Future Cities Made Real – Efficient, Sustainable, Liveable

Our future lies in cities that are efficient, sustainable and liveable. It is not only a challenge of relentless innovation in technology and business models – it is also a need for broad collaboration at a scale unprecedented in human history. How can we make future cities a reality? By balancing long-term sustainability vision and planning with shortterm economics. In this presentation, we will share our experience and the lessons learned as we make cities across the world smarter.

Transcript

Jim Anderson

As Jessie said, my name is Jim Anderson. I’m responsible for leading our smart city activities in the US. We’ve been at it for a little over a year now so we’re relatively new in the space I would say from an overall “smart city” perspective. But as far as dealing with cities and dealing with infrastructure in cities, we’ve been doing that for many, many, many years so we’re very familiar with city organization, city structure, and the infrastructure associated with those cities. I’m going to talk a little bit about cities made real and made real today. We don’t need to be waiting where there are some things we could be doing in setting up for cities of the future. I’m going to talk a little bit of the process and then get into some examples of some cities around the world that we’ve been active in working this whole process.

From that standpoint, a little bit about Schneider Electric because I think we are one of the largest companies that no one has ever heard of. In fact, I was talking to someone this morning and orange trucks are not part of who we are. We really are an energy management company, a global specialist in energy management with about €22.5B in sales and that’s roughly $29B in sales. We have over 137,000 people in more than 100 countries around the world. You can see from a geographic balance, we are pretty much balanced from a sales revenue perspective and focused on pretty much 5 diversified end markets. Some of the things from a US country standpoint that the name may be more familiar to you from a brand standpoint will be SquareD from a power perspective or APC from a data center perspective. Most recent acquisitions would be Summit Energy from an energy consulting standpoint or Telvent from a software solutions infrastructure business. Those are all parts of who Schneider Electric is and what it is we have the capability to do.

Getting to the city side of things, what we need to talk about are the cities and why the cities need to be smarter. I think there’s a lot of evidence around that today and I won’t bore you with all those details. As we recognize that populations continue to move to cities, cities become the place where much of the energy will be consumed in the next 40 years. 80% of the energy will be consumed in the cities. Over 90% of the greenhouse gases will be in cities. Lots of things need to change. Lots of things need to happen relative to cities. We think that as a way to get things moving and get the ball rolling, urban efficiency is a main foundational brick to get cities to move forward now rather than waiting for some event to happen in the future. We think urban efficiency delivers livability. We think that delivers sustainability.

When we talk about urban efficiency, what are we talking about? We’re talking about efficiencies from an energy use perspective. We’re talking efficiencies in building. We’re talking about efficiencies in transportation −those kinds of things. We think we can start to generate efficiencies associated with those different areas of the city, use those potential savings from those efficiencies and start to drive other things in the city around improving public services −like schools, crime, security and those kinds of things− which, in turn, make the city more livable from a place where you have people come, attracts more people to want to live in that city because they hear about the good things going on in the city, which then gets into this idea of creating jobs and economic development which, quite frankly, is the holy grail in city governments. They want to show growth, show jobs coming into the city, show businesses coming into the city. In fact, I was in a meeting with one of the mayor of one of the major cities not that long ago and he made it very clear that in his role as trying to drive economic development in his city that this idea of sustainability and driving the city into the future is extraordinarily important for recruiting new companies into the city. He said one of the top 2 questions the recruiting companies ask him is “What’s your plan around sustainability? What are you trying to drive and making sure that that is somewhat compatible with what the company wants to do and what the company wants to be known as?” That is an extraordinarily important part of city, city government and city mayors around economic development. The more companies get there, you start to increase competitiveness of the city, which then gets to the whole idea around getting clean, connected growth within the city. We think urban efficiency is a main driver of sustainability. We think that can start happening today because generally, we can find ways to make it pay for itself.

We talk about 5 steps in becoming “smart”. I use that term in quotes. Smart is OK but it is way overused and way undefined. We use it today but something will evolve and change into that. The first one is working with city governments and talking about trying to establish a vision. A lot of cities today are doing that. They’re having discussions around what their city wants to be, what their future would look like, trying to do city planning, trying to establish the vision for an efficient, livable, sustainable city. Quite frankly, what really is required here from the city government standpoint is you need a strong leader, a strong advocate, a bold advocate inside the city government −typically the mayor− to drive this thing forward. Without a bold visionary, things tend to not move forward nearly as fast. You really need to find the bold advocate to make that happen.

Then you need to move into defining some scaled projects for the city particularly around efficiencies. Scaled projects like energy and how the energy grid is operating within the city, within transportation, within buildings. Whatever the vertical would be, it doesn’t matter. Start to get some scalable projects within the city to drive efficiencies within the city and then utilize those efficiency savings to start to generate other projects around more livability and sustainability.

Once you start your foundational piece in place at the “do it” level around the efficiency side of things, then you can start integrating the information you gathered from the water department, the transportation department and start linking things together from an integration perspective. This starts to improve the efficiency of the city at a different level.

