Navigant Research Blog

India’s 100 Smart Cities Program Spurs Investment and Criticism

— October 28, 2015

Narendra Modi, India’s new prime minister, has embraced technology more so than any of his predecessors. With 15.7 million followers on Twitter (I was happy when I reached 100) and more than 30 million Facebook followers, the global leader recently made an imprint on the high-tech epicenter of Silicon Valley, visiting a number of companies there last month to talk about how technology can help India face difficult social, economic, and environmental issues. His 100 Smart Cities program is a landmark of this philosophy, aspiring to develop new urban spaces to support overwhelming population growth, adapt to climate change, and create a modern economy. But many have asked if this program really has the capability of supporting these development needs, and if it is instead channeling funds away from areas that desperately need support.

Modi introduced his program in June of 2015, just a month after taking office, pledging a short term investment of $1.2 billion for the planning of projects across the country to be completed over the course of 7 years. Other countries such as Japan, the United Kingdom, Singapore, and the United Arab Emirates have also promised billions in investments. Indian cities planned for upgrades and development are predominantly located in the economic corridor between Delhi and Mumbai, as well as in Special Investment Regions and Special Economic Zones where there are fewer restrictions upon international business and investment.

The program’s flagship city of Dholera, located in Modi’s home state of Gujarat, has been in planning mode since 2009 and is currently under construction, with completion expected in 2020. Plans for the megacity include a modernized smart grid infrastructure that supports high levels of renewables and a citywide communications infrastructure and smart city platform that supports both public and private sectors.

Challenges Loom

But aside from Modi’s smart city plan is the fact that much of India will still remain severely underdeveloped. A number of Indian and international development groups have spoken out about the negative impacts of developing isolated super cities while the rest of the country remains underdeveloped and without adequate public infrastructure and access to utilities. Large parts of the country still need to be electrified, and many that are suffer from as much as 40% capacity losses from theft. This has led to a troubled financial state for many of India’s utilities, which are expected to struggle to balance these issues and attract financial support for smart infrastructure investment.

Developing smart cities as a top-down initiative leaves room to overlook the ground-up steps required to effectively meld together technology and community interests. Without citizen participation as an integral part of planning, even if citizens have access to smart city infrastructure to some degree, what are the chances that it will be relevant to them? This is a concern particularly with the country’s poorest citizens, which remain a majority of the population in the country, and may face loss of farmland in areas where smart cities are scheduled to be developed on top of it. Additionally, a large part of this population is dispersed among the outskirts of many cities—how can centralized smart infrastructure provide support to those that can’t easily access it? Modi’s planning, as big and impressive as it sounds, still has some issues to address in order for it to enable economic growth for all of India’s citizens.


Digital Strategies Help Bridge the Bike Infrastructure Gap

— October 5, 2015

The number of Americans switching from cars to bikes for their commute of choice is increasing at a rapid rate—up 62% between 2000 and 2013, according to U.S. Census data—and is challenging cities to develop solutions that can address the safety and convenience needs for this new set of commuters. Cyclists in San Francisco and the Netherlands have famously demonstrated the need for separate infrastructure and rules, causing large traffic jams as a form of protest. However, developing bike infrastructure can be prohibitively expensive for cities burdened by transportation department regulations, and as some cities have experienced, reducing lanes in order to allocate more space for bikers can be extremely unpopular among citizens.

In recent years, new, more cost-effective and data-based approaches to planning and managing bike infrastructure have emerged. Cities like New York and Chicago are proving that improved data collection has the ability to inform where and how cities can strategically develop bike lanes (based on the number and location of bikers at any given time during the day) and also better enable cyclists to pass through not so bike-friendly areas through better integration with public transportation.

Motivate, formerly Alta Bicycle Share, is a for-profit organization based out of New York City that manages bike-share systems in New York, Washington, D.C., and Chicago. The company has struggled financially in recent years, and in its (so far successful) attempt to turn itself around, Motivate has developed a technology-based approach to engaging with members. This involves pulling together information on road and air conditions, public transportation schedules to optimize internal operations and development, and trip planning for members that includes other forms of public transport.

In Portland, Oregon, Open Bike Initiative and Knock Software have also recognized the need for improving open access to data in order to support bike travel. Knock Software is currently developing two projects to support the city’s efforts to be more bike friendly. The first is a low-cost sensor network that monitors and analyzes bicycle traffic and car traffic trends to provide planning insights for the city. The second uses this same data, paired with other sources such as weather data and road conditions, to help bikers plan and optimize their travel via an app called Ride. Similar to Google’s Waze for drivers, Ride provides information on routes and weather and allows members to give feedback on their commute.

Technology-based approaches have the benefit of improving safety and convenience and can result in much more strategic—and less expensive—transportation planning for cities. While cities like Portland, San Francisco, and New York have been open and supportive of their cycling populations, other cities where bike commuting is still just emerging have not quite figured out how to support this demographic in a low-cost manner—and something as simple as a smartphone app could be an easy first step.


Clean Power Plan Ruling Presents Opportunities and Issues for States

— August 3, 2015

After a year in review, and following approximately 4 million comments and appeals by state public utilities commissions (PUCs), legislators, and special interest groups, the Obama Administration and the U.S. Environmental Protection Agency (EPA) have released a final ruling on the Clean Power Plan.

