Smart cities and the energy transition

Cities are becoming more influential in shaping the energy sector, writes Eric Woods, research director, Navigant Research.
Published: Tue 04 Oct 2016

Cities are a focal point for some of the most profound economic, environmental, social, and technological issues facing the world today. Not least of these is the need to move to cleaner and more efficient energy resources to meet the demands of urban populations that will expand by 2.4 billion people over the next 35 years. Energy networks underpin the smart city, but cities are also examining the sources of that energy and how efficiently it is being used, as they look to reduce both greenhouse gas emissions and energy costs.

City energy policy is evolving rapidly as cities become more ambitious and proactive in setting their energy strategy. Cities have played a key role in the development of many of the technologies and new business models associated with the transformation of the energy sector. Some of the most important advanced smart grid demonstrations have involved close partnerships between municipalities and local utilities. Cities are also driving forward smart metering and energy efficiency programmes.

These trends are all part of a broader transition in the energy sector that Navigant Research identifies as the emergence of the Energy Cloud. The Energy Cloud represents a shift away from centralised energy generation and distribution toward a networked and dynamic infrastructure that incorporates demand-side generation technologies and capabilities and renewable energy sources alongside traditional assets. Such a system is characterised by increased complexity and redundancy, allowing for greater choice in the manner in which energy is generated, supplied, and consumed. As a result, commercial, industrial, and residential energy consumers are becoming more actively engaged in energy management and energy generation. Cities are also seizing the opportunities presented by the Energy Cloud and are working with utilities and other stakeholders in the creation of new urban energy systems.

There are five key areas where cities are becoming more influential in shaping the energy sector.

Accelerating the shift to renewable energy

 An area where cities are having a significant impact is in their support for renewable energy. Cities are increasingly proactive in setting targets for their utilities to shift from fossil fuels to renewable energy to help meet carbon emissions targets. Cities are also encouraging residential and commercial energy generation through programmes to support solar PV and small wind generation, combined heat and power systems, and other community energy schemes.

Driving the adoption of smart grid technologies

Support for renewable generation by city authorities increases the pressure on utilities to deliver an infrastructure that can integrate these new resources in a manageable way and accelerates other changes in a city’s energy infrastructure. Cities are the focus of extensive smart grid pilots that are demonstrating the increased control, flexibility, and integration enabled by a digital infrastructure for grid monitoring and management.

Increasing energy efficiency

Collaboration between city departments and local energy utilities to improve energy efficiency is one of the simplest and most effective measures for reducing the energy footprint of a city. Coordinating programmes for energy efficiency improvements is an obvious step and enables cities and utilities to target the most appropriate residents, businesses, and communities for retrofit and rebate programmes.

Increasing resilience

Resilience has long been part of the debate about the nature of smart cities, but it is becoming a much more central part of the discussion. Resilience requires an assessment of each city’s complex and interconnected infrastructure and institutional systems that span the physical, economic, institutional, and socio-political environment. Electricity networks are at the heart of this complex web of infrastructure interdependencies. A failure in the electricity network can have a dramatic impact on water, sewerage, health, communication, and transportation systems.

Cities and energy markets

One of the most significant trends emerging around smart cities and their energy policies is an increasingly proactive approach to energy management. Cities are becoming active players in their local energy markets, collaborating with their existing utilities where that makes sense but also increasingly willing to challenge and even compete with those providers.

This article first appeared in Metering & Smart Energy International Issue 3 2016.

To sense of the intersection between smart energy and smart cities join Engerati's In Focus on Smart & Sustainable Cities.

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