systems will be the largest technology
Pacific will account for 15% of the market in 2012. By 2020, segment, accounting for 21% of the global market (vs. 19%
North America and Europe will each account for 30% of in 2012). This equates to a projected global market value
the market, while Asia Pacific will account for 26% of the of $0.32 billion in 2012 and $2.10 billion in 2020 (26% CAGR).
market.
In 2012, field equipment (15%), hardware (13%), software
 North America: From 2012 to 2020, the region will (10%), and sensors (8%) will account for a total of 46% of
grow by 21% annually, from $0.67 billion to $3.01 the global market. By 2020, these four technologies will
billion. account for 44% of the market.

 South America: From 2012 to 2020, the region will Among the six core energy management system
also grow by 21% annually, from $0.09 billion to $0.39 technologies, sensors and software are projected to grow
billion. the fastest (30% CAGR).

 Europe: From 2012 to 2020, the region will grow by
25% annually, from $0.51 billion to $2.96 billion.

 Asia Pacific: From 2012 to 2020, the region will grow
by 34% annually, from $0.25 billion to $2.55 billion.

 Rest of the World (ROW): From 2012 to 2020, the
ROW will also grow by 25% annually, from $0.18
billion to $1.07 billion.



Global EMS Market Value Forecast Global EMS Regional Market Segmentation
CAGR = 25% 2012 to 2020 - % of Global Market
2012 to 2020 (in U.S. billions) (figure 2, source: Zpryme)
(figure 1, source: Zpryme)
$12 100%
11% 11% 11% 12% 12% 12% 12% 11% 11% ROW
$9.98 90%
$10 15% 16%
80% 17% 18% 19% 20% 22% 24% 26%
70% Asia
$7.66
$8 Pacific
60% 30% 30%
$5.89 30% 30% 30% 30%
$6 50% 30% 30% 30% Europe
$4.54 5%
40% 5% 5%
$3.72 5% 5% 5%
$4 $3.05 4% 4% 4%
30%
$2.50 South
$1.70 $2.06 20% America
$2 40% 38% 37% 35% 34% 32% 32% 31% 30%
10%
North
$0 0% America
2012 2013 2014 2015 2016 2017 2018 2019 2020 2012 2013 2014 2015 2016 2017 2018 2019 2020

Global EMS Market Segmentation by Technology Global EMS Market Segmentation by Technology
2012 - % of Global Market 2020 - % of Global Market
(figure 3, source: Zpryme) (figure 4, source: Zpryme)
Field
Equipment, 9%

Field
Equipment, 15%
Control System, Control System,
19% Hardware, 10%
21%

Hardware, 13%
Sensors, 11%
Comm. Comm.
Networks, 20% Networks, 18%

Sensors, 8% Software, 14%

Other , 15%
Other , 17%
Software, 10%



Energy Management System Market Transition
(table 1, source: Zpryme)
Energy
Type of Solution Providers Key System
Management Description Primary End-use Sectors
(% of market served) Features/Characteristics
Systems
Large commercial and Cloud based
industrial customers
EMS mainly employed in large
Preventive analytic
buildings and facilities to decrease
Multinational corporations modeling functions
energy costs by controlling,
Multinational corporations (75%)
monitoring and assessing the
Today Large commercial building Control hundreds of
energy use of lighting, HVAC,
and real estate owners and Niche solution providers (25%) devices across several
machinery, thermostats, and other
managers locations
areas that use large amounts of
energy.
Federal and State Automatic device
Governments start/stop functions

Full energy profile
Mid-sized manufacturing visualization
The EMS will integrate energy
facilities* Multinational corporations (60%)
efficiency with business processes,
Customized to user needs
management and operations.
Large retail operations* Niche solution providers (30%)
This will enable integration and
In 3 – 5 years* Micro-level device control
control by department,
Mid-sized corporate offices* Start-ups (5%)
appliance, equipment, IT
M2M communication
infrastructure, human resources,
Healthcare/Hospitals* Utilities (5%)
etc.
Advanced demand
Multi-unit apartments* response capabilities

Plug-n-play
The EMS will allow businesses to Small manufacturing Multinational corporations (50%)
Highly interoperable
In 6 – 10 align energy efficiency with facilities**
years** business goals, and be able to Niche solution providers (25%)
Energy-management-as-a-
(Energy integrate and communicate with Small and medium retail
service (EMaaS)
Management energy aggregators, utilities, operations** Start-ups (10%)
3.0) distributed energy resources, and
Control thousands of
whole sale electricity markets. Small offices** Utilities (15%)
devices across multiple
locations

*In addition to the functions, features, and sectors mentioned in ‗Today‘
**In addition to the functions, features, and sectors mentioned in ‗Today‘ and ‗in 3 – 5 years‘



Recommendations and Opportunities environmentally responsible and better global
corporate citizens. These are key value drivers that
Recommendations utilities can use to get their customers to see benefits
beyond cost savings for EMS.
1. Vendors looking to enter the EMS market need to
take a long-term view of the opportunity. The Opportunities
current global market is only $1.7 billion, but will
grow to $10 billion by 2020. They must also 1. North America and Europe provide the most
understand the regional nature of EMS, with 70% of immediate opportunities for vendors in the energy
current expenditures being in either North America management space, and combined, currently
or Europe. account for 70% of the market.

