Cypress, Adura Team Up for Building Management

Oct.28.09 | About: Cypress Semiconductor (CY)

By Michael Kanellos

Heating, air conditioning and ventilation account for 32 percent of the energy consumed in commercial buildings and lighting consumes another 25 percent, according to the 2008 Buildings Energy Data Book. Cypress Envirosystems and Adura Technologies are going to work together to reduce it.

Cypress, a division of Cypress Semiconductor (NASDAQ:CY), has developed a radio controlled thermostat that can replace the pneumatic thermostats deployed in most buildings built before 1995.

"You can't control them (pneumatic thermostats) remotely," said Harry Sim, CEO of Cypress Envirosystems. "They are compressed air."

Cypress' thermostat costs about $500 and installs in a few minutes. Google (NASDAQ:GOOG), Kaiser Permanente and Stanford have all installed the thermostats. (You need a single thermostat for roughly every 1,000 square feet of floor space, said Sim.)

Adura, funded by VantagePoint Venture Partners, has devised a controller for lighting systems. In tests with PG&E (NYSE:PCG), Adura managed to cut power going to lights in a building by over 72 percent.

By combining together, the two companies say they can cut building power consumption by 30 to 50 percent. Cypress will sell Adura's equipment and vice versa. Over time, the two companies will try to synchronize their software so that it comes across more as a seamless solution. The technology from Cypress and Adura also work with the building management systems from incumbents like Johnson Controls (NYSE:JCI) and Honeywell (NYSE:HON).

Along with energy efficiency retrofits, building management has turned into a growth market in the past few years. Both the Federal government and the state of California have already passed initiatives to ensure that new commercial buildings will be net-zero energy structures by 2030. While solar will provide power, a substantial portion of the net-zero goal will be accomplished through clever conservation.

And each building adds up. Sim noted that California's baseline power requirement is around 35,000 gigawatts and the peak power requirement is around 55,000 gigawatts. That 20,000 gigawatt gap between baseline and peak is largely consumed by air conditioners flipping on on a hot summer day.