Navigant Research Blog

Telcos Aggressively Expanding Smart City Services

— December 7, 2017

Among the essential building blocks for the smart cities market are communication networks that connect the sensors, controllers, cameras, and other hardware infrastructure capturing valuable data from the city environment. The need for urban connectivity is creating new opportunities for the telcos responsible for providing public wired or wireless communication services to government, consumers, and businesses. Telcos are increasingly making strategic acquisitions and extending their footprint into solutions and services for smart cities and Internet of Thing (IoT) application areas. Whether through established technology such as 3G/4G or potential disruptors like 5G and narrowband-IoT (NB-IoT), cellular providers are aiming to become the leading suppliers of connectivity for smart cities.

Significant Acquisitions and Service Offerings in North America

In recent years, a number of telcos have made bold expansions into the smart cities market. Verizon, for example, has been working to expand its presence in that industry. It made a major move to extend its footprint with the acquisition of smart street lighting and sensor network provider Sensity Systems in late 2016. Verizon is supporting a wide range of smart city applications, including transportation, public safety, city management, and smart buildings.

AT&T has also significantly increased its visibility in the market since its initial smart cities launch in 2015—notably through its role in the Atlanta and San Diego IoT platform deployment projects. It is supplying Bluetooth and Wi-Fi for short-range connectivity, plus fiber and LTE for backhaul to the cloud.

In early 2017, AT&T obtained exclusive rights to distribute the sensor nodes from Current powered by GE through a reseller agreement in the US and Mexico. AT&T will be the commercial lead on future smart cities projects, with Current as its technology provider.

Significant Global Acquisitions and Offerings

Telefónica, the Spanish-based global telecom provider, has also been targeting smart city opportunities. It was lead commercial partner in the SmartSantander project, which involved deployment of over 20,000 devices in Santander and the surrounding area (including sensors, repeaters, gateways, etc.).

French carrier and service provider Orange is leveraging its expertise in 4G, fiber, LoRa, Wi-Fi, and Bluetooth to install a network of connected sensors for Romania’s Alba Lulia Smart City 2018 project. Telefónica and Orange Group are key players in the development of FIWARE standards—an open source initiative that aims to establish a standard for smart cities based on the FIWARE platform.

Most recently, Telestra, an Australian telecom company, acquired fleet management systems provider MTData and created a partnership with Melbourne-based Smart Parking. The company has already won contracts to install Smart Parking’s sensors in five Australian council regions.

Telco Expansion Challenges Non-Cellular Connectivity Providers

The aggressive telco expansion into the smart cities market should serve as a warning shot to other providers of urban connectivity such as RF mesh and Wi-Fi players. These providers should quickly move to protect market share by emphasizing their relative advantages over cellular (e.g., private networks, lower operating costs) and developing more vertical solution partnerships and connectivity capabilities.

While most cities are likely to have multiple providers and types of connectivity for different use cases, cellular providers are making a clear push to capture the high bandwidth segment of the smart city communication networks value chain. There is evidence that resistance to public cellular is declining in the utility sector. With the deployment of new cellular technologies such as NB-IoT and 5G on the horizon, the same is likely true for cities.

 

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.

 

Cities Looking to Automated Vehicles to Solve Congestion and Emissions Challenges

— November 21, 2017

Around the world, major cities have been setting targets to combat the negative effects of local transport on public health, local pollution, noise levels, and greenhouse gas (GHG) emissions. Cities are looking increasingly at the potential of automated vehicles (AVs) to help solve these problems through improved traffic flow, the near elimination of collisions, increased productivity, and reduced pollution and GHG emissions.

 Moving toward Full Automation

The concept of automated or self-driving cars has shifted from the realm of science fiction into reality, as showcased by some of the latest developments in cities around the world:

 Key Challenges Remain

Partial automation is becoming commonplace in all road vehicle classes. Full driving automation is starting to be piloted in numerous cities globally with regular commercial deployments expected in the next 2 to 3 years. Before AVs can become ubiquitous in city streets, new infrastructure investments, communication network upgrades, the need for fleets to operate in varied conditions, and concerns about cybersecurity need to be addressed. Cities also need to develop frameworks to integrate and coordinate AV mobility services with existing transit services to optimize the use of road infrastructure and avoid increased congestion. Although the AV was not at fault for the accident, the recent Las Vegas automated shuttle collision shows why vehicle-to-vehicle communications will also be crucial to the success of AVs.

