Many of today’s businesses rely on technology for core operations including transactions, security, communications, and more, making power reliability essential. When there's a power outage, the unexpected downtime can be costly for businesses. Backup generators can ensure tenants don’t experience prolonged power interruptions, but they cannot provide the generation capacity to ensure uninterrupted, high-quality flow of power when the grid goes down.
Without grid reliability, tenants may deal with equipment damage, increased operational costs, and difficulty reaching sustainability goals. As a commercial property manager, you might see the same challenges — including loss of tenants if they decide to relocate. Your ability to provide reliable electricity will help you retain tenants and give you an edge over competitors.
For example, when the Texas power grid failed amid severe weather in 2021, millions of customers were left without electricity and heat in sub-freezing temperatures for a week or longer, causing massive loss of income for business owners and uncomfortable conditions for residential customers.
While grid modernization efforts are in the works, they will take time — and the potential for a similar scenario lingers. In the wake of electric grid failures like these, tenants who lived through the experience are now looking for property managers with the ability to provide highly reliable power — even when the grid fails.
How can you ensure better power reliability for your commercial real estate tenants? In this article, we’ll look at the key drivers for change, the main challenges, and commercial energy solutions that can give your tenants the confidence they need.
Power reliability matters in commercial real estate because for today’s businesses, reliable electricity is essential. From retail stores to healthcare offices to software companies, just about every business relies on technology — and a connection to the internet — to perform basic operations. In certain industries, including finance and healthcare, uninterrupted power is part of regulatory compliance.
According to a recent global survey, unplanned outages cost industrial businesses nearly $125,000 per hour.
Even a short interruption can lead to significant financial losses for many businesses, driving a growing demand for uptime and reliable power sources. And increased electrification, driven by a desire to replace devices that rely on fossil fuels for power, is another trend increasing the need for a robust power supply.
While a reliable power grid is a national expectation, some areas of the U.S. are struggling to provide sufficient service to meet peak demand. Up against challenges such as extreme weather events, aging infrastructure, and increasing power demand, utilities are sometimes scrambling to meet demand.
Achieving reliable operation even when the public electrical grid fails is possible for commercial property owners, but several challenges stand in the way. Understanding the challenges will help you take a strategic approach to attaining more operational reliability for your properties.
The power grid is under stress in the U.S. because of its age and condition, along with increasing demand. With more than 70 percent of transmission lines more than 25 years old and approaching the end of their lifecycle, power infrastructure is in desperate need of an upgrade — but it’s not happening quickly enough. For commercial buildings, the state of the surrounding public power grid can introduce uncertainty and unreliable power even if your building’s infrastructure is in good shape.
With virtually every business reliant on electric power and internet connectivity to function, the demand for uninterrupted power is increasing. And the amount of energy businesses consume is also on the rise, with the recent increase in EV charging stations, commercial data centers, and other energy-intensive business needs.
Adopting advanced energy solutions often comes with significant up-front costs. While many commercial property owners would like to embrace cleaner energy sources and energy management software, some hesitate over the capital expense investment needed at the front end.
A range of commercial energy solutions exist today, and can be tailored for any size building or campus. Microgrids, self-sufficient energy systems that include components such as distributed energy resources (DERs), a battery energy storage system (BESS), and a software management system, are becoming an increasingly attractive benefit as the energy world faces more disruptions due to heavy loads on an aging grid or inclement weather as a result of climate change.
Microgrids allow you to integrate renewable energy sources directly, combining power from on-site DERs like solar panels or wind turbines with the traditional grid. Installing a microgrid can help you optimize energy use, save on costs, improve power quality and reliability, and make progress toward sustainability goals. e2Companies’ R3Di® System is one example of this, providing all the benefits of a traditional microgrid in a turnkey solution.
Our GROVE energy optimization services, including software and a team of experts, continuously monitor your energy assets, weather, and market conditions, allowing your commercial buildings to optimize energy usage. Together, these innovation solutions create Virtual UtilityⓇ, the first utility-grade network that operates in-sync with the grid or independent from it.
Energy management systems monitor and analyze your building’s energy usage, yielding huge benefits in the long term. Coupled with DERs and a natural gas generator, an advanced energy management system can allow you to predict and respond to disruptions instantly and automatically.
Energy management software applies AI to monitor the microgrid in real-time, anticipating demand and helping to optimize energy storage and usage.
For example, you might choose to participate in your utility’s demand response program to lower peak energy costs. Energy management software can oversee this, automating a shift toward using energy from your DERs and BESS during peak times and shifting back to grid power when demand drops.
In Boulder, Colorado, commercial real estate investment and management firm Conscience Bay Company (CBC) installed energy conservation measures (ECMs) in a number of its buildings. In one building, energy conservation retrofits and upgrades, including an energy management system for HVAC, resulted in an annual energy savings of 14% through reduced maintenance, hot/cold calls, and operating costs, and a corresponding annual cost savings of $54,383.
The iconic 102-story, 2.8 million-square-foot Empire State Building in New York, New York, undertook an ambitious project to reach carbon neutrality by 2030. Following an extensive retrofit, the Empire State Building is now powered by 100% renewable wind energy and has reduced its energy use by more than 40%, while carbon emissions are down by 54%.
Smart building technologies often play a key role in providing reliable power. The ability to monitor the flow of electricity and track the health of electrical systems with predictive maintenance sensors can give commercial real estate owners a firm foundation for power system reliability. Here are a few examples of energy-efficient systems integrated with smart building platforms:
Considered the first net zero electric commercial building in the U.S., the 31 Tannery Project in Branchburg, New Jersey, is headquarters for Ferreira Construction and Ferreira Group. Constructed to use both renewable energy systems and traditional systems, the building relies on real-time energy usage monitoring tools and software, along with energy-efficient design, to achieve its net zero status. The software system provides a constant flow of energy data, including equipment diagnostics, allowing for decision making that optimizes energy savings and efficiency. With this project, the company reduced its total carbon footprint by 83%.
A recent study showed that an IoT solution that incorporates connected smart sensors and machine learning capabilities with legacy equipment can achieve dramatic energy-saving results. According to the results, a commercial building in Ireland used the solution to manage a combined cooling and heating unit, allowing a 61% reduction in energy consumption.
Located in Lausanne, Switzerland, The University of Lausanne has about 15,000 students and 4,900 employees in 40 campus buildings. The university wanted to transition to renewable power and reduce its energy consumption to comply with the Swiss Federal Council’s Energy Strategy 2050. With the help of technology partners, the university implemented an intelligent energy monitoring system that automatically optimizes energy efficiency and gives university managers access to real-time data, along with maintenance and management tools. Using the system, the campus reduced its heat consumption by 11%.
For building owners, investing in energy management and smart building monitors can pay off in the short- and long-term. Gaining a clear picture of energy usage and the ability to automate actions — such as turning off lights, lowering window shades, or regulating HVAC usage — can save energy and costs. And close monitoring of equipment enables predictive maintenance, allowing you to stay ahead of service needs before they result in downtime.
As more businesses demand a reliable power system, energy trends like decentralization and smart grids will shape the future of energy management. Tenants will increasingly seek to align with sustainability and ESG goals, making them more particular about the properties they choose to rent.
As a commercial real estate owner, now is the time to consider early adoption of energy management tools and software in order to stay competitive in today’s — and tomorrow’s — market. Investing in power reliability today ensures a sustainable, cost-effective future.
If you’re ready to explore new solutions to improve power reliability while enhancing the tenant or guest experience, schedule a discovery call with us.