One of the most appealing aspects of urban smart energy, at least from a consumer perspective, is the possibility to break the hegemony of a centralised distribution system and make power more local. It’s a challenge to the traditional utility structure certainly, but microgrid projects offer a glimpse into how local, distributed energy infrastructure can improve system resilience. 

2017 was a year of disastrous power outages across North America as a result of storms and wildfires, from Texas to Puerto Rico and California, and these incidents have strengthened calls for grid modernisation and more investment in microgrids, which can protect communities and critical infrastructure amid wider outages. In October, Microgrid Knowledge reported on a California farm that used its microgrid to remain powered for ten days while wildfires caused outages elsewhere, with staff even able to operate the grid remotely after being evacuated.

It’s this kind of resilience that Panasonic is hoping to achieve with its CityNow smart city project outside Denver, Colorado. The company previously completed work on the Fujisawa Sustainable Smart Town west of Tokyo, Japan, in 2015. The town’s 1,000 homes are all connected to a solar-powered smart grid, giving the neighbourhood the ability to run off-grid for up to three days.

According to Panasonic, the Fujisawa project is a thriving community with 70% less carbon emitted and a 30% return of energy back to the grid. In Denver the company is looking to replicate Fujisawa’s microgrid success over the next decade, and start new projects across the US if it can make its business case in the Midwest. 

Microgrids also serve as enablers for locally driven energy schemes, allowing communities to sell their own renewable energy back to the grid or, as is being trialled in Brooklyn, to each other. The Brooklyn microgrid project is a collaboration between LO3 Energy and Siemens, which aims to introduce a microgrid-supported local energy market that gives residents with rooftop solar capacity to sell their excess to their neighbours.

Clearly, regulatory and policy hurdles will be complex and different from city to city, but new innovations are emerging to make the technological side work. That the Brooklyn pilot uses blockchain technology – the digital ledger system that underpins cryptocurrency transactions – could be a key facilitator of secure, transparent energy trades between individuals or organisations. In an August interview with Power Technology, Joanna Hubbard of blockchain energy company Electron outlined the technology’s potential contribution to more flexible energy markets. 

“If we can create a marketplace for energy that’s demonstrably fair, that has transparent protocols as to who you can trade with and how, but enables you to keep private your trading data, then that would be a very effective way of growing that flexibility market and enabling us to balance our grid for less cost and to integrate far more renewables,” Hubbard said. 

Smart grids will help distribution systems keep pace with the deeper integration of intermittent renewables such as wind and solar, and smart city projects are investigating how intelligent, connected local energy storage systems can support more renewables on the grid.

In Austin, Texas, the Austin SHINES project is trialling the installation of solar PV with integrated storage and software that will allow homeowners and businesses with on-site panels to automatically switch between grid power and their owned stored electricity based on current load and other factors. Projects like this one provide a glimpse into the central role that autonomously despatching energy storage could play in the local urban energy eco-system of the future.    

On the other side of the coin, energy efficiency and demand-side management strategies represent a core part of re-balancing the smart city’s energy mix. Underpinning support from city authorities is vital, of course, as the city of Charlotte, North Carolina demonstrated back in 2011 when it launched Envision Charlotte, a public-private smart city project turning the city’s downtown area into a ‘living laboratory’ for energy efficiency schemes, with a goal of­­­­ reducing the 61 participating buildings’ energy usage by 20% by 2016, on 2010 levels.

Shadow meters and usage information kiosks were installed in buildings, and the project achieved a 19% reduction by last year – just short of its goal, but still representing $26m in energy savings and a CO₂ reduction equivalent of 11,000 cars taken off the road. 

Connected technologies are making meaningful contributions to city efficiency and demand-side response efforts already. Many urban centres have carried out street light replacement programmes, switching to more efficient LED bulbs and incorporating sensors that automatically decrease lighting output when there is no one on the street. Earlier this year, Chicago Mayor Rahm Emanuel announced the city would replace 270,000 light fixtures with an intelligent lighting management system.

The energy transition also presents issues for those working to reduce urban energy demand. The rise of electric vehicles is an important part of decarbonisation and air quality efforts, especially in cities, but handling the extra demand generated by tens of thousands of energy-hungry EVs and plug-in hybrids will be one of the key challenges for energy management in a smart city. 

Every scrap of savings from efficiency schemes and demand-response incentives will be important in this context, while new vehicle-to-grid innovations, while still nascent, could see EVs feed electricity back into the grid are periods of peak demand if technical and regulatory hurdles can

be overcome. 

Of course, if these smart city concepts were easy or cheap, everyone would be trying them.  The fact is that grid modernisation is a technical debt that utilities, often dealing with infrastructure that has moved far beyond its original lifecycle, have been struggling to pay for decades. Smart grid projects might offer long-term solutions to urban energy dilemmas, but many cities don’t have the money to make the big investments. 

In Black & Veatch’s 2017 Smart City/Smart Utility Report, surveyed municipalities were asked to list the top three constraints for cities trying to make energy systems smarter and better integrated, more than 70% cited budget constraints, with lack of resources and expertise (57.3%) and policy hurdles (34.6%) trailing in second and third. 

Despite the threat seemingly presented by the emergence of distributed generation and local energy schemes, utilities still have an important role to play in preparing current grids for more advanced smart city technologies. 

Alternative financing arrangements such as public-private partnerships can offer new ways to fund the necessary improvements, with performance contracting and other concession agreements providing ways to recoup investments without putting undue strain on ratepayers’ bills. So for utilities, there’s a brave new world of opportunity up for grabs in the smart cities of the future, but it will take a progressive mindset to make the jump.

“Utilities should not approach the emergence of smart cities with a business as usual attitude,” wrote Jan Vrins, Eric Woods and Marcel Volkerts

of energy consultancy Navigant in the June 2017 edition of Public Utilities Fortnightly. “New forms of urban energy production and consumption challenge traditional utility business models while at the same time they present a wide range of

new opportunities.”