Transforming cities: The impact of smart buildings

Empowering cities through intelligent and productive buildings

To understand how buildings can contribute to a city, it’s essential to consider the various stakeholders within the city, including residents, local governments, energy providers, and objects such as cars and streetlights.

By mapping out the needs and capabilities of each stakeholder, potential collaborations can be identified, such as exchanging data and physical resources like energy and parking spaces.

Building as part of a natural ecosystem

A generic commercial building needs energy, water, data about its environment, and maintenance. At the same time, with the use of smart building technology, it can provide data from sensors and equipment and resources like EV charging stations and parking spaces.

By mapping out the needs and capabilities of other stakeholders, such as local governments and energy grids, the potential for collaboration becomes clearer.

Smart building examples in the context of a smart city

What is a smart building?

A smart building is a structure that utilizes advanced technology to optimize its operations and improve the experience of its occupants.

These technologies include the use of Internet of Things (IoT) sensors, building management systems, and digital twins, to name a few.

These tools work together to help the building efficiently use resources such as energy, water, and lighting, while also maintaining a safe and comfortable environment for those who occupy it.

Real-world smart city applications

Smart buildings play a crucial role in the functioning of smart cities by optimizing resource usage and improving occupants’ experience.

One example of a smart city application is the integration of buildings and cars. Buildings can offer extra capacity in their parking spaces or available electric vehicle (EV) chargers for vehicles to use. At the same time, cars can share data such as outside temperature, rain detection, and air quality with nearby buildings to optimize their operations.

Resource and knowledge sharing between buildings

Another example is resource and knowledge sharing between neighboring buildings. For instance, excess electrical energy in one building, produced by solar panels, can be transferred to a nearby building or back to the local electrical grid or energy storage.

Generic and specific data can also be shared, such as the outside temperature sensor values used by many facilities for their heating and cooling control algorithms. By comparing the building’s local sensor value with similar sensors in neighboring buildings or cars around the same location, possible issues with this sensor, for instance, can be more easily detected, and the incorrect value can be replaced with the average value of the sensors in neighboring buildings until the issue is resolved. Thus avoiding unnecessary energy consumption and discomfort for occupants.

Collaboration and coordination among city stakeholders: Leveraging the interconnectivity of smart buildings

Exchanging data can also assist a building in exhibiting a “social behavior”, especially when sharing resources with other city stakeholders. For example, if a district heating plant supplies an area with many buildings, and one of them is a “high-priority” building, such as a hospital, then other buildings that are connected to the same heating network can automatically lower their own hot water consumption – if the hospital urgently needs that. This can be applied in case of a malfunction in the hospital’s equipment, the district heating station’s equipment, or if there is a more general crisis mandating the need to prioritize certain buildings over others, like an energy crisis or a natural disaster.

These examples require buildings to express requirements, offer city-level services, and exchange data to organize, communicate, and align with other city stakeholders in a standardized way.

Enhancing building intelligence for a better future

The imperative for improving building intelligence

The current state of buildings, particularly newer ones, is that their systems may be connected internally, but they are not equipped to fully utilize the potential of smart building technology and are still in their own silos when seen from a macro city-level.

Even though buildings have a set of standardized communication protocols in place, they are primarily designed for system integrators and specialists to connect different systems during the building’s construction phase, especially within areas of heating, ventilation, air conditioning, lighting, access control, and fire alarms. These protocols enable the exchange of precise data for specific purposes on a localized level but are not intended for communication with third-party systems outside the building throughout its operational phase.

As a result, these buildings lack the necessary “communication skills” to exchange information and collaborate with other city stakeholders on a more abstract level.

This creates a disconnect between the capabilities of smart building technology and the current state of the buildings themselves. The lack of openness and interoperability between systems within buildings and those outside of the building limits the potential of smart building technology in achieving more efficient use of resources and improved experience for building and city occupants. In essence, having interconnected buildings would elevate efficiency and usage.

