Hi, everyone. Welcome to GreenMonk TV. My guest on the show today is Rich Lechner from IBM. Rich is VP of Energy and Environment for IBM. Rich, welcome back to the show. Thanks very much. Glad to be here again. Second of the monthly installments, Rich. And we wanted to talk today about smart buildings. I mean, you've done a lot of stuff around the smart planet on a kind of a macro scale, but you're also working on a more micro scale, helping customers build out smart buildings. Right. You know, the whole notion behind the smart planet is this idea that things are becoming more intelligent, more instrumented, more connected. And it's about making systems, the world's systems, more intelligent, work more efficiently and effectively. So if you think about a building, it is a complex system of systems. You have the water infrastructure, the IT infrastructure, the electrical infrastructure, the security systems, the waste management system. So a building itself is a microcosm of a smart city or a smart planet. And it's fraught with the potential to make it more efficient and more intelligent. But buildings to date have been enormously inefficient, haven't they? And they're massive consumers of energy and electricity and massive producers of CO2. That's absolutely right. You know, by it's been estimated by 2025, buildings will be the single in aggregate, will be the single largest consumer of power on the planet. And in the US today, about 40% of the power is consumed by buildings. They're also in aggregate, the largest emitter of greenhouse gases. So, you know, there's huge, there are huge power sinks. They're, they're very inefficient, both in their use of power, you know, from an energy and a thermal perspective, but also from the, from the utilization of the assets. So there's a, there's a similarity here to the
2:04discussions we've had before around IT, where, you know, data centers are big power sinks, and they're, they're full of equipment that is lightly utilized. Well, you think about a building, the utilization rate of a building is, is pretty phenomenally low. On average, workspaces are, you know, only filled about 23% of the time. So you think about that, you know, the average occupancy of a building, only 23%. So there's plenty of room to, to improve how the, not only how the asset works, but how it's, how it is utilized in, in filled. Okay. So is, is, is smarter buildings looking at, for instance, rates of occupancy and deciding when to turn lights on and off based on when people are at desks, or does it go well beyond that? Well, absolutely is, you know, it's more than just motion sensors, right? So that things like motion sensors in offices is a great idea. But it's also about, you know, sort of intelligent occupancy. So as, as you have more flexible design, so as, as workers come in, they're not sent to their specific queue, but they're actually, you fill up the building in a logical fashion so that at 7am in the morning, you don't have these buildings where you have a, a, a, a one person in one corner on one floor and a different person on a different floor and a different corner. And that's all that's there, but the lights are blazing across all of it. So it's about, you know, more intelligent occupancy. It's about, um, harnessing the environment more effectively. So, you know, it's not uncommon today to have irrigation systems, you know, sputtering away in the middle of a rainstorm, right? So, because, because the irrigation system is not tied to the environmental conditions. Uh, it's not uncommon to have, um, you know, air conditioners blowing when, uh, when, when it's colder outside than it is inside, but the, but the windows don't open. So, uh, it's about harnessing the environment, not just coexisting, but, but harnessing the environment. Um, what are the, what are the drivers for, uh,
4:10people to roll out smart building, uh, programs now? Well, first of all, there are, um, of course, the energy cost savings is, is a, is a primary driver. There's also lots of evidence that says that you can improve occupancy rates. We, we work with a, um, with a hotel, the St. Regis in China, and, um, not only, and I, and I want to just check the, to get the fact here. So I have it right. Um, the energy cost, the revenue is below 5%. Now that compares to an industry average of greater than 8% for other five-star hotels. So they've improved their energy costs, but they've also relative to the revenue and the occupancy have, have had a significant effect. There's also evidence that, uh, from other surveys that show that 10, that tendency rises in smart buildings or more intelligently designed buildings or green buildings, uh, and that you have higher occupancy rates, um, and happier tenants as a, as a result. So less of the sick building syndrome that we've heard a lot about over the last couple of decades. Right. In fact, one of the customers we've had the chance to work with is a company called green spaces in India and in new Delhi. And they're, uh, they haven't an existing office park, but they're building and they start construction this year on a new office park. What they believe will be the greenest building and office complex in the world is so be a super platinum leads rated building, but not only that, it'll have, um, support for electronic plug-in electric electric vehicles in its, in its, uh, parking lot. It'll have, um, uh, complete 100% recycling of all gray water, uh, zero waste emission, and it will, um, they are growing their own air. So they will, uh, um, and they have demonstrated in their existing office park that, you know, spending five hours in one of their buildings will increase your blood, blood oxygen level by 1%. And they actually go around and sample the oxygen levels of, uh, with a little finger device,
6:13uh, of, uh, of the, uh, you know, volunteer tenants. So, uh, and, and they have evidence again, that it really improves the, uh, the mood and the, and the health of the tenants. It is relatively, um, inexpensive to do so. And, and, um, it's about a five to one ratio in terms of number of plants required per occupant. Wow. I, I saw a, a TED video on that recently about, uh, a certain triad of plants that were, uh, uh, that, that could increase your blood oxygen level by something like five percent. That's exactly right. And there's certain plans for, uh, for, uh, taking, um, you know, negative contaminants out of the air, others for oxygen in the air, et cetera. And it was that gentleman who was at the TED conference, who is, uh, the, the person responsible for the green spaces project. And IBM is the technology partner for that project. Fantastic. And what, what are the barriers to people rolling out, um, green or sorry, smart building programs right now? Well, so there's a, there's a few, first of all, it's the technology, right? So, and this idea of increasing the instrumentation, um, and the connectedness of devices is certainly going a long way towards helping that we're doing a lot to deliver integrated building management systems so that you can have a single console or command center where all these systems interact and can, and you can see the interoperability of them. So technology is one. Standards, though, is, is critical here because there's a real lack of standards. Um, and they're just now being defined. So the IT industry, again, has an opportunity to take a leading role here because we have, um, you know, solved many of these issues in our own scope. And, and IBM is active, along with many others actively participating in defining standards, uh, for smart buildings at, at every level of the infrastructure. And the third though, and the, perhaps the most challenging is the incentives, because it's a classic case of the, the, um, the, the people building and constructing the,
8:15the buildings are, are not the owner occupiers of the buildings in many cases. So, so there's a a mismatch of incentives. Now, um, work is progressing in many, uh, countries around the world to provide the incentives for businesses to, to make it, uh, financially attractive for businesses to create and, and run these smart buildings. It's been, uh, with, with, with the stimulus package coming out of the U S there's been a series of, um, um, um, incentives for people to roll out these kinds of programs. That's right. Yeah. I'm very familiar with the ones in the U S it's not just U S I should add, because in China and other places, there is stimulus money, uh, tagged this way. But in the U S for example, the GSA, which is the, uh, so the government administration responsible for all of the various government buildings, whether they be military bases or federal courthouses or what have you, um, has earmarked three and a half billion dollars of stimulus money for upgrading those buildings and making them more efficient. And that's everything from the data centers to the buildings themselves. Um, the, uh, uh, the second piece of, uh, stimulus money in the U S is about $5 billion for energy efficiency programs. And these are aimed at commercial properties, trying to drive demand reduction, uh, in those spaces to take load off the grid to do peak shaving, uh, and to make the infrastructure more efficient. Um, these, this stimulus money is, is, you know, just adding more incentive, uh, to businesses to embrace the notion of green or smart buildings. Superb. Great. So we'll, uh, hopefully see a lot more smart buildings being rolled out in the next couple of years. Super rich. That's been great. Thanks for coming on the show. Thank you. Bye. We'll be right back.