29 June 2011 – Exto Partners is a venture capital company that picks start ups, funds them – no leverage – and expects around 50 per cent return for its private and institutional investors.
So when Exto boss Peter Hammond selected BuildingIQ as one of its start-up investment favourites, it was with huge optimism that energy efficiency in buildings was a growth story.
“We invest in start up companies; we build them up to sustainability (in a financial sense),” he explains with the kind of gusto you expect from such an investment model.
Today, not yet two years since the company’s late 2009 launch, BuildingIQ has 20 full time staff, with several in the US. It recently searched for – and found – a high level business development manager, Carmelo San Gil (snatched from Bluescope Buildings) and it’s looking for more staff.
So what is this company selling?
According to BuildingIQ managing director Mike Zimmerman what’s on offer is energy efficiency software for buildings with a twist – a kind of “autopilot” for the building management system that doesn’t require a huge amount of upfront cost and returns generous levels of savings.
“We started in late 2009. We were set up to commercialise some technology coming out of CSIRO – energy optimisation software for buildings,” Zimmerman tells The Fifth Estate.
“Basically it interfaces with the existing BMS [building management system] in the building. It acts like an autopilot for the BMS, continually optimising energy consumption and cost,” Zimmerman says.
In Zimmerman’s view, the technology is “cutting edge”.
“It is now being deployed in some of the major buildings in the US. They’re not announced yet, but what we’re doing is cutting edge on a global basis.”
In Australia existing clients include Lend Lease, Stockland and Investa.
Hammond is as enthused as Zimmerman.
“It’s an energy efficiency service that uses technology to make the building system more intelligent. It leverages the energy store of the building to optimise the way it’s operating,” Hammond says.
“I think energy efficiency is an area with huge focus in the future in terms of reaching those green targets, [emerging from legislative and market drivers] especially if you can do it in a way that doesn’t involve a large amount of up front investment.”
And that’s a key to BuildingIQ’s prospects, he says.
In a second or third tier building, the energy savings could be 30-40 per cent. “It makes a huge difference to those buildings,” he says.
Costs are $10,000 to $20,000 upfront for an average building of about 25,000 square metres and an annual fee of $1 to $2 per sq m for running costs.
Part of the technology is automated fault detection. The technology can also create a thermal model of the building and map how it reacts to changing weather patterns.
It takes in information such as predicted weather patterns from the Bureau of Meteorology, pricing information from the utilities, as well as information from building sensors that show how the building is reacting to the different weather conditions by building a thermal model.
“And it optimises the set points every five minutes,” Hammond says.
“It’s a rich set of data for the buildings.”
Built in, is also a fault detection system so that if there is a mechanical fault, which can cause the heating ventilating and airconditioning system or HVAC to use more energy, then the system can identify this.
Another major energy saving component is automated demand response, which is particularly helpful in the US, where utilities will pay companies to reduce their energy loads. This means companies can get paid for reducing their energy bills if they structure their energy use the right way.
Hammond’s background is with KPMG and consulting in the US. His partner in the business is Will Deane who worked in the US law firm Skadden Arp.
Zimmerman’s background is as team leader with Johnson Controls and 15 years in building management systems.
See Zimmerman explain his company’s technology at a GreenNet conference in the US, captured on You Tube