Integrating technologies for a smarter, greener future: Johnson Controls interview with APUEA magazine

Q: Can you give us an introduction to Johnson Controls and describe your role in the company? 
Johnson Controls was founded in 1885 by Professor Warren Johnson, who invented the room thermostat. He got tired of tapping the pipes in his college classroom to let the boiler operator in the basement know when the temperature was uncomfortable, so he invented the electric thermostat. Since then, we have made significant additions to our portfolio in the building technology and solutions space. We acquired York International, a major provider of HVAC equipment, chillers, and air handling units, among others. A couple of years ago, we merged with Tyco International, which is a leading provider of building technologies in the fire, life safety, security, and video surveillance area. Our company grew over the years to include a battery business, an automotive interior enterprise, and a facility management venture that we, since then, have spun off or sold. Today, Johnson Controls is a pure-play building technology and solutions company. I am the vice president of global sustainability and regulatory affairs but have had a number of different roles in the U.S. and Europe over the past 37 years. 

Q: Can you elaborate on Johnson Control’s geographical focus? 
We operate in 150 countries, and I have had the pleasure of visiting many of them. I spend a significant amount of time outside the U.S. and particularly in the Asia-Pacific region because the growth is so significant there. I spend time working with our regional offices and working with governments to develop policies that will drive investment in smart and sustainable building technology and solutions.

Q: How do you see competition in the market from Johnson Controls’ point of view, and what is your value proposition to the market — how do you differentiate yourselves from your competitors? 
We believe our strength is that we bring an integrated set of technologies to address the need of key vertical markets, like healthcare, higher education, government and transportation on a global basis. We differentiate ourselves by being able to integrate all those technologies at a building level, campus level, and increasingly at a community or city level. 

Q: Buildings stand for 30 percent of the final energy consumption in the Asia Pacific and, in general, buildings account for a large part of GHG-emissions in cities. What are the key challenges for buildings to minimize energy consumption and carbon footprint? 
There is a tremendous opportunity to leverage and improve energy efficiency in new construction as well as in existing buildings. That is why we are so active in working with governments and through organizations like the Asia Pacific Urban Energy Association (APUEA) and the International District Energy Association (IDEA), the Sustainable Energy for All Building Efficiency Accelerator, the Cool Coalition and the Three Percent Club to introduce policies and programs that drive greater efficiency and reduce carbon emissions. Effective policies range from more stringent building codes, equipment standards, building performance benchmarking, and encouraging governments to show leadership in the buildings they design and occupy. We believe it is important for the private sector to participate in both policy development and advocacy. The private sector has the expertise, and they bring the capital. They also bring the capability to encourage countries and cities to be more ambitious, both in their goals and in their actions.

Q: In your opinion, which technologies will play a major role in creating sustainable urban energy systems for cities in the future? 
We see a transition from the focus of efficient individual components, devices and equipment to more systems-oriented approaches, and utilizing digital technologies, such as advanced building controls, analytics, and machine learning. Our research shows that low carbon buildings are increasingly incorporating a range of different technologies to optimize performance. We also see a trend in new construction buildings of taking advantage of district energy systems; for example, a campus served by a high-efficiency district energy system, powered by renewable energy and incorporating thermal and battery storage. We see these trends as an opportunity to provide the next level of energy efficient and resilient supply. 

Q: Do you think that there can be a decoupling between economic growth and energy consumption and carbon emissions? 
I certainly hope so, and I think energy efficiency shows us the way. The International Energy Agency (IEA) says that reducing carbon emissions by 40 percent is possible through currently available, cost effective energy efficiency technologies. These benefits can be realized if countries commit to a three percent annual improvement in energy efficiency. Unfortunately, we are off track to meet this target in many parts of the world. 

Q: What is your take on different sustainable concepts, such as smart cities, eco-cities, and future cities? 
We have been researching the industry globally for over a decade in our energy efficiency indicator research (previously published in APUEA Magazine, issue 4, February 2019). Our research on Smart Cities has taught us that the priorities, drivers, and investments in smart cities are very much focused on connected technologies, sustainable buildings and resiliency. Cities around the world where their investments are going, and the answers are, distributed energy systems, district energy systems, and energy efficiency improvements like LED street lighting, etc. Energy is central to a smart city strategy. 

