Category Archives: Efficient Building Systems

Azbil’s JV with CECEP-ID Introduces a Potential Powerhouse for Building Energy Management Systems in the Chinese Market

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In March, Azbil Corporation signed a cooperation agreement with CECEP Industry Development Company (CECEP-ID), a subsidiary of China Energy Conservation and Environmental Protection Group (CECEP), to establish a joint venture in May. Azbil Corporation is a leading Japanese provider of building automation systems (BASs). CECEP is the only state-owned enterprise in China that focuses on energy savings and environmental protection. The JV – called CECEP Building Energy Management Company (CECEP-BEM) – will leverage CECEP’s marketing network to open new channels for Azbil’s BEMS in the Chinese market.

CECEP has total assets in excess of RMB 63.2 billion ($10.03 billion), making it the largest energy savings firm in China. Azbil already owns around 70% share of Japan’s BEMS market, and brings to the table significant experience in developing and implementing automation systems, along with key technologies for monitoring and controlling indoor environments.

China will retrofit 99% of its 400 billion ft² of existing building stock for energy efficiency in the coming decades. Plus, it is building an additional 20 billion ft² of building space annually. At present, the BEMS market in China is underdeveloped, fragmented, and has no major players with significant market share. Companies with cost-effective and efficiency-enabling technologies, resources to scale growth, and a strong Chinese network are expected to take the lion’s share of future BEMS market growth.

Based on this recipe for success, we think CECEP-BEM has a very bright future. Poised to enter a rapidly growing market, it will likely become one of the major BEMS suppliers in China over the next three years.

The cooperation between CECEP-ID and Azbil highlights two key takeaways for those watching the BEMS and related markets. First, building partnerships with domestic players in China is a straightforward and effective way to get access to the region’s market. Second, it signals the willingness of Chinese companies to collaborate with foreign developers with strong product offerings rather than wide global channels to market. Since Chinese companies tend to focus exclusively on domestic markets – where new construction fuels the majority of BEMS uptake – the technology value of potential partners trumps wide market access in almost every case. With those takeaways in mind, companies interested in tapping into the Chinese BEMS market’s growing potential should monitor the JV’s progress and seek to establish similar partnerships with strong Chinese technology developers, such as Beijing Tellhow (Client registration required) and Shenzhen Das.

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Big Growth in the Small Building Market: Advanced Sensors and Controls for Building Energy Management Systems

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Sensor and control technologies provide the intelligent backbone for building energy management systems (BEMSs) by enabling near-real-time connections between equipment, building subsystems, and analytical tools. To date, BEMS developers and integrators have almost exclusively targeted buildings above 50,000 ft² to optimize the return on investment. This is beginning to change, however, as a slew of advanced sensors and controls have emerged. Advanced technologies promise to significantly reduce the payback period for BEMSs, thereby opening new demand in the largely untapped small building market – the highest hanging but plumpest fruit in the global building stock.

This week’s graphic comes from a recent Lux Research report (Client registration required) that sizes market opportunities for both standard and advanced sensor and control technologies. Despite the proven benefits of standard sensors and controls, the advanced variety highlighted in this week’s graphic will experience the greatest market growth through 2020 as they proliferate in commercial buildings under 50,000 ft².

Specifically, the market for advanced sensors and controls will grow from a niche of $53.7 million to a massive $745 million by 2020, representing a CAGR of 38.9%.

In the U.S., controllers, and advanced occupancy and CO2 sensors will drive much of the new growth. At the expense standard occupancy sensors, the market for the advanced equivalent will grow from $15 million in 2012 to reach $145 million by 2020 at a strong CAGR of 32.8%.

Meanwhile, the market for advanced carbon dioxide sensors will expand from $10.3 million in 2012 to a towering $145.6 million in 2020 at a CAGR of 39.2%. Also notable, the market for energy harvesting devices grows from $2.2 million in 2012 at a CAGR of 48.5% to reach $51.5 million by 2020, and the market for conductive media technologies grows robustly from $3.6 million in 2012 to reach a staggering $174.2 million by 2020 at a CAGR of 62.7%.

Source: Lux Research report “Sensors and Controls for BEMS: Providing the Neural Network to Net-Zero Energy.”

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iControl Networks partnership with Time Warner Cable signals convergence in home energy management and security systems

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iControl Networks partnered recently with Time Warner Cable to develop the IntelligentHome home energy management and security system (HEMSS) for U.S. customers. The HEMSS will enable users to manage in-home appliances via wireless thermostats and lighting controls using a touch-screen control unit. Customers can also monitor, manage and control the system through a website or free mobile application. On the security side, IntelligentHome allows users to monitor their residences from abroad via preinstalled security cameras, and can be personalized to alert the user by email of any pre-prescribed events.

When we spoke to Redwood City, California-based iControl late last month, the company emphasized that its market research had indicated customers wanted an intelligent home management system that coupled both energy and security in one package. Through its partnership with Time Warner Cable, iControl opened a wide channel to market to test this hypothesis. If embraced by end-users, it could prove to be the new go-to differentiator for cable companies in 2012.

Clients should closely monitor happenings around two developing facets of the iControl/Time Warner Cable partnership. First, they should track the U.S. market’s adoption of the duo’s HEMSS offering, along with similar offerings from Comcast, Verizon, 4Home, and Ingersoll Rand. If strong, it could trigger a slew of similar product partnerships. Second, clients should watch for further convergence between the once disconnected security and energy management technology arenas, particularly as they manifest in home management systems that couple energy and security management in the same offering. Lux clients can look forward to a profile of iControl Networks in an upcoming issue of our biweekly Efficient Building Systems Journal.

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