Schneider Electric and Stratasys recently announced a partnership aimed at expanding Schneider’s use of 3D printing to include injection molds for electronic components and tooling for assembly. The components are printed using Stratasys’ fused deposition modeling (FDM) technology. By switching from milled aluminum to printed polymer, Schneider is able to cut production costs for a mold from €1,000 ($1,120) to €100 ($112), and the lead time from a month to a week. Continue reading
Oncor is a large regulated utility in Texas. It provides transmission and distribution services to 10 million customers that state – making it the biggest such player in Texas, and one of the largest in the U.S. It is also a pioneer in energy storage, recently putting forth a proposal to buy billions of dollars worth of stationary energy storage. Separately, it recently hired S&C Electric Company to build it a new microgrid on the outskirts of Dallas, resulting in what it calls a Technology Demonstration and Education Center (TDEC) for microgrids. In turn, S&C chose Schneider Electric for its migrogrid controller platform, while S&C focused on hardware and software like switchgear and battery systems.
The TDEC microgrid uses nine distributed generation sources, including:
- One 200 kW, 400 kWh lithium-ion (Li-ion) battery from Tesla ([client registration required] its PowerPack product)
- One 25 kW, 25 kWh Li-ion battery from S&C (its PureWave Community Energy Storage System)
- Two solar panels totaling 114 kW; one mounted on a carport and the other one on the ground; both are from Axiom
- One 65 kW microturbine, which is optimized to primarily run on propane from Capstone
- Three diesel generators, two of them 175 kW and the other 210 kW
- One 45 kW gas reciprocating generator
The microgrid integrates these sources using:
- An S&C fault interrupter that detects power issues from the utility, runs tests to see if these issues may be permanent, and then decides whether to island the microgrid in response to the outage
- A Schneider microgrid controller that coordinates four independent zones within the TDEC microgrid
- Schneider’s demand side operations software that analyzes multiple streams of data (see below) to try to get the best economic returns from the microgrid
Besides its forward-looking focus on renewables – the integration of the solar panels with distributed energy storage – the TDEC microgrid is also interesting for its integration of big data to make the most money. It does this using Schneider’s demand side operations software. This software takes in four key pieces of information: The electricity market’s pricing signals, the current weather and its forecasts, the site’s historical energy usage patterns, and the site’s real-time information about building conditions and demands. Crunching these various pieces of information together, it looks to make as much of an economic return as possible, autonomously switching between different generation sources. To date, the TDEC microgrid has no specific economic metrics disclosed, but this software will be key to making the site’s payback sensible.
Interestingly, the TDEC microgrid is actually made up of four smaller sub-microgrids (or zones). Each of these can act independently, or act in concert via interconnections. Schneider’s microgrid controller handles this coordination, which in theory can add additional resiliency over standard microgrids. However, the feasibility of this approach depends on the number of generation sources available: TDEC’s nine sources of distributed generation are unlikely to be replicated in the majority of microgrids around the world, so instead of four independent zones, others may have to contend with just one or two.
Lux Take and client recommendation:
Wait and See – This project involves a dream team of collaborators in Oncor, Schneider, and S&C Electric, with Tesla’s batteries thrown in the mix, as well. However, these developers have purposely over-engineered it for the sake of demonstrating the integration and balancing of many different sources of distributed generation. In practice, a simpler microgrid design will be able to shave costs while still enabling excellent reliability and business models. The quicker these players can move towards a lighter-weight turn-key solution that is easily replicated, the better. Granted, each microgrid will always require some customization depending on customer and geography. However, judiciously narrowing down choices to a few specific categories of off-the-shelf designs will boost sales volumes, cut costs, and quicken the pace of deployment.
