September 30, 2014

| By Michael Fitzgerald and Elizabeth Dwoskin

View the original article on the Wall Street Journal's website.

Big Data Cuts Buildings' Energy Use

Sensors and Analytic Software Help Make Buildings More Efficient

Deep in the bowels of the Stata Center on the Massachusetts Institute of Technology's campus is an energy war room.

A row of flat-screen monitors lines one wall, showing exhaustive data on energy use in dozens of buildings across the campus. Buildings are displayed in colors that depend on their overall energy use. If a building is red, that indicates an energy leak in one of its lighting, climate-control or ventilation systems, or a water leak. The system, using software from KGS Buildings LLC, can also predict where problems will crop up.

"It makes us more efficient, because we know what to look for," says Balby Etienne, an MIT buildings-systems analyst. He also credits the software for a big drop in temperature and humidity complaints.

Cheap Sensors

For years, there was little information about how energy was being used in the roughly 5.6 million commercial buildings in the U.S. Air-conditioning use spiked on hot days, as did the demand for heat on cold days. But that was about it.

That's starting to change, thanks largely to an expansion of cheap sensors that collect real-time data on how energy is being consumed. At the same time, the market for software to analyze that data is booming.

"We're seeing an explosion of companies coming up with novel approaches to data" on energy use in buildings, says Noah Goldstein, research director at Navigant Consulting Inc. Navigant estimates the market for such energy-management systems in North America will grow to $1.6 billion by 2020 from about $775 million this year.

Regulation is helping to fuel the trend, as pressure mounts from local governments across the U.S. for building owners to find ways to reduce their energy use. In recent years, six U.S. cities—New York, Chicago, San Francisco, Washington, Boston and Austin, Texas—have passed laws requiring buildings to report their energy use, submit to energy audits and lower their energy consumption. A handful of other cities and states are considering similar legislation.

Government officials point to buildings as a significant contributor to greenhouse-gas emissions. Roughly 75% of New York City's carbon footprint, for example, comes from building operations, according to city data.

Retailers Buy In

Large retailers are getting into the act. Kohl's Corp. pledged seven years ago to use roughly a third less energy than the national average for retailers of its size by 2015. Achieving the goal required much more data about energy use than the company had, says Tari Emerson, Kohl's director of sustainability.

One hurdle: Every Kohl's store has different energy needs and use patterns. They're different sizes, in different regions, in different types of buildings of different ages, and the schedules for when they are restocked at night differ. They use different equipment and systems.

So Kohl's invested in software from SkyFoundry LLC and Environmental Systems Inc. that helps Ms. Emerson analyze how all those factors affect energy use and design a plan for each store to reduce energy consumption. The software also takes readings of every store's energy use every 15 minutes, allowing her to quickly spot and deal with any anomalies.

Analytics tools helped the General Services Administration, the federal government's landlord, meet federal mandates for evaluating energy usage in its largest buildings.

Brian L. Wright, a senior mechanical engineer at the GSA, says that sending an engineer through a building like Washington's Ronald Reagan Building—a 4.1 million-square-foot facility—and preparing a report on it took vast amounts of time, and the 150-page reports were overwhelming for building managers. The GSA adopted analytics software from a Lexington, Mass., startup called FirstFuel Software Inc., and has since saved about $13 million annually, roughly 90%, just in evaluation costs, Mr. Wright says.

He adds that he can now pull up on his computer a single page showing a building's energy usage every 15 minutes for a 12-month period. The software flags where energy usage varies from a pre-established baseline.

The analysis helped the GSA discover, for instance, that in the Reagan Building, two large exhaust fans in the garage were coming on full strength unnecessarily twice a day and the settings on a part of the air-conditioning system were set too high. Resetting the fans to 50% power and lowering the air-conditioning settings saved $800,000 in energy costs in one year, Mr. Wright says.