Enhancing building intelligence: Strategies for data insights and communication

The importance of a common language and semantics

The scenarios involving multiple city stakeholders necessitate interoperability and openness. From a technical point of view, all the participants have to speak the same language and have the same set of communication skills and data formats, and at the same time, they should not need to understand all the details of each participant to achieve a certain use case.

A building should not have to navigate through the intricacies of different systems and all the technical details of a car, a street light, or another building to acquire the data it requires. Instead, it should be able to pose general queries, such as “who can provide me with air quality data for a certain location?” or announce its “needs” for more hot water and receive a response. 

For this to work, it needs a common language of things and their relationships (semantics), as well as a way to understand other participants’ needs and services.

The need for an abstraction layer in smart buildings

This is why there is a clear need for an abstraction layer to be set on top of the plethora of technologies for each of these stakeholders. For buildings, using semantic modeling and having a building operating system (BOS) built on open standards can help achieve just that.

Current Semantic modeling initiatives include:

• Real Estate Core
• Project Haystack
• Brick Schema

Use case: Reducing energy consumption, air pollution, and traffic congestion

To make the abstraction layer point clearer, let us focus on one potential use case. We can say it is in the interest of a city to reduce energy consumption, air pollution, and traffic congestion caused by cars. It has been identified that one reason for cars staying mobile in the streets and contributing to these issues is the lack of parking spots, which causes drivers to drive for longer times and at lower speeds while searching for a parking spot.

At the same time, other buildings might have extra capacity in their parking spots during different times of the day. For example, an office building’s garage might have a considerable capacity left empty during peak hours since many employees work from home.

After working hours, the whole garage might be empty and can be used to park cars or bikes for people living nearby. This can also apply to a retail store with empty garages at night or a house’s parking spot during the work day. Some of these garages might even have EV chargers that are setting idle most of the time. Imagine having your car tell you where to go for a free parking spot.

The free parking spot dilemma: What is the solution?

An ambitious company, let us call it Company X, wants to become the Airbnb of parking spots and let anyone offer these parking spots online. How do you identify the availability and number of free parking spots, and how do you communicate that to the outside world?

The answer for a homeowner with one parking spot might be easy, as this can be done manually on the “app” that Company X developed, set the GPS location of your garage once and manually set the parking space as “available” in the app when the spot is not being used.

For the business owners of a retail store or office building, where a high percentage of parking spots may be vacant, a more automated approach would be necessary. The office building might have an underground garage, and the property owner or operator could opt to install individual sensors for each parking spot. In contrast, the retail store might have an outdoor parking area equipped with a single camera system that is sophisticated enough to detect the number and location of empty parking spaces from streaming video footage. 

The importance of scalability in smart building connectivity

For Company X to achieve scalability, its technology, such as an “app” for parking management, should be adaptable and easily integrated into various buildings with minimal effort, regardless of the specific parking technology used. If the company had to manually investigate the availability of parking technology in each building and then connect the necessary data from each piece of equipment to use in its app, the connection to each building would become a unique project, making it difficult for the company and its app to scale, become mainstream, and gain widespread adoption due to time and cost constraints.

In the real estate industry, this is currently the case. Company X would have to connect to each building individually and adapt to the technology available, limiting its scalability and success. 

To achieve scalability, company x will need a standardized independent abstraction layer between its app and the building to enable its solution to interact seamlessly with different parking technology available in various buildings.

The potential of smart building technologies in making our cities more liveable

If Company X’s parking app was not limited by the need for adaptability and integration into each individual building the company could then focus its efforts on other areas of innovation. This could include the cost of parking in different times and locations, balancing the number of parking spaces available to the public versus those reserved for building occupants and visitors, adding additional services such as an electric vehicle (EV) and e-bike charging, enhancing the overall user experience, implementing online payments, and other features.

This, in turn, would attract more building owners, increasing adoption and benefiting all parties involved.

