Urban Growth Provides Challenges, Opportunities for Electric Utilities

For the first time, more people are living in cities than rural areas. According to the 2010 U.S. Census, nearly 81 percent of the U.S. population lives in cities. The U.N. Department of Economic and Social Affairs (DESA) reports that 54 percent of the worldwide population lives in cities, and that number will reach 66 percent by 2050.

The latest DESA report states that 10 megacities-cities with 10 million people or more-existed in 1990 and were home to slightly less than 7 percent of the global urban population. Today, 28 megacities exist worldwide and are home to some 453 million people, or about 12 percent of the world’s urban population. Population projections released in January by the U.S. Conference of Mayors state that by 2042, three new megacities will join the existing four in the U.S. In addition, the organization predicts the number of major U.S. metropolitan areas-those with more than 1 million people-will rise from 51 in 2012 to 70 in 2042.

As electricity demand in swelling urban areas increases during the next few decades and beyond, electric utilities and power producers unlikely will add enough generation capacity and other required infrastructure to meet demand. Electricity providers and consumers must consider other solutions, including energy efficiency, automated demand response, on-site generation such as wind and solar, and energy storage.

Electricity is but one of many required commodities and services that will struggle to keep up with growing demand in urban areas. The ways food, water, wastewater, natural gas, trash and garbage disposal and transportation-related services are delivered and managed must evolve, too. Efficiency and sustainability will be key to meeting 21st-century demands.

Providing necessary products and services will require fine-tuned coordination among public, private and civic entities. Electric utilities will be instrumental in leading the effort because it is their civic duty, and they must to survive.

Recently I attended Schneider Electric’s Influencer Summit 2014 at the company’s new U.S. headquarters in Andover, Massachusetts. The conference theme was The Next Era of Change, and much of the discussion centered on urban populations, smart buildings and smart cities. All the speakers I heard and experts I interviewed said the electric utility industry is part of a revolution in which consumer behavior and expectations, technology and business models are quickly changing.

I interviewed Charbel Aoun, Schneider Electric’s smart cities president. He talked about some of the latest smart city trends and technologies. He said a smart city is a system of systems. Planning and creating smart cities is complex and can happen only when all stakeholders collaborate and benefit from the plan, he said. It’s common for some stakeholders to resist the changes and complexity involved with creating a smart city.

Aoun said three things are necessary to create a successful smart city implementation plan. First, the city must have great leadership and vision. Second, it must have a basic foundation and infrastructure. And finally, it must have collaboration from consumers, public and government agencies, utilities and technology companies. He said electric utilities must take a leadership role in any smart city plan and implementation, and they must go beyond their normal responsibilities.

Given the expected growth of urban areas, cities must become smart to meet their populations’ future demands. So far, the evolution to smart cities has been gradual, and only a few cities have begun the journey. Charlotte, North Carolina, is one of them. “Envision Charlotte’s Path to a Smart City” on Page 14 explains the collaboration of many public and private entities to create a smart city. The article’s authors, Amy Aussieker of Envision Charlotte and Russ Vanos of Itron, write about “a new brand of collaboration” and how more than 67,000 people are part of the initiative. When you read the article, you’ll learn how Duke Energy is key to the initiative’s success.

Aoun said other cities to watch include: Boston; Boulder, Colorado; and Hong Kong.

Because electric utilities play such a significant role in smart city development and the pace of that development is likely to increase, Electric Light & Power will continue to follow smart cities’ initiatives. If you’re involved in such an effort, we’d love to hear from you.

Editor in chief

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