The Proposed Rule was released last June.  It included interim (2020) and long-term (2030) regulations that will be imposed state by state to decrease CO2 emissions from generation facilities.  It also requires gradual decommissioning of high-emissions facilities, increased support for low-emissions natural gas and renewable generation, and improvements in demand-side management and energy efficiency.  Speculations and protest across stakeholder groups has been colossal.

According to a paper sponsored by the Brookings Institute, the majority of comments to the plan centered upon several major issues: fairness, reliability impacts, attainability of goals, and its legal basis—many reaching past state boundaries and party lines.  Fairness concerns, held by 23 states, are largely based upon the 2012 baseline level of emissions. Many states had been proactive in the decade prior, already attacking the low-hanging fruit and therefore were being forced to implement improvements with higher marginal costs than those states that had not yet proactively addressed emissions. Reliability impacts, which differ from state to state, caution the over-dependence upon less reliable sources of power, in particular renewables.

Perhaps the most contentious pushback centered upon the attainability and legality of the program. According to the Brookings report, 36 states commented on attainability, predominantly criticizing the timeline as too short. Some states have even argued that the goals altogether are unattainable. Wyoming, for example, has an economy that is reliant upon coal production and coal-based generation. Wyoming Public Service Commission Commissioner Alan Minier, as well as other agencies in that state, has been outspoken in stating feasibility concerns surrounding the decommissioning of coal-fired plants as much as 30 years before scheduled retirement.  Similarly, although Wyoming has abundant wind resources, most of this power is exported and Wyoming would be unable to receive renewable energy credits under the plan.

The cherry on top is concerns on legality of the Clean Power Plan, particularly how it interprets the Clean Air Act (its legal basis), and that favoring gas-fired generation will encroach upon the Federal Energy Regulatory Commission’s least-cost principles in the dispatch of power. Experts have appropriately forecasted large sums in legal and lobbyist fees.

Issues and Opportunities

It’s clear that a number of issues exist within the Clean Power Plan’s approach to reducing CO2 emissions in the United States, and these do need to be addressed in order to realistically comply.  But there are also many opportunities.  In terms of creating pathways to alternative production and more efficient distribution of electricity, there has been more innovation in the energy in the past 5 years than in the previous 50. The introduction of the smart grid has invited the possibility of real-time, grid-wide networking and monitoring, enabling the use of renewable resources with very large to very small generating capacities, while ensuring reliability across the grid.

Many question the worth of derailing support for innovation in order to contest the rule. By supporting more engagement between utilities and building and industrial facility owners, city planners, and even individual homeowners to implement energy efficiency programs and integrate distributed generation, states can employ more creative and innovative approaches to compliance with the Clean Power Plan.  The possibilities are endless in terms of inviting an array of new stakeholders and developing new revenue-generating systems that can help states achieve their state goal. The question is whether the state will lend itself to innovation or litigation.


Smart Thermostats Helping To Grow Home Energy Management Market

— July 31, 2015

Home energy management has come a long way in recent years, and smart thermostats have been a significant portion of its increasing technology adoption.  Nest, ecobee, and Honeywell (to name a few) have created iconic and effective tools that have proven results for regulating the amount of energy used to heat and cool homes and small commercial spaces.  Some would suggest that these devices are well on their way to being adopted as mainstream (and not niche) tools for home energy management.

According to a market research report released this month by Parks Associates, the market for smart thermostats is expected to have composed 40% of total thermostat sales in the United States in 2015, which is estimated at around 10 million devices annually.  In 2017, greater than 50% of all thermostats will be smart thermostats.

According to the report, the majority of these devices sold will be via the retail channel, although significant numbers will also occur through HVAC contractor, Home Security/Automation, and Utility channels.

Assuming a mix of devices priced between $150-$250, with cost declining slightly year over year, and relatively linear growth in the overall market, this could mean a $1 billion to $1.3 billion opportunity in the United States alone.  No small figure.

Smart Thermostat Unit Sales, United States: 2013-2017

Smart Thermostats

(Source: Parks Associates)

Making a Case

Parks’ breakdown of the multiple sales channels show that retail is by far the fastest-growing channel, followed by HVAC. The chart also shows that utilities and home security/automation channels are expected to experience less upfront growth in the near-term.

This distinction between channels is helpful, but quite possibly one of the most interesting aspects of the smart thermostat market has been the overlapping of sales channels that has occurred recently.  Through Bring Your Own Thermostat (or BYOT) programs, utilities are looking at how they can decrease overall program costs, mitigate risk, and increase consumer choice by networking consumers’ pre-purchased devices into their demand response and energy efficiency programs.

Similarly, in Spring 2015, Commonwealth Edison (ComEd) incentivized Comcast Xfinity Home customers to sign up for Comcast’s Summer Energy Management Program, managed by EcoFactor (ComEd also incentivized Nest owners to sign up for that company’s Rush Hour Rewards demand response program).

As vendors in this market show no signs of decreasing their level of creativity in marketing these devices to consumers across different geographies and demographics, the market will continue to evolve.  In terms of overall home energy management, smart thermostats are just the beginning.  The recently published Navigant Research Leaderboard Report: Smart Thermostats provides a comprehensive overview of leading vendors, recent market activity, and both current and forward-looking market trends.


Blog Articles

Most Recent

By Date


Clean Transportation, Electric Vehicles, Finance & Investing, Policy & Regulation, Renewable Energy, Smart Energy Practice, Smart Energy Program, Smart Transportation Practice, Smart Transportation Program, Utility Innovations

By Author

{"userID":"","pageName":"Lauren Callaway","path":"\/author\/lcallaway","date":"11\/30\/2015"}