Navigant Research Blog

Why Smart Cities Need Smart Grids

— March 8, 2013

The correlation between smart cities and smart grids is strong.  Around one-third of the smart city projects that Pike Research is currently tracking in North America and Europe are primarily focused on smart grids or other energy innovations. Almost half of smart city strategies include energy-focused projects.

The huge investment being made in smart meters on both continents will provide cities with a platform for energy efficiency improvements, new customer services, and network optimization. Cities also provide important pilot environments for a range of smart grid innovations, including the integration of distributed renewable energy, support for EV charging, and the introduction of demand management programs.  Both city planners and utilities need to take a holistic view of these diverse developments.

In Europe, there are several long-standing smart grid/ smart city projects including the InovCity project in Évora, Portugal and Malaga Smartcity in Spain.  One of the United Kingdom’s most ambitious smart grid pilots, Low Carbon London, is a £30 million ($48 million) smart grid and energy efficiency project led by the local distribution operator, UK Power Networks.  Although primarily a pilot for smart grid technologies, the project has embraced a wide range of both technology and community-focused energy management issues that are closely aligned with smart city requirements. Similar developments can be seen in The Netherlands, France, Germany and most recently Italy.

Boulder’s ill-fated SmartGridCity project cast a shadow over North American smart city projects, but other cities have picked up the baton.  Smart City San Diego is building on a series of energy efficiency and smart grid initiatives promoted by local utility SDG&E, the San Diego Cleantech Cluster, and the city council. The Solar-to-EV Project at the San Diego Zoo, for example, has been given center stage in an iconic city landmark.

Going Citywide

Smart grid investments provide an intelligent energy infrastructure that links together different elements of city operations.  Conversely, smart city initiatives can help build consumer awareness of energy efficiency initiatives.  From the utilities’ perspective, tying smart meter programs into a broader smart city project enables a closer engagement with communities, individual consumers, and businesses.

The biggest challenge is to extend these pilots into citywide deployments.  This is where the unified thinking shown in pilots can start to fall apart.  Large-scale programs must be tied in to utilities’ deployment plans, which in turn are often determined by industry regulators and national government policies, making city concerns a secondary consideration.  There is more chance of maximizing the benefits of countrywide smart meter deployments in Europe, for example, if they can be tied to local energy initiatives.  Only by working together can city officials and utilities create fuller consumer engagement and ensure that there is adequate energy infrastructure for the needs of a smart city.

At Smart Utilities Scandinavia in April, I will chair a series of presentations and discussions on how Scandinavian cities and utilities are driving innovation in energy distribution and energy efficiency.  The discussion will center how Scandinavian cities, leaders in many areas of smart city and smart grid development, are building on their investments, how they are addressing the challenges of integration, and what other cities and countries can learn from their experience.


Glasgow Gets Smart City Cash

— February 1, 2013

Glasgow has been named the winner of a £24 million ($38 million) prize to fund the U.K.’s Future Cities Demonstrator project.   Its proposal was chosen from 30 city projects submitted for the final round of the competition run by the government-funded Technology Strategy Board.  The level of enthusiasm for the competition reflects a growing interest in smart cities across the United Kingdom.  For example, Bristol has a wide portfolio of smart energy  and digital government projects, and Birmingham has launched its own smart city program.

Glasgow’s proposal is focused on the development of a series of integrated projects spanning health, transport, energy, and public safety.  As with many smart city projects there is a dual goal of improving the quality of life of citizens and boosting the local economy.  The government hopes that the award will help U.K. businesses to develop “integrated urban solutions” that can be exported around the globe.  The proposal for a Glasgow City Management System echoes many of the key themes we have explored around integrated city platforms and the better use of city data.  Glasgow is looking to integrate “urban services and infrastructures (transport, water, energy), using multiple data sources,” and to make that data available through a City Observatory.  It also plans to integrate low carbon energy systems in a holistic view of the city’s “resources, infrastructure, energy demand, and investment.”

In the prize announcement, the Glasgow proposal was singled out as “a strong, local authority-led project proposal in partnership with their business and academic communities.”  Glasgow has a number of existing initiatives on which to build, in particular the Commonwealth Games, which it hosts in 2014.  The Commonwealth Games may not be in the same league as the Olympics, but as Manchester showed in 2002, it is an event that can be the springboard for a range of urban rejuvenation projects, as well as help develop civic pride and a city’s global brand.   It’s also worth noting that Glasgow has developed a comprehensive sustainability strategy.  The Sustainable Glasgow report was developed by the city, academia, and the private sector in 2010 and sets out a comprehensive vision for how Glasgow could reduce its carbon footprint by 30% over 10 years.  One of the interesting elements of both the sustainability strategy and the proposed smart city project is that they accept the serious economic and social challenges facing the city, summed up in the sad fact that Glasgow has the lowest life expectancy of any city in the United Kingdom.

It is important that the Future Cities Demonstrator address the real-world challenges of a city like Glasgow struggling with the challenge of post-industrial decline and a legacy of poor housing stock.  The project, for example, will encompass systems to help tackle fuel poverty and to look at the health issues around low life expectancy.  Other areas to be addressed include the innovative use of technology to improve the City Council’s operations and service provision, and improvements to public safety and the transport system.   Delivering on these ambitious goals would certainly place Glasgow at the forefront of smart city development.  Glasgow’s leaders should also be looking at how Amsterdam and Barcelona, for example, have been able to use smart city initiatives to boost their image across the globe.  Glasgow has the opportunity to become another important hub in the growing smart city movement.


