Category Archives: Green Buildings

The Lux Top 10

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During the fourth quarter of 2011, Lux Research analysts profiled 262 companies across 12 different emerging technology domains in the fourth quarter of 2011.Here are the 10 they thought were the most compelling. Some, such as Proterro, stand out for their disruptive potential. Others, such as Diamon-Fusion, made the grade with well-executed business strategies. The competition for a Top 10 spot will only get hotter as we expand our portfolio of coverage domains to include Energy Electronics and a broadened green buildings portfolio.

1. Diamon-Fusion International – Positive – Advanced Materials

With its transparent silicone film used to coat silica-based substrates, Diamon-Fusion is one of the few startups in the protective coatings space with a strong track record in both technology and business execution.

2. Proterro – Wait-and-see – Bio-based Materials and Components

Proterro is commercializing a strain of photosynthetic organism that produces sugars at levels ten times more productive than sugarcane and in a configuration that could deliver the holy grail of “five cent” sugars (i.e. five cents per pound). But it will need funding and downstream partners to scale its potentially breakthrough technology beyond a lab prototype.

3. Topell Energy – Positive – Alternative Fuels

Working with German utility RWE, Topell Energy scaled its first commercial torrefaction facility in 2011 to convert wood waste into bio-coal pellets. Topell is a leader in the torrefaction space and is positioned to capitalize on healthy incentives in the EU for coal/bio-coal co-firing.

4. Spirae: Wait-and-see – Smart Grid

With the growing grid penetration of renewable energy sources and the inherent difficulty in managing their fluctuating inputs, Spirae could be in a prime position to support utility infrastructure with its comprehensive control and management system – if it can prove its concept on a large scale and secure long-term utility contracts.

5. eIQ Energy – Positive – Solar Systems

One of the few DC/DC optimizer companies staying with stand-alone hardware, eiQ partners with engineering, procurement, and construction companies that can realize its technology’s value in the strong commercial market segment.

6. Pervasive Displays – Wait-and-see – Printed Electronics

Using a technology honed for the One Laptop Per Child Program, Pervasive Displays produces low-power electrophoretic display modules that target application developers for warehouse signage and electronic shelf labels. While Pervasive has power advantages from its control functions, it will need to drive its costs down to compete with more established competitors and access a broader market.

7. Kurion – Positive – Water

A high-risk but high-profit U.S. nuclear contamination control company that rapidly scaled to clean up the Japanese Fukushima radioactive cooling water problem. The work generated massive windfall profits when no one else on the planet was prepared to deal with the problem.

8. Hycrete – Wait-and-see – Green Buildings

Hycrete’s water barrier technology improves the durability of concrete infrastructure at prices significantly cheaper than the incumbent membrane-based approach. But it will need to establish partnerships with well-known infrastructure or chemical companies in order to gain market access in the conservative infrastructure segment.

 

9. Citic Guoan MGL – Wait-and-see – China Innovation, Electric Vehicles

In the sea of Chinese lithium-ion battery developers, state-owned MGL stands out for its traction in China’s electric and hybrid-electric bus market. Its strong government relationships could provide ready channels to market for would-be foreign technology partners. But competition with other domestic firms such as China Aviation Lithium Battery Corporation (CALB) will be fierce.

10. Ablynx – Wait-and-see – Formulation and Delivery

Ablynx engineers its “nanobodies” – therapeutic proteins derived from antibodies in camel blood – to specifically deliver small molecule drugs to a target site. Despite stiff competition in the saturated antibody field and a multitude of emerging targeting strategies (such as DNA aptamers), Ablynx has snagged more than its share of heavyweight partners (Boehringer Ingelheim, Merck Serono, Norvartis, Pfizer), and is generating tens of millions in revenue to assist in its own healthy development pipeline.