Q: Many buzzwords are used today in the industry. Can it be problematic to use popular concept names like Smart Cities? 
That is true; in India, for instance, there are over one hundred official smart cities, and I am not sure how many of those would be defined as a smart city in exactly the same way. My mother always told me, “smart is what smart does,” and I think we need to talk more about the outcomes we are providing to the communities, visitors and businesses. Shenzhen, in China, is a great example of a green city. The city is a leader in sustainable transportation with electric buses, and they have many low energy buildings, including net-zero energy buildings. It is very much a green city from an urban planning standpoint, and they are embracing concepts like district energy and community solar systems. I think that the more we showcase cities where we can show the many benefits of integrated urban energy systems, the more we can address urban challenges and opportunities.

Q: How do you see the trend of energy efficiency investments in the Asia-Pacific region? 
In our annual Energy Efficiency Indicator survey, we follow current and planned investments, key drivers, and organizational barriers to improving energy efficiency in facilities. In our latest survey from 2018, we see that that investment in energy efficiency, renewable energy, and smart building technologies is rising in the Asia-Pacific region. Looking at the survey, 61 percent of organizations in Asia and 70 percent in China plan to increase investment during the next year, which can be compared to 59 percent globally.

We can see that the energy cost savings are the most significant drivers of investment in Asia. Several other factors are important in making decisions around energy efficiency and smart building technology. These include greenhouse gas footprint reduction, increased energy security, and attracting and retaining employees and customers, which are identified in the survey as important factors in investment.

Q: How is Johnson Controls utilizing the ongoing Digital Transformation in its business?
The digital transformation is a critical element of our business, and perhaps the most exciting area where we are deploying these advanced digital technologies is in district energy systems. We have over the past few years been developing a suite of tools that we call Central Plant Optimization, and it is suitable for campuses such as universities, large hospital complexes, military installations, and other large community-scale applications. The system includes planning tools, design tools, and, most importantly, the operational platform to optimize, not only energy use but energy storage using ice, chilled and hot water and electric batteries. The system can also coordinate distributed energy generation through combined heat, cooling and power and renewable energy systems. Our software essentially predicts the heating, cooling, and power load requirements for the campus seven days in advance. It downloads or predicts the energy prices over that period, it uses weather forecast to adjust its estimate of the thermal loads, and it optimally stores and dispatches energy to minimize cost, energy use or carbon emissions. We have a number of successful campus installations now that are automating and optimizing plant operations previously done manually by teams of very experienced engineering professionals.

Q: What is the strategy/next step for Johnson Controls in the Asia-Pacific region?
We try to connect our business strategies with ongoing megatrends in the various regions of the world. The Asia-Pacific region has so much construction through urbanization and the rising middle class, so there is a real opportunity to be able to influence codes and standards and community-level design for lots of new construction. That is a focus for us. Another ongoing megatrend is electrification, and as we talked about in previous issues of the APUEA Magazine (issue 1, 2018), we are very much involved in applying our heat pump technology to enhance the efficiency in the output of district heating systems in northern China. In the winter, to meet the heating demands for the communities they serve, the combined heat and power plants are running at maximum capacity. This leads to excess electricity on the grid and the reduction of renewable power generation. We can provide additional thermal output at much higher efficiencies, utilizing efficient technology like heat pumps or the generation of cooling through absorption chillers or steam turbine-driven systems. We also see digitalization as a megatrend. Buildings are becoming more sophisticated, and more building owners are striving towards net-zero energy buildings or net-zero carbon buildings. Controls and automation play an increasingly important part of being able to deliver that and also connecting buildings to microgrids and other energy assets within cities and communities. These very exciting technology-driven trends address serious economic and environmental challenges and provide a path for the future of the company in Asia-Pacific and globally. 

Q: In June 2017, Johnson Controls announced the opening of a new Asia-Pacific headquarters in Shanghai that is built entirely around green building principles. What role do the new headquarters play in your strategy?
It is a great example of what can be delivered when integrating disparate building technologies. With a fundamentally energy-efficient design, the building uses almost half of the energy of the energy of modern office buildings. It also uses 40 percent less water and has 20 percent less embodied energy in its construction materials. The building provides a comfortable, productive, and healthy environment for our employees and visitors. The building is a showcase project of the U.S.-China Clean Energy Research Center Building Energy Efficiency Consortium and has LEED Platinum, IFC Edge/net-zero ready and China Three Star green building certifications. We view our Asia-Pacific headquarters as a showcase of state-of-the-art in sustainable design and building technology while demonstrating the many owner and occupant benefits of smart, safe and sustainable buildings.

This article was first published on APUEA magazine. Check out their other issues here.