Who Will Control Energy Consumption? Comverge Makes Its Pitch

Who will control buildings and homes in the future?

It's one of the biggest battles in green technology right now.

Multinational giants like Honeywell (NYSEL HON), Johnson Controls (NYSE: JCI), Siemens and Echelon (Nasdaq: ELON) argue that they will because they already have installed building control systems in large numbers of office buildings and industrial plants. To that end, Siemens acquired SureGrid and SiteControls to beef up its management portfolio.

IT behemoths like Cisco (Nasdaq: CSCO), Google, Microsoft, Intel and IBM say they will, or will participate with the Johnsons of the world, because they can marry building networks to IT networks. Right now, organizations manage to parallel networks -- one for data systems and one for facilities -- and the dream is to marry them.

Utilities and power providers might too, even though it brings up conflict of interest issues. Constellation Energy just bought CPower.

Meanwhile, start-ups like and Redwood Systems and Adura Technologies say they will play an important role because they add lights to these networks. Most traditional building systems only focus on controlling the thermostat. (Redwood further adds that it will, over time, add things like motion and carbon dioxide sensors to its network and swap out copper wire with Ethernet cable for further savings.)

And datacenter management companies like SynapSense argue that they their tools will migrate from the server room to the office building.

You can add demand response companies to the mix too, says R. Blake Young, CEO of demand response provider Comverge (Nasdaq: COMV). Demand response, in reality, is becoming demand management. (We wrote about the industrywide shift from "response" to "management" in name and mindset back in June.) In this new framework, companies like Comverge will effectively serve as a fluid conduit between utilities and operations, modulating air conditioners and other appliances to smooth out peaks. Now, these companies curb power consumption suddenly after a request from utility.

Comverge calls this "intelligent energy management." The company will discuss it at GridWeek taking place in Washington D.C. this week.

"The smart grid is never going to be finished," he said. "The increasing level of sophistication will require solutions that serve that sense of sophistication."

In fact, demand response players have a number of advantages. The ultimate goal of these building management systems, after all, is to allow facilities managers to link their operations to time-of-use pricing signals and other information coming from utilities.

"We have over five million devices deployed on the grid," he said. Companies in many of these other fields "cannot offer the scope and breadth of services, hardware and software."

Demand respon... whoops, demand management companies are also familiar with operating in a regulated environment and with utilities, some of the most conservative businesses on the planet.

"Regulators are going to hold utilities accountable for reliability and supply," he said. "They aren't going to disaggregate it to nascent players in the market."

In other words, a track record will help land deals. Comverge started in 1997. It has mostly concentrated on services connected to controlling energy in homes and small offices but is moving into new markets. (Technically speaking, Comverge sells its services to utilities but serves consumers.)

Are acquisitions in its future? Rival EnerNoc (Nasdaq: ENOC) has bought eight companies. Young declined to comment on Comverge specifically but said one could expect to see tuck-in sort of acquisitions in the field.

It's an interesting debate. Comverge has a white paper on intelligent energy management on its site. If you hear much about these concepts at GridWeek, let us know.

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