Hundreds of initiatives to make cities more environmentally sustainable were under way worldwide. Against that backdrop one paradox stood out: traditional providers of municipal services, electricity and gas distributors, infrastructure operators, were largely on the sidelines.
It was information technology players who had taken the media initiative and the lead on R&D projects, seeing the addition of intelligence to public infrastructure as a significant growth opportunity.
Three models with distinct economics
- The eco-city covers cities built on a comprehensive environmental approach across construction, energy and transport. The levers are largely passive: materials, bioclimatic architecture, urban design. Scale varies widely, from 1.7 hectares at BedZED south of London to nearly 90 km2 for China’s Dongtan project, targeting 500,000 residents by 2050. Its economics rest partly on monetising externalities, avoided CO2 or transport inefficiency.
- The smart grid city aims above all at more efficient consumption through active management of power networks, to ease the integration of renewables and electric vehicles. US utility Xcel Energy was the pioneer with its SmartGridCity pilot launched in Boulder in 2008. Its economics rest on network management savings and avoided reinforcement costs.
- The connected city is the territory of telecoms operators and equipment makers, built around pooled communication infrastructure. South Korea trialled the concept in 2007 at Hwaseong-Dongtan and planned some fifteen further projects, including Songdo, which alone was to cost more than €30 billion.
A retreat that raises questions
Our analysis of nearly 70 players involved in significant projects shows that technology firms and public authorities together account for more than 60 % of participants, against 13 % for utilities and affiliated companies.
That retreat is the more surprising because the activities affected concern them directly: the shift from passive efficiency to active consumption management, changes in the generation model, meter reading, water network maintenance, urban traffic management.
Network equipment makers, for their part, depend on the momentum of their traditional clients. Where technology firms reach public decision-makers directly, equipment suppliers remain dependent on network operators.
Blurring industrial boundaries
The development of these concepts erases the classic boundaries between urban services. Electricity will also be produced by consumers, communication infrastructure managing water, heat and power will be pooled, street lighting will serve traffic management and security, and multimodal transport will build on geolocation and real-time data.
In France one weak signal deserved attention. Pressing demands from local authorities, the concession-granting bodies for distribution networks, on the technical and economic performance of those networks, and possible changes to the concession regime, could lead them to use the sustainable city concept to apply additional pressure on concession holders.
Distributors, public infrastructure operators and telecoms operators therefore had an interest in anticipating those moves rather than absorbing them.
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The downloadable PDF of this study is available in French only.