2. EMS solutions consist of several components, namely 2. By region, the U.S., Canada, U.K., and Germany are
hardware, software, sensors and control systems. To four countries that have adopted these
get early traction, vendors need to be technologies at the highest rate over the past few
interoperable, plug-and-play, and compatible with years, and are expected to continue leading the
the customer‘s communications network. market.

3. Vendors must also be careful in targeting the right 3. While North America and Europe drive short-term
types of customers. EMS offers the most immediate demand, the long-term growth opportunity includes
value to large consumers of energy, such as Asia. During the forecast period, North America‘s
industrial or commercial facilities and campuses. market share will decline, Europe‘s will remain
While small businesses represent the largest number constant, but Asia will steadily grow from 15% share
of physical sites, the ROI is more difficult to gauge, to 26% of the global market by 2020.
and this end of the market will develop later as EMS
costs come down and the track record is more 4. In Asia, the most immediate opportunity is Japan,
proven. where industries have been charged with reducing
their energy consumption as a result of the
4. Utilities need to view the value proposition of EMS Fukushima disaster that happened in 2011.
beyond ROI. In the U.S., smart meter stimulus
funding, the Better Building Initiative and the ISO 5. Advanced energy management systems will
50001 certification are examples of how become more attractive financially when they
government and industry bodies are working to enable individual customers to sell power back to
promote solutions that make businesses more the grid. This capability will emerge as smart meter



deployments reach critical mass, and as
communications networks become more integrated
with the smart grid.

6. Companies with multiple locations stand to benefit
from advanced EMS deployments in terms of
aggregated billing capabilities. Not only will
advanced analytics help optimize power
consumption across all sites, but they will streamline
the data management, making the billing process
simpler and more accurate.

7. On a more granular level, EMS will provide real time
visibility into energy consumption with the ability to
control the usage of any endpoint connected to
the data network. This will provide businesses with
unprecedented capability to proactively manage
energy use, and allow utilities to make better use of
dynamic pricing with customers, which will help
align energy supply with real time demand
conditions.



Market Overview limiting, and renewable energy generation management.1
The business specifies preferences and goals that govern
State of the Market automation activities and create cost savings. In addition,
advanced analytics allow management to make more
Deployment of the Smart Grid and smart meters enable cost effective and energy efficient decisions.
business management to understand their consumption,
as well as take measures to lower consumption and For the purposes of this report, the term ‗commercial‘
energy costs. To date, energy management systems have refers to both commercial and industrial businesses.
been adopted primarily in large industrial facilities,
however use in other business settings is increasing as Commercial Energy Management Systems (EMS) are a
executives become more aware of the benefits they suite of applications and technologies that enable users to
produce. In addition, technological advances will drive monitor, control, and optimize their use of energy. The
adoption by reducing prices and creating products that typical energy management system is comprised of the
will not only optimize energy efficiency, but also optimize core components described below.
operations. Finally, economic recovery will further propel
EMS Core Components
adoption, as firms will have greater ability to make (table 2, source: Zpryme)
investments in energy efficiency. EMS Component Description
Measurement devices installed in a facility, building, or
Commercial buildings currently consume approximately Field equipment business. Examples include sub-meters, cameras, power
analyzers, and media gateways
40% of all energy or $400 billion per year in the United
Proprietary software needed to integrate EMS with user
States, making them the largest sector of the energy Software operations/ systems. This includes software that enables
market. Given the size of the market, reducing additional functionality to an existing EMS.
consumption in the commercial market will significantly Main system interface that manages, controls, and
Control system
increase overall grid reliability. (user interface)
communicates with the entire EMS. Users optimize and
program the EMS with the control system.
Physical equipment used to integrate EMS such as servers,
Technology Definition Hardware user work stations, backup power suppliers, and mobile
monitoring devices such as tablets.
One way that a building is able to decrease its overall Communication equipment and architecture that
Communications
consumption is through the deployment of an energy network
connects and enables the transmission of data and
information in the EMS.
management system (EMS). It does this through utilizing a
Wireless or wired sensors placed throughout an installation
number of proven energy efficiency programs, such as to measure power and/or communicate device data.
Sensors
load shifting, duty cycling, optimal start and end time, Some devices or equipment may come installed with EMS
thermal heat utilization, energy storage, response to compatible sensors.

weather changes, time of day scheduling, demand
1 www.eisalliance.com/documents/EIS_A_CEMS_WP.pdf



