Optimizing HVAC Systems to Create Grid-Interactive Efficient Buildings (GEBs)

Imagine a building’s heating, ventilation, and air conditioning (HVAC) systems not only adjusting the temperature, but also responding to power grid demands and shifting energy usage to times when electricity is cheapest and cleanest.

This is the core idea behind Grid-Interactive Efficient Buildings (GEBs), which aim to reduce costs and environmental impact by dynamically interacting with the power grid.

In the U.S., HVAC systems in commercial and residential buildings consume a significant portion of energy. Heating, cooling, and ventilation can account for up to 38% of total energy use in commercial spaces and buildings are responsible for 75% of the nation's electricity usage.

In GEBs, Demand Side Management (DSM) enables HVAC systems to intelligently manage energy use, particularly during peak demand times. DSM techniques are essential for GEBs because they allow buildings to adjust their HVAC energy consumption when electricity demand on the grid is highest, which is also when electricity is most expensive.

By reducing HVAC loads during these peak periods, GEBs can cut energy costs and decrease strain on the grid, which is particularly important as more renewable energy sources like wind and solar come online.

GEB-enabled HVAC systems can automatically reduce energy consumption during peak times by pre-cooling or pre-heating spaces before the peak demand window begins, or by adjusting setpoints to maintain comfortable temperatures with minimal energy use.

For instance, during a summer afternoon when grid demand is high, a GEB’s HVAC system might respond by reducing cooling output or drawing energy from on-site battery storage rather than relying entirely on grid power. These adjustments are achieved through smart control systems that can “talk” to the grid and optimize energy use while still providing comfort to occupants.

How Do Building Owners Stand to Benefit?

For building owners, the advantages of GEBs extend beyond mere energy savings, offering both direct and indirect financial gains. By actively managing energy consumption and participating in demand response programs, building owners can see a notable reduction in utility bills.

GEBs help streamline energy consumption patterns, allowing owners to take advantage of lower energy rates during off-peak hours and avoid high rates during peak times. This is especially advantageous in regions with dynamic pricing structures, where the cost of energy varies significantly throughout the day.

Demand response events can also be a source of income, as building owners are paid to reduce or shift their energy use temporarily. During a typical season, buildings might participate in four to eight demand response events, creating considerable savings opportunities.

Another cost-saving advantage of GEBs is their ability to lower demand charges. In many areas, large commercial buildings are subject to demand-based fees, which can sometimes make up 70% of an energy bill. By managing and smoothing out peak energy use, GEBs help owners sidestep these fees.

An analysis by the Rocky Mountain Institute found that the adoption of GEB technologies across the General Services Administration (GSA) building portfolio could save as much as $50 million annually, which amounts to roughly 20% of the GSA’s energy budget.

With these cost-saving mechanisms in place, GEBs provide a compelling case for energy-conscious building owners looking to maximize savings while enhancing their buildings’ efficiency.

What Do GEBs Mean for the Community?

Beyond financial gains for individual buildings, the widespread adoption of GEBs offers clear benefits for communities and the environment.

By reducing energy use and balancing demand, GEBs contribute to a more resilient and sustainable power grid. Also, efficient and flexible energy management reduces the amount of energy buildings draw from fossil-fuel-based power plants, which directly translates to lower emissions.

By decreasing peak demand, GEBs help reduce reliance on older, less efficient power plants—known as “peaker plants”—that emit significantly higher levels of pollutants compared to newer, cleaner plants.

For example, the New York Department of Environmental Conservation reports that peaker plants can emit as much as 30 times more nitrogen oxides than newer power sources, impacting air quality and public health.

GEBs also support broader climate goals by facilitating the integration of renewable energy sources into the grid. Renewable energy sources like solar and wind are often intermittent, creating challenges in balancing supply with demand. By adjusting their consumption patterns to match renewable energy availability, GEBs help reduce the need for carbon-intensive backup power sources.

With buildings making up close to one-third of global energy consumption, GEBs offer a pathway for states and municipalities to significantly reduce their carbon footprint and advance toward sustainability goals.

Where Are GEBs Going?

With federal support and a growing emphasis on state and local policies, the GEB market is set for rapid growth. By enhancing grid efficiency and reducing peak demand, GEBs help states avoid reliance on inefficient power sources and increase the integration of renewable energy.

Grid-Interactive Efficient Buildings (GEBs) represent a pivotal shift in energy management, merging the goals of sustainability and operational efficiency. By reducing peak energy demands, participating in demand response events, and utilizing on-site renewable energy, GEBs deliver substantial financial and environmental benefits. These buildings stand at the forefront of efforts to achieve climate goals, lower grid strain, and support electrification in a sustainable way.