If AVs are managed properly, highly integrated with public transport, and coordinated as part of a multimodal transportation ecosystem, the shift to self-driving vehicles could lead to reduced traffic congestion in cities, lowered demand for parking spaces, and highly beneficial energy and environmental effects. For more information on the potential effects of AVs in cities, see Navigant Research’s recent white paper on Redefining Mobility Services in Cities.

 

Cities: The Focal Point of Climate Action

— November 17, 2017

This blog post was written by Richard Boehnke.

Cities are a focal point of climate action, both individually and as signatories to large networks dedicated to climate mitigation (e.g., Covenant of Mayors and C40). However, efforts to pledge support, sign an agreement, and publish a local climate strategy with an emissions target do not equate to implementing meaningful climate action. Little data is available to support whether cities are on track to achieving targets or if their targets can be met. For example, with the Netherlands reporting only a 3.8% emissions reduction between 2010 and 2015, municipal governments will be required to take the lead in climate action. Yet, with limited budget and staff working on mitigation, most municipalities are also falling behind on individual climate targets. Ecofys, a Navigant company, investigated which existing best practices could be used by local governments to work towards achieving climate goals.

Opportunities for Local Governments: Best Practices in Climate Action

The study examined 26 best practices from 13 Dutch municipalities. These ranged from community energy ambassadors in Almere, to an energy coalition in Den Bosch, to the investment scheme that led to the construction of large wind turbines in Nijmegen. Civil servants stated the goal of these practices was to act as facilitator, engaging the public and businesses to mediate regulatory and institutional processes. However, more needs to be done to meet ambitious targets.

The First Missing Piece: Collaboration

Listening to other departments’ targets and collaborating on projects is crucial to developing citywide climate solutions. Climate projects typically involve several aspects of city development and are frequently cut due to varying priorities when considering the expense of a specific climate measure. It is possible to use mitigation actions to achieve municipal targets because of the broad impact these actions can have beyond reducing CO2 emissions, like air quality improvement or job creation. Achieving climate targets can be considered a co-benefit when conducting successful and profitable municipal projects.

The Second Missing Piece: Monitoring

Databases like the Klimaatmonitor—which contains key energy and climate statistics for Dutch municipalities—are extremely useful for overviews of municipal progress and national trends. However, there are no clear data or monitoring schemes of local climate projects. This gap limits decision makers because the effects of any given project are not known. Without this data, pilots are less likely to be scaled, best practices are difficult to develop and replicate, and real-time progress cannot be assessed.

A Way Forward

Clear, actionable climate plans are necessary to realize the potential of local climate action. Local governments lack public short- and long-term plans in areas where emissions will be locked in (e.g., district vs. electric heating, hydrogen vs. e-transport, in-depth vs. cursory building renovations). There are several tradeoffs when considering each of these paths, but inaction will only delay the inevitable choice and reduce related short- and mid-term benefits. Robust climate plans require:

  • Emissions targets
  • Emissions baseline
  • Budget
  • Stakeholders
  • Clear measures
  • An implementation plan and timeline
  • A monitoring scheme

If full-bodied plans are implemented, municipalities can share each step of their projects and monitor progress towards achieving local climate goals. With public long-term planning, citizens, cooperatives, and businesses can participate, invest in, and adapt to the municipal energy transition. Municipalities will have to invest a lot more than the currently allocated budgets and manpower to become climate neutral in 20-30 years.

Research conducted for the municipality of Utrecht (350,000 inhabitants) shows that if all measures were realized within the city limits, becoming climate neutral would require investments of about €9.5 billion. However, if the municipality agreed to take part of its investments outside of Utrecht (e.g., funding offshore wind in the North Sea), total investments could be reduced to roughly €4 billion. Ecofys, a Navigant company, proposes that national and municipal governments should agree on a fair effort sharing to reduce overall societal costs.

For more information, please get in touch with our team.

 

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