Typically, an EMS comprises of system placed in the Market Drivers
customer's premise, including hardware and software,
designed to control the operation of other energy devices Energy management is an evolving market and end users
according to customer preferences and objectives such are investing selectively in energy management solutions.
as reducing energy costs, or maintaining comfort or However, the market provides several opportunities for
convenience. Controlled devices could include, but are growth as new companies focused on the space emerge,
not limited to, security, thermostats, lighting, HVAC, and longstanding IT companies and building
appliances, large pieces of equipment, and even IT management system companies gravitate to this growing
infrastructure such as servers, computers, and market. Several factors are driving demand for energy
communication networks. Among other control inputs, an management solutions including rising significance of
energy management system can accept energy pricing social responsibility and climate change; focus on
signals from a utility or third party energy service provider. increasing demand efficiency and operating cost savings;
new product offerings; compliance with energy efficiency
The EMS of the future will further integrate energy regulations; and increased use of renewable energy.
efficiency with strategic business goals. Because future
business energy management systems will control more By using energy management solutions, firms are able to
devices, from individual electrical outlets to the individual respond to government regulations to reduce carbon
lights and pieces of machinery, the EMS will go a step emissions; to employee, customer, and community
further than current capabilities to both control energy requests to operate in an environmentally friendly manner;
and optimize production efficiency. and to shareholder demands to decrease costs and
produce higher returns. There are several approaches to
It will utilize occupancy sensors and scheduling to turn off reducing the carbon footprint, from promoting eco-
individual outlets to reduce vampire energy, shift the friendly practices to changing energy production methods
storage of information to maximize server use, while to establishing and enforcing carbon emissions limits.
leaving critical outlets protected and backed up by a
storage system to maintain constant operation. It will even While the U.S. has yet to enact federal carbon regulations
perform programmable functions like copying and or pricing laws, other government regulations affect future
computer maintenance and updates during non-peak energy supply strategies. In Pennsylvania, for example, a
times. By integrating operations with energy efficiency, new law requires a 4.5 percent reduction in peak energy
firms will be able to better maintain equipment, reduce demand by 2013. Moreover, by 2015, U.S. stimulus
downtime, improve production and maximize overall spending promises to support an additional 50,000
profitability. megawatts of renewable energy sources. These types of
energy sources present intermittency challenges: The wind
does not always blow, and the sun does not always shine.



As a result of intermittency, energy management systems In the U.S., for example, BuildingIQ (an energy
must incorporate rapidly accessible response reserves for management software company) and Schneider Electric
use during power shortages. Furthermore, plug-in hybrid (a global specialist in energy management) announced in
and all-electric cars, such as the Nissan LEAF and Chevy April 2012 that they were collaborating to provide
Volt, promise to help reduce both carbon emissions and commercial building owners with a next generation
dependence on imported oil; however, they also lead to solution for energy management. This partnership provides
an increase in demand for power. Thus, energy customers with a cloud-based energy management
management systems are required to assist in minimizing system that automatically and continually reduces
the energy requirement of these vehicles. Heating, Ventilation, and Air-Conditioning (HVAC) energy
use and connects commercial buildings to the Smart Grid.
The use of energy is the second-largest variable cost in the
manufacturing process after raw material costs. Energy Market Barriers
use changes from one hour to the next depending on
many influencing factors, such as outside temperatures. Getting consumers to understand that the use of energy
Since energy needs can change abruptly, the energy management systems can empower them to do
infrastructure must always have the capability of meeting something about their energy costs is the biggest market
the peak demand. Newer, informed demand-response barrier for the energy management system market. Most
technologies help shape energy demand, predict companies and customers realize there are means to
available load, and then precisely shape that load. In reduce energy costs, but they lack information about
particular, informed demand response enables distributed what is happening within their energy systems. Energy
intelligence end-points, verifiable results, accountability management systems can provide a window of how the
and measurement, and comprehensive data analysis. equipment in their buildings is operating, monitor
performance, and identify areas of potential savings.
Organizations require enterprise-level reporting for
hundreds of thousands of devices across their highly Financing installations is a problem. Vendor providers can‘t
distributed offices and data centers worldwide. Therefore, provide up-front costs, and equity leasing firms are not
there is an increasing demand from global enterprises for interested in entering the market. If they would, it‘s
more depth and breadth to their energy management predicted that the applications would explode.
solutions. This allows them to seamlessly scale to and
support multiple locations around the world. Rapid energy Last, a burdensome regulatory environment, a lack of
modeling, app stores, energy kiosks, cloud computing, big standards, and acceptance of modern communications
data, online communities, and continuous optimization networks are also holding back the potential of the energy
are now required in the vocabulary of market players. management systems market.



Technology Benefits and Segments are more affected by the cost of the energy
management system. Although there is considerable
Businesses that deploy an EMS first benefit from reduced interest in energy management systems, widespread
energy consumption, which leads to reduced energy adoption will not be possible until the cost decreases and
costs, reduced GHG emissions, and reduced pollution. the size becomes more scalable and customized.
Our research finds that peak energy demand (load) can
be reduced 10% to 20% through the use of advanced The office business market is the largest segment of the
energy management systems. In addition, the firm will be commercial building market. Offices have very specific
more knowledgeable about consumption and better able needs and critical equipment, such as servers, that must
to identify the high consumption areas, as well as plan for be continually on. Energy waste can be significantly
the future. Modeling also lets the firm try out decisions reduced through implementation of an energy
before they are implemented, allowing the firm to management system. The segment is poised for
determine the optimum settings and prevent potential widespread adoption, however the cost must be reduced
problems. and the energy management system must control all
devices, while insuring the continued operation of others.
Any areas performing out of range can be quickly and Finally, small businesses (those with under 500 employees)
automatically scheduled for maintenance. In addition, represent a huge portion of the commercial market. In
energy optimization can increase the utilization of 2009, there were nearly 27.5 million small businesses in the
equipment, and coordinate energy efficiency programs United States, representing 99.9% of all businesses. In 2008,
across multiple locations, thus reducing overall energy 21.4 million firms had no employees. The size of the market
costs for a business. is enormous, however facilities and capital are very
limited, and ROI is extremely important. For that reason,
The EMS market has several segments. First, the large energy management systems for small businesses must be
industrial, commercial, and government segment has relatively inexpensive and extremely customizable.
been implementing EMS for some time as energy
accounts for a significant portion of their operating costs. Service Delivery
In the near future, the large industrial market will
implement improvements, especially as technology Initially advanced energy managed systems and services
enables further integration with operations management. will be provided and managed by technology vendors,
third-party aggregators, and eventually utilities.
The Mid/Medium commercial segment includes retail Management of these systems will take place under one
facilities, manufacturing facilities, and hospital and of the three scenarios below.
medical buildings. These mid-sized facilities are not as
dependent on energy consumption as large facilities and



