Somewhere around 500 BC the Greek philosopher Heraclitus, who is known for his doctrine of change being central to the universe, made a profound statement that is still often quoted: “The only thing that is constant is change.”
As business leaders, we are all too familiar with this adage because we deal with change every day, and our ability to anticipate and manage change often underpins the continued survival of the organizations that we lead.
Change takes place along a spectrum ranging from evolutionary to revolutionary. Evolutionary change is often imperceptible until one steps back and views the change or transformation over a long period of time. Evolutionary change could be viewed as “change on the edges” – changes needed just to remain competitive.
Revolutionary change on the other hand can be disruptive to an entire industry and almost instantly result in winning and losing participants in that industry.
The Radial Tire Effect
Steve Jobs often referred to the “radial tire effect” being a threat in the tech world. Radial tires? Yep.
In the 50s and 60s, Michelin was quietly developing a brand-new tire called a steel-belted radial. Evolutionary? Not at all. If successful, this tire would get 40,000 miles of wear as opposed to 10,000 for the standard tire of the day. Jobs pointed out that if successful, the invention would reduce the need for new tires by 75% and permanently transform the tire industry. And that it did. In 1970, the Lincoln Continental was the first automobile to offer radial tires, and all other automobile manufacturers soon followed suit. Michelin revolutionized the industry and was an industry winner, albeit in a smaller market. Others, on the other hand, went out of business.
So why did Jobs talk about the “radial tire effect”? He knew that eventually the “radial tire effect” would ultimately create revolutionary winners and losers in the Apple world of computers, phones, etc. Remember the Commodore 64 and the Radio Shack TRS80?
A Shift in the Energy World – The LED Revolution
I believe the same shift is happening today in the energy world, specifically around the demand side of the energy equation. Reducing energy consumption accomplishes two critical goals for an enterprise’s sustainability initiative: a reduction in dollars spent and a reduction in greenhouse gas emissions. Is the energy demand management industry immune from the “radial tire effect”? Certainly not. EVERY industry has a disruptor lurking around the corner.
When we view the historical energy consumption of commercial and industrial customers, a convenient way to categorize the consumption is in three equal categories, each comprising about a third of consumption: lighting, HVAC and everything else (or “plug power”).
Lighting has already experienced a revolutionary change, and virtually every large entity has converted (or is planning to convert) to LEDs. Just as radial tires changed the tire industry, so too have LEDs done the same for lighting industry, because it too has a cost/benefit of two or three times its predecessor, the incandescent light bulb.
Not only have incandescent bulbs disappeared, but so have many of the companies that manufactured them – a true revolution in an industry that was around for a hundred years.
Beyond Lighting: Changing the HVAC Game
The other major consumer of electricity in C&I facilities is HVAC. Within the HVAV realm, there have been many marginal and incremental improvements to accomplish energy consumption reductions.
A little-known fact is that roof top packaged units (RTUs) operate independently of one another, and their operating commands are mandated by either individual dedicated thermostats or a complex building management system (BMS). In other words, the operations of each individual RTU are mandated on a centralized command and control basis. In this operating realm, “energy savings” are found on the margin using strategies developed over the past decade by either utilizing more efficient packaged units or “load shifting” strategies such as temperature setback and staggered starts.
These strategies do indeed create marginal savings, but just as lighting is being revolutionized by LEDs, so too, I believe, will HVAC energy savings be revolutionized by thinking outside the box and enabling RTUs to work together synergistically instead of separately. In fact, we have already seen 15%-25% reductions in HVAC energy use using just such a “work together; not apart” concept.
As Helen Keller once said, “Alone we can do so little; together we can do so much.” It is just this philosophy that drove Encycle’s developers to create the swarm intelligence-based, biomimicry-inspired Swarm Logic technology that enables RTUs to work together like a swarm of honeybees. Here’s how it works.
Using a small controller device or smart wi-fi thermostat with on-site or in-the-cloud logic the technology enables each RTU to think for itself and make decisions based on the collective decisions and actions of all other RTUs at the facility. By employing this decision-making strategy every few minutes, on a 24/7/365 basis, this “group think” results in savings of 15-25% even where other systems have been installed.
The beauty of this swam intelligence approach is that it automatically calibrates and adjusts the swarm’s behavior without the need for complex engineering studies to be performed prior to installation, smoothing out demand across all RTUs at each facility, and accounting for changes in operating conditions without the need for operator intervention.
There’s no question that heating and cooling efficiency is the most effective way to decrease overall energy consumption, and there is no doubt that the savings opportunities we’ve been deploying for the last several years have yielded positive results. However, this is only the beginning. With new technology unfolding to make RTUs smarter and more connected, they can now communicate, collaborate and make informed, intelligent decisions about precisely when and how they should be operating to achieve the best possible efficiency. This is a change whose time has come, bringing the much-needed, revolutionary efficiency gains to HVAC energy consumption that LEDs brought to lighting.