Who is Leading the Smart City Revolution?

It seems like every time you turn around, another company, utility, municipality or institution announces some sort of “smart” initiative. In July, Xcel Energy and Panasonic announced a collaboration with the National Renewable Energy Lab (NREL) and others to study a potential carbon-neutral energy district master plan for Peña Station NEXT smart city development in Denver, Colorado; a trio of companies announced the formation of the “Energy IoT and Smart City Technology Alliance,” which consists of Envision, Microsoft, Accenture and others; and Black and Veatch and CPS Energy hosted a webcast called “The Smart City Puzzle: The Role of Utilities in Next-Gen Communities.”

Indeed, the smart city revolution is unfolding as cities seek to embrace the marriage of technology, energy, infrastructure, and transportation and use it to create better living environments for people across the world.

“Holistically [a smart city] relates to the services that cities offer to the residents and businesses,” said Jennifer James, Smart City Solution Lead at Black and Veatch, adding “it relates to things like safety and ultimately quality of life for people.”

Smart City Leaders

Take San Diego, California as an example. The city is number one in the nation for rooftop solar and has in place a climate action plan that calls for all electricity to come from renewable sources by 2035, according to James. But what is making San Diego stand out is the fact that in addition to its extremely ambitious renewable energy goals, the city is upgrading to LED streetlights and equipping those poles with cameras, sensors and a variety of devices to help with things like traffic management, management of parking and even crime, said James.

“They also have a major drive toward electric vehicles,” she added.

On the other side of the U.S. is Boston, Massachusetts, a city that James said is focusing on smart city initiatives related to community engagement and energy.

Credit: Rufustelestrat-Own work, CC BY 2.5.

“They have a vision zero initiative around traffic and pedestrian safety so they have a very interesting smart intersection project,” she said. The state of Massachusetts has been a leader in pushing energy storage and as a result, Boston has been working on clean energy microgrids for resiliency, especially in underserved areas, according to James.

She said Boston worked with Massachusetts Institute of Technology to map out the energy footprints across the city in order to determine prime locations for microgrids and district energy.

In the middle of the country, James pointed to Kansas City, Missouri for its efforts around its streetcar system that is outfitted with sensors and wifi. She also mentioned Minneapolis, Minnesota for its close work with utilities to help achieve its climate action plan.

Bottom Up or Top Down?

There are lots of different triggers that might cause a city to start a smart city initiative. According to James sometimes it starts with a single building or sustainability mandate.

“There are some positive things happening in one area and it kind of organically grows until it becomes a bigger focus point for the city,” she explained.

Other times it can be led by a utility, such as the case with CPS energy in San Antonio, Texas. Paula Gold-Williams, CEO, explained that for them the smart city initiative began with CPS Energy looking to upgrade its grid with smart meters from Landis + Gyr and a networking platform, advanced metering infrastructure and distribution automation from Silver Spring Networks. The smart city initiative simply grew from there. Gold-Williams added: “There is no end to creating a smart city. You just start and keep going.”

But according to Black and Veatch’s James, the best initiatives take place when there is full buy in from city leadership, the local utility, academic institutions and community groups.

The most successful work happens when there is “a collaborative integrated entity that is working together to make it happen,” said James. She added that Clean Tech San Diego is a great example of that.

While city leadership with a solid vision is one of the keys to creating the smart city initiative, ultimately, “the city may not be the strongest player in the mix of actually making it a reality,” said James. In Spokane, Washington, for example James pointed to Urbanova.

“It includes the utility, the city, the university and again it’s a collaborative network of public sector, private sector and non-profit and academic sector coming together to try to move goals forward at that intersection of smart city and energy.”

How Do You Pay for It?

Forrest Small is a senior managing director at Black and Veatch. He said the number one hurdle highlighted in a recent Strategic Directions report put out by the organization is budget.

“Budget tops the list. A lack of resources or expertise is number two and policy hurdles come up as number three,” he said.

That said, there are some tried and true traditional financing mechanisms that cites are using to find the money to usher in smart city upgrades. One avenue is through energy savings performance contracts, which have been around for decades. When an upgrade — such as a switch to LED streetlamps — will result in reduced energy costs, there are entities willing to fund the upgrade and receive payment back based on the energy savings.

A smart distribution system is an integration of automation and communication systems as primary components to support the end-to-end operations and analytics of the electrical distribution grid. Nearly 60 percent of Black and Veatch’s Strategic Directions: Smart City/Smart Utility Report survey respondents identified improving the reliability of the electric distribution grid as a leading investment driver. Credit: Black and Veatch.

A newer financing mechanism is advertising. In New York, the city is replacing old telephone booths with smart connected kiosk systems that offer free wifi, said James, explaining that the kiosks are one answer to the city’s connectivity goals. But they also offer an opportunity for cell-phone charging and have sensors that take air quality measurements and count traffic. James said in an emergency they could also be used for public safety announcements. Funding for the kiosks comes from interactive panels that include geo specific advertising, said James.

“In the case of New York City, they are actually making revenue from these,” said James.

A lot of investment companies are looking into smart city projects as a new area of interest, said Small and James, pointing to Long Haul Capital, a company that offers innovative financing for smart city initiatives such as walkable cities, smart growth mortgages and Intra-city rail.

What City Will Be Next?

At the intersection of clean air, connected people, connected infrastructure and public safety lies the smart city and while many are already on board, there are some cities still ripe for this type of development.

James said there are some cites that might benefit greatly from smart city initiatives because they can spur job growth.

“Communities that are looking to find new economic development opportunities and community re-vitalization,” said James.

“Detroit comes to mind and they are active in this area. Cleveland and Milwaukee, those are areas that have a real strong reason from an economic development perspective to make a move,” she said, adding, “And a number of those places are also in the position to have strong networks of private sector, academic sector, progressive utilities that can help make that happen.”

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