 Vendor or third-party managed: The solution provider a monthly subscription fee that is determined by the
will manage the user‘s system from a central location overall size and number of locations each customer has.
(off-site). They are typically the least expensive solution, Initially, utilities will not be interested in providing these
as they have the lowest capital investment and a services unless they are reasonably progressive. Due to the
monthly management fee. This EMS is cloud-based regulatory landscape, utility decision-makers are keen on
and business executives can link remotely to modify keeping the status quo due to potential liabilities. They are
preferences. ultra-cautious and hesitant to engage in programs and
services that might disrupt their operations.
 User managed: In this case, a building or company will
manage the solution on site or from a central location. They are open to looking at utility rebates but won‘t be
The executives directly input preferences and openly receptive to discussing the alternatives being
parameters, and staff monitors the system to perform offered by these companies until they can demonstrate
overrides or manual operations. These systems typically critical mass, which is normally considered to be a
have a significant initial capital investment, and require successfully installed base of at least 300 units.
continued maintenance costs. In addition, human
resources are also utilized to manage the EMS. Overall, next generation services will be delivered and
managed through the Internet cloud. However,
 Utility managed: The utility will manage the progressive utilities seeking new revenue streams will
solution/service for the user (commercial/residential eventually enter the market.
building or facilities). However, it is extremely costly due
to extensive deployment costs and could lead to
significant problems, such as customer equipment
failure due to duty cycling. In addition, the utility would
manage numerous clients, decreasing customization
by businesses and preventing individual efficiency.

Prices for advanced energy management services vary
significantly. Companies that work with smaller entities
such as residential homes, grocery stores, hotels, and
telecom applications charge as little as $1,500 for
upgrades of existing customers, $5,000 - $7,000 for most
installations, and up to $50,000 to $100,000 for large
customers. The average ROI time frame is 2 – 4 years for
such systems. In addition, customers are normally charged



Energy Management Market Transition
Several benefits of employing corporate energy
As energy management systems become more management systems are being experienced by its users.
advanced, they will go through a series of changes. First, The primary benefit of utilizing an energy management
the users that utilize energy management systems will system is reducing energy consumption. Reducing energy
expand to comprise a larger section of the small to consumption provides a number of secondary energy
medium sized business market. In addition, as adoption of benefits including reducing the energy cost, reducing
energy management systems increase, benefits to users greenhouse gas emissions, and reducing the carbon
and the overall electric grid will also increase. Next, the footprint for the firm. Because the firm would reduce
technology will advance significantly, enabling the energy consumption, it would require less energy from the
potential to control thousands of devices across multiple grid, thus creating a more reliable grid. Another benefit
of locations. Finally, seamless integration with the electric firms experience is increased knowledge about its energy
grid, distribute generation resources, and whole sale consumption. Finally, this increased knowledge also
electric markets will become a key feature of the energy improves documentation and compliance of
management systems of the future. environmental and other regulatory requirements.

Energy Management Systems Today Several key pieces of technology enables business energy
management systems to integrate disparate systems to
Currently business scale energy management systems are offer energy reduction for the firm. Energy sensors can be
employed in facilities large enough to consume a very attached to energy consuming equipment, allowing the
high amount of energy, operate many pieces of high energy management system to monitor and control the
consumption equipment, coordinate multiple buildings, or devices. These sensors are becoming integrated with new
where energy availability, reliability, and security are a equipment, as in smart appliances, such as air
priority. Industrial facilities frequently utilize energy conditioners, water heaters, and security systems. In fact,
management systems because they employ a number of the motion sensors employed by security systems become
very high energy consuming devices. Large automotive, more important as they provide valuable information
food production, and other energy intensive industries also about occupancy and feedback about facility use. The
utilize energy management systems. Universities frequently more devices that can be connected to the energy
utilize energy management systems to manage energy management system, the more valuable the system
consumption in multiple buildings across their entire becomes for the firm. Energy management system
campus. Finally, government facilities also employ software is exceedingly important, as it takes the
enterprise energy management systems, both due to the information obtained from the multitude of devices and
size of their facilities, and their security and efficiency sensors and analyzes it to monitor and manage energy
requirements. facility-wide. Also, additional features are being added,