Leveraging user-friendly technologies in smart building design

Creating a seamless experience: Applying user-friendly design principles to smart buildings

If you compare your building to your phone or laptop, you may wonder why it is that apps work seamlessly on laptops and phones even though they may have different hardware components like different processors, different cameras, different microphones, and speakers?

The short answer is that the operating system you have on your laptop or phone takes care of the dirty work, not the apps themselves. One of the goals of an operating system is to connect the applications with the hardware functions without requiring software companies to customize their apps for all possible hardware combinations and include specific code for each type of hardware. This is the reason, for example, why any mouse you plug into your laptop works without issues with any application you are running without you having to think about it.

Buildings with operating systems

Following this example, if the building had an operating system, company X would not have to deal directly with the hardware available in the building but rather with the operating system as an abstraction layer in between, resulting in the seamless portability of this app across buildings with the same BOS (Building Operating System).

However, one important aspect of the BOS is that it has to be built on truly open standards. Otherwise, we end up with the same old issue of vendor lock-in. If many vendors are available on the market, all with their proprietary way of doing things, company X would have to re-write their app for each BOS and hit the scalability issue as each BOS app becomes its own development project.

Unlocking business potential: Smart building opportunities for real estate owners and app developers

With some effort, all of the suggested examples above are possible from a technical point of view, but why would a real estate owner or operator, the end customer in our case, invest in such technologies anyway?

Can real estate owners and app developers monetize these investments and efforts? The short answer is yes. Some things can be done in the short term, and others in the medium to long term. We just need to get more creative on the “how” part.

There are many areas where smart building technology can be attractive for real estate owners and operators. This includes

• Reducing energy consumption
• Compliance with ESG (environmental, social & governance) regulations
• Reducing operational and maintenance costs
• Increasing productivity of occupants and employees
• Achieving higher rents for real estate owners
• Creating new revenue streams

Direct monetization through specialized building applications

You can imagine an ecosystem with different specialized apps that can run on top of your buildings to achieve direct monetization. Buildings can, for example, participate in capacity markets and save/make money while helping electrical grid operators balance their networks. Applications specialized in energy optimization algorithms can run the building’s equipment more energy-efficiently. One example is HVAC equipment that can benefit from the smart reset of temperature setpoints to avoid heating/cooling overshoots, smart schedules based on weather data, and similar algorithms. Applications can also be vertical-specific, like guest experience apps for hotels or employee experience in offices.

App developers can sell these apps for a one-time fee or through a SaaS (Software as a Service) model. Real estate owners and operators can monetize their investment in these apps by the direct benefits they achieve through them, like energy and operational savings, or creating new revenue streams, as in the parking app example.

Optimizing building performance and revenue streams with data

Another possible way to monetize the data, although a bit more forward-looking, is to sell or exchange anonymized building data in a data marketplace. Today there are already data marketplaces, with some even specializing in IoT data. This will also need an app to run over the BOS to serve different purposes for parties interested in this data. For example, manufacturers of HVAC equipment (boilers, chillers, etc.) might be interested to understand how their equipment is being used in real-time life scenarios. This data can be used to inform their product line and better match it to their customer’s needs. This is already happening today; an example is robot vacuum cleaners, where sharing mapped data with customer consent is underway. This leads to better innovation resulting from the availability of big data big data on how the product is being used.

Enhancing business with building data

Building data can also enhance product quality by understanding the causes of equipment failure in real-life situations rather than in controlled factory environments. Building data can also be used by machine learning and AI experts as training datasets for their algorithms, such as energy optimization algorithms, predictive maintenance, and sensor and data point classification. Historical data from fire alarm systems can help construction planners understand how fire spreads and how to enhance new building designs to create better safety systems.

Data monetization doesn’t have to be direct, such as selling data for money, but rather in exchange for a service. For example, an energy consumption optimization company can offer a free tier of their application where the building’s data is collected and shared with interested companies in exchange for intelligent optimization algorithms. Such companies might target you with offers of their more energy efficient equipment as a direct sell or with business models like EPCs (Energy Performance Contracts), where they offers to replace your older, less efficient equipment with newer, more efficient ones, in exchange for a part of the savings achieved.