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Korean green building forum reinforces key messages and spotlights local market opportunity

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Recently, we attended the Green Building Forum 2011 organized by the American Chamber of Commerce in Korea (AMCHAM). Market leaders like 3M, BASF, and Southwall Technologies joined representatives of the Ministry of Land, Transport and Maritime Affairs and the Korea Institute of Construction Technology to discuss topics like net zero energy buildings, and zero carbon homes. They also vetted solutions for facilitating a positive future for green buildings in Korea. Forum participants reinforced several key messages familiar to clients from past* coverage.*

  1. Real-world deployment data has proven that “integrated planning” and a design-build approach make it possible to cost-neutrally construct commercial buildings that are 50% more energy efficient
  2. There is often a disconnect between design and actual building energy performance with some buildings saving less than expected. A few buildings even perform worse than the code baseline. As a result, it is important to measure, monitor and manage energy performance during occupancy
  3. Existing building stock offers an important, but oft overlooked opportunity,where energy efficiency improvements can be realized at no/low cost

The interactions between leading multinationals and the AMCHAM highlighted the fact that the Korean market poses an attractive opportunity for global clients developing green building products and services. As a small country with limited energy and mineral resources, South Korea must find ways to improve its energy efficiency. As a high-income developed country (15th in the world by nominal GDP and 12th by purchasing power parity) it has the financial power and domestic appetite for sustainable solutions in its building and construction space.

Consequently, the country has instituted a Green Building Certification System (GBCS) that it hopes will spur adoption of green buildings, as the LEED system did within the United States’ institutional and government sectors. Korea’s GBCS covers semi-residential buildings, office buildings (public and private), commercial buildings, and remodeled buildings, as well as residential projects, which account for a bulk of the green building initiatives in the country. It emphasizes indoor environmental quality and material and resources. Also, somewhat uniquely (relative to other global systems) it accounts for land use, like access to rivers, mountains, and forests, as well as and creation of pedestrian walkways in the apartment complex. Although, the guidelines under the GBCS are non-binding and somewhat ambiguous, they are expected to stiffen over time. As evidenced from the AMCHAM event, several foreign corporations are betting on this and increasing their local activities. Clients that are not currently active in the market should give the country a close, second look.

* Client registration required.

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New building norms can drive BIPV mainstream, with 6.6 GW market in 2021

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Building-integrated photovoltaics (BIPV) have remained a niche technology due to high costs and stringent specification requirements. Nor has their adoption been helped by the slow emergence past the developmental stage of thin-film solar modules – the best suited PV candidate for replacing traditional building materials.

As this week’s graphic shows, however, BIPV may yet enter the mainstream. Recent analysis by Lux Research projects a scenario in which BIPV sees a 1.2 GW global market by 2016, equivalent to $6 billion per current estimates, with a 69% share for Europe.

Currently, the European Commission’s Net‐Zero Energy Buildings (NZEBs) standards continue to fuel widespread adoption across the continent, and are on track to give Europe a lion’s share of BIPV installations in 2016 – assuming, of course, that the Euro Zone sees continued macroeconomic stability.

Primarily driven by greater adoption of LEED buildings, BIPV installations in the U.S. will grow at a steady clip, albeit slower than the EU. Meanwhile, growth in Asia will be limited to showcase projects driven by government and corporate sustainability goals.

Given that the EU directives on NZEBs all have 2020 targets, it is further likely that BIPV’s inflection point will occur in the 2017-18 timeframe as 2020 NZEB targets loom over EU member countries. In this scenario, the divergence between Europe and the rest of the world grows even larger, with Europe accounting for over 85% of global BIPV installations at 6.6 GW.

Source: Lux Research report “Building Integrated Photovoltaics: Moving Beyond Showcase Projects.”

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The Lux Top 10: Q3′ 11

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In the third quarter of 2011, Lux Research analysts profiled 286 companies in 11 different emerging technology sectors. Here are the 10 they thought were the most compelling. Some are already enjoying great commercial success, and should continue to do so. Others are promising upstarts that could yet fail but have the potential to achieve great things. Let us know your thoughts and watch this space for the next quarter’s results.

1. Semprius – Positive – Solar systems

If the company can maintain high yields in automated mass manufacturing, it will have the market’s most attractive high-concentration PV module.

2. Qingdao Institute of Bio-energy and Bioprocess Technology, Chinese Academy of Sciences – Positive – China Innovation, Alternative Fuels

With multinationals such as Boeing and Shell undertaking joint research partnerships, Qingdao has emerged as a leading Chinese institute in alternative fuel technologies.

3. Ice Energy – Positive – Green Buildings

As a complete solution provider of ice-based thermal storage systems for peak-demand load shifting, Ice Energy has secured valuable channels to market via partnerships with Trane and Carrier.

4. Oxis Energy – Wait and See – Electric Vehicles

Although still too early in development to declare success, next-generation energy storage solutions are potentially disruptive in the transportation market, and UK-based Oxis Energy could be one of the first to reach market with its lithium-sulfur battery.