such as GIS integration, modeling and renewable energy creating an integrated total energy management system
integration. Of course, renewable energy integration capable of optimizing all resources. Automation will also
includes solar panels, wind turbines, and all other be key, as firms will receive automatic notifications of any
equipment associated with renewable energy generation. equipment performing outside the normal range, and the
Finally, energy management systems require a dedicated energy management system will also schedule
computer terminal or control center to manage its maintenance and repairs, thus automatically reducing
network of connected devices. Increasingly, cloud based downtime and increasing production. This will also
systems are being deployed to allow remote monitoring, increase the lifetime of the equipment and minimize
control, and utilization. equipment failures. The main focus of energy
management systems in 3-5 years will be integrated
Energy Management Systems in 3-5 years energy efficiency with business management and
operations. The firm will benefit from being able to
In 3-5 years the enterprise grade energy management prioritize devices, thus maintaining consistent operation of
system will have expanded beyond the large industrial, critical systems while minimizing energy costs, such as
manufacturing, government, and university market. At this moving data to one server while shutting down a
time it will have expanded to offices, large retail stores, secondary server when it is not needed.
global conglomerates, building and apartment operators,
and the primary education sector. In addition, hospitals The energy management systems will evolve to integrate
and medical buildings will also begin to utilize facility business information by department, appliance,
energy management systems, as they are highly equipment, IT infrastructure, human resources, etc. The
dependent on energy reliability, especially during system will use advanced analytics and modeling to make
emergency situations. predictions, detect patterns, and manage systems based
on this information. Because the firm will be able to
In addition to benefits currently experienced by firms control energy to the individual device level, most new
utilizing energy management systems, numerous other building and office equipment will have to be produced
benefits will be experienced. The energy management with sensors allowing control by the energy management
systems will be controllable to the individual device level. system. Next, commercially produced sensors will be
In addition, systems will be able to suggest opportunities available to integrate with older appliances, such as
for additional savings, such as opening windows, and computers, copiers, fax machines, phones, etc. Finally,
cycling the air conditioner. This will provide additional advanced weather devices will also integrate with
energy efficiency and cost savings, further lowering renewable energy generation and modeling technology
operational costs, increasing profits, and increasing cash to optimize the load profile of business users. Examples of
flow. These energy management systems will also offer this weather technology include thermostats, barometers,
integration with natural gas, water and cable systems, and hygrometers. In conclusion, technological



advancements integrating all areas of business utilize the most efficient equipment first, and even perform
information, advanced analytics, sensors, storage, and routine maintenance automatically. In addition, the
weather devices will enable both manufacturing firms and system will be able to integrate and communicate with
large office and retail facilities to experience the energy aggregators, utilities, distributed energy resources,
numerous benefits of utilizing business energy whole sale electricity markets, and across thousands
management systems. devices located at different locations.

Energy Management 3.0 (6 - 10 years) For these benefits to be realized, technology must be
enabled. First the energy management system will
Within the next 10 years, small businesses will realize the become scalable with customization features that allow
potential benefits of employing an energy management both pre-set programs and a high level of individualization.
system and will look for suitable options to meet their The energy management system will also develop plug-
needs. The use of energy management systems will and-play capabilities that offer the ease of set-up for all
expand to include small to medium size businesses such as users. One key development in the energy management
small retail facilities, restaurants, and small offices. These system will be the ability to integrate data from every
systems will be smaller, inexpensive, and highly business segment, including inventory, purchasing, human
customizable. resources, billing, IT, maintenance, etc. Another
technological step will be the ability to enter operational
The benefits firms experience by employing a business goals and then translate those goals into an appropriate
energy management system will be based on and optimum course of action. The software will be able
customization and integration. Again, business operations to utilize real-time data to make instantaneous corrections
will be of primary focus, and will allow businesses to align to meet said goals and optimize energy. The software will
energy efficiency with business goals. One way the also be able to offer different options to obtain the goals,
energy management system achieves this benefit is as well as suggest improvements to achieve better results
through the ability to prioritize energy functions by business across systems or departments.
impact. The energy management system will evolve to
the extent that the operational goals can be input into the
energy management system and the system will be able
to discern patterns, and make predictions to guide energy
management efforts. This will result in the energy
management system warming up equipment, turning off
outlets to reduce vampire energy, and optimize staff
deployment. In addition, the energy management system
will extend the life of equipment by detecting irregularities,



Global Market Value Forecasts

Global Energy Management Systems Market Value Forecast, 2012 – 2020
(table 3, source: Zpryme, in U.S. billions)

Region 2012 2013 2014 2015 2016 2017 2018 2019 2020 CAGR

North America $0.67 $0.78 $0.92 $1.07 $1.26 $1.47 $1.87 $2.37 $3.01 21%
South America $0.09 $0.10 $0.12 $0.15 $0.18 $0.21 $0.26 $0.32 $0.39 21%
Europe $0.51 $0.62 $0.76 $0.93 $1.13 $1.38 $1.78 $2.29 $2.96 25%
Asia - Pacific $0.25 $0.33 $0.42 $0.55 $0.71 $0.93 $1.30 $1.82 $2.55 34%
ROW $0.18 $0.23 $0.28 $0.35 $0.44 $0.55 $0.69 $0.86 $1.07 25%
Total $1.70 $2.06 $2.50 $3.05 $3.72 $4.54 $5.89 $7.66 $9.98 25%

Global Energy Management Systems Market Value by Technology, 2012 – 2020
(table 4, source: Zpryme, in U.S. billions)

Technology 2012 2013 2014 2015 2016 2017 2018 2019 2020 CAGR

Field Equipment $0.25 $0.28 $0.35 $0.39 $0.43 $0.47 $0.59 $0.77 $0.90 17%
Hardware $0.22 $0.27 $0.30 $0.34 $0.41 $0.45 $0.59 $0.77 $1.00 21%
Software $0.17 $0.23 $0.28 $0.37 $0.45 $0.59 $0.77 $1.00 $1.40 30%
Communication Networks $0.34 $0.41 $0.50 $0.58 $0.71 $0.86 $1.06 $1.38 $1.80 23%
Control System $0.32 $0.39 $0.50 $0.64 $0.78 $1.00 $1.30 $1.61 $2.10 26%
Sensors $0.14 $0.16 $0.23 $0.27 $0.33 $0.45 $0.59 $0.77 $1.10 30%
Other $0.25 $0.31 $0.35 $0.46 $0.61 $0.71 $1.00 $1.38 $1.70 27%
Total $1.70 $2.06 $2.50 $3.05 $3.72 $4.54 $5.89 $7.66 $9.98 25%



