Japan looking to sell 'smart' cities to the world

The article on 7th Oct 2010 in Business Week read 'Japan looking to sell smart cities to the world'.


For a minute I thought that this is got to be the craziest idea every! How can someone or even more a country sell a smart city on a commercial scale? But, when I started reading the article it all started making sense. Below I have taken a few points from the article to give you a picture of how they plan to do this.

Recently in Combined Exhibition of Advanced Technologies, better known as Ceatec, in Chiba-Japan the attraction was the concept of a smart city which was energy efficient in the year 2020. The Japanese have been toying with the idea of creating a smart city which uses energy solely from sun, wind and nuclear. Their goal is to create cities of the future which are carbon emission free and would help reverese the global climate impact. Japan hopes to make this their primary export in the future and help them recover from their current slump.

The city of Yokohama in Japan, is the site of a social and infrastructure experiment to create a smart city. Launched as a pilot project called "Yokohoma Smart City Project" it involves companies such as Nissan Motor Co., Panasonic Corp., Toshiba Corp., Tokyo Electric Power Co., Tokyo Gas Co., Accenture's Japan unit and Meidensha Corp.

The Japanese are treating the pilot smart city project very very seriously and hope to take this concept to other countries very soon. Japan is not the only country in the race to create smart cities of the future which are energy efficient. We see that Australia is in the process of creating a smart grid city in Newcastle in New South Wales and has already invested $100 million. South Korea is even more ambitious and are embarking on a $200 billion smart grid project on their Jeju Island. China is expected to invest $7.3 billion in smart grid and technologies this year. So all-in-all, alot of countries want to be the first to prove to the world that they can create and sell smart cities with smart grid technologies. But more so, it estimated that the global smart grid market will be worth $171.4 bn in 2014 and who wouldn't want to be part of such a large untapped market.

With competiton heating up, Japan hopes to be pioneer in creating smart cities and has already started courting overseas customers in emerging countries where demand for energy has always been higher than supply. The challenge though remains, for Japan and many other countries, in the race to create smart energy efficient cities to not just talk but walk the talk!

Smart Meters: Not So Brainy

I came across this rather interesting article on Business Week about 'Smart Meters: Not So Brainy'. In essence it was a debate about if the government investment in smart meters - to monitor and regulate energy consumption in homes - is a waste of money or not. Pro or Con?

Pro: Not Effective
The people who support the fact that it is really a waste of money believe that the smart meters, which would cost $500 to install and communicate, would only provide information to the average consumer how much he or she uses at real time. It would not provide them enough incentive to conserve energy. Believing in the 80:20 rule only 20% of the people would really do anything about cutting their needs where as the reminaing 80% would feel that the smart meters would not change their consumption needs significantly.

The US government is in the process of deploying $3.4 billion of federal Smart Grid Investment Grant Program funds, matched by $7 billion of state, local, and ratepayer funds for technological improvements to our electricity grid. A part of this would be used for Smart meters installation.

People believe that change in consumer behavior can only come about by economic or financial incentive. For the people to adopt using the smart grid, they need come up with incentive plans like if they use less electricity they get taxed less and also disincentives of higer charge rate for not conserving.

Cons: Built-in reminders to conserve
They say that knowledge is power. If smart meters are installed in US houses it would help the avg consumer save between $60-$180 annually. In a recent study it was found that when consumers tracked their energy usage, it declined by 15%.

Doing some basic calculations. If 338 million smart meters were installed in the US, each bringing in avg $120 savings annually, then that would be $40 bn in savings for the Govt. Just imagine that the $3.8 bn investment in smart grid technology would reap in savings of $40 bn! Clearly this would be really good use of tax payer's money.

Conclusion:
Smart Grid and smart metering seem very promising for everyone but we still do see many implementation challenges. To overhaul the electric grid which hasn't been done in the last 40-50 yrs is going to take time. It will benefit alot of industries, leading to a world of connected devices and internet of things.

Future:
The future would be where we would be living in smart homes where all devices will be controlled by our smartphones! The smart meter will just be one of these devices.



Below is a video of how smart metering is the foundation of the smart grid:

http://www.youtube.com/watch?v=zhT6-NCK0pM

Smart Grids and the Forgotten Utilities

Ok, so utilities are not really forgotten in the smart grid discussion, but they often attract far less attention than the technology-focused players in the smart grid arena, like Cisco, IBM, GE, Google and a host of start-ups. Despite the lack of public attention, any business operating in the arena of smart grids is keenly aware of the importance of the utilities role going forward. But what is the role of the utilities? Will they be reactive and rely on other players to drive the change, or will they emerge as leaders of the grid transformation? Without utility leadership, the transformation to a universal smart-grid will be slow, hobbled by failures, and detrimental to long-term customer adoption of energy-efficient practices. Without broad utility engagement, a lack of consistent smart grid standards will likely emerge and could lead to an inefficient system that will need another transformation. And in the process, much of the cost and energy savings could be lost.

This is a pessimistic view that I hope can be avoided, but today many utilities are resisting adoption of smart grid technology and the heavy investment required. It seems more likely that the early adopter utilities will lead the charge, reap the benefits, and others will follow later on. This will be good for some business interests, but consumers and the environment as a whole will gain less. So, it is incumbent on consumers to demand smart grid technology to put pressure on utilities (which will take serious effort given today's consumer mentality related to energy use). Consistent government policy with incentives and power to enforce policy (to drive real accountability) will also be critical to the effort.