Utility Week

Utility Week 6th February 2015

Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government

Issue link: https://fhpublishing.uberflip.com/i/457279

Contents of this Issue


Page 11 of 31

The Topic: Future cities Future cities THE Topic 12 | 6th - 12th February 2015 | utILIty WeeK T he numbers stacking up around the future of cities are staggering. By 2050, the world's population will total almost 10 billion and 70 per cent of that swarm, experts say, will live in cities – cities with electrified transport networks and distributed sources of heat and electricity generation. Moreover, future cities will bring not only a concentration of domestic demand for utilities but may also home far more diverse economies. Even today, the world's 300 big- gest metropolitan areas account for half of global GDP, and this proportion will increase significantly if anticipated trends for decen- tralised, urbanised industry and agriculture take hold. Clearly, all these developments have mas- sive implications for energy and water sys- tems, magnifying and changing the profile of demand. Internationally, numerous initiatives are underway to try and understand how the social, environmental and economic require- ments of future cities can be met and who will be the major winners as solutions are monetised. So far, these programmes have been char- acterised by fragmented schemes – estab- lishing demonstration projects and pilots working in isolation. In the next five years however, we can expect to see considerable convergence in future city initiatives and the emergence of more tangible models for the operation of integrated, multi-vector, city systems (see chart Integration of city sys- tem, p15). There is a common belief among experts that new models will see city author- ities seize more control of their power and water management. For utilities, this means the time is ripe for more engagement in broad, collaborative city innovation programmes. To date, large technology and communications companies with expertise in manipulating big data have been working with UK innovation hubs such as the Future Cities Catapult, while utilities have been conspicuous by their absence, concentrating instead on the intra-industry innovation priorities set out by regulators or simply waiting to see what early movers achieve before committing themselves. Will future cities provide an urban utopia or low-value limbo for utilities? "Matching the expectations and requirements of citizens with practical, financially viable solutions delivered by city authorities and service providers is one of the greatest obstacles facing cities today." Juan Bejar, chief executive, FCC While this is understandable, some industry commentators fear it could cause utilities to suffer declining relevance to emerging players – including city authorities who might take a far more proactive role in managing energy use within their jurisdic- tions in years to come. For suppliers, this could mean missing out on new business streams in the provision of energy and environmental management services to cities. For our regulated networks, the consequences could be even more severe, according to John Scott, director of Chiltern Power. "If the regulator steps in to carve out space for new entrants – in the interests of customers – the networks will be le with a low value slice. They will become simply the wires owners and suppliers of last resort for largely energy-independent communities. You can be sure the regulator would squeeze the income they are allowed to make for only supplying a back-up role." Adding a gloomy conclusion to this sce- nario, Scott adds: "If you allow this evolu- tion to happen, you have to ask, 'Who will want to work for these low-value, fallback providers?'" Read on for insight into the state of play for future cities in the UK and exploration of the associated challenges for utilities. Opinion: meeting expectations

Articles in this issue

Archives of this issue

view archives of Utility Week - Utility Week 6th February 2015