Methodology

Zpryme utilized secondary research sources, publicly
available sources, government announced plans, and
Smart City, Smart Grid, and Building Efficiency plans to
analyze the Energy Management Systems (EMS) Market for
commercial and industrial users. In-depth industry
interviews were also conducted to better understand the
market drivers, demand, and opportunities. Qualitative
assessments were made by Zpryme‘s research team that
take into account both the primary research
(meetings/interviews) and secondary research findings to
assess the market segments of interest.

Finally, time series forecasting was used to project market
values from the baseline data obtained from primary and
secondary research methods. Other variables accounted
for in our models include but are not limited to:

 Energy demand
 Energy/fuel prices
 Economic growth (GDP growth)
 Government stimulus
 Government goals
 Renewable generation targets
 Private sector capital investment.



Key Players and Solutions IBM® TRIRIGA® Energy Optimization combines real-time
systems monitoring with facilities and event management.
Currently, Energy Management Systems for businesses are It helps analyze and optimize facilities operations, reduce
offered by a group of specialty firms, as well as energy expense, and improve asset management and
multinational firms offering a range of services. reliability.

IBM: IBM has recently introduced its Smart Building and Smarter Rebuilding in New Orleans
Power Systems Energy Management Program. IBM
integrates a building's diverse systems including security, Tulane University's School of Architecture, a program
lighting, doors and windows, CO2 sensors, and even distinguished by its focus on community engagement and
badge readers into an illustrative analytics program environmental sustainability, has turned to IBM Intelligent
capable of making predictions and modeling decisions. Building Management and Johnson Controls to advance
The solution provides visualization of key benefits and goals its own smarter buildings evolution in the wake of
including reliability, efficiency, performance and Hurricane Katrina's destruction six years ago. As the largest
availability. IBM has been named one of the top four firms private employer in the City of New Orleans, Tulane
leading the way in Enterprise Energy Management University has made significant advances in rebuilding in
Systems, and the firm's establishment in diverse sectors of more environmentally sustainable ways.
the energy industry makes IBM one of the most trusted
firms in the field and its product is suitable for large firms The first IBM project is helping to transform the home of
already utilizing IBM products.2 Tulane's School of Architecture, the century-old
Richardson Memorial Hall, into a "smarter building living
Another solution offered by IBM is IBM TRIRIGA. IBM TRIRIGA laboratory," using IBM Intelligent Building Management
provides a single system to manage the life cycle of while maintaining respect for its historic status. The school
facilities. It delivers business analytics, critical alerts and aims to arm a new generation of architects with
automated processes to increase visibility, control & techniques that will allow historic buildings to be more
automation of real estate management, capital projects, efficiently adapted for modern use.
space management, facility maintenance and energy
management. IBM TRIRIGA provides an integrated The IBM project will bring together building technology for
workplace management system to increase operational, heating, cooling, lighting and water to act in a more
financial and environmental performance of facilities.3 holistic fashion for better results. The building will have
intelligence to monitor itself and communicate how it
should be most efficiently operated, significantly reducing
the natural resources it currently uses.4
2 www-03.ibm.com/systems/power/software/energy/solutions.html
3 www-01.ibm.com/software/tivoli/products/ibmtrir/index.html 4 www-03.ibm.com/press/us/en/pressrelease/34694.wss



IBM to Monitor 50 Federal Buildings Emerson: Emerson Process Management, an Emerson
business, is a leader in helping businesses automate their
IBM has won a contract to develop and install smart production, processing and distribution in the chemical, oil
building technology in 50 of the U.S. federal government‘s and gas, refining, pulp and paper, power, water and
most energy-consuming buildings, and the resulting data wastewater treatment, mining and metals, food and
could help reduce operating costs across the General beverage, life sciences and other industries. The company
Service Administration‘s entire inventory of nearly 182 combines products and technology with industry-specific
million square feet. engineering, consulting, project management and
maintenance services. Its brands include PlantWeb™,
The GSA says this initiative will save taxpayers up to $15 Syncade™, DeltaV™, Fisher®, Micro Motion®, Rosemount®,
million annually by connecting building management Daniel™, and AMS suite.
systems to a central cloud-based platform. In the first year,
50 buildings will be integrated on this building Emerson‘s Ovation system with SCADA technology
management system. As additional federal buildings are integrates all processes, not only the control of
constructed and other facilities are upgraded, the mechanical equipment such as turbines, boilers, pumps
platform will manage those buildings, too. and mills, but also the control of electrical equipment, all
performed from a common platform. The Ovation
Under the terms of the contract, IBM will develop a system controller combines technologies and Ethernet networking
to monitor building performance nationwide and stream which enables an interface with multivendor equipment in
data to a central facility. The technology will link major the low and medium voltage arenas. It includes
building controls, and when the system is fully integrated, capabilities for the automation, monitoring and control of
tenants will be able to view the performance of their actuators, variable speed drives, automatic voltage
buildings on dashboards with real-time metrics on energy regulation, transformers and generator protection.
savings. They will also see recommendations on how to
further increase efficiencies. Ovation also supports specific protocols designed for the
power industry for data exchange between generating
GSA says it will then use the data and analytics to save facilities and dispatch centers, and can be installed in new
energy and reduce costs across its entire fleet of buildings. or existing enclosures. Emerson also provides a CSI 6500
Machinery Health Monitor which combines protection and
The contract is part of GSA‘s larger smart building strategy prediction, with real-time performance monitoring and
to reduce energy use. The agency‘s plan to meet the process automation. Integrated with Ovation, it provides
requirements of President Obama‘s Executive Order 13514 the enterprise-wide information needed for real-time
goal of reducing energy consumption in federal buildings decision making.
by 30 percent by 2015, using fiscal year 2008 as a baseline.



