White Paper: Smart Cities and the Energy Cloud
This Navigant Research white paper examines the critical issues facing cities and utilities as they develop the energy policies needed in the century of the city. The emerging vision is of smart cities that integrate large and small-scale energy initiatives ranging from improvements in national infrastructure through citywide energy efficiency programs to local energy generation.
Navigant Research defines a smart city as the integration of technology into a strategic approach to sustainability, citizen well-being, and economic development. An integrated energy strategy is a crucial factor in delivering improvements such as the following in each of these three areas:
- Sustainability: Cities represent only 2% of global land use but are responsible for around 80% of global gross domestic product (GDP). They are also responsible for around 70% of the world’s energy use and roughly the same percentage of greenhouse gas (GHG) emissions. City leaders have recognized this and have taken a lead in developing ambitious energy efficiency and carbon reduction programs, often working in close partnership with local utilities. Utilities are also helping cities deliver ambitious energy efficiency programs through innovations in smart grid technology, demand management, renewable generation, and the adoption of electric vehicles (EVs).
- Citizen well-being: City leaders are only able to deliver change programs if they can assure citizens that the programs will lead to an overall improvement in their quality of life through improvements in public services. Energy efficiency is providing a means for cities to reduce their operational costs and thus protect vital services (such as public safety and education) from budget cuts. Smart energy programs can also improve quality of life through making comfortable homes affordable (by lowering heating bills) or improving services while reducing costs (as with smart street lighting). These issues are even more critical for developing countries that need to provide efficient and affordable energy to rapidly growing city populations and to integrate semi-formal developments and communities into city infrastructures.
- Economic development: A defining characteristics of the smart city movement is the focus on economic development within cities. Cities need to be centers of innovation that can provide jobs for citizens and attract new businesses and new talent. Affordable and reliable energy is one of the basic features of an economically robust city. Providing an energy infrastructure to meet the needs of industrial and commercial organizations while meeting sustainability goals is a growing challenge for cities, particularly in the developing world. Energy infrastructure is also a critical element of a city’s resilience to catastrophic events and its ability to bounce back with limited impact on its economy and social structures.
The report addresses the following key questions:
- How are the energy needs of cities changing?
- How can cities benefit from new opportunities in the energy market?
- What opportunities do smart city programs provide for utilities?
- How can cities benefit from smart meter and smart grid deployments?
- What is the energy cloud?
- What is the role of energy technology in resilience?
- What are the key smart city/smart grid pilots around the world?
- How will smart energy communities emerge?