Grid-Integrated Buildings Are Good for Business and the Climate

The importance of decarbonizing buildings cannot be overstated. Buildings account for up to 70% of energy consumption in major cities and 30% of greenhouse gas (GHG) emissions globally. At the same time, the building sector has high potential for cost-effective and long-term carbon reductions among other economic sectors. To curb GHG emissions and meet global climate goals, buildings need to use less energy and simultaneously enable a low carbon grid by avoiding high and peak energy demands.

Buildings Make a Difference

While energy efficiency and renewable energy has been sought after for decades, it is time to start connecting buildings as interactive parts of the larger energy grid. Because energy grids have a growing share of intermittent resources, such as wind and solar, load management is increasingly critical to grid operators. At the same time, demand peaks are increasing, making real-time energy management at the building level more important to balance supply and demand.

Fortunately, a growing number of buildings are engaging in demand response through real-time energy management software allowing buildings to become responsive assets. These grid-integrated buildings can dynamically interact with the power grid and ramp energy use up or down depending on the cost or carbon intensity. This helps utilities to decarbonize the electricity system, prevent outages, and allow optimal levels of renewables to be supplied to the grid.

What Should Buildings Do To Improve?

To do this, grid-integrated buildings should adopt enabling technologies such as digital infrastructure, analytics, automation and controls, renewable energy, and energy storage. This results in a smoother energy load profile that delivers operational cost savings and resiliency. According to Guidehouse Insights' report, Building-to-Grid Integration, global revenue for commercial and industrial buildings-to-grid integration is expected to reach $28.8 billion in 2026.

Building owners can unlock several revenue generation opportunities by adopting these building-to-grid technologies, although they may vary depending on utility rate structures, solar resources, and more. Some of the financial benefits include energy cost reduction, demand charge reduction, opportunity to sell electricity back, and resilience to avoid interruptions and outages. Additionally, utilities can enjoy the ability to avoid service interruptions due to the flexibility and rapid response of virtual power plants, as in grid-integrated buildings. Grid-integrated buildings can create tangible value across key stakeholder groups, including utilities, grid operators, building owners, and building occupants. Optimization of the building and grid interaction is good for business, as well as the environment.