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and consumed. As a result, commercial, industrial, and residen- its $50 million-plus energy costs and to meet the goal set in
tial energy consumers are becoming more actively engaged 2007 to reduce greenhouse gas (GHG) emissions 25% by 2020
in energy management and energy generation. Cities are also and 80% by 2050. The city is targeting energy consumption
seizing the opportunities presented by the energy cloud and across residential and commercial properties. Other initiatives
are working with utilities and other stakeholders in the creation include the introduction of an energy management system
of new urban energy systems. (EMS) for the city’s public buildings and the deployment of
light-emitting diode (LED) street lighting.
How Cities are Driving Change
One area where cities are having a big impact on this emerging Still much to do
energy landscape is in their support for renewable energy. Cities The drive for change in the fundamentals of how cities operate
are increasingly proactive in setting targets for their utilities to will also help drive the transformation occurring in the energy
shift from fossil fuel to renewable energy to help meet carbon industry and help direct it for the greater benefit of local
emissions targets. Cities are also encouraging residential and communities. However, aligning change programs of this scale is
commercial energy generation through programs to support a difficult task and the difference in priorities, investment models,
solar PV and small wind generation, combined heat and power governance, and operation models makes it far from easy to
systems, and other community energy schemes. Among cities mesh different initiatives. City-focused smart meter deployments
that have set renewable targets, Munich stands out as having often begin as trials in a limited area, but the move from pilot to
one of the most ambitious programs: It is aiming to move to citywide deployment is far from simple. Large-scale deployments
100% renewable electricity consumption by 2025. San Francisco need to be integrated with utilities’ deployment plans, which in
is another city that has set a 100% renewable energy target, turn are often determined by industry regulators and national
while London has a target to generate 25% of its energy locally government policies. This means that the interests of the city can
by 2025. become a secondary consideration.
Support for renewable generation by city authorities increases Many large-scale smart meter deployments are still being
the pressure on utilities to deliver an infrastructure that can inte- considered in parallel with smart city projects, with little inte-
grate these new resources in a manageable way, and accelerates gration of strategy or alignment of objectives. City authorities
other changes in a city’s energy infrastructure. Cities are the and utilities need to work closely together to ensure that they
focus of extensive smart grid pilots that are demonstrating the do not lose the benefits of an integrated approach. In order to
increased control, flexibility, and integration enabled by a digital build on foundations laid by smart city/smart grid pilots and
infrastructure for grid monitoring and management. demonstration programs, they need to look at the overlaps
in their strategic objectives, energy efficiency programs, and
The smart grid innovation that has the most visible impact infrastructure investments.
on energy consumption in cities is the introduction of smart
meters. Smart meters are the basic building block of many The emerging vision is of a smart city that integrates large-
city-focused smart grid programs—but smart grid investments and small-scale energy initiatives, including major infrastructure
have other advantages for cities, as well. Distribution automa- investments, citywide improvements in energy efficiency, and
tion, for example, enables the grid to support new services distributed energy generation. In the process, cities will become
such as demand management, EV charging, and distributed clusters of smart energy communities that can exploit the ben-
energy. An intelligent grid infrastructure can also link into other efits of the new energy systems. Cities will be fully immersed in
services. For example, Barcelona, Spain and Nice, France have the complexities and dynamism of the energy cloud.
piloted systems that integrate utility networks and other city
services, including street lighting controls, smart parking sys- A full version of Navigant Research’s Smart City and the Energy
tems, and environmental monitoring. Cloud report is available for download at: www.navigantresearch.
com/research/smart-cities-and-the-energy-cloud.
Collaboration between city departments and local energy
utilities to improve energy efficiency is one of the simplest and Eric Woods is a research director leading Navigant Research’s
most effective measures for reducing the energy footprint of a coverage of smart cities. He has written several reports on the
city. Coordinating programs for energy efficiency improvements smart city markets and technologies, including the recent report
is an obvious step and enables cities and utilities to target the on Smart Cities and the Energy Cloud. He has 20 years of
most appropriate residents, businesses, and communities for experience as an analyst and consultant on new technology
retrofit and rebate programs. Boston, for example, is working trends.
closely with local utilities (National Grid and NSTAR) to reduce
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