Navigant Research Blog

Congestion Charging Makes a Comeback in Major Cities

— March 31, 2015

Congestion charging—and similarly ambitious programs for traffic management—are once again on the agenda for the mayors of large cities struggling with traffic jams, rising pollution levels, and shortfalls in transport funding. The fact that a traffic pricing scheme is again under discussion in New York is a significant indicator of the changing mood, and there are reasonable grounds to believe that this time it might happen.

Other cities are also stepping up their programs to manage or reduce private vehicle use. The mayor of Paris is considering a series of restrictions on high-emission vehicle use in the city, starting with a ban on older diesel engine vehicles. Madrid—another city suffering from poor air quality caused mostly by diesel vehicles–has introduced intelligent parking meters that charge higher fees for more polluting vehicles (there is no charge for electric vehicles [EVs]), and there are plans to extend the current controlled areas for vehicle access to other parts of the city. Beijing’s city leaders are also considering a form of congestion charging, though public resistance continues to be a considerable barrier in the Chinese capital.

Pioneers

Singapore led the way on road user charging in cities in the 1970s, but it was the introduction of the London Congestion Charge in 2003 that seemed to herald the wider adoption of such schemes around the world. However, enthusiasm waned after similar projects were rejected in cities like New York, Manchester, and Edinburgh. For most city leaders, such large-scale projects were seen as politically risky. So although road charging is used on many highways around the world and is becoming more attractive as an alternative to general road or fuel taxes, the reference cases for urban congestion control remain relatively few. Alongside London and Singapore, Stockholm, Gothenburg, and Milan are still the most notable examples.  While many cities still grapple with basic arguments over congestion management, Singapore continues to evolve its approach and is now proposing a new system, which will give it almost total visibility on vehicle movements in the city.

Political Courage

Gaining acceptance for a congestion charging scheme requires strong, even brave, political leadership and the willingness to engage with citizen and business concerns. Apart from a common resistance to paying for something that was previously free, many citizens and businesses are wary of schemes that are not linked to improvements in the transport system. The London and Stockholm schemes, for example, were both linked to funding improvements in transport infrastructure, and this is a key part of the recent proposals for New York, as well.

It’s also important that a city can offer viable alternatives in terms of connected and reliable transit scheme. The growing acceptance of EVs in cities (which are excluded from many charging schemes) and the availability of electric car-sharing programs like Autolib’ Paris means that there are now ready alternatives to commuters who can’t or don’t wish to abandon their own vehicle.

Congestion charging schemes today are part of a much broader debate on the nature of urban mobility, with better information and more alternatives available for many city travelers. Once again, we are looking to see if New York will pick up the baton.

 

California Utilities Look to Manage EV Charging

— March 27, 2015

Through multiple programs aimed at both supply and demand, California has developed the most vibrant market for plug-in electric vehicles (PEVs) in the world. According to the forthcoming update of Navigant Research’s report, Electric Vehicle Geographic Forecasts, the total number of light duty PEVs in California is expected to surpass 140,000 by the end of this year and 1.5 million by 2023. The state’s electric power sector is taking note because the speedy PEV market growth may pose problems if PEV charging isn’t managed well.

The most likely problems will occur at the residential transformer, where a cluster of PEVs may outstrip a transformer’s capacity, requiring costly upgrades and/or repairs. To date, this issue has been fairly minor, with California’s three major utilities (Pacific Gas and Electric [PG&E], Southern California Edison [SCE], and San Diego Gas & Electric [SDG&E]) reporting that, of the 97,350 PEV customers in their combined service territories from July 2011 to October 2014, there have only been 126 PEV-related infrastructure upgrades.

Getting Worse

These problems are likely to worsen with the aforementioned 10-fold increase in PEVs in under 10 years. Looking ahead, the California Public Utilities Commission (CPUC) launched a PEV submetering pilot in September 2014 through the big utilities. The pilot is designed to lower energy costs for PEV owners through time-of-use (TOU) rates that incentivize off-peak charging and measure their energy consumption for vehicle charging apart from their overall energy consumption. By separating PEV charging, utilities could assess how best to influence PEV charging beyond TOU rates to avoid infrastructure upgrades.

Although TOU rates are effective at managing demand for a more efficient grid at the generation and transmission level, their effect on localized demand issues like transformer capacity is limited. Automated charging of PEVs based on TOU rates essentially creates a new spike in demand at the beginning of the off-peak period. This spike looks marginal at the grid level, but can be fairly drastic at the transformer feeding a cluster of PEVs.

Leading Edge

Thus, utilities, electric vehicle supply equipment (EVSE) manufacturers, and EVSE service providers are looking to create more dynamic and advanced PEV charging schemes to manage charging at all levels of the grid. Greenlots, for example, recently announced its partnership with EVSE LLC to demonstrate the company’s SKY Smart Charging system in 80 Level 2 workplace chargers at SCE facilities. The SCE project will examine how PEV owners respond to demand response events and dynamic pricing schemes for a number of purposes, including mitigating local transformer issues.

