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M A R K E T I N T E L L I G E N C E • A N A L Y S I S • B E N C H M A R K I N G

Navigant Research Smart Cities Research Service

September 16, 2013

Eric Woods Research Director

©2013 Navigant Consulting, Inc. Notice: No material in this publication may be reproduced, stored in a retrieval system, or transmitted by any means, in whole or in part, without the express written permission of Navigant Consulting, Inc.

» Introduction and Summary of Recent and Planned Research» Why Cities Matter» Smart City Applications, Industries, and Case Studies» The Smart City Market» Future Development» Q&A

Agenda

2 ©2013 Navigant Consulting, Inc. All rights reserved.

Introduction

Navigant Research provides in-depth analysis of global clean technology markets.The team’s research methodology combines supply-side industry analysis, end-user primary research and demand assessment, and deep examination of technology trends to provide a comprehensive view of the Smart Energy ecosystem.

Introduction


Sector Focus:Smart EnergySmart UtilitiesSmart TransportationSmart IndustrySmart Buildings

Research Offerings:Research Reports

Subscription Research Services

Custom Market Research

• Go-To-Market Strategy• Custom Market Analysis• Market Sizing & Forecasts• Primary Research• Technology Evaluation

• Commercial Due Diligence• Competitive Benchmarking• Strategic Advisory Sessions

Smart Energy Ecosystem


Research Services


SMART ENERGY

SMART UTILITIES

SMART TRANSPORTATION

SMART INDUSTRY

SMART BUILDINGS

Solar Energy Wind Energy Emerging Renewables Biofuels

Biopower

Energy Storage

Advanced Batteries

Fuel Cells

Distributed Generation

Microgrids

Electric Vehicles Light Electric Vehicles Natural Gas Vehicles

Advanced Transportation Technologies

Building Energy Management

Building Automation Systems

Energy Efficient Lighting

Smart Building Technologies

Green Buildings

Smart Cities

Industrial Innovations

Smart Meters

Transmission Systems Distribution Optimization Home Energy Management

Utility Communication Networks Smart Grid Technologies

Utility Innovations

Commercial Vehicle Innovations

Demand Response

Smart Cities and the Energy Ecosystem


SMART CITIES

» Service components:› Approximately 10 smart cities research reports published per

year› Back catalog of all published smart cities research reports› Unlimited analyst inquiry access for special requests on smart

cities topics› Input into Navigant Research’s prioritization and scheduling of

research projects

Smart Cities Research Service


Recent Smart City Reports


» 3Q 2013:› Smart City Supplier Leaderboard

» 2Q 2013:› Smart Parking Systems

» 1Q 2013:› Smart City Tracker 1Q13› Smart Cities › Smart Grid Technologies

» 4Q 2012: › Smart Street Lighting

» 3Q 2012: › Electric Vehicle Charging Equipment› Utility Distribution Microgrids

» 2Q 2012: › Smart Government Technologies

» 1Q 2012:› Community and Residential Energy

Storage

» 4Q 2011: › Smart Transportation Systems

» 2Q 2011: › Neighborhood Electric Vehicles

» 4Q 2010:› Clean Mass Transit

Future Report Topics (Provisional)


» 4Q 2013:› Smart Water Networks› Smart Cities Tracker 4Q13› Electric Vehicle Charging

Equipment› Navigant Research Leaderboard

Report: Smart Cities› Market Data: Smart Cities› Smart City Communications

» 1Q 2014:› E-Mobility in Smart Cities› Smart Energy Communities › Smart Traffic Management

Systems

» 2Q 2014› Smart Cities

Why Cities Matter

» Global urbanization is a defining characteristic of 21st century» The urban population will rise from 3.6 billion in 2011 to 6.3 billion in 2050 » By 2050, 70% of the world will live in urban areas

The Urban Century


Urban vs. Rural Population Growth, World Markets: 2010-2050

(Source: United Nations)

0

1

2

3

4

5

6

7

8

9

10

2010 2015 2020 2025 2030 2035 2040 2045 2050

Rural Population

Urban Population

(Bill

ion

s)

Only the Beginning


» Almost all the world’s population growth during the next 4 decades will be in urban areas of the less developed world

» China and India alone will add 500 million urban inhabitants over the next 20 years