5. Aerogen Therapeutics – Strong Positive – Targeted Delivery

Aerogen is targeting both health and consumer applications, as well as the medical device market, with a versatile electronic micropump technology that aerosolizes liquid drug formulations.

6. Modumetal – Strong positive – Advanced Materials

This leading developer of electroplated metal coatings has shown great savvy in procuring high-profile customers and partners across the aerospace/defense, automotive, and oil and gas industries, despite long development lead times.

7. Sensus – Strong Positive – Smart Grid

A dominating player in the North American advanced metering infrastructure market that spans the entire value chain.

8. Breivoll Inspection Technologies – Wait-and-see – Water

Technology adoption in the $20 billion water infrastructure repair market is notoriously slow, but is inspiring innovations from the likes of Breivoll, which has developed a nondestructive metal water pipe profiling to locate and fix water system weak points before they cause blowouts.

9. E-Ink – Strong Positive – Printed Electronics

Having captured most of the market for e-reader displays with its electrophoretic film technology, E-Ink is looking to other applications as the leisure e-reader market saturates.

10. Avantium – Positive – Bio-based Materials and Components

With its novel furanic platform, Avantium is pushing towards the polyester markets and fanning the flames of the drop-in versus novel chemical debate.

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Finding the synergy between the boiler room, boardroom, and break room

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The October print edition of Oregon Business (OB) raises the all-important question: “Are green buildings really saving energy?” It draws upon the experience of Portland, Oregon to evaluate whether or not incentives for energy-efficient buildings translate into buildings that meet expectations once they are occupied. In the article, the city’s green building manager, Alisa Kane (whose office is a part of the City of Portland’s Bureau of Planning and Sustainability), points to this troubling statistic:Over the past 15 years, while the energy codes for buildings have become more stringent, the actual energy use has not gone down. The culprit, she says, is operations and behavior of the occupants.

Ms. Kane’s point is well taken, and speaks to a broader concern in the green buildings regulatory community. While regulators are able to monitor and effectively assess if a LEED-rated structure meets pre-construction expectations during design and early post-occupancy evaluations, the process falters when occupants bring in “plug loads” that increase energy use beyond the building’s design expectation. This problem is magnified with the proliferation of plug-and-play devices (e.g. mobile phones, music players, mini-refrigerators, computers, space-heaters, etc.) that are ubiquitous in most offices and commercial spaces today. This disconnect prevents regulators and tenants from getting an accurate idea of the building’s true energy performance.

In the short term, the solution is two-pronged: First, the U.S. should follow the model established by the European Commission through its Directive on Energy Performance of Buildings (2010/31/EU, 19 May 2010). This directive states that all building owners must show energy performance certificates to prospective buyers or tenants when constructing, selling, or leasing property. Although overall, the U.S. lags Europe on this front, individual cities like Seattle, San Francisco, Austin, and Washington, D.C. have enacted similar laws over the past few years. Such policies impose a true market value on building efficiency, and provide a benchmark for improvements. However, predicting energy requirements is easier said than done. As the Oregon example shows, building owners and managers are loathe to accept such legislation since they see it imposing a penalty on them for the truancy of their tenants.

Second, when commissioning a building, set more realistic design parameters that account for the true expected in-use profile of today’s tenants. However, this approach has its own issues. Not only does it not dissuade ballooning energy consumption, it also risks over-compensation in design affecting the cost-optimality/profitability of the project.

Both of these measures are only a short- to mid-term fix. The longer-term solution is fundamental behavior change on the part of building owners and the corporate managers and employees on the tenant side, leading to an integrated decision on managing energy use. In short, as one respondent in the OB article pointed out, we need “a synergy between the boiler room, boardroom, and break room.”

This issue, and its likely solutions, augurs a few trends for clients operating in the green buildings space. Demand for energy audits will increase and, depending on region, they could be either voluntary or mandatory. Expect enhanced prospects for companies like CADmeleon*, kWhours*, and FirstFuel*. Also, there is a clear need in the marketplace for companies offering a BEMS-integrated services package.Players active in the domain like IBM*, Cisco*, Echelon*, and Lucid Design Group* provide parts of the whole, but often lack in the understanding/management of the fundamental human element of this puzzle. Expect increasing incorporation of new ideas (e.g. OPower*), and more acquisitions by larger players looking to obtain this missing piece.

