Two largely related innovation drivers are challenging the conventional way of designing and operating commercial buildings: the need to reduce energy consumption and the need to reduce electrical demand. The first driver has provided momentum towards the design of Net Zero Energy Buildings (NZEBs), while the second towards the operation of buildings that are responsive to signals from the electrical grid.

NZEBs emerged as the drive to lower energy consumption made the integration of renewable energy in buildings commercially feasible in a number of jurisdictions. New tools are now facilitating the implementation of collaborative processes targeting designs that lower energy consumption to the point where it is possible to design buildings that, over a year, generate as much energy as they consume.

The second driver emerged as electrical network operators and utilities provided financial incentives to building owners to reduce, during specific periods, their electrical demand in response to signals from the electrical grid. These incentives are fuelling the development of Demand Responsive Buildings (DRBs), buildings that are operated in response to these signals to shed or shift their demand, making the released electricity available to the grid.

Until recently buildings have been operated as passive loads of the electrical grid. DRBs, however, have expanded the range of building operation and are increasingly shifting the role of buildings from passive loads of the electricity networks towards that of active participants that not only shift or shed electrical demand but also store and generate electrical energy. Whereas the emphasis on NZEB research has been largely on how to design buildings to lower their energy consumption to reach net zero energy levels, the emphasis on DRBs has been on how to operate them in a way to lower their electrical demand during specific periods. Given the potential for NZEBs to adversely affect grid stability due to their inherently low power factors, operating strategies developed for DRBs would need to be integrated to NZEBs to counteract this effect. This paper discusses these "Smart NZEBs" and explores the relationship between NZEBs and DRBs in the context of the Smart Grid. It also provides an overview of technologies that will facilitate the emergence of Smart NZEBs, such as Building Information Modeling and the application of open communication standards.