Barking Power LTD., one of the largest independently the cost of natural gas, electricity and water that will pay
owned generation plants in the UK, successfully installed for itself in 10 years. The upgrades included low-flow
Emerson‘s Rosemount wireless acoustic transmitters to fixtures to conserve water, enhanced lighting, retrofitted
identify failed steam traps, leaking valves, and boiler tube heating, ventilation and cooling systems, and a new 630
leaks to improve the efficiency of its Combined Cycle Gas panel photovoltaic system, all linked by the Metasys©
Turbine Power Station in London. Using the wireless building management system to monitor and control the
networks already in place, additional devices can be performance of Pioneers‘ facilities.
added at a much lower cost than if they had to be wired-
in individually. Siemens: Siemen‘s Totally Integrated Automation (TIE)
concept for energy management offers the integration of
Johnson Controls: Johnson Controls provides equipment, all types of products and solutions, including the
controls and services for heating, ventilation, air manufacturing systems of other vendors. Their product
conditioning, refrigeration and security systems to increase spectrum extends from automation and drive
energy efficiency and lower operating costs in buildings. technologies to system integration using industrial software
Their Metasys© building management system, with IT- to technology-based customers. Their products allow
based infrastructure, software and wireless capabilities, companies to digitally plan and simulate entire production
provides monitoring and control of all building systems, plans and manufacturing processes to optimize them prior
including comfort controls for temperature and humidity, to commissioning.
lighting, fire safety, and security equipment. In addition,
one of their strategies is to play a significant role in the Their SPPA-M3000 is an energy management suite of
growing market for demand response services by enabling modules for power plants and fleets which provides
smart buildings to interface seamlessly into the grid. precise detection analysis along the entire workflow
processes. The suite consists of five modules: Plant
To enhance their position in this market, the company Management, Early Fault Warning, Generation Planning
acquired EnergyConnect Group, Inc. to create a new and Monitoring, Business Performance Monitoring, and
level of building intelligence. EnergyConnect‘s demand Process Information Management.
response technology and service platform provides
energy managers and facility operators with real-time Their ―b.data‖ Energy Management product creates
energy information and access to energy markets to transparency in infrastructure processes, making
manage their energy use. heterogeneous system landscapes easier to navigate, due
to the provision of a source-related energy cost allocation
Johnson Controls engineered a $3.8 million facilities and the ability to transfer data into an accounting system.
upgrade for Pioneers Memorial Hospital in Brawley,
California to improve operational efficiency by reducing



Schneider Electric: Schneider Electric provides a product Honeywell: Honeywell provides energy and emission
called StruxureWare which is comprised of platform of management solutions to help manufacturers monitor,
applications and software suites that allows companies report, analyze, and reduce greenhouse emissions.
visibility into energy, other resource usage and business Honeywell experts combine their knowledge of radio
needs across buildings, industrial plants, and data centers. frequency fundamentals and wireless networks with their
Each suite delivers seamless integration with third-party experience in process control networks and cyber security
offers and legacy systems, as well as a scalable platform. to provide the most secure and high performance wireless
network for a facility.
Their Resource Advisor module is an online carbon and
energy reporting portal. This enterprise level software-as-a- Their Energy Dashboard product provides a complete
service (SaaS) tool allows end-users to visualize energy cost integration with the overall information and work
and resource usage data, capture and report carbon processes of a manufacturing facility.
emissions accurately, and manage all energy efficiency
projects in one location. Their SentientSystem is an integrated suite of modules
specifically designed to address boiler, boiler cleaning,
The Energy Operation module is also a SaaS tool which turbine cycle and unit optimization to provide asset
transforms data into essential energy information to management to utility companies.
identify areas of continuous improvement to reduce
operating expenses. The Building Operation module Honeywell‘s Experion PKS transforms process control
provides integrated monitoring, control and management beyond traditional DCS functionality by unifying people
of energy, lighting, fire safety, security and HVAC. with process variables, business requirements and asset
management. Integrated with the Experion PKS, their
The Power SCADA Expert module is a real-time monitoring Digital Video Manager (DVM) product presents video as
and control software solution for large facility and critical the next generation process sensor to automate the
infrastructure operations. It provides real-time data detection of events and improve the speed and accuracy
intelligence for power distribution through alarming and of operator response to process upsets.
graphical interface functions. The Process Expert module is
the software that integrates the control application, the Honeywell also provides a highly scalable, integrated,
supervision, and the field devices in a single environment. multi-server SCADA solution that incorporates applications
In the fourth quarter of this year, Schneider Electric will for human machine interface (HMI) to address complex
release the Security Expert module to encompass video, remote automation requirements. They also provide a
access control and building management, as well as the specialty quality control solution, the HC900, for the pulp,
release of an Asset Operation module in 2013. paper and rubber industries.