* Client registration required.

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Aspen Aerogels files for IPO

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On June 24, Aspen Aerogels filed for an initial public offering (IPO) with the U.S. Securities and Exchange Commission, announcing plans to raise up to $115 million to expand its operations and manufacturing capacity. Aspen makes aerogel insulation, a highly-porous nanostructured material targeted at building insulation, industrial applications, transportation, and even clothing. The announcement has seemingly been in the works for years. In 2005, CEO Don Young projected his firm was on the cusp of profitability and a potential IPO, and we speculated in 2006 about an imminent exit for the company. However, the company has been held back by limited demand for its product, stemming both from its high cost as well as the building construction downturn in 2009.

Aspen originally targeted the building insulation market, but has found better traction in oil and gas applications, namely for undersea pipeline insulation. These “pipe-in-pipe” lines are high-value, space-constrained applications that are well suited to aerogels. Companies will pay a premium for a thermally-robust, highly-insulating material that is packed between the inner and outer pipe. This translates into a reduced diameter of the outer pipe, saving material costs of steel. Aspen’s customers in the subsea pipeline market include ExxonMobil, BP, and Total. Aspen’s shift of focus is analogous to many water desalination companies now targeting fracking applications for gas and enhanced oil recovery. Water and electricity remain subsidized commodities in many regions of the world, and emerging cleantech players may have to look at higher value markets , such as oil and gas, for their technologies.

Aerogels are one of several emerging technologies vying for a piece of the multi-billion dollar general insulation market in buildings. Although aerogels have suffered in the past from handling difficulties on a construction site, by far their main issue is cost. At up to $10/ft2, Aspen Aerogel’s Spaceloft aerogel blanket is simply not competitive with standard insulation like fiberglass, which costs about $0.50/ft2, except for niche, space-constrained applications. Cabot Corporation, one of Aspen’s rivals, is proposing a solution to both problems. Cabot encapsulates its granular Lumira aerogel material into translucent “daylighting” panels that enable natural light to be transmitted while being more insulating than standard double-glazed windows. With this product, Cabot is hoping to find a profitable niche as an eco-friendly daylighting solution in the green building sector. We review the prospects for advanced insulation products – namely aerogels, phase-change materials, and vacuum insulation panels – and size the market forward to 2020 in our latest LRGI state of the market report, Opening the Thermal Envelope: Emerging Innovation in Dynamic Windows and Advanced Insulation, projecting a $230 million market for aerogel building insulation by 2020.

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Simple to Implement: Advanced HVAC components see adoption potential

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Graphic of the Week

Building HVAC systems consume 13% of all primary energy generated around the globe, which underscores the need for new, more energy-efficient HVAC systems and components. Yet, despite rising energy costs and looming carbon regulations, cutting-edge heating, air conditioning and ventilation (HVAC) technologies face an uphill battle for adoption by a conservative building industry.

This week’s graphic comes from a recent report by Lux Research that surveys the field of incumbent and emerging HVAC technologies and assesses which systems and components are best positioned for future growth. Specifically, the graphic plots the relative potential for component technologies that improve the operational cost or performance of existing HVAC equipment.

Unlike full-blown systems, advanced HVAC components are simpler to implement, helping to shorten the path to their adoption. This is particularly illustrated by component-level solutions such as variable frequency drives (VFDs) and expansion valves. Rated a Current Winner, low-cost VFDs enable compressors to pump only what is needed for specific applications, significantly improving the efficiency of chillers; most see payback periods of 2.5 years or less. Expansion valves, meanwhile, rank among the Future Winners, thanks to their ability to reduce energy consumption of air conditioning systems and boilers and their very attractive payback periods.

Also, in the Future Winners Quadrant are large-area membrane-based modules, which can greatly reduce energy consumption associated with air ventilation. Developed by companies like Architectural Applications and DAIS Analytic, such technologies can improve the performance of chillers by 50% and reduce total HVAC energy consumption by up to 20% while reducing solar heat gain. Still, before they infiltrate the Current Winners quadrant, companies developing this technology will need to overcome significant barriers to adoption, such as the need to significantly change construction methods for implementation.

Source: Lux Research report “Uncovering Attractive Innovations in HVAC Amidst Evolutionary Growth.”

