Navigant Research Blog

Crunching the Data for Urban Mobility

— March 3, 2015

One of the hottest areas of urban innovation is mobility. Cities are grappling with ways to reduce congestion and vehicle emissions while enhancing the transport options for citizens. Infrastructure improvements are, of course, critical to this strategy in the form of new mass transit systems, the deployment of EV charging networks, or the creation of bicycle sharing schemes, for example.

However, a less expensive but critical piece of the puzzle is the delivery of better information so residents and visitors can make the right choices about their journey options and to enable the better management of the existing road and transport systems. As a consequence, a host of new players are entering the market to deliver services to both travelers and cities.

X-Ray Specs

Urban Engines is one of the most notable new players. Formed by a group of former Google employees, it developed its first advanced analytics solutions were aimed at city operators for improved management of transit systems. The company has now launched its first app for travelers, which provides transit options and map data across seven U.S. cities. In addition, an augmented reality overlay called X-ray mode maps transit information against a real-time image of current surroundings provided on a phone camera. Urban Engines not only uses spatial analytics to provide journey planning, but also wants to use behavioral economics to help cities incentivize citizens on the most efficient forms of travel.

Urban Engines does not have this market to itself, of course. CityMapper, for example, has been building its portfolio of city travel apps for a number of years and currently covers 12 cities in North America and Europe, plus Mexico City and Tokyo. It provides analysis of alternative options for user spanning walk routes, cycle routes, public transit, and taxis.

The Next Wave

Journey-planning applications are just one aspect of the changing landscape for transportation and travel data in cities. A new wave of start-ups is trying to expand the range of data that can be captured on city activities in order to provide new services and insights into movement across urban spaces. Some notable examples:

  • Veniam, founded in Porto, Portugal, provides networking technology that turns vehicles and infrastructure into Wi-Fi hotspots. By adding its networking technology to vehicles, it hopes to create a massive network that will generate a vast new range of data on the city as well as enhancing the communication capabilities for people and things.
  • Placemeter, a New York-based start-up, is paying people to use their old smartphones to monitor their neighborhood for people and traffic. This anonymized data can then be used to inform people or businesses about current conditions (for example, traffic levels or queues for restaurants), as well as for analysis about general trends in activity in the area.
  • TravelAI, a U.K. startup, has developed software to exploit crowd-sourced smartphone data to develop new levels of insight into travel patterns and mobility options for cities and citizens.

Of course, cities also have data from their existing traffic management systems, transit information systems, and bike-sharing schemes. And to this picture, we can add the recent announcement that Uber has agreed to share its journey data with cities, starting with Boston. These rich seams of data are increasingly available for cities and entrepreneurs to develop new services and new tools for urban mobility management. The data gold rush for urban mobility has just begun.

 

Reforms Drive Renewables, Grid Modernization in Mexico

— March 3, 2015

A recent ranking of the most attractive power markets for investors in Latin America, based on a survey conducted by BNAmericas of power sector stakeholders, places Mexico at the top. The updated rankings cite reforms to the country’s power sector, which are expected to allow for greater levels of private investment and a loosening of Mexico’s state-owned Comisión Federal de Electricidad’s (CFE) monopoly over the national power grid.

Mexico, which ranks 16th globally in installed generation capacity, is among the largest power markets in the world. Currently, CFE controls more than three-quarters of the country’s installed generating capacity and holds a monopoly on electricity transmission and distribution. The status quo has made it difficult for the country to keep up with rising electricity demand, effectively acting as a headwind for broader economic growth across the country.

Reform and Renewables

Although Mexico is heavily dependent on fossil fuels for power generation—representing 86% of delivered electricity—estimates suggest that it has sufficient resources to meet 50% of its generation demand with non-fossil fuels by 2050. Among non-hydro resources, geothermal, biomass, and waste are currently the most utilized. But like Chile, which previously topped BNAmericas’ rankings, Mexico is increasingly being seen as a haven for solar PV and wind development.

Energy sector reforms are designed to enable private firms to sell electricity to commercial and industrial consumers, as well as partner with CFE to finance, build, and operate transmission and distribution infrastructure. Private sector companies can participate through an open permitting process for independent power producers and self-supplied and combined heat and power (CHP) facilities that are typically located at industrial plants. Ultimately, these changes are designed to create a more competitive electricity market, according to Fitch Ratings, and to encourage the use of renewables by awarding clean energy certificates.

As a result of these reforms, private investment inflows could mirror similar trends already underway in Chile. According to some estimates, Mexico will add 66 GW of capacity to its power grid over the next 15 years, with investments in renewables potentially reaching $90 billion.

Wind as Well

U.S.-based solar firms see Mexico as among the countries with the highest growth potential. According to Navigant Research’s report, Global Distributed Generation Deployment Forecast, the country is expected to add more than 800 MW of distributed solar PV over the next decade.

Mexico is rapidly emerging as a substantial wind market as well, second only to Brazil among Latin American markets. Deregulation is expected to accelerate the wind market. The federal energy secretariat (SENER) has targeted 12 GW of new development by 2020. CFE plans to commission eight wind farms, totaling 2.35 GW of capacity, by the end of 2018, and private investors such as Iberdrola, Pattern Energy, and Cemex have announced significant investment targets for the same period. These investments, along with projects under development in Baja California and southern Mexico, are expected to help fuel a 5.5 GW expansion in wind capacity across the country through 2019, according to Navigant Research’s forthcoming report, World Market Update 2014 – Wind Energy.

