While there is growing global interest in smart city applications, there are also significant challenges in scaling implementation and impact.
Building on the success of its annual Energy Efficiency Indicator study, Johnson Controls recently conducted its first Smart City Indicator survey to track key drivers, organizational barriers, technology trends and the status of smart city initiatives around the world. The global survey queried more than 150 leaders involved in smart city initiatives in 12 countries.
The survey findings show that the key drivers for global smart city initiatives are economic development, environmental protection and sustainability. In North America, communications infrastructure and public safety are the leading drivers. Public safety was also the greatest driver for the smallest cities in the survey. While 90 percent of survey participants claim to have smart city initiatives underway, only 7 percent are implementing a published, strategic program of initiatives. This is despite the fact that 49 percent of participants have a dedicated program office to lead their smart city initiatives.
Lack of funding is the primary barrier for adoption globally, while security issues are also a significant challenge for smaller and North American cities. Funding for global smart city projects primarily comes from national and state governments (57 percent) while in North America, public-private partnerships are the primary source of funding (43 percent). The primary financial barriers are the availability of appropriate financing options and, especially in smaller cities, internal competition for capital.
With respect to smart city projects, smart/LED street lighting, city data platforms, smart public safety, broadband communications and distributed energy systems have been piloted or partially implemented by more than 60 percent of global participants.
Smaller cities were much more likely to have implemented LED street lighting, city data platforms and city operations centers than larger cities. About twice as many organizations (38 percent) have been piloting applications versus implementing them (21 percent). Meanwhile, 99 percent of the cities say they plan to fully implement 21 out of the 22 smart city applications included in the survey.
From a technology perspective, there was interest in a range of emerging technologies with machine learning/data analytics, the internet of things and cybersecurity predicted to have the highest impact on smart city projects over the next five years.
From Planning to Pilots to Projects to Partnerships
The learnings from this study suggest a couple of approaches that cities can take to accelerate the impact of smart city initiatives. The highest rated drivers for smart city investment, including economic development, sustainability, public safety and infrastructure, are generally the focus of other dedicated planning activities.
Integrated planning efforts, which cross traditional government and stakeholder boundaries, can be effective in identifying and leveraging cross-cutting opportunities across the city. Integrated planning also can help uncover opportunities such as smart LED street lighting, which can simultaneously reduce energy and maintenance costs, increase public safety and security, and promote healthy lifestyles (well-lit bike paths) while providing a connected platform for networked sensors, broadband communications and other community services.
Pilots are an effective way to evaluate smart city applications including the validation of technology performance, cost, savings and other factors. But with most funding for global smart city initiatives coming from national or state governments, transitioning successful pilots to full-scale implementation is often a challenge. One approach is to use innovative financial solutions, such as public-private partnerships, energy savings performance contracting and “lighting-as-a-service” agreements, which can improve municipal infrastructure without burdening tax-payers or increasing city debt.
El Paso, Texas, is a good example of a city that took advantage of energy savings performance contracting. El Paso contracted to install 18,800 new LED street lights and 6,600 LED traffic signals along with wireless lighting controls and an automated GPS fixture inventory management system. The result of this program is that it reduced energy and maintenance costs by about 65 percent.
Smaller cities are particularly challenged with funding so the city of Marquette, Michigan, took advantage of recent Tax Exempt Lease Purchase legislation and entered into a $27 million performance contracting partnership, which will deliver $42 million in guaranteed savings over the term of the contract.
This single project includes heating ventilation and air conditioning (HVAC) and building retrofits, new IT infrastructure, new security and life safety systems, 22 upgraded traffic intersections, 2,600 LED street lights and bike path lights, 3,300 smart water meters and a new electric co-generation system at the local wastewater treatment plant. This partnership will enhance community services, improve public safety, reduce energy consumption by 37 percent and generate significant economic development with over 70 percent of the project work being executed by local companies.
To effectively deliver on the promise of smart cities, it is critical to move from planning to pilots, from pilots to projects and from projects to partnerships. Integrated planning, innovative financing and collaborative partnerships are some of the approaches cities can take to deliver on desired outcomes and community expectations.
This article was originally published on GreenBiz.
Clay Nesler is Vice President of Global Sustainability and Industry Initiatives at Johnson Controls and a Senior Advisor at WRI Ross Center for Sustainable Cities.