Optimization and energy reduction are better for the environment

This is a win for the building’s owner to save energy, and on the other hand, it provides reliable data for such companies to target the customers who could benefit from such equipment changes without the hassle of costly site visits or collecting and analyzing data themselves just to prove if there is a savings potential, greatly lowering the risk in such business models.

Building data sharing & service exchange opportunities

Of course, these are only examples of many possible scenarios of using the data and capacity siloed in buildings and sharing it with other stakeholders in the city for profit. Each use case must go through market forces to prove its usefulness and desirability. The bottom line is that having a standardized way to communicate with buildings encourages companies to be more ambitious. This, in turn, creates an incentive for investment in developing new applications from the software companies’ side and a desire to invest in building technologies on the property owner/operator’s side.

Steering away from direct commercial monetization, and probably looking at the long term here, governments may be able to offer subsidies or tax benefits for more “digital ready” buildings, which could fulfill certain criteria like the ability to share certain data or offer different types of services like parking spaces, EV chargers, and the ability to reduce their energy consumption on demand, actively contributing in achieving the city’s or country’s wider ESG (Environmental, Social, and Governance) goals.

For ESG and the sustainability agenda to materialize, these activities must be categorized and aligned with other initiatives. An example of that in Europe is the EU Taxonomy for sustainable activities. A “digital building” certification scheme might be necessary as well, following the example of certificates such as LEED (Leadership in Energy and Environmental Design) or BREEAM (Building Research Establishment Environmental Assessment Method), but more focused on the “digital” aspect of the design and functionality.

Building operating systems and semantic modeling:
Enabling the future of smart buildings

The issue of abstraction within a building is being addressed by semantic modeling initiatives such as RealEstateCore and Brick Schema, which are being implemented into building operating systems and applications.

This semantic modeling achieves a transparent and standardized way to describe a building’s spaces, equipment, sensors, and stakeholders, which is a huge step forward compared to a few years ago. However, semantic modeling alone, primarily when exclusively focusing on the internal operations of a building, falls short of the big picture of the smart city.

The following steps for these initiatives and standards are to expand these efforts to align with other groups working at the city level models and specifications, an example of which is the ETSI NGSI-LD specification, to match the common definitions within each of these standards. 

The second step, again in alignment with other standardization groups, would be to add definitions and classification of services and needs possible within buildings as seen from the outside world to help move from the micro level of a building to the macro level of a city, this should, of course, be included in the standardized tags, ontologies, and APIs within these initiatives and BOSs as well. 

This will allow buildings to seamlessly communicate with other city stakeholders and help validate if a specific application will work with a certain building. Defining building profiles, where each profile defines a set of services and needs of a buildings, can further enhance this, as well as serve as a basis for “digital readiness” certification schemes.

Future outlook (conclusion): The evolution of intelligent commercial buildings

There are various ideas and visions of what a smart city could look like and how it may function; however, the reality is that smart buildings are an essential part of any smart city vision.

Smart cities rely on smart buildings, which are often automated, but unaware of their own capabilities and needs or those of their surroundings. Buildings serve a very wide range of functions and industries (hospitality, healthcare, retail, offices, residential, etc.), and to make smart buildings a reality, there is both a need to standardize data within buildings and how they communicate with the outside world and to customize the experience for each building’s unique challenges and opportunities.

The standardization part is already in progress through initiatives like RealEstateCore, Brick Schema, Haystack, and ETSI NGSI-LD set of specification, but there is still a need to align across domains to achieve the bigger picture of the smart city.

The customization part can be solved with a user-friendly and flourishing ecosystem of operating systems and apps, lowering entry barriers for software companies to participate in the smart building and smart city market. This will allow the property owner or operator to flexibly choose the features and applications to link or download to their building’s operating system as easily as if they would with their smartphones.