Navigant Research Blog

New Opportunities in the Urban Energy Cloud

— January 2, 2018

The importance of cities to meeting global climate targets is undisputed. Since the COP21 Paris Agreement, more and more cities are joining early leaders like Copenhagen and Stockholm in pledging to become carbon neutral cities. Boston and London, for example, have both recently announced the goal of becoming zero carbon cities by 2050. To achieve such ambitious goals, cities will need to have implemented major changes to their energy systems by 2030. And given the speed of urban planning processes and infrastructure programs, cities and their partners need to instigate many of these projects within the next 3-5 years.

This transformation will touch every aspect of city services and infrastructure, including energy generation and distribution, heating and cooling systems, building energy efficiency, transportation, water and waste management, and the efficiency of city services such as street lighting. At the same time, city operations are being transformed by digital technologies such as the Internet of Things (IoT), smart buildings, artificial intelligence, robotics, and automated vehicles.

A new Navigant white paper, Navigating the Urban Energy Transformation, looks at the critical elements of the emerging city energy landscape and the intersection with the radical changes that Navigant characterizes as the Energy Cloud. As the City of Madison is showing, the transformation of the energy sector provides the bedrock for the creation of the low carbon cities of the future. This convergence of urban innovation and the energy transformation makes smart cities one of the key combinatorial platforms for the Energy Cloud.

The opportunities this creates for utilities and other energy sector plays is particularly evident in the building and transport sectors. A zero carbon city will need to address the role of fossil fuels in space heating and in transportation. Improvements in energy efficiency and the shift to renewable resources are essential steps but, more profoundly, the much closer connection between buildings and transportation and the energy grid will lay the foundation for a new Urban Energy Cloud:

  • Building in the Energy Cloud: The extension of building systems from standalone applications focused on the operation of a single building to hubs within a wider network of energy and environmental monitoring systems will be one of the most dramatic changes in the technical infrastructure of the city. Navigant Research estimates that only 0.5% of the commercial building stock globally is actively participating in the energy system today, but by 2026, more than 9% will be involved. This development will create new roles and opportunities for all players in the sector, including utilities.
  • The age of low carbon mobility: The decarbonization of urban transportation fleets is also offering many opportunities for utilities. EVs will be the single largest addition of energy demand to the power grid in many nations of the developed world. By 2020, more than 4,000 GWh of electricity will be consumed by plug-in EVs annually in the US alone. New services are already combining EVs with stationary storage and other renewable energy offerings to optimize regional supply and demand. The smart charging of swarms of managed EVs will enable greater concentrations of rooftop solar, as charging will be staggered outside of peak times and will be matched to distributed generation.

The city of 2030 will need to manage a much more complex set of interdependencies between diverse aspects of city operations, infrastructure, and platforms. This requires new networks for collaboration between cities, utilities, and other energy sector players, as well as transportation providers, building owners, telecommunication companies, and technology suppliers. Navigant Research estimates that this will create a market worth more than $1.5 trillion over the next decade for smart services across urban energy, buildings, mobility, and other city operations.

 

Evolving Smart City Strategies: Five Trends and a New Challenge

— December 5, 2017

During research for the UK Smart Cities Index 2017, we had the opportunity to discuss the current state of smart city development with smart city leaders and other key stakeholders. They are now seeing years of work on developing city innovation programs coming to fruition as smart city programs become central to city strategies and successful projects are deployed at greater scale. This momentum is reflected in a number of emerging trends.

Bridges between Innovation and Operations

The leading cities have laid strong foundations for the development of innovation both technically (in terms of test beds and platforms) and culturally (in terms of a trusted ecosystem of partners). The challenge now is to integrate this innovation culture with the day-to-day operations of the city. These cities are strengthening the links between innovation teams and city departments. New pilots and demonstrations are also being more closely aligned to city strategies and priorities.

Emergence of City Platforms

Cities are developing more cohesive strategies for the deployment of new technologies. In particular, they are taking a more strategic view on the future deployment of Internet of Things (IoT) technologies and the necessary communications infrastructure. These cities have deployed or are planning large-scale deployments of low power networks, are vying to be test beds for 5G technologies, and are looking at future fiber needs to support these ambitions.

From Smart Cities to Smart Places

Smart city programs are branching out to include multiple local authorities and agencies at different tiers of government. A city-region approach enables closer integration across a range of services and offers the benefits of scale when applying for funding or tendering for new services or solutions. It also enables smaller cities and towns to be involved in more ambitious programs. At the other end of the scale, there is a growing focus on the development of smart districts and communities within cities.

City Partnerships

There is a strong desire among city leaders to build more public-private sector partnerships. One of the most notable developments in this regard is the increasingly close relationships that smart city programs are developing with local universities. Universities are not only providing research support, but are also often active players in defining projects, securing funding, defining strategies, and contributing to or providing leadership of programs.

A Holistic View on City Challenges

The opportunity to take a more holistic view of city challenges is one of the foundational concepts of the smart city movement. However, it is much harder to achieve in practice. The leading cities are now taking their experience with diverse pilot projects to develop approaches that embed such a perspective in the design of programs, scoping of projects, and measurement of benefits. Some cities, for example, are combining this with a focus on smart districts or communities where the complex interconnection between transport, health, energy, housing issues, and innovations can be tested at scale.

Learning to Manage Risk

These positive developments are leading to fresh assessments of the challenges facing smart city initiatives. While funding unsurprisingly continues to be a significant issue, the most commonly cited challenge to the wider adoption of new technologies was the ability of local government to accept and manage the risks associated with innovation—in financial, organizational, cultural, and technical terms. Finding new ways for cities to manage these risks—and the role that the private sector, national government, and other partners can play in reducing or underwriting that risk—may be the most important innovation of all.

