The Internet of Things (IoT) is changing the way governments and organizations tackle some of humanity’s thorniest challenges. In this three-part series, we looked first at common issues leaders must address to drive digital transformation in their cities. Next, we’ll be focusing on exciting, major applications of IoT. This post focuses on combatting climate change with technology, and a companion piece highlights advances in disaster management.

With rising temperatures, extreme weather events, and other environmental impacts, signs of climate change are on the rise. Scientists are now warning that global temperatures are accelerating past the goal of the 2015 Paris Agreement (an increase of no more than 1.5°C to 2°C) and are expected to climb an average 3.2°C globally by 2100 if unchecked. In addition, significant demographic shifts are driving parallel impacts. The world’s population is anticipated to soar from 7.6 billion to 9.8 billion by 2050, with 70 percent living in urban areas.

Fast-paced urbanization will require large cites to maintain an uninterrupted supply of energy to power food and water production, transportation, residential and commercial life, and health and human services, all of which occurs in and around buildings. In fact, buildings and construction currently account for 36 percent of global final energy use and 39 percent of energy-related carbon dioxide emissions when upstream power generation is considered.

Smart buildings are a faster fix to reduce energy use

Fast-paced urbanization offers an exciting opportunity to immediately reduce climate impacts. Because buildings—office complexes, multifamily housing, hotels, stores, schools, hospitals, and malls, among others—comprise a big part of city infrastructure, making them smarter can dramatically lower the energy and carbon footprint of a city. Thus, reducing climate change can happen one building at a time, by updating older buildings and by building technology into new construction. We don’t have to wait for shifts in public policy or huge budget allocations to make an impact, individually and collectively.

Connected building technology can manage lighting, heating, and cooling, reducing unnecessary use while maximizing usability and comfort. In addition, smart building software can schedule preventive maintenance, automatically identify and prioritize issues for resolution by cost and impact, and continually optimize buildings for comfort and energy efficiency. Despite these benefits, building owners have historically been hesitant to engage in these solutions, fearing a prolonged, costly, “strip to the studs” retrofit and remodel. However, changes can start as simply as using technology to manage and optimize HVAC usage.

Cutting energy usage at Microsoft headquarters by one-fifth

Microsoft was concerned massive CapEx investments would be needed when its building team analyzed its own portfolio. But the team discovered another way—a software retrofit instead of a physical retrofit. The company worked with ICONICS to develop an “analytical blanket” that enabled 30,000 sensor-connected pieces of equipment and diverse building management systems across 125 buildings to talk to each other. It also provides building managers with the analytics, machine learning, and online dashboards to drive optimization programs. Imagine being able to see at one glance how all your buildings consume energy and other resources and share that information with decision makers to shape priorities. With data visualization, courtesy of online dashboards, that is possible.

“The net result of the 88 Acres project was that it led to a really hyper-scalable project that could be deployed across buildings and cities,” says Daniel Lee, Senior Program Manager for digital transformation at Microsoft. “Microsoft has expanded its smart building program to more than 300 buildings across several campuses. With other efficiencies, we were able to reduce power usage from 59 megawatts of power, which is a small power plant, to 43 megawatts. That’s a 22 percent power reduction which saves millions of dollars annually.”

Companies like Microsoft are realizing that smart buildings don’t just make good environmental sense. They offer a compelling business rationale, reaping ROI in one to two years and then delivering significant cost savings for years to come.

Taking smart buildings to the next level

All of these gains are impressive, and they can be pushed even further with new technology. In addition to reviewing online dashboards, building managers and facilities crews can now use analytics and modeling to build smarter spaces with Microsoft Azure Digital Twins. A spatial intelligence solution, Azure Digital Twins helps users understand relationships and interactions between people, places, and devices; identify needs and issues for addressing; and connect them to automated ticketing systems such as Dynamics 365 for Field Service.

“Azure Digital Twins enables you to take assets, like an air handler, a filter, a pump, or a motor, and describe them in the platform,” says Russ Agrusa, President and CEO of ICONICS, which delivers a SaaS-based, automated smart-building solution. “Meanwhile, you have IoT sensors—flow, pressure, temperature—this data is all flowing into the Azure Digital Twins service. While there, you can do a lot of smart-system work, such as visualizing and analyzing data, scheduling preventive maintenance, and empowering connected field workers.”

For example, sensors, Azure Digital Twins, and ICONICS software can be used to identify issues such as open windows that should be closed, heating and cooling systems that are running simultaneously, or excessive heating and cooling on weekends and holidays. This technology also can be used to adjust lighting, temperature, and technology to real needs—such as a meeting in 10 minutes—reducing unnecessary use without sacrificing comfort.

Using commercial space efficiently: a double win

Azure Digital Twins can also be used to analyze how space is used, helping reduce the real estate footprint required by companies, which further contributes to reducing climate impact. For example, at Microsoft, the building team looked at real space occupancy and utilization data instead of traditional “space-per-head” metrics and found that on average the company had built spaces 20 percent larger than necessary. Knowing this, the company can make more efficient use of its owned and leased spaces.

While any organization with buildings can benefit from Azure Digital Twins, the gains are especially significant for those managing large campuses or installations, such as global companies, education institutions, city governments, and the military.

Commercial office space is slated to grow from 87 billion square feet in 2012, the last year it was measured, to over 126 billion square feet in 2050. Nearly half that space can reach net-zero energy use if current energy efficiency technologies and roof solar panels are implemented. IoT can push gains so much further, enabling the world to move from being energy-wasteful, to energy-neutral, to energy-positive. Here’s how.

Taking smart buildings to the next level

Succeeding with smart buildings opens the door to achieving the vision of smart cities: interconnected systems that help maximize precious natural resources, create new sources of energy, and give energy back to the grid.

Smart building campuses can become connected ecosystems, with technology-enabled businesses, solar panels, smart-battery storage, and electric vehicle fleets, managing energy efficiently to avoid overloading the grid or adding new infrastructure. Azure Digital Twins can help model energy generation, transmission, and distribution relationships, to increase their just-in-time effectiveness. With the electric-vehicle-charging value chain, Azure Digital Twins connects consumers, cars, utility companies, and more to drive smart utilization and growth of this energy-saving form of transportation. And, finally, even individual consumers can become energy producers, by using solar roofs and electric cars to store energy for when they need it or to produce energy to sell back to utility companies.

A business case that’s hard to argue against

Decreasing building energy usage around the world would significantly reduce carbon emissions and slow global warming, giving climate change programs a running start to succeed. Since lower energy use and falling alternative energy prices equal lower costs, smart buildings also provide a compelling business case for motivating government mandates and driving faster adoption. Some 66 percent of global organizations say that better energy management is their primary business driver for making smart building investments, according to a recent Harvard Business Review survey.

“Azure Digital Twins technology is absolutely ideal for smart cities,” says Agrusa. “You can’t do connected cities without it, because everything is siloed otherwise and on-premises, and you really need a cloud, hyper-scale solution to do that.”

In closing, there is a path forward when it comes to climate change that is business-led and economically motivated. As companies and other organizations share their successes with smart-building energy savings and connectivity gains, it’s likely that governments and cities will join in with mandates, investments, and resources. Smart buildings provide a rare opportunity to do what is morally responsible, deliver better services and outcomes, create a sustainable future, and deliver pro-business cost savings.

Don’t forget to read about digital transformation in smart cities and how IoT is reinventing disaster management.

Learn about technology for smart cities.