Mexico’s power generation system is plagued by inefficiency and regulatory rigidity. It currently has the highest distribution losses among Organisation for Economic Co-operation and Development (OECD) countries. While the reforms are designed to liberalize the sector, a likely flood of new intermittent renewable generation capacity and customer-sited distributed generation will likely further strain Mexico’s already inefficient, old, and outdated transmission grid. These challenges are expected to drive an estimated $36 billion in emerging transmission, distribution, and grid modernization technologies over the next decade.

 

Funding Smart Buildings to Limit Climate Change

— March 3, 2015

The inefficiencies in commercial building operations have direct implications for the country’s carbon footprint. With climate change still a political stalemate, the Obama Administration has instead taken aim at energy waste in buildings, with voluntary programs led by the U.S. Department of Energy (DOE) that are making waves in the private sector. Energy efficiency challenges, showcases of business best practices, and now a call for private sector financial commitments to fund technology development are all targeting business transformation.

At this year’s ARPA-E Summit, the Obama Administration announced a $2 billion Clean Energy Investment Initiative as a challenge to the private sector to fuel investment in the kind of innovation needed to tackle the threat of climate change. Brian Deese, deputy director of the Office of Management and Budget explained, “Further clean energy innovation to improve the cost, performance, and scalability of low-carbon energy technologies will be critical to taking action against climate change. Foundations and institutional investors have the potential to play an important role in accelerating our transition to a low-carbon economy and cutting carbon pollution.”

Anteing Up

Wells Fargo stepped up to the plate with a $10 million Innovation Incubator (IN2) program to support early-stage energy efficiency technologies for commercial buildings. A collaboration with the National Renewable Energy Laboratory (NREL), the program offers startups grants, mentorship, research and testing support at NREL, and field testing in Wells Fargo buildings.  The effort will not only help startups develop commercial-ready business models, but also generate proof-of-concept demonstration for innovative technologies. In conjunction with the launch of the Clean Energy Investment Initiative, Wells Fargo also announced it will expand investment partnerships with other financial institutions to bring more money to the table in support of the $2 billion target.

New building technologies remain a bright spot for clean tech investment. In fact, according to statistics from Crunch Base, venture funding for building technology innovations characterized as Internet of Things (IoT) solutions has steadily risen, even as more general clean tech investing took a dive. A recent article on TechCrunch suggests that almost 40% of all clean energy rounds in 2014 went to IoT smart building startups.

Direct Impact

Recent research from Navigant Research echoes the optimism around growth in the market for building innovations. Building energy management systems (BEMSs), for example, leverage the IoT to deliver unprecedented visibility and insight into building and significant improvements in energy consumption and resource utilization. Our recent report, Building Energy Management Systems, shows that the business impacts facilitated by BEMSs have direct and quantifiable climate change impacts. A growing pool of funding sources for companies helping to evolve this maturing marketplace is just one example of the benefits that may come from the Clean Energy Investment Initiative.

 

Islands Sail into Energy Storage

— March 3, 2015

Saddled with the highest electricity rates in the world (and threatened by climate change more than almost any other communities), many islands and isolated grids have opted to integrate wind and solar to replace expensive, imported diesel fuel. One challenge for these systems is that they do not have the benefit of calling upon neighboring systems to balance their wind and solar against load–leading to instability and insecurity of supply.

As a result, many remote grids are adjusting their technical requirements for connecting intermittent resources like wind or solar to the grid, requiring that these resources be firmed. In late 2013, for instance, Puerto Rico adjusted its technical requirements for connecting wind and solar assets to the Puerto Rican grid. This isn’t a direct requirement for energy storage specifically, but is a good fit for storage.

The Flywheel Option

Other island markets are betting on storage more directly. Aruba has committed to an aggressive plan to become 100% renewable by 2020 and has signed agreements with BYD and Temporal Power, as well as a power purchase agreement with Hydrostor in order to achieve its energy goals.

The typical applications in these markets are wind, solar, and diesel hybrids. In previous years, the most common technology for remote, isolated grid storage was advanced batteries. This was partly a function of availability and technology fit. Very few other storage technologies are modular–underground compressed air and traditional pumped storage require specific geologies–and few vendors were targeting the space. Moreover, the working assumption in terms of technology fit has been that a longer-duration storage system is more valuable than a short-duration storage system. Several flywheel vendors are disproving this assumption, however.

ABB’s Powercorp, for example, uses flywheel technology in remote microgrids, such as the BHP Billiton nickel mine in Western Australia and the Coral Bay community in Northwestern Australia. These are remote diesel-led systems.

Way Up North

Beacon Power has commissioned a demonstration project in St. Paul, Alaska, combining an existing plant, which includes a 225-kW wind turbine and 300 kW of diesel generators, with a 160-kW flywheel system. In this scenario, the flywheel system will enable the host utility to further improve wind utilization and deliver fuel savings of up to 30% over existing (pre-flywheel) consumption levels.

While it is still the case that some amount of long-duration storage is necessary in order to achieve very high renewables penetration on an isolated grid, flywheels are demonstrating that significant diesel savings can be achieved with as little as 30 minutes or less of storage.

 

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