Outside of California, other PEV markets are expanding, too; utilities in these areas will need to begin testing and implementing similar technologies and programs soon. Companies competing for utility services in California now will be well served by expansion elsewhere and likely represent the leading edge of charging services development for years to come.

 

Balance of Power in Building Automation Shifts to Lighting

— March 27, 2015

Earlier in my career, when I worked for a mechanical, electrical, and plumbing (MEP) design engineering firm, my boss used to tell me, “Mechanical drives the bus.” The mechanical design of a building is composed primarily of the heating, ventilation, and air conditioning (HVAC) system, which has historically been the most complicated of the MEP systems. Moreover, HVAC equipment accounts for about 30% of commercial building electricity consumption in the United States. What my boss wanted to get across was that HVAC needs to be designed first—and all of the other systems can fit in afterwards.

Indeed, until relatively recently, the idea of building controls really meant HVAC controls. Before widespread adoption of microprocessor controls, HVAC controls consisted of a series of tubes (pneumatics, not the Internet), lighting controls consisted of a switch, and the idea of integrating more than one building system was preposterous. Building automation emerged from HVAC controls. Now, however, the integration of multiple systems into a single building management platform is becoming more common. Navigant Research’s recent report, Commercial Building Automation Systems, maps these trends in the integration and interoperability of systems.

More Equal Than Others

Even in highly integrated buildings, the HVAC system retains priority—but that may be changing. As part of the Continental Automated Building Association’s Intelligent Buildings and Big Data research project, Navigant Research quantified the number of data transactions generated by the automation systems of intelligent buildings. In the future, lighting might generate far more data than HVAC. The rapid adoption of LED lighting coupled with faster and cheaper computing options creates the possibility of individual light fixtures having their own sensors and controls. While HVAC systems may still be more complex, the data volume created by the dense sensor networks of these advanced lighting controls is immense. Soon, it may make more sense for HVAC operations to be managed through an additional module on a lighting controller, using data gathered by lighting sensors.

New Pecking Order

The market seems to be reacting to the new pecking order. Acuity Brands recently announced its plans to acquire Distech Controls, a building controls and energy management company. Despite having a complete portfolio that includes lighting, access control, and closed-circuit TV (CCTV), Distech Controls emphasizes HVAC. The company’s integrated room controls solution, for instance, creates an environment where the HVAC controller also controls lighting and automated blinds. Acuity Brands, on the other hand, is a lighting company. It is a designer, manufacturer, and distributor of a variety of indoor and outdoor lighting fixtures and lighting controls.

Overall, as integration between building automation systems increases, so too does the opportunity for the crossover between HVAC companies and lighting companies. Indeed, Daintree Networks, a leader in wireless mesh networking for integrated lighting controls, expanded into HVAC controls in 2013. But the trend has been for established HVAC players to acquire lighting solutions or for lighting players to organically expand into HVAC. Acuity Brands’ acquisition of Distech Controls may signal a shift in the balance of powers.

 

Doubts Surface About U.K. Smart Meter Rollout

— March 26, 2015

Serious doubts have surfaced about the rollout of smart meters in the United Kingdom, with a key government committee raising the issue to a new and alarming level. In its most recent report, the Energy and Climate Change (ECC) parliamentary committee concluded the program “runs the risk of falling far short of expectations. At worst it could prove to be a costly failure.”

The smart meter rollout is large, expensive, and complex. By 2020, a total of 53 million electric and gas meters are to be installed in some 30 million British homes and small businesses. The estimated cost is $16.2 billion, which is to be passed on to consumers. The cost is supposed to be offset by an estimated savings of $25.5 billion, in part from greater energy efficiency. One of the more complex features of the rollout is a communications infrastructure that aims to coordinate meter data among the energy suppliers, network operators, and authorized service providers. A government-appointed company called Smart DCC is charged with setting up this infrastructure.

Shaky Foundation  

The rollout is still in its early stage, called the foundation phase. The committee’s report expresses disappointment with several unresolved issues to this point: meters unable to communicate in multiple occupancy and tall buildings; interoperability issues among different types of meters and in-home displays; a shortage of installation engineers; network rollout delays by Smart DCC; and delays in public engagement around the program. So far, about 550,000 smart meters have been installed and are in use, which is about 1.2% of all domestic meters under management by the country’s largest energy suppliers.

The start of the next phase, called the mass rollout, has been delayed twice, as noted in a previous blog. As of now, the mass rollout is to begin in the fall of 2016. However, with this latest government report and the ongoing technical issues, that start date could slip once again.

Eventually, smart meters will be deployed widely in the United Kingdom. But given the complexities involved, it’s a good bet that the 2020 target will be missed—and perhaps by a wide margin.

 

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