In the latter regard, Honeywell was selected on May 16, analyze, visualize, and benchmark energy consumption
2012, by Mitsubishi HiTec Paper Europe GmbH, a leading across operations, including offices, data centers, plants,
European specialty paper manufacturer, to replace its equipment, and other assets‖.7 The product offers
current quality control systems with Experion MX at its advanced analytics and modeling features, as well as
production facility in Bielefeld, Germany. offering real-time interaction and facility-wide analysis. C3
has won numerous awards, including Company of the
Power Measurement Limited: The company has been Year from Going Green Global 200 and Platts Global
awarded a $3 million grant from the Government of Energy Award's Award of Excellence.8
Canada to participate in a pilot project at the British
Columbia Institute of Technology. The company installed CA Technologies: CA Technologies offers the CA Enterprise
Ion Enterprise, an enterprise energy management system Energy and Sustainability program to help firms manage
with advanced forecasting, emergency power systems, and track their energy consumption to meet company
functionality allowing load side management and robust goals, including sustainability, carbon footprint, resource
security. Total consumption is forecasted to decrease management, government compliance, water usage,
energy 10-25%, and illustrate the extent in which business and waste generation. One key feature is the CA
customers will decrease consumption based on energy ecoDesktop, which reduces the energy consumed by
management system usage, as well as the ability of computers. The product is scalable and able to identify
integration with dynamic pricing models, and is a suitable consumption from the entire firm to the smallest asset,
option for multi-building facilities, such as universities.5 relying on advanced metrics and analytics to make
predictions. CA Technologies has also won numerous
JouleX: JouleX offers the JouleX Energy Manager that awards, including being named one of the four leaders in
offers a scalable solution for businesses. The sensorless the Enterprise-Scale Energy Management System field.
system integrates office equipment including VOIP
phones, copiers, servers, as well as distributed facilities into Carbon Systems: Carbon Systems has also been named
a central system. Through cloud computing, the product one of the top four leaders in the Energy Management
offers remote management, real-time feedback, demand System field, deploying their Enterprise Sustainability
response, and green initiative support. Their primary Platform in over 45,000 locations worldwide. The web-
customers are large office buildings.6 based platform analyzes and reports information on
energy, environmental, and carbon consumption as well
C3 Energy: C3 Energy offers its Energy and Emissions as progress on social responsibility goals. In addition, it
Management Software as a part of a portfolio of services provides detailed information on return on investment and
for business clients. C3 Energy's product ―monitors, energy cost reduction.

5 www.nrcan.gc.ca/energy/science/programs-funding/2050 7 www.c3energy.com
6 www.joulex.net/enterprise-energy-management/ 8 Ibid.



Verisae: Verisae offers its Energy Information System to niche industries, but primarily mobile telecom operators
enable upgrades and support firms that are already with cellular shelters. Their patent-pending IP-based system
involved in energy management and have already optimizes peak and non-peak power consumption by
experienced the cost savings that basic, low cost using proprietary algorithms. eCurv reports utility cost
improvements bring. The second level of improvements reductions in excess of 11% without the costs or impact of
focus on energy supply and demand, and optimization of a major infrastructure overhaul, and savings of over
energy projects, as it suggests opportunities for $2,000/month for each megawatt under their
improvement and potential energy savings. ―The energy management. The company has future plans to market to
solutions primary components include utility bill processing commercial customers with large footprints and large
and meter data management for energy spend analysis, fleets of appliances, including hotels, hospitals,
energy alerting and review through flagging data government buildings, universities, institutional buildings,
anomalies, energy analytics, executive dashboards for and eventually, EV‘s.
reporting and performance scoring, and energy validation
for exception management.‖9 Their solution is uniquely OutSmart Power Systems: OutSmart, based in Natick,
suited for the large scale industrial customers that have Massachusetts, is the latest company launched by
implemented previous improvements, thus looking for Manifold, a firm that spins off tech start-ups to
upgrades to existing systems within the next 10 years. commercialize products developed by outside investors
and its own engineers. It consists of a network, including
Emerging Companies to Watch hardware and software that monitors energy usage,
building occupancy, and other activities in each room of
Retroficiency: Retroficiency is a start-up firm founded from commercial properties. The network includes nodes
MIT. They focus on expanding the capabilities of the designed for installation in electrical breakers, outlets, and
energy management for businesses, including managing switches. The nodes are equipped with electronics that
several buildings from one location. The on-site program calculate electricity consumption and use existing wires in
allows access to every energy consuming area, and a building to feed that information into a controller. The
partners with utilities to not only strengthen business energy controllers are linked to servers, where the information can
management, but also the Smart Grid as a whole. The be accessed and viewed over the Internet. The company
solution is best suited for firms with many locations.10 also plans to sell sensors that connect with the existing
electrical infrastructure in buildings to detect motion,
eCurv: eCurv is a privately-held start-up company based temperature, and other conditions. In addition to owner
in Cambridge, Massachusetts. The company focuses on occupied commercial properties, their current marketing
and sales efforts focus on the domestic food vertical
markets including grocery stores, cold storage and
9www.verisae.com/energy-information-systems/Energy-Systems-Overview/
10energy.aol.com/2012/07/23/building-energy-efficiency-options-in-a-dynamic-
environment/



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