» Asia will be 50% urban by 2020, 65% by 2050

» Africa will be 50% urban by 2035, 58% by 2050

» 35% of the urban population of the developing world live in slums


Population Growth, Asia and Africa: 1950-2050

Cities and Megacities


World’s 37 Largest Cities by Population: 2025


-

5

10

15

20

25

30

35

40

45

The Cities of the Future


World’s Fastest Growing Cities by Percentage Growth: 2011-2025


2.07%2.11%2.11%

2.25%2.26%2.27%

2.41%2.52%2.63%2.72%2.75%2.76%2.78%2.83%2.84%2.89%2.91%

3.16%3.71%3.79%

0% 1% 2% 3% 4%

IstanbulMumbaiBangkokManilaTianjin

ChongqingWuhan

ShanghaiGuangzhou

KarachiDelhi

ChennaiBeijing

ShenzhenLahoreDhaka

HyderabadBangaloreKinshasa

Lagos

The Diversity of Cities


Total Population by City Size Class


» By 2025, 13.6% of the world’s population will live in megacities

Smart City Applications,Industries, and Platforms

» A smart city is characterized as the integration of technology into a strategic approach to sustainability, citizen well-being, and economic development

The Smart City: A Definition


Smart City

Sustainable City

Slim City

Eco City

Intelligent City

Knowledge City

Digital City

Low Carbon

City

U-City

Em

bed

ded

Inte

llig

ence R

edu

cedF

oo

tprin

tSmart Growth

Connected Environments

(Source: Navigant Research)

The Smart City in Context

Smart City Model



Environmental Sustainability

• Energy efficiency• Pollution • Resources

Economic Viability

• Investment• Jobs• Innovation

Smart Energy

Citizen Well-Being

• Public safety• Education• Health care• Social care

Smart Transport

Smart Buildings

Smart Government

Smart City Operating System

Sensor Networks Intelligent Devices Communication Platforms Data Analytics Control Systems Web Services

Smart Policies andObjectives

Smart Industries and

Services

Smart Infrastructure

Smart Water

A Multi-Dimension Smart City Model

» Cities are becoming prime test cases for smart grid integration» Water management is growing in importance» Transportation shapes the smart city and shows the strongest

growth » Public sector can be a driver for building energy efficiency» Government services are the glue for smart city strategies» There will be a slow evolution from pragmatic projects to a more

integrated view of city operations» Resilience is increasingly important

Smart City Industries and Operations


Tracking Smart City Projects

21

Smart City Projects by Primary Industry Sector, World Markets: 1Q 2013

©2013 Navigant Consulting, Inc. All rights reserved.

Smart Energy27%

Smart Water5%

Smart Transportation

25%

Smart Buildings13%

Smart Government 30%


Tracking Smart City Projects

22

» More than 50% of smart city projects in the Navigant Research Smart City Tracker 1Q13 are addressing some aspect of urban mobility

Percentage of Smart City Projects Involving Each Industry Sector, World Markets: 1Q 2013


0%

10%

20%

30%

40%

50%

60%

Smart Energy Smart Water SmartTransportation

Smart Buildings Smart Government

(Per

cen

tag

e o

f P

roje

cts)


Smart City Applications and Technologies

23

Smart City Applications and Technologies



Industry/Operational Area Smart City Applications Key Technologies City Examples

Smart Energy Demand management, EV support, energy efficiency program, renewable energy integration

Smart meters, home energy management, distribution automation, grid analytics, demand response systems

Austin, San Diego, Bilbao, Évora, Friedrichshafen, Lyon, Málaga, Yokohama

Smart Water Water system upgrades, consumption monitoring, wastewater treatment, environmental safety systems, flood management

Smart water meters, sensor and communications networks, water monitoring and management systems, water system analytics, weather forecasting

Dubuque, Masdar City, Nice, Paris, Washington, D.C.

Smart TransportationTraffic monitoring and management, congestion management, road user charging, emergency response, public information systems, smart parking, integrated traffic light management

Intelligent transportation systems, EV charging systems, road use pricing systems, sensors networks, monitoring and management parking, traffic monitoring, predictive analytics, vehicle telematics, public portals and smart apps, open data platforms

Dallas, San Francisco, Stockholm, Amsterdam, Hamburg, Santander, Singapore, Shenzhen, Zhenjiang, Toyota, Rio de Janeiro

Smart Buildings Public sector energy management programs, grid integration for renewables, EV charging stations, lighting/waste/water management

Building energy management systems, energy performance management, grid integration, intelligent lighting systems

