There’s more to buildings than meets the eye: They hold a key to net zero emissions

At first look, buildings may appear like inert structures, giant boxes made of concrete, steel and glass. But on the inside, they provide space for many activities, most of which require energy. Energy consumption in buildings is needed for lighting, heating, cooling, cooking and powering all sorts of devices. Buildings account for about one third of the world’s final energy use and are key to achieving net zero emissions by mid-century. But in order to play their role in the transition to net zero, buildings must switch from being passive and inefficient energy consumers into active participants in the energy system.

In a modern net-zero future, most buildings would be equipped with a range of digital technologies together with energy efficiency measures and on-site renewable energy generation and storage. Such a transformation would not only allow buildings to use energy more efficiently, but also to interact with the grid to limit costly demand spikes. Electricity costs would decline for consumers, allowing them to take more control over their energy use and thermal comfort. It would also ease congestion in the grid and reduce the need for fossil-burning power plants and their related greenhouse-gas emissions. 

The inherent variable nature of renewable energy creates challenges for power systems, illustrated by the infamous duck curve. Standard grid design hasn’t changed substantially for a century and is mainly intended to operate with large centralised power plants that can dispatch energy at any time. Wind and solar generation challenge the stability of electricity networks because they are decentralised and variable, which is one reason countries such as Vietnam are curtailing excess renewable energy.

Modern electricity grids need to become more flexible to dynamically integrate numerous distributed energy resources, and to interact with buildings. The good news is that smart digital technologies can optimise energy use and renewable electricity generation.

Grids can communicate with buildings through software algorithms and smart controls, for example instructing a connected device or equipment (e.g. a heat pump or cooling system) to temporarily reduce its electricity use (load shedding) or shift it to when electricity is cleaner or cheaper (load shifting). Demand response programmes that manage peak loads (e.g. Saver’s Switch Program in the United States, Demand Response in Singapore) often offer monetary rewards for consumers.

About 90% of electric vehicle global charging stations are located in buildings, and smart charging can determine the best time to charge, based on information from the grid (e.g. Charging Perks Pilot, PLN program in Indonesia), especially if supported by time-of-use tariff mechanisms (like in Italy).

Electric vehicles are essentially batteries on wheels, and can be used to store energy. Bidirectional charging powered by vehicle-to-grid technology can both charge EVs and supply stored energy to the grid to balance demand spikes. Vehicle-to-home is similar, with the energy used to supply a home. A fully charged EV can support an average home for several days, and can produce net zero emissions if combined with a rooftop solar system. Electric water heaters can also be used as storage, if equipped with a storage tank and ”smartened” with special control devices. Heat energy can even be stored in well-insulated building envelopes. In Arizona, customers are paid for making their storage capacity available to the grid, almost like renting out a spare bedroom on Airbnb just for ‘hosting’ electricity.

Virtual power plants -- intelligent digital platforms that can make use of local energy storage, advanced data analytics, smart and innovative technologies (e.g. artificial intelligence, machine learning, blockchain, etc.) -- are already demonstrating benefits for the grid and consumers in Australia, California, Germany, China, and other countries.

Virtual power plants can also facilitate peer-to-peer energy trading, allowing buildings to sell their excess renewable electricity through an online platform. A project like this has been running for several years in a district of Bangkok. There are similar pilot projects in Bangladesh, Australia, United States, Malaysia, Singapore, India and Japan) but for them to scale, not only do buildings and systems need to become more efficient, but grids also need to better manage distributed energy resources. It’s a dramatic shift, akin to going from a single television broadcaster to a new connected world where everyone can create and share their own content.