Schneider is building a building systems integration and IoT play. Schneider Electric has some notable partnerships in the U.S. market, which differentiate it from the competition. The company boasts several technology partners in the energy-IT space, such as Cisco and Intel. Digging deeper, we find relationships with Verdiem and JouleX (now part of Cisco), companies that target energy efficiency of IT infrastructure and networks. In the same vein, partner Belden specializes in signal transmission, and HMS Industrial Networks and Niobara R&D are both playing in the Internet of Things (IoT) and communication of industrial equipment. In addition, the company has engaged start-up KGS Buildings (client registration required) to build its energy analytics software to allow in-depth analysis of building data in well-instrumented buildings. From this focused network, it is clear Schneider is making a play both in building energy data analytics – which can be a strong ECM-identification tool in its own right – and in the industrial segment.
Johnson Controls leverages its facility management position. Separate from its ESCO business, Johnson Controls operates Johnson Controls Global Workplace Solutions (GWS), a facilities management services company, which operates real estate assets totaling more than 1.8 billion ft2 in more than 75 countries.i Perhaps predictably, Johnson Controls has connections with Jones Lang Lasalle (JLL), a leading real estate services provider. In addition to the highly visible, deep retrofit of the Empire State Building in New York City, which involved Johnson Controls and JLL, the two companies have cooperated to help drive retrofits as part of the leasing and building-out cycle in commercial buildings. In addition, the company has partnered with VFA, which provides a facilities management and capital planning software tool. VFA has worked with organizations like the U.S. General Services Authority’s Public Buildings Service, which is the largest real estate company in the U.S. Such a partnership allows Johnson Controls to dovetail capital planning with energy efficiency upgrades to form differentiation in its facilities management capabilities. Not only would GWS have the ability to identify retrofit opportunities, but it could deliver them with its ESCO capability. Johnson Controls has also engaged start-ups Retroficiency, Optimum Energy (client registration required), and most recently BuildingIQ (client registration required). The BuildingIQ partnership actually allows this energy data analytics software to be made available through Johnson Controls’ new Panoptix building automation system. Here Johnson Controls has leveraged not only its facilities management, but hardware business lines to deliver ESCO services.
Building materials companies left out in the cold. One conspicuous absence in the U.S. ESCO partnership landscape is that of building materials suppliers. The Johnson Controls-BASF link on the map is misleading, because it is not related to building materials but rather facilities management. There are two notable relationships, however: those of Schneider Electric and Sage Electrochromics (now a part of Saint-Gobain Group), and Johnson Controls’ connection to Alpen Energy (a part of Serious Energy). While Johnson Controls and Schneider have led the pack with their engagement of start-ups for data analysis and even hardware for systems, we have not yet seen significant deals with materials companies to facilitate envelope retrofit activities; these two partnerships touch only on glazing, leaving room for other building envelope solution providers.
Source: Lux Research report “Partnering to Unlock the Trillion Dollar Opportunity in Energy Efficiency Retrofits” — client registration required.
Last May, Johnson Controls filed a petition to dissolve its joint venture with French battery-maker Saft. But Saft opposed JCI’s pressure to move the JV outside the original scope of automotive battery applications and into the energy-storage market*.Saft’s resistance appeared to be vindicated in late July, with the announcement of two grid-storage projects in France totaling nearly 6 MWh of advanced lithium-ion storage.
In the first, Saft will deploy 500 Li-ion storage units of 4 to 8 kWh for the Millener Project to smooth out energy supply generated from photovoltaic installations being rolled out across several of France’s island territories. In the second, Saft announcedits listing as first-rank partner for 2.7 MWh of energy storage in mainland France’s Nice Grid project, which covers storage applications at origination and distribution substations as well as residential storage. Though energy storage and renewables are typically more cost-effective for island applications such as the Millener Project where a region lacks a robust centralized grid, the Nice Grid project provides evidence that the time is approaching for larger mainland grid storage projects. Both projects not only offer Saft the opportunity to further test and demonstrate the effectiveness of its technology, they also allow it to cultivate relationships with the numerous other project partners, including BPL Global*, Delta Dore, Edelia, Schneider Electric,Tenesol*, the European Regional Development Fund (ERDF), Alstom Grid, and EDF.