London, Amsterdam, Songdo, Tokyo, Yokohama

Smart Government Public safety, social care, tele-heath, e-education, smart street lighting, citizen portals, waste collection

Sensor networks, cloud computing services, data analytics, open data platforms, lighting networks, emergency response systems

Chicago, Houston, New York, Amsterdam, Helsinki, Bristol, Barcelona, Sunderland, Busan, Seoul, Rio de Janeiro

Smart Grids and Smart Cities Can …


» Improve the energy efficiency of residential and commercial buildings

» Support integrated demand management services

» Help integrate renewable energy sources and new demands such as EV charging

» Create an extended network of intelligent energy devices that provide a more detailed view of the patterns of energy consumption

» Enable new community-based programs for energy monitoring

» Link energy management systems with other parts of city infrastructure, including electrified transport and building management systems

» Build new relationships between energy companies and businesses, consumers, and the public sector

» Provide test beds for integration of smart grid technologies – managing, monitoring, and analyzing complex interdependencies

Málaga Smart City, Spain


» Led by Endesa, coordinating a group of 15 companies and research institutes, including Enel, IBM, and Telvent

» The project covers 300 industrial customers, 900 service companies, and 11,000 residential customers

» Includes a network of MV transmission lines and 59 MV/LV transformers› The ultimate objective is to achieve 20%

energy savings and reduce emissions by more than 6,000 tons of CO2 per year

» Integrates renewables in the form of PV panels and small wind turbines, battery storage systems, and EV trials

» €31 million integrated smart grid demonstration project in southern Spain› Partly funded by the European Regional

Development Fund› 4-year project started in 2009

» In 2010, 1 billion vehicles in operation globally› By 2035, potentially, 1.7 billion vehicles

» If China matched U.S. vehicle ownership, the country would have 1 billion vehicles

» In 20 years (1981-2001), India’s population doubled and vehicle ownership increased nearly eight-fold

Transport in the Urban Century


The Future of City Transport


» Low carbon› Electrified› Energy efficient

» Multimodal › Rethinking how the city moves› Deploying intelligent transport

systems › Integrated planning and

management

» Connected and informed › Real-time information› Intelligent traffic management

(Source: Hiriko)

(Source: car2go)

The Pressures of Growth

28

(Source: University of California Transportation Center)

Income and Passenger Car Ownership


»Parking is tied to critical smart city objectives› Improving economic performance› Reducing environmental impacts› Delivering better public services and quality of life

» Smart parking can:› Increase revenues and operational efficiency › Play an important role in mobility and traffic management strategies › Provide a financial basis for smart street networks› Deliver incremental improvements within a broader strategy

Smart Parking: A Spearhead for Smart City Networks


San Francisco: SFpark


» 7,000 metered on-street parking spaces (about 25% of the city's total supply)

» 12,250 parking spaces in 14 city-operated garages and one lot (75% of the spaces managed by SFMTA)

» Around 11,700 parking sensor and 300 repeaters and gateways

» Program includes:› Real-time parking availability information› Demand-responsive pricing to create

parking availability› Longer time limits at parking meters › Credit card payment› Improved garage facilities

(Source: SFpark)


Installed Base of On-Street Smart Parking Spaces by Region, World Markets: 2013-2020


Smart Parking Adoption

» Smart parking is part of a 5-year strategy to transform parking in the city, launched by the mayor in September 2011

» Part of the city’s EcoCity strategy for sustainable development» 14,000 sensors will be deployed across the whole city by 2014» Part of an extended City Passport concept that also includes:

› Traffic movement and air quality sensors› New kiosks that provide multiservice utility management › New software systems to improve the management of parking and other

municipal services› New mobile apps for citizens and visitors

Nice, France: Beyond Smart Parking


Financing the Smart City: Some Examples


» Government investment› Masdar, United Arab Emirates› China smart city program› Singapore

» Innovation partnerships › Amsterdam SC, Barcelona› San Diego

» International partnerships› Sino-Singapore Tianjin Eco-City› Delhi Mumbai Industrial Corridor

» Efficiency savings› London RE:FIT

» Utility/smart grid programs › Málaga, Spain and Évora, Portugal

» Other demonstration projects› T-City, Friedrichshafen

» Public-private developments› Songdo, Korea

» Stimulus funding› San Francisco, SFpark

» PPP demonstrations› EU - SCC Europeans Innovation

Partnership › Japan Smart City Demonstrations

» Extending city benefits to smart rural communities› More people in the developing world have access to mobile networks than to

energy, water, and sanitation (GSMA)