 

UK Cities Are Embedding Smart City Principles in City Policy

— November 7, 2017

My previous blog summarized five of the Innovation Awards spotlighted in the UK Smart Cities Index 2017, commissioned by Huawei, which assess the 20 leading smart cities in the UK. Those awards focused on five key smart city service areas: transportation, health, energy, education, and public safety. Equally important are the cross-sector strategies and technology investments that enable innovation across these service areas.

Four other Innovation Awards identify key strategic and technical areas where UK cities are making significant contributions to the development of smart city policies and infrastructure:

Sustainability: Cities are making sustainability the heart of city policy, as they recognize the need to reduce their environmental footprint and contribute to the global reduction in greenhouse gas emissions. Peterborough takes the Innovation Award for its environmental focus and commitment to becoming a circular city, as exemplified in the Share Peterborough programme for resource sharing. Also commended are Bristol, European Green Capital in 2016; London, which has launched an ambitious new environmental policy; and Manchester, which has set a goal of being a zero carbon city by 2050.

Internet of Things (IoT): UK cities are looking to establish a large-scale test bed environment that can support a rolling programme of innovation projects. Bristol Is Open continues to lead the way in terms of its scope and ambition and the contribution it is making to the city’s broader plans. Other leading examples include Manchester’s CityVerve IoT demonstrator, Milton Keynes’ MK:Smart, and Cambridge’s new LoRa-based intelligent city platform.

Data and analytics: All the cities included in this report are looking at how to use data to improve services and boost innovation. London continues to be at the forefront on data innovation with its London Office of Data Analytics and a new Chief Digital Officer accelerating the use of data to improve services across the capital. Leeds also deserves mention as one of the pioneers for open data in the UK with Data Mill North, just one of several data-focused initiatives in the city.

Strategy: The successful adoption of new technologies to improve city services requires cities to rethink the way they design, manage, and operate city services in the digital age. All the leading cities are taking a fresh view on the impact of technology on city policy making, planning, and service design. The Innovation Award goes to Aberdeen for its new Target Operating Model, which seeks to embed smart city thinking into city planning, service design, and infrastructure investment. This will be enabled by new approaches to the provision of digital infrastructure and services.

The 10th Innovation Award is for City Partner and reflects the importance of central government and other agencies in fostering collaboration between cities and supporting follower cities as they develop smart city initiatives. The Future Cities Catapult is having a strong influence across the country by helping cities initiate smart city programmes, share ideas and insight, develop common standards, and accelerate innovation in areas like smart planning.

These Innovation Awards demonstrate the range of activity occurring across UK cities. In my next blog, I will examine some of broader insights to be drawn from Navigant Research’s efforts for the report and its conversations with city leaders.

 

Bristol Claims Top Spot as UK Cities Step Up Innovation Programmes

— November 3, 2017

The UK Smart Cities Index 2017, commissioned by Huawei, provides a timely review of the progress of smart cities in the UK and offers insights for urban innovation projects around the world. Bristol gains the top spot in the new index, a reflection of the city’s continued investment in programmes such as Bristol Is Open and the growing integration between innovation projects with the city’s operations. The city exemplifies the way smart city concepts are gradually being embedded at the heart of city policy. While Bristol edges ahead of London this year, the UK capital is also showing a strong commitment to driving smart city innovation, notably with the recent appointment of a new Chief Digital Officer. Following the two Leaders is a strong group of Contenders led by Manchester, Leeds, Birmingham, Milton Keynes, Glasgow, and Nottingham.

Innovation Highlights

The scope of work being done across the UK is highlighted in the report in a series of Innovation Awards that showcase leadership in 10 areas. The first five awards focus on specific areas of city services:

Transportation: Many UK cities are looking at technologies to reduce congestion and transport-related emissions, and Milton Keynes stands out for its range of projects and its close alignment with the city’s broader strategy for growth. Its initiatives include mobility apps, EV and automated vehicles, and a new citywide intelligent traffic light management system.

Health: Supporting aging populations and reducing health inequalities, notably in terms of differences in life expectation between communities, are high priorities. Leeds is a leader among UK cities in exploring the possibilities of more integrated approaches to health and social care, the role of technologies in supporting people throughout their lives, and the importance of data in improving health outcomes.

Energy: As Navigant Research has highlighted, energy is an increasingly important issue for many cities in the UK and elsewhere. Not only is energy policy a key element in any broader sustainability target, it is also closely connected to transport, housing, and health policies. Among several cities driving new energy programmes, Nottingham gains the Innovation Award for its city-owned energy company, foundational energy projects, and new community energy schemes exploring the use of solar and storage solutions.

Education: One of the significant trends identified in the study is the closer relationship developing between local government and the university sector. Among the cities working in new ways with their universities to drive smart city projects are Bristol, Cambridge, and Oxford. But the Innovation Award goes to Newcastle for the role the University of Newcastle has taken in the establishment of Newcastle City Futures and in directing and supporting a range of digital programmes in the city—as well as the establishment of the Science Central facility.

Public Safety: As most UK cities have already deployed extensive closed-circuit TV systems, the focus is now on coordination and the better use of video analysis and other forms of analytics. Glasgow has led the way in the creation of a new city operations centre, the showcase development from its smart city demonstrator award.

Cities are exploring the potential for new technologies in each of these service areas, they also realise the need to join up these programmes through more holistic approaches and the development of common platforms. In my next blog, I will look at the cities leading the way in these areas.

 

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