Are smarter buildings a reality in India?

by Vinita Gupta, InformationWeek, April 27, 2012

More and more Indian companies and developers are adopting the smart building concept, which in turn is generating a huge revenue opportunity for vendors like IBM, Cisco and Capgemini

Energy shortage is a reality in India that affects the economy of the country. Water and energy savings are discussed but are we really doing anything about it? Yes, some are -- with initiatives, such as smart and green (or sustainable) buildings. The smarter building technologies are believed to save up to 30 percent of water usage, 40 percent of energy usage and even help to reduce the building maintenance cost by 10-30 percent. It also guarantees users of buildings comfort, better health and safety. The smart building concept not just looks at buildings but also campuses, towns, cities etc.

Today, many companies especially IT companies like UST Global, Infosys, EMC, etc., and real estate developers are adopting it.

Some real adoptions in India

UST Global is building a smart and intelligent campus (about 36 acres) in Kerala (Trivandrum). The company has engaged with Cisco during the architectural design phase of the campus to put in place a solution that can support their existing and projected business requirements. The first building of the campus (about 800 k square foot) would be completed by November 2012.

Alexander Varghese, Vice President - Corporate Services & Country Head, UST Global asserts that the smart building concept should be implemented at the design stage itself, as then the equipment and materials purchased are compliant to the concept. He informs, “The smart building solution will help us to save on energy (about 15 percent by November 2012), maintenance as it is IP enabled and will also provide security and safety for our employees and customers.”

Accordingly, Smart Building Systems (SBS) have provided Infosys with valuable operational data on energy consumption, energy demand and comfort on buildings, which has helped the company verify the impact of its design choices.

“SBS helps us monitor our equipment and allows us to take predictive maintenance action and control energy loss. In addition to energy, we are also applying SBS to our water consumption. We believe that this will provide us useful insights in conserving water in our buildings as it has done for energy. We believe that we can achieve our energy efficiency goal with disruptive designs that use SBS with the support of employee behavioural changes,” says Rohan Parikh, Head of Green Initiatives at Infosys.

Similarly, Godrej Bhavan in Mumbai is a high-performance green building that maximizes operational efficiencies, while minimizing environmental impact as well as lower energy and operating costs. Also, EMC has put together an emergency response system to control the operating costs of building maintenance.

Not just companies but real estate developers like Wave, Sobha Habitech and Mantri Developers are looking at smart building concept. For example, Wave City, a smarter township (about 4,500 acre) in Ghaziabad (Uttar Pradesh State) will be designed with smart systems to improve the quality of life for residents, while keeping operating costs low.

The smart building concept will not just help developers to generate revenue but it’s a big opportunity for the vendors that are helping companies and developers to it.

Big opportunity for vendors

According to ABI Research, the market for IT-enabled building automation is more than USD 30 billion by 2015. Thus, the vendors are tapping this opportunity by building capabilities and developing partnerships.

Smart building is easily a USD 3 billion extension for IBM’s hardware, software and services. IBM recently announced its partnership with Ingersoll Rand to provide remote energy and asset management solutions for the Indian market. According to this partnership, IBM will bring in the analytics and other solutions to Ingersoll Rand’s clients like Godrej and Le Meridien Hotel.

Cisco has around 6-10 customers in India to whom it provides different smart building offerings. Likewise, Capgemini is planning to invest and develop new projects in India. The company has done a pilot project with Tata Power on smart metering in Mumbai that included the 1,500 Commercial & Industrial (C&I) customers of Tata Power. The company will participate in the smart grid pilot projects that are coming up in India.

“We started our Smart Energy Services initiative in 2005 and since then, the company has added about 50 projects worldwide. We have seen huge growth of about 55 percent in the smart building initiative. Globally we has about 8,600 people in the smart building project team,” states Perry Stoneman, Vice President and Global Leader, Smart Energy Services, Capgemini.

The vendors are offering, and the companies and developers are building smart buildings, campuses, cities and homes. But will this concept cost a bomb to the end-user?

What about the cost?

It is true that there is an increasing awareness about sustainability in India but the question is how cost effective are these buildings. Companies and developers believe that the initial investment for green buildings is not higher than standard buildings but there is a huge cost saving in the long run.

“We have not made high investment compared to the returns. We have made about USD 50 million investments for the first phase, which includes the construction charges, solutions from Cisco etc,” says Varghese from UST Global. Similarly, Godrej’s project, which costs approximately USD125,000, has resulted in 15 percent reduction in annual energy costs, representing a simple payback of less than four years.

Along with immense environmental benefits that smart buildings offer, they are a win-win concept for all — the companies, developers, vendors and end users.  

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