» Mobile payment systems support new commercial models› E.g., M-PESA (Safaricom) in Kenya – 15 million users› M2M applications still small – 1.5% of total

» Enabling distributed renewable energy services› Remote monitoring of solar PV stations › Commercial services via pay-as-you-go and microfinancing› M-KOPA (Kenya), Mobisol (Tanzania, Kenya), SharedSolar (Mali, Uganda, Haiti)

Mobile Communications: An Alternative Infrastructure


» Improving water services› Remote monitoring of wells, pumps, and sewage systems› Low-cost transmitters on hand pumps in Kenya› Integrated payment systems to reduce costs › Sarvajal, India – remote monitoring and ATM payment service allow local

management of water services› Grunfos Lifelink, East Africa – renewable energy-powered water system and

mobile payment service

» Providing remote e-health services› E.g., remote HIV diagnostics using mobile link (Mozambique, Zimbabwe, Kenya)

Mobile Communications for Water and Health


The Smart City Market

» Momentum has continued to build› City leaders around the world have taken up the concept

» Global trends: collaboration and diversity› U.S. cities taking up the smart city concept› Broader adoption across Europe› Asia looking to be a center of innovation› Latin America addressing transport and other infrastructure issues› Africa looking at ICT and innovation, but many urbanization challenges ahead

» Suppliers › Delivering new platforms› Extending the concept› Adapting their offerings

A Market, But Not As We Know It


The Smart City Global Market Opportunity



Smart City Technology Annual Revenue by Region, World Markets: 2012-2020

$-

$5

$10

$15

$20

$25

2012 2013 2014 2015 2016 2017 2018 2019 2020

($ B

illio

ns)

North America

Europe

Asia Pacific

Latin America

Middle East & Africa

» More suppliers will offer smart city platforms› However, smart city solutions must focus on specific pain points and operational

needs› Incremental enhancement of core services and solutions – not big bang› Smart city platforms are emergent, not the driver

» Differentiation in smart city capabilities is determined by:› Understanding of city needs, ways of working, and technical and financial limits› Developing third-party relationships to deliver innovation (financial as well as

technical)› A roadmap for integration and collaboration – where can cities exploit their data

resources for operational improvement?› Engagement with standards development – what is the operational requirement for

interoperability?

Supplier Trends


Assessing Smart City Suppliers

40



Smart City Suppliers Leaderboard Grid

Future Development

» Moving from pilots to city-scale deployments› Commercially viable projects that meet the needs of all citizens› Which operations and applications will lead the way?

» Establishing proven and repeatable financial models› Projects that show a real ROI can lead the way › Accounting for other benefits: sustainability, service quality, economic

» Improving access to and exploitation of data resources › Where is better information management making a real difference? › What are the barriers to integration and exploitation of data?› Improving access to data and improving integration across operational silos

» The establishment of appropriate standards and interoperability frameworks to enable innovation

From Vision to Reality: The Challenges


The Smart City Operating System


» Ubiquitous connectivity› Fixed and wireless broadband

» Consumerized IT› Smartphone, tablets, telematics, etc.

» Social media platforms› Facebook, Twitter

» Sensor networks› Multiuse, multiprotocol networks

» Integrated information management › Centralized operations management and

distributed intelligence

» Open data platforms› Open data projects, third-party development

» Cloud computing models › Public, private, hybrid clouds

(Source: SmartSantander)

SmartSantander Platform

» Develop repeatable, reliable, and efficient models for smart city projects

» Enable cities to take ownership» Create a context for collaboration

for all stakeholders» Address the challenges of:

› Common terminology and concepts› Standards for integration› Business cases and finance models

The Need for Interoperability and Standards


(Source: City Protocol)

The City Protocol View

Cities: Another Order of Complexity


» 22@ district: A $250 million infrastructure development › Focused on the old industrial area of Poblenou, around 115 city blocks › A center of a series of innovative living labs projects, including: ‒ Ubiquitous communications infrastructure based on the deployment of fiber and Wi-Fi

networks‒ A platform of sensor networks and the provision of open access to data‒ Investment in human capital through collaboration with universities, research institutes,

technology companies, and startups‒ The testing of new citizen services and new city management tools

» Other Barcelona projects include:› Open data platform › Transport innovation› City protocol

Barcelona: Showing the Way?


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