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UTILITY Week 27th March 2015

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22 | 27th March - 2nd april 2015 2015 | UtilitY WEEK Operations & Assets Market view O n 6 February Utility Week published a special feature that explored the evolution of future cities and asked industry experts for their views on the role of utilities in these emerging urban megaliths. This was an important and timely article given recent United Nations data showing that the population of the world's cities is growing at a rate of two people per second. Projections now show that in 2050, the num- ber of people living in cities will be almost as large as the world's entire population today. In short, this means that cities will have to become smarter. Clean and efficient tech- nologies provide one of the main enablers of this transition and, it is becoming increas- ingly clear, the value that can be extracted from their deployment is at the point where these technologies integrate. Discussing the current state of future cit- ies projects in the UK in the aforementioned article, Juan Bejar, chief executive of FCC wrote: "So far, these programmes have been characterised by fragmented schemes, estab- lishing demonstration projects working in isolation." I for one could not agree more. The cur- rent state of affairs in future cities is por- trayed by disparate, unconnected pilots exhibiting a single, or few, technological sub-segments. Utilities, in the main, have been conspicuous by their absence in such demonstration projects. One way in which the European Union has been trying to accelerate these isolated and fragmented schemes is through the Horizon 2020 Smart Cities Framework Pro- gramme for Research and Innovation. With a budget of €92 million (£66 million) last year, this ambitious project aims to showcase large-scale interconnected future city dem- onstrator use cases, covering multiple mar- ket verticals and product solutions. The project, of which Siemens is a part, is called Triangulum and includes seven cities (Manchester, Stavanger, Eindhoven, Prague, Sabadell, Leipzig and Tianjin). These cit- ies all have a common city level ICT (infor- mation and communications technology) architecture covering distributed energy management, traffic management, electric vehicle integration, building device integra- tion, water and wastewater organisation and smart parking soware. The granularity surrounding what these future city sub-segments are and how they interconnect has been too vague for too long. As John Scott, director of Chiltern Power, said in Utility Week's future cities feature: "We need to start nailing down some specif- ics if we are to be sure they are not simply an excuse for a lot of conferences." One way in which the EU Horizon 2020 framework and Triangulum are trying to tackle this problem is by obligating all seven cities to publish their data and associated findings in a public forum, for the consump- tion of the wider future cities community and mandating a common ICT platform across multiple city workstreams – energy, transport, water and so on. Looking forward, the expectation is that the current wave of funding in the future city area will steadily transition into business-as- usual practices for cities and local authori- ties in the UK. This will mean the cities of the future will have to take on a far more proactive role in managing their infrastruc- ture, with particular focus on their inherent energy assets. It is worth remembering that before nationalisation in the 1940s there were hundreds of individual municipal and city-owned electricity generation and sup- ply utilities providing local services for their local citizens. My prediction is that the most profound and immediate change in this market will come in the way a city or local authority takes ownership of its distributed generation assets, how they are managed and how they can be leveraged to provide a better quality of energy service to citizens. Spearheaded by energy secretary Ed Davey, and with new regulation from both the Community Energy Taskforce and from the Heat Network Deliv- ery Unit, the UK government has made clear its strategy now no longer revolves around energy services being delivered by the big six but, instead, aims for a "big six thousand". The beginnings of a business-as-usual approach to future city development and integration have already started, with a Living in the future Thomas O'Reilly responds to Utility Week's recent Future Cities feature with insight into the progress of funding, integration and rollout of programmes in this important area. Cities are engines for converting resources – energy, brainpower and raw materials – into value. In a resource-constrained world where cities are the engines for growth (and hope- fully also plant the seeds for sustainability in resource use and maintaining lifestyles), there may well be a call for cities to take more control of their supply chain. Historically, up until the late Victorian age, cities and municipalities in the UK took control of supplying water services and sometimes energy services. This was part of a competitive situation where cities were looking to attract and retain industry and people. What has changed? Cities are still in a competitive situation, but the competition is now, for the largest cities, global. Taking con- trol of services might once again be in vogue. In the water sector, for instance, the institu- tional arrangements are nearly all in place in England and Wales. Soon there will be with retail competition for large consumers – there are already inset appointments for supply and distribution – and in the future there may be competition in resource development and sup- ply. In such a world, integrated supply chains could in principle be developed outside the current water company system. Energy supply is similarly open to competition, such that it is feasible for multi-utility entrants to operate complete or partial city systems. Of course, cities and their inhabitants will have to be convinced that the balance of risk, cost, efficiency and benefits supports the a new model. Mike Woolgar, managing director and environmental and water management, Atkins Time for cities to take control?

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