Smart Control Systems and Better Energy Efficiency with ‘Smart City’ Technology

Several U.K. cities are looking to initiate smart projects and developments to improve the efficiency of local services, enhance sustainability and develop their competitiveness. Smart city initiatives improve the ‘liveability’ of a city, helping to attract business and talent to support economic and business growth.

A number of cities are now approaching smart transformation through a series of smaller smart projects that help to generate savings and effectively pay for the initial investment. These projects, costing a few thousand to a few million pounds, can offer highly dependable return on investment (ROI), helping to ease the continued pressure on public budgets.

For many cities, enhancing sustainability is a key goal of implementing ‘smart’, digitalized technology. For example, London, ranked first in the U.K.’s Smart Cities Index, has an ambitious target to cut its carbon emissions by 60 percent by 2025. The Mayor of London’s initiatives include the RE:NEW program, which aims to reduce carbon emissions and energy bills in London’s homes. Part of this program includes the installation of smart gas and electricity meters to every home between now and 2020. The meters will allow homeowners to monitor their energy use and can help them to reduce their own energy consumption.

Cities can take this idea further with the implementation of smart controls for buildings. These controls give buildings — whether public sector or commercial — a “central nervous system” that balances and reconciles competing interests such as energy minimization, occupant comfort and grid stability. Today, things like fire protection, climate control, ventilation lighting and video surveillance are usually still controlled separately. Modern, sophisticated management stations, on the other hand, allow all building systems to be integrated into a single platform.

Use of smart control systems has the potential to reduce energy use, support carbon reductions and reduce running costs for building and homeowners.

Investing in such equipment, however, requires financial resources that may be beyond the reach of city council public budgets and private building owners. In the face of these challenges the use of capital from the private sector has become an increasingly common means of financing such investments. Tailored, all-encompassing financing packages tend to be offered by specialist financiers who have an in-depth understanding of energy-efficient technology and its applications.

Specialist finance providers understand the importance of implementing new equipment and new technology to generate revenue and cut operational expenses, and can therefore provide customized financing solutions that deliver energy savings and lower expenses, for instance, flexing the financing period to suit cash flow. This contrasts with the standard financing terms usually available from generalist financiers.

Our recent report, SmartStart (2016), identifies a number of potential Smart City initiatives — including smart building controls — that can be financed by using funds from the private sector and have the potential to generate savings that effectively pay for the investment. The report estimates that as much as €6.21 billion (US$6.9 billion) could be available in funding from the private sector in the U.K. for these small-scale initiatives. Many of these projects effectively unlock more finance availability for cities from financiers that intimately understand how such smart city technology applications work and the benefits they produce.

Specialist funding can help to make green technology more rapidly available both in cities and for private building owners. Because private funding providers combine technological and financial expertise with a focus on innovative and customized financing solutions, specialist private financing will be the key to accelerating the trend towards SmartCity transformation. Both cities and private building owners require access to a wide range of financing methods, and private and public funding can complement each other as facilitators for a smarter future.

Ian Tyrer (left) is Head of Sales – Energy Finance, Siemens Financial Services, UK

Chris Wilkinson, Head of Sales for Healthcare and Public Sector, Siemens Financial Services, UK

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