Smart networking platform can deliver big energy and cost savings

Aimed at reducing energy consumption through more efficient building controls, the LonWorks networking platform is used by manufacturers to build solutions for energy management, automation, and control for diverse applications from complete building automation systems to cabin and engine management systems for high-speed passenger trains. It is differentiated from other embedded technologies in that it is a complete control networking platform that encompasses ISO/IEC standard communications protocol, twisted pair and power line signaling technology, and IP integration (via tunneling).

Market leaders such as Honeywell, Johnson Controls, Philips, Belimo, TAC and Distech have used the platform for nearly two decades to provide the “smarts” in many of the world’s smartest building environments including BP’s corporate headquarters in the UK, the new Malaga airport terminal in Spain, Gard du Nord in Paris, and Beijing’s Bird’s Nest Olympic stadium.

In order to extend the benefits of smart control networks to encompass the growing demand for energy-efficient environments and products, Echelon recently introduced the LonWorks 2.0 version of the platform. The latest version reduces manufacturer costs, provides greater flexibility in component choices (specifically memory), decreases the cost and complexity of integrating and installing LonWorks based products, and provides companies with a vehicle to deploy smart networks into new and more cost-sensitive markets.

In a recent study by the Continental Automated Building Association (CABA), over half the buildings market specified open technologies in 2009. The LonWorks platform powers the majority of smart devices for open system, making enhancements to the platform important from an overall market perspective.

The 2.0 platform delivers several new components including development tools, management software, and processors.

This article focuses on a specific use case study that illustrates the benefits of the FT 5000 Smart Transceiver — the LonWorks 2.0 version of the dominant transceiver in Europe’s building market.

Small building/branch office controller

The need for energy efficiency across every facility asset is driving control systems into new markets. Branch offices (small buildings) are a chief concern among large enterprises. The potential savings of a simple control system retrofitted to existing facilities, plus the addition of a few new devices on key systems, is huge. For example, a North American bank with 1200 locations found that over 80 percent of its branches conditioned their air 24/7. And over 30 percent lit the interior space 24/7.

The use case that follows shows the manufacturer, integrator, and end-user benefits affiliated with creating a branch controller using the FT 5000 microprocessor and supporting LonWorks 2.0 tools. The recent upheavals in the worldwide banking industry have forced large banking institutions to evaluate the costs of operating their many branches. Most face two choices — reduce their operating costs or consolidate branches — and closing branches is clearly not a good one. The recent experience of Bank of America in the U.S. market shows that shutting branches can result in an exodus of customers. In fact, Bank of America rescinded their decision to reduce their number of branch offices due to customer backlash.

In our use case, the institution has over 1000 locations and is seeking to first, normalize operations affiliated with their remote offices, and secondly, to optimize costs.


The FT5000 smart transceiver allows manufacturers to bring higher value/higher performance products to market using the same development tools that they already use for their other LonWorks-based products. Cost reductions are achieved through a larger on-board memory space, faster and cheaper off-board memory interface, lower cost isolation transformer costs, and significantly reduced package size. Increased performance comes from an up to eight-fold increase in clock speed and support for up to four-times as many variables. All of this is accomplished at roughly half the cost of previous generation smart transceivers.

By the time the small building controller hits the market, the manufacturer has done more with less, delivering a more powerful product with lower manufacturing costs ideally suited to the small buildings/branch office market.


System integrators often bear the burden of software licensing in the buildings market. Typically, client licenses are charged on a per node installed cost basis. This cost is transferred to the end-user via higher prices, or borne by the integrator in the form of lower margins. Two primary payment mechanisms exist in the market for open control systems — prepaid credits bundled with the cost of the server, or grouped credits allocated (and paid) on a per job/per installed device basis. Neither is particularly welcome in a landscape dominated by a “hardware” cost paradigm.

The FT 5000, when used with the LNS Turbo Edition network operating system, eliminates software credits entirely. Integrators can therefore realize the full margin that the market will bear or transfer their lower cost to the end-user. Furthermore they can eliminate the administrative and on-site installation complexity of credit tracking and replenishing.

A LonWorks 2.0 controller is also compatible with the LonWorks products and tools already on the market. This allows integrators to maintain their current work force with little or no additional training, integrate products already in distribution with new LonWorks 2.0 product, and maintain their current distribution relationships.

The net result is that integrators can easily transition to the new 2.0 controller with better margins, lower cost to their customer, without incurring any additional costs.

End users

A key reason that the building control market continues to experience slow growth, even in good economic times, is that it is largely restricted to the medium large and large building market. Only recently has it become a competitive necessity to reduce energy consumption through more efficient building controls. Unlike many forms of operation expenses (OpEx), increases in energy use for non-manufacturing organizations do not translate into increases in revenue.

The problem we’re solving in our use case is as follows:

  • 1,000+ branch bank needed to integrate building control systems for energy savings

— No standard operating schedule
— Needed customized applications to better manage and optimize system performance

Lower cost, more powerful controllers that can work with key energy-consuming systems are a natural answer to the market demand for greater efficiency. The key systems that need greater efficiency are lighting and HVAC. A third element that needs to be part of a branch/small building system is energy metering. A basic system diagram follows:

Click on image to enlarge.

In our use case, powerful controllers are designed to operate in a standalone or network connected mode to give end-users greater visibility and control over lighting and HVAC, while providing better insight into the overall energy consumed and the energy used per sub-system.

Using a more powerful LonWorks controller has the following advantages for end-users:


Based on confidential returns from an ongoing implementation, the return on investment for our use case looks like this:


The benefits to the end-user transcend those of the building control system and advanced controller. In our use case, the bank can lower its overall operating expenses and therefore reduce or eliminate the need to close branches, which helps retain customers and maintain better environments to keep customers happier.

Energy efficiency is opening new markets within the building control space. Where advanced controls were once limited to large commercial buildings, they are now demanded by enterprises in all their facilities as a means of staying competitive and controlling OpEx. With the second generation of the LonWorks platform’s introduction and the FT 5000 Smart Transceiver, smart embedded energy efficiency is cheaper, more powerful, and simpler than ever.

About the author: Steve Nguyen joined Echelon in 1992, where he has been a marketing director since 2001. While at Echelon, he has served in a number of marketing management positions including public relations and online services. In addition to his role in corporate marketing, Nguyen has been responsible for data systems and tools for marketing and sales including sales force automation, customer resource management, and technical support. Nguyen currently serves on the Board of Directors for the Continental Automated Building Association (CABA) and LonMark Americas, and represents Echelon in the Business Council for Climate Change (BC3) and the Silicon Valley Leadership Group Demand Response Task Group. Before joining Echelon, Nguyen worked in computer sales and consumer goods merchandizing. He holds an MBA from the Carroll School of Management at Boston College and an undergraduate degree from Brandeis University. You can reach Steve at