Throughout this whole process, innovation is absolutely critical. In fact, innovation is one of the most important points not so much from a technology standpoint but from a business model perspective, from a financing perspective, looking at problem-solving differently. One of the biggest issues I see with cities is change management and getting cities to look at problems from a different perspective. Typically, the easy answer is always to go back and do what I’ve always done because that’s the easy thing to go do. At the end of the day, maybe that’s not the best answer to go do. Really, it’s about the innovation side of things that gets this moving forward.

The last piece to that is getting into the collaboration from a broader perspective, not only within industry people like us sitting in this room but also collaboration with all the different stakeholders that are relevant to cities and city governments. There are many, as you all know.

Those are the 5 steps. They’re extraordinarily difficult at times but if we start ticking off those steps and go down that process, it becomes a workable plan. That’s the methodology that we’re trying to establish as Schneider Electric and start taking that to the cities. We’ve got projects that we’ve done in over 200 cities in the world. Some of the things we have learned around the energy efficiency side of this are the fact that we believe there’s up to 30% energy savings potential, up to 15% savings in water that’s possible, and in transportation 20% reduction in travel time. These come from real live case studies, not made up. At the end of the day, these become real money from a city perspective. If you think of a major city in the US that maybe has a $350 million annual energy spend and you start saving 15%, 20%, 25% on that, it starts to become real money for the city to reinvest in other things. This is real savings that is possible today and doesn’t have to wait for things to happen in the future or wait for new technology because the technology exists today.

We know what it takes to do these things and I’ll give you some examples of 3 different cities around the world that we’ve got some information on and we’ve done some real projects with. The first one is Dallas. We’ve done some SCADA improvements for the water department distribution system. You’ve got to start with the foundational SCADA level within that and then you can start to build on other applications on top of SCADA. Start to deliver some results and solutions on the efficiency by putting the SCADA in. Beyond that, one that’s really interesting in the pilot project that’s going on in Dallas is this intermodal transportation project with a 20-mile sections of US 75 going from northeast Dallas down to central Dallas. It basically follows the same line as the red route on the DART transit system. So it’s a 20-mile stretch of road where we are investigating passing information back and forth to try to improve the transit rail coming in and out of the city down that route. From an intermodal perspective, not only do we have the freeway traffic management system and the dynamic message signing on the freeway boards, we also incorporate that into the transit system going down the rail to notify people that there may be an accident down road somewhere and to potentially get off at the next exit and take the rail in, if that’s what they want to go do. Beyond that, they’re also integrating in the local secondary streets along the roadway of US 75 some traffic management signalization that says if there’s a problem on the freeway, I may need to move the traffic faster on the side roads. I’m going to make the lights change to try to make the traffic go faster down the secondary streets. Not only is it an interesting play from an integration standpoint, it’s also an interesting learning opportunity from a behavior change management standpoint. How will the travelers behave given this information? Will they change? Will they not change? What do we think will make them change going forward? So a lot of learning taking place with this integrated corridor management opportunity in Dallas. It should become operational sometime around the end of this year. We’ll start to capture some real data associated with that.

Another city that we’ve done a lot of work in is Houston, Texas. Not all the cities are in Texas, just so you know. I’m not from Texas either. The interesting one about Houston is more about the office buildings that we’ve done, the city-owned administrative buildings in Houston. There are roughly 40 municipal buildings that cover around 11 million square feet of office space that we gone through and improved the efficiency of those office buildings to where the city is actually saving around $3 million a year in energy savings. The interesting part is the first phase of that is making sure the buildings are efficient in what it is that they do. We haven’t even taken it to the next step which would be connecting those buildings to the grid and start working the grid side of that thing. There is more learning to go do relative to that but clearly, getting to grid level is the important next step as we get on this journey of urban efficiency. That ties very closely with things that are going on and what we’re doing relative to smart grid. So there is a lot of interesting things happening in Houston.

The final one is in Brazil. I’m sure you’ll hear more about this today because this happens to be a global city that has a lot of activity going on over the past few years of which Schneider has been very involved through the Telvent piece, providing lots of different software systems, their SCADA distribution system and the energy management system, and also putting in part of the security surveillance system and the traffic management system. All of that data coming up from all those different systems are all coming from Schneider systems but then feed into the integrated intelligent operations center that the city is running. We didn’t do the integration of that but we’re providing a lot of the data that comes into that center. As a business, we really are at the operational level of the city, trying to drive urban efficiency at the operational level and then move up to the next level going forward.

Final thoughts: one, smart cities is not a concept. From an urban efficiency standpoint, we need to be driving things today and we can be driving things today. What we need to do is to follow the process around that. Start to find cities that have strong leadership, strong willingness to move forward, and really start to put forth some innovation around what we can do with those cities. The second piece to that is really the collaboration that needs to take place, both in terms of the industry collaboration like a lot of the people in this room and also the broader view of collaboration with city government, regional government, federal government, state government and all those other stakeholders that are part of the “makeup” of smarter cities. That’s all I have.

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