RTEM’s Answers to Today’s Energy Challenges

Maria Solobay, product manager at Yardi Energy

Among its many other effects on operations, the COVID-19 crisis has reshuffled thinking about energy strategies in the office sector, as well as in other asset categories. Real-time energy management is emerging as a value proposition for owners and managers that need to take a fresh look at energy solutions. Maria Solobay, a product manager at Yardi Energy, recently offered strategies for exploring RTEM technology. 

What are the main differences between a conventional building management system and real-time energy management? What does RTEM add to the toolkit?

A conventional building management system (BMS) controls and monitors a property’s electrical and mechanical equipment. They are used for managing equipment scheduling, fault detection and maintenance at a property. They are typically considered a form of static control, where manual adjustments are required to compensate for changing conditions. In a typical portfolio, it is common to have multiple BMS vendors for various properties, depending on the age and location of the property. That makes it difficult to obtain a top-down view of your portfolio, and any operational decisions need to be taken individually at each property, which can lead to inefficiency and missed savings opportunities.

In contrast, real-time energy management (RTEM) solutions incorporate elements of automation and predictive analytics to develop a more dynamic approach to managing a property’s BMS. Using historical and forward-looking  data to improve fault detection and inform decision-making around scheduling allows building operators to react to changing conditions more robustly, thereby optimizing the energy usage at their properties. An RTEM solution can complement existing BMS functionality and sits on top of your entire portfolio, providing property management teams with centralized, continuous visibility into their portfolios as well as flexibility in performing changes across multiple properties.

As we’re all aware, COVID-19 is having a far-reaching impact on real estate management. Are there any takeaways about how this is changing perceptions of RTEM?

While the concept of RTEM is not new in the industry, the urgency for RTEM solutions has become more apparent during the pandemic. As the COVID-19 situation unfolded globally, it impacted each industry and completely changed the way many businesses operate. Retailers either reduced hours or temporarily closed locations. Large events were either cancelled or postponed. Companies enforced mandatory work-from-home policies for their employees. That resulted in unprecedented vacancy at commercial properties, and potential rent deferrals left owners at risk of huge losses of income.

Almost overnight, it became critical to cut operating costs wherever possible in order to stay afloat for as long as possible. Schedules had to be adjusted on the fly, and energy budgets had to be recalculated immediately. While these vacancies offered an opportunity to reduce utility spend on lighting or HVAC, visibility into usage was key in order to quantify consumption during revised operating hours.

For those that only have access to data from utility invoices, it would take months to reflect any changes in consumption due to the pandemic. Having access to reliable real-time demand and consumption data allowed owners and operators to quantify any savings (or lack of savings) within days. This data was crucial for recalculating budgets and projecting how long operating costs could be maintained. Property owners and managers without an RTEM solution, and especially without one deployed across their entire portfolio, were struggling to react to this changing landscape.

Looking to the future, we will very likely see an acceleration of RTEM in the industry in the next year or two, as it has become increasingly apparent that the value of having access to real-time energy data to inform business and operating decisions is worth the investment.

How can RTEM technology manage demand and help control costs this summer?

Depending on rate structures, demand charges can account for 30 to 70 percent of a utility invoice. It is not uncommon to be charged on a kilowatt value that was only met for 15-30 minutes in a given invoice period. Unexpected weather and equipment malfunction can contribute to these otherwise avoidable demand spikes. RTEM technology can help operators understand the load profiles in their properties by providing actionable insights based on threshold alerts and reports.

Look for an RTEM solution that includes peak demand forecasting, which uses historical performance and forecast weather data to predict whether a property is expected to set a new peak in the next day or two. That way, peak demand charges could be avoided entirely by taking action ahead of time.

Certain reports can identify demand trends to help avoid anomalous spikes that contribute to excessive peak demand charges. For example, a load duration report illustrates how often a property hits a certain demand level each month and puts into perspective whether there is an opportunity to bring that cost down. We see many such reports where the highest peak demand level, the one that our client was ultimately charged on, was met only 1 to 2 percent of the time.

Are there benefits to implementing RTEM throughout a portfolio, rather than property by property?

There are five main drivers that we see for developing a portfolio-wide RTEM strategy:

• Operating Costs: Reduce utility costs, lower maintenance costs and benchmark across a portfolio
• Property Values: Increase market valuations, decrease rental concessions and charge potentially higher rents
• Finance/AP Efficiency: Reduce manual effort in processing utility invoices
• Tenant Experience: Increase tenant comfort and reduce complaints
• Investor Expectations: Many investors are using Environmental, Social, and Corporate Governance (ESG) criteria as a part of their decision-making process, using benchmarking data from organizations such as Global Real Estate Sustainability Benchmark (GRESB) to inform their decisions.

If you have a distributed portfolio, it can seem challenging to coordinate the implementation of new technology across individual locations. RTEM solutions can certainly be useful in just a few problem buildings, but it’s the portfolio-wide application that gives you unparalleled visibility and decision-making capabilities. Look for solutions that will work with you to ensure scalability and ease of implementation.

From a pricing perspective, incorporating RTEM across your portfolio is more approachable than often perceived. In many cases, payback on RTEM solutions can be realized within months or even weeks. Depending on location, there are also incentive programs available to help cut down on upfront costs.

For owners or managers who want to explore adding RTEM for an entire portfolio, what’s the best way to start?

Implementing a cohesive energy strategy using RTEM can be intimidating. At Yardi, we recommend starting with an automated utility invoice processing solution across your portfolio. Not only does this eliminate low-value manual effort of scanning and keying in these invoices, but all the data from the invoices can be used to benchmark your portfolio and meet compliance regulations for ESG platforms such as ENERGY STAR.

The next step is to compare the energy data coming from your utility invoices to the real-time data coming directly from your meters. By seeing how your worst- performing buildings are using energy in real-time, it allows you to make small, incremental changes that have powerful lasting results. Actionable dashboards, reports and prescriptive alerts help you reduce energy and costs. ​

From there, incorporating equipment level fault detection and diagnostics and smart building solutions such as automated HVAC optimization can help you identify further scheduling improvements and setpoint adjustments, all while managing your properties remotely.