Despite its emotionally tarnished relationship with JCI, Saft made the correct tactical move to isolate its strong position in the energy storage market from JCI’s reach into the energy storage arena, which already includes a memorandum of understanding with Hitachi and an endowment for an energy storage program at the University of Wisconsin. It is important to note that, similar to its microgrid project in San Francisco*,Saft’s projects in France are subsidized by government funds, which indicates indicating that in many applications grid energy storage is not yet market-ready on its own. Nonetheless, if Saft succeeds with its several ongoing energy storage demonstration projects, it should remain a leader in this market over the mid- to long-term.
* Client registration required.
On March 3, the building controls giant Johnson Controls announced its acquisition of EnergyConnect, a demand response company, for $32 million. EnergyConnect offers a software-as-a-service energy dashboard focused on the commercial and industrial (C&I) “price-response” demand response market, which helps customers save money by shifting consumption to times with lower electricity rates. It also offers traditional “dispatch” demand response to reduce energy consumption during periods of peak demand.
Building on a 60% revenue growth in 2010, EnergyConnect further increased its acquisition appeal in January when it won a multi-year contract with the California State University (CSU) system, which also happens to be a customer of EnergyConnect’s competitor EnerNOC. This head-to-head competition of direct response players within one institution is indicative of the increasingly competitive C&I marketplace, and the competition will only get hotter as building management systems integrate more deeply with smart-grid systems.
The strategic alignment of Johnson Controls with EnergyConnect furthers the ongoing consolidation in the DR industry, highlighted last year when Honeywell acquired Akuacom (see the May 17, 2010 LRGJ*). The “big four” building controls companies – JCI, Honeywell, Siemens, and Schneider Electric – all now have significant stakes in the lucrative C&I demand response market. As these diversified companies supplement their core offerings with a demand response add-on it will squeeze pure-play demand response providers like EnerNOC and Comverge by driving their margins down (see the November 17, 2010 LRPJ*).
As we reported last fall (see the September 29, 2010 LRPJ*), it is not only the building controls companies who are applying the squeeze, but also utilities (see the September 22, 2010 LRPJ*) and third-party deal-makers. As the size of the pie for C&I demand response grows, the winners will be determined not only by their ability to find new slices in uncharted territory, but also their ability to take bites out of competitors’ pieces by offering multiple DR services. Clients should divest investments in pure-play demand response companies, and look to establish partnerships in the building IT space before the best offerings are off the table (see the Lux Research report, Sifting Winners from Losers in the Building IT Acquisition Frenzy*).
*Client registration required.
Earlier this month, Honeywell announced its acquisition of Akuacom, a Bay-area company that provides automated demand response technology and services for the smart grid. The acquisition beefs up Honeywell’s current smart-grid portfolio by enabling it to provide utilities and independent system operators (ISOs) two-way communication with energy management systems at commercial and industrial sites. This capability lets utilities and ISOs automate the delivery of price and reliability signals to these facilities and more effectively trim peak demand.
With nearly ubiquitous temperature and HVAC controls (several of which already interface with demand response software), Honeywell is already one of the “big four” building controls firms – along with Johnson Controls, Siemens, and Schneider Electric. The company is currently the largest residential demand response player in North America. It also has a presence in more than 10 million commercial buildings and thousands of industrial plants. As such, adding demand response technology will let Honeywell leap from inside the building envelope to the utility and provide an end-to-end connection between energy provider and user to reduce peak energy demand and maintain optimum building efficiency.
The acquisition marks the beginning of industry consolidation that will see a handful of winners emerging from the demand response segment. Among them will be established early entrants like EnerNOC, and a half dozen or so alignments between large building control players and key demand response firms. There may also be one or two stranger alliances between large appliance makers and demand response firms, such as by the Tendril-GE pact. Thus, look for a few more high-profile demand response acquisitions to occur as other stalwart control firms quickly follow suit in the wake of Honeywell’s Akuocom acquisition. Meanwhile, we also expect the vast majority of mass-produced, VC-backed demand response and building energy management firms to be frozen out of the market and fall off the map.