Building Services Research and Information Association (BSRIA) Proplan has been doing market studies in the building controls segment since the 1980s, and one of the main issues we come across often is the confusing terminology the industry is using when referring to building controls and energy management software.
Building controls are often referred to as BMS (building management systems) or BACS (building automation and controls systems) in equal measure, and when BEMS (building energy management systems) is brought into the conversation, the confusion deepens.
Consequently, BSRIA Proplan decided to follow the ISO definitions in its approach:
BACS, or building automation and controls systems (ISO 16484), control and monitor the mechanical and electrical equipment in buildings, including heating, cooling, ventilation, lighting, power systems, fire systems, and security systems.
BEMS, or building energy management systems (covered by ISO 50001 Energy Management), are software-based systems providing analysis functions to monitor energy consumption, and identify opportunities for saving.
BSRIA recently completed a study of the World Building Automation and Controls Systems market, according to which the world BACS market was worth approximately $22 billion in 2012.
The total world BACS market is comprised of 33 percent products (sensors, software, controllers, values, and actuators), 45 percent value add (engineering, commissioning, and installation), and 22 percent breakdown service and preventive maintenance.
The total world BACS market has been growing at 4.4 percent, and is emerging from recession, driven by new energy legislation, standards, and strong construction activity in emerging markets. BSRIA forecasts this market to grow at 5.7 percent per annum to 2017.
Europe accounted for over one-third of the world’s BACS market last year, followed by North America. Japan is the largest market in Asia, but the BRIC (Brazil, Russia, India, and China) countries are rapidly gaining share, and now account for 9 percent (up from 7 percent in 2009).
The main market driver for BACS in Europe is the focus on energy efficiency. The current European energy policy is built around the 20-20-20 targets (20 percent reduction of energy demand, 20 percent renewable energy, and 20 percent reduction in emissions of greenhouse gas emissions). The Energy End-Use Directive, the directive promoting the use of energy from renewable sources, and eco-design (ERP) requirements for energy-related products were set to reach the above objectives. In 2011, as part of the 2020 strategy, the European Commission has put forward an energy-efficiency plan, and the proposal for a new energy-efficiency directive, setting an energy-efficiency target that affects heavy energy consumers, such as buildings.
According to eu.bac (the European Building Automation and Controls Association), around 20 percent of energy consumed by buildings is wasted. As building controls is a technology already available that contributes toward the fulfillment of energy-efficiency targets, the BACS industry should benefit from the development of the energy-efficiency plan.
Policies to increase energy efficiency and invest in smart energy infrastructure are the main market drivers in North America, which consumes 26 percent of world energy, but accounts for only 5 percent of the world population. The Energy Independence and Security Act of 2007 includes funding to improve building codes.
Demand for BACS in the Middle East and Africa is generated by the growing construction market and strong support from government. In Saudi Arabia the political influence is very strong, and currently it is investing in the market. In UAE energy conservation is raising awareness of energy efficiency and a focus on return on investment. The Emirates Green Building Council supports various initiatives such as a green star rating system and the introduction of LEED [Leadership in Energy and Environmental Design] certifications.
In Asia, energy efficiency and energy management are the key market drivers for BACS. Japan and India have been supporting energy-efficient products; in particular, the nationwide energy shortage has driven the Japanese government to aggressively provide financial support to BEMS and energy-efficient products. China is also trying to increase energy efficiency by setting up legislation.
Australia, as one of the nations keen on environmental conservation, introduced a carbon tax in July 2012 that has a direct impact on the costs of the air conditioning industry. It also adds additional cost on energy consumption.
The expenditure on BACS per capita indicates the maturity of the markets, and we see Germany as one of the most developed countries (spending $23/capita), followed by North America, as well as Japan and Australia. Clearly the BRIC countries are still underdeveloped but show enormous potential.
Open Standard Communication Protocols
One important development in the BACS segment has been the uptake of open standard communication protocols, taking over from proprietary protocols. BSRIA has seen big gains in the penetration of BACnet, which now accounts for almost 50 percent worldwide, 60 percent in North America, and 43 percent in Germany. There is also an increasing uptake of wireless communication protocols (especially in retrofit solutions) with EnOcean Alliance, Zigbee, and Z-Wave commonly mentioned as preferred solutions.
BSRIA Proplan has seen the penetration of open standard communication protocols rise from 40 percent in 2004 to 70 percent in 2012. It is forecast that the penetration of open standard communication protocol will rise to at least 80 percent by 2017, driven by customer demand for connectivity and interoperability between different systems. The uptake of open standard communication protocol is stimulating competition, and this is proved by the contrasting situation between Germany and Japan.
Whereas the German market is extremely fragmented — international players compete with national suppliers — the Japanese market is dominated by Azbil (Yamatake), owning 86 percent share with its proprietary protocol.
In terms of vertical markets, offices account for the largest share with 15 percent, although this has been reduced from the 20 percent share they held prior to recession. The other main segments are education and health care. During the research, BSRIA Proplan witnessed smart home products being used in the light commercial segments such as small offices, hotels, and retail. In Germany, about 60 percent of smart-home products are sold into the nonresidential buildings segment.
In the past three years, the distribution channels went through significant changes: whereas in Europe, growth came via system integrators (control contractors) and energy services companies. In North America, sales via contractors fell, and proportion of direct sales grew.
BSRIA Proplan has recently completed a study in Europe and North America about the penetration of BEMS and BACS in nonresidential buildings. According to this research, it identified that buildings with BEMS (including complex BACS) are typically fully air conditioned. Buildings with complex BACS, but no BEMS, are partly air conditioned.
An important conclusion is that a large number of nonresidential buildings do not have BACS or BEMS. In fact, in the 27 EU countries, only one in five buildings has BACS, and these are generally medium to large, so there is a large untapped opportunity to retrofit medium-to-small buildings.
As a large number of smart-home systems are in fact installed in light commercial applications, this is currently a strong threat to BACS projects. The total European smart-home/home automation market accounts for €675m, and is growing annually by 13 percent on average. This is principally a B2B market with manufacturers not selling directly to end-users, but rather through wholesalers to installers, most of whom are small-scale. Products account for 70 percent of total value and the majority of installations use KNX communication protocol.
Apart from smart homes, variable-refrigerant flow units with BACS/BEMS started to appear on the market in Asia and BSRIA Proplan sees this development as a further threat to nonresidential BACS. A BACnet/Lonworks gateway, or other communication adaptor, enables them to connect to other elements of a BACS system and their energy management module offers functions such as peak-cut operation, outdoor unit capacity save mode, indoor unit rotation operation, and individual electricity billing of several tenants using the same system.
Content for the European Spotlight is provided courtesy of Refrigeration and Air Conditioning Magazine, London. For more information, visit www.racplus.com.
Publication date: 8/12/2013