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Mirovar - Intelligent Energy Management System

Wintersemester 2010/11 

Executive Summary

Mirovar is an Estonian company developing an “Intelligent Energy Management System”(IEMS) for office buildings.

This system adjusts the use of lighting, heating and ventilation according to external conditions and presence of people in premises by monitoring these conditions with a set of sensors and microcontrollers. In other words, Mirovar’s system assures that the energy is only consumed when it is really needed. Thus, the energy costs of office buildings can be reduced by up to 30%, which leads to an average pay back time of only two to three years.

In the beginning Mirovar is going to focus its activities on the German market due to its substantial amount of office space and the strong German economy with growing investments in “green technologies”. 

Background

Since the provision of heating and electricity for real estate accounts for 40% of the European total energy consumption, there’s a growing need for higher energy efficiency in buildings. Electricity prices have increased by nearly 70% since 2000. This leads to a huge market potential for a product solution which is able to reduce energy consumption of real estates.Furthermore, the social mindset to save energy and support the “green” movement for environmental-friendly usage of real estate is already established in the general public opinion and is expected to grow even more in the following years. According to recent studies, 75 % of tenants and 69 % of landlords declare that energy efficiency ratings influence their choice of building. 

Product 

Mirovar offers an “Intelligent Energy Management System” (IEMS) for office buildings.This system adjusts the use of lighting, heating and ventilation according to external conditions and presence of people in premises by monitoring these conditions with a set of sensors and microcontrollers. In other words, Mirovar’s system assures that the energy is only consumed when it is really needed. Thus, the energy costs of office buildings can be reduced by up to 30%, which leads to an average pay back time of only two to three years.The system’s hardware is currently in the development stage, a first prototype will be completed by January 2011. Furthermore, the software is currently developed, and a first version will be completed by midst 2011. Patents have already been awarded in Estonia and are pending in the United States and Canada. An application for a European patent is also imminent. 

Market and Positioning 

Initially, Mirovar is going to focus its activities on the German market due to its substantial amount of office space and the strong German economy with growing investments in “green technologies”. Mirovar’s system can be integratied in more than 35% of the 141 million m2 total office space in Germany, which leads to a savings potential of 840 million euro. The German market entry is planned for 2012.France and the UK represent a vast growth potential for Mirovar as well. Due to their large office stock, nearly the same economies of scale as in Germany can be realized. Market entry in France and the UK is planned for 2014. After Mirovar’s expansion throughout Europe and the establishment of a strong financial position, Mirovar will enter the US and the Canadian market in 2015 as North America constitutes a market with immense energy consumptions and therefore huge potential for Mirovar’s system to expand in the mid-term.The market for IEMS has been growing significantly in Germany. Current market players provide systems that need higher initial investments and a longer time span to reach breakeven. Furthermore, these systems are mostly installed during the finalization period of newly built offices. This creates a niche market for Mirovar’s IEMS that can be easily installed in existing office buildings and reaches the point of amortization after a shorter time period. 

Company 

The company is set up as an Estonian limited liability company and is headquarteredin Tallinn, Estonia. The management team consists of Raul Parusk as CEO and Urmas Tangsoo as the head of Research and Development. Raul Parusk is an expert in the field of facility management; he held the position of a CEO at ISS Estonia, the largest facility management company in the Baltic States. Urmas Tangsoo is the author of the idea and the development specialist of the technology. He has been working in related fields for more than 25 years. 

Business Model 

In order to lower marketing and sales costs Mirovar’s IEMS is going to be distributed via facility companies. Their main benefit comprises a highly competitive provision payment of 25 %, which animates facility companies to offer our system instead of the direct competing products. As soon as facility companies include Mirovar’s IEMS into their portfolio, they attune themselves to the product and become familiar with its functionality and as such are less willing to change to a competitive IEMS. In building up this close and trustful cooperation with the facility companies a lock-in-effect can be realized. 

Financials 

Mirovar needs a cumulative investment of € 900.000. 10% are financed via the current owners of the company, 30% by state grants and 60% by an investor. Annual revenues will rise to € 1.34 million in three years (2014). The break even point will be reached in 2013.  

Cooperation Partner

Student Team

  • Jakob Detering
    Gregor Herndlhofer
    Enno Krey
    Lukas Milchrahm
    Paul Schmitzberger