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The cool-roof market is heating up

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The Department of Energy (DOE) announced this week that two government labs, Oak Ridge National Laboratory (ORNL) and Lawrence Berkeley National Laboratory (LBNL), will partner with Dow Chemical to develop higher-performing cool-roof technologies (client registration required). The main objectives of the partnership are to develop white elastomeric roof coatings (ERCs) that are more resistant to microbial growth and dirt accumulation, thereby preserving their reflective properties for a longer duration. The program also aims to raise current cool-roof standards for low-slope commercial roofs. Current standards dictate the material’s solar reflectance must be at least 55% three years after installation, but the new standards would raise reflectance requirements to 75% after five years. In certain building types, especially single-story facilities with large roof areas relative to floor areas, this could increase the air conditioning energy savings attributable to a cool roof from 15% to 25%.

Ideal materials for a cool roof are characterized by a high solar reflectance (r) in both the visible and infrared spectrum, and high infrared emittance (e) meaning whatever heat they do absorb, they effectively radiate. It is hard to beat the performance of a white-washed roof on a Mediterranean villa (r = 0.8, e = 0.9). But that hasn’t stopped materials suppliers such as Dow Chemical and Owens Corning, or roofing companies such as CertainTeed and GAF from exploring higher-tech solutions that achieve high thermal performance, deliver increased durability and microbial resistance, look aesthetically pleasing, and of course earn money in the process.

It is well known that cool roofs are one of the most cost-efficient strategies for increasing building energy efficiency in hot climates, such as the southern states and California. Not surprisingly, the DOE labs have been researching the space since the 1980s. What is new, and is acting as a market pull for building materials manufacturers like Dow Chemical, is the variety of federal, state, and utility-level programs encouraging – and in the case of California, mandating – cool roof adoption. California is a bellwether for the space. In 2005, its Title 24 building energy-efficiency standards mandated a three-year aged reflectivity value of r = 0.55 for most low-sloped roofs. Since the start of 2010, it has further required r = 0.20 for the steep-sloped roofs typical of residential homes. This rather modest target for steep-sloped roofs is indicative of the predominance of asphalt shingles, which are favored for their relatively low cost and darker shades. Asphalt shingles for residential cool roofs typically incorporate reflective granules that reflect the infrared parts of the spectrum while looking dark in the visible parts. Clients with materials capabilities should note that there is a huge scope for performance improvements in the (hot-climate) residential steep-roof shingle market by incorporating white (or light-colored) materials. However, such innovations will need to tackle weathering issues, such as streaking and discoloration (which is a major goal of the DOE / Dow Chemical partnership), as well as consumer preferences. Cool roofs are just one part of the building thermal envelope, which is a critical determinant of the thermal and energy performance of a building, and we will tackle the emerging technologies and market in this space in our Q2 2011 Green Buildings state of the market report.

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The demand response market shakeout continues

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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.

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Antagonism towards smart meters crosses political lines

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According to a recent New York Times article, resistance to smart-meter implementation is sprouting across the country and seems to cross all ideologies and political boundaries.

In California, PG&E has installed nearly seven million smart meters, but protests are erupting just as installation of the devices has reached full steam. “Stop Smart Meter” signs are found on bumper stickers and lawn signs while, ironically, local governments surrounding the epicenter of smart-grid techno wizardry in Silicon Valley are raising big challenges. In Santa Cruz County south of San Jose, the Board of Supervisors extended a yearlong moratorium on smart-meter installations, while in tony Marin County north of San Francisco, officials approved a ban in the largely rural areas of the county comprising 25% of its inhabitants.

It seems that people from all stripes are against smart meters, but for widely differing reasons. Some on the environmental fringe are concerned about the health effects of all that “radiation” from the low-power radio and microwave emissions zipping data from the meter to utility. Meanwhile, smart meter opponents from the right decry the erosion of freedom, while those on the left fret about the rise of corporate power.

It is doubtful that this small but growing opposition will put a serious dent in smart-meter deployment. Already, some 16% of buildings and homes in the U.S. incorporate advanced meters, and that number is expected to grow to 20% by the end of 2011 alone. Even so, it remains quite possible that customers will dig in their heels over the variable pricing that smart meters enable. However, even if resistance materializes, utilities will still benefit – both from reduced costs, as manual meter-reading becomes superfluous, and from improved grid stability as info on electricity demand – and blackouts – becomes vastly more accessible. In the end, the protests may be loud, but the smart-meter purveyors like Itron and Landis+Gyr will continue to see robust growth.

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