London’s Tube Hits 150

— January 2, 2013

Imagine a megacity so congested that traffic makes it “almost insupportable for purposes of business, recreation and all ordinary transit from place to place.”  A city where the working population faces an arduous and difficult journey to the centers of business and employment, and vested interests and concerns over over-ambitious engineering plans for new transport links are delaying radical solutions to a problem that is choking economic growth.  The answer is to build a new mass transit system that will open up the city and enable it to continue to be an economic powerhouse for centuries to come.  And that’s what happened a century-and-a-half ago, in London.  (The description quoted above is by William Malins, one of the founders of the Metropolitan Railway, quoted in London in the Nineteenth Century by Jerry White.)

January 9, 2013, marks the 150th anniversary of the day the world’s first underground railway was opened in London.  The next day, January 10, 1863, saw the first rush-hour crush, as 50,000 people turned up for the first service (only half could find places).

Running 4 miles from Farringdon Station to Paddington, the Metropolitan Railway, the predecessor to today’s Tube, was the world’s first underground railway and the first urban mass transit system.  The trains were pulled by steam engines.  The idea of an underground railway powered by steam sounds like an image out of a steampunk novel, but as shown by a recent trial for January’s celebration of the Underground’s birth it was, and still is, feasible.

I am not going to suggest that the cleantech industry should take a back-to-the-future look to steam and coal-power for new approaches to urban transportation, but it’s worthwhile reflecting on the ambition and the vision of those London engineers.  Perhaps more than any other element of its infrastructure, transportation networks define a city: what’s possible, what’s impossible, how the city can grow, and what it feels like to live and work and move around in that environment.  Transport policy is also one of the main levers that city leaders have to shape the future of their city.  As I was researching our new Smart Cities report, to be published in January, it became even clearer that the way we look at transport (and its links to energy policy, building services, and various public initiatives) will determine the success of many of our current plans for smart cities.  As London found, and as have many other cities since, the decisions we make today about transit in the city will have repercussions far into the future.  So city leaders in our new megacities, and straphangers around the world, should take just a moment on January 9 to acknowledge those bold Victorian engineers.



Smart Street Lights Face Financial Hurdles

— November 14, 2012

In 1807, London’s Pall Mall became the first street in the world to be illuminated with gaslight.  Since then street lighting (first by gas and then electricity) has become so ubiquitous that few people give it a second thought (unless they see a broken lamp in their street).  But street lighting is once again becoming a focus for innovation and a priority issue for city managers as they try to reduce energy costs and meet their sustainability targets.  Smart street lighting can play a similar role in the development of 21st Century smart cities to the one played by gaslights in Victorian London.

Street lighting can account for up to 40% of a municipality’s electricity bill, not counting maintenance costs.  Some U.K. cities have tried turning off lights to save money (though this commonly leads to a public outcry and subsequent rethink).  The dimming of the lights can also stand as a potent metaphor for a city’s decline, as in the case of Detroit.  Many cities are now looking at alternative approaches to reducing the energy consumption of their street lighting.  The most attractive solution is to move to more efficient lighting technologies.  LED lighting is generally seen as the future for street lighting, as falling costs and improvements in quality are driving adoption in cities such as Seattle.  Our recent report, Smart Street Lighting, estimates that shipments of LED street lights will rise from fewer than 3 million in 2012 to more than 17 million in 2020.  Other cities, such as San Diego, have chosen to introduce induction lighting to replace their existing high-pressure sodium lamps, with the same aims – a significant reduction in energy use and maintenance costs and savings to the city purse that can reach millions of dollars (around $2.4 million a year for Seattle and $2.2 million for San Diego).

The Piggyback Approach

The biggest challenge for cities looking to change their lighting systems is one common to many smart city innovations: finance.  The long term savings may be indisputable, but cities still need to find the upfront investment.  In the United States, stimulus funding has played a significant part in getting smart lighting pilots underway.  However, in many municipalities street lighting is provided by the local utility, so building the business case for energy efficiency depends on the incentives set for the utility by regulators.

The adoption of LED lighting is only the first step: the real revolution comes when intelligence is added to lighting systems.  Networking the street lighting system can further improve energy efficiency and introduce more adaptive local lighting without reducing public safety.   The network infrastructure can also be used to support additional services, such as traffic monitoring and even local Wi-Fi.  A pilot in San Francisco, for example, is looking at smart street lighting in this broader context.

But if building the business case and finding the investment funds for LED lighting is hard, justifying an advanced control network is still a step too far for many cities.   The additional costs and complexity have slowed the adoption of networked street lighting systems, behind that of LED lighting.  Cities must be able to leverage that network investment for other services or piggyback street lighting systems onto other systems.  This, of course, presents a chicken and egg problem as to which application can provide the initial cost justification for the network.

Most cities still struggle to develop investment models for new technology that take the holistic view of city operations.  Pilots in areas like Barcelona’s 22@ district show what can be achieved by taking an integrated view on energy, communications and city operations, but scaling such projects up to city-wide deployments requires innovations in city financing as much as in technology.  The implementation of smart street lighting will depend on new forms of private-public partnership based not on cost-saving models of traditional outsourcing but new approaches to long-term energy efficiency and improved operational effectiveness.


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