There are natural parallels between the Smart Grid and smart cities in terms of concepts and deployments. Both rely on ICT technologies and M2M (machine to machine) communications applications to enable devices and systems to be remotely monitored and controlled. Both are infrastructure plays that often require significant financial investments and have payback periods that are not always immediate.
But there the similarities end, because cities have much more experience at evolution than the traditional electrical grid. After all, cities have been adopting radically new technologies that disrupt the state of the art and the status quo for centuries. The Romans created aqueducts and fundamentally changed how water could be controlled and distributed in cities. Discoveries in hygiene and disease transmission and control allowed people to healthily live in population densities with minimized odds of large scale epidemics. And then automobiles exerted their benign and malign influences on cities. In each case, city systems, policies, and people changed to accommodate new technologies, new knowledge and new practices.
Just a couple of decades ago, the ability for a customer to have equipment that created dialtone (the private branch exchange or PBX) was a mind-boggling different systems approach to the old model of a central office switch delivering dial tone for all devices, which by the way, were very proprietary and closed. The technologies had changed over time, but that system model persisted. The PBX fundamentally changed the telecommunications model and market, and encouraged more opportunities for technology innovations. The culmination is the coming explosion of M2M applications. As often noted Alexander Graham Bell wouldn’t recognize the modern telecommunications networks or technologies, but Thomas Edison would feel right at home with the North American electrical grid.
Distributed generation (building-scale solar, wind, geothermal) and energy storage + energy efficient designs and materials + energy and water management systems are the grid’s equivalents of PBXs. There’s no going back once building owners see compelling financial justifications for these investments.
The evolution of buildings was a primary topic at a roundtable sponsored by the Consulate General of the Netherlands in San Francisco recently. My talk focused on the relationship between the Smart Grid and smart cities, and the Dutch delegation shared fascinating information about urban planning and development, sustainable retrofitting of existing building stock, and M2M applications to make buildings intelligent. While in the USA energy is a fraction of overall cost of living expenditures, in Holland it is about 50/50 spent between energy and housing. That motivates Dutch political leaders and business to develop policies and technologies that reduce energy consumption.
Residential and commercial buildings are dumb now, but intelligent buildings will contain M2M applications such as automated energy and water management systems and be built or renovated with energy efficient designs and materials. Buildings will become participants in energy markets. Some are already participating in demand response (DR) programs that put a value on negawatts. As regulatory policies change, more building owners will find it financially feasible to participate from a kilowatt perspective, and buildings will upload electricity that was generated or stored onsite. Buildings that operate as prosumers in energy markets can disrupt the existing business models and the systems in place that are designed for electricity flow in one direction – from centralized sources.
M2M applications will have very interesting impacts on cities, and on their commercial and residential buildings. Ambitious goals such as zero net energy buildings will change the relationships that physical structures have within cities, and in turn change the relationships that occupants (full or part-time) have within buildings and within cities.
As discussed in last week’s article, sustainable transportation leverages ICT and M2M applications to re-think how we move people and goods. The same will be true for cities – we need to think of them differently in terms of how systems and models (and our assumptions) will be disrupted by new technologies, ideas, and policies; and how smart cities will interact with the Smart Grid.