Urbanisation rose during the industrial revolution, when rural inhabitants moved in massive numbers to the cities in search of work. During the 20th century, the appeal of the cities gradually increased. While 12 to 15 percent of the world population lived in cities in 1900, by 1950 that percentage had grown to 30 percent and in 2000 it was already 50 percent. The United Nations expects that 5 billion people, around 60 percent of the world population, will live in urbanised areas in 2030.
An important driver of this migration is work, as mentioned above, better pay and higher standard of living. Other factors include infrastructure, i.e. culture, sport, recreation and care, etcetera. In a city these things are all within reach, which is not the case in the country.
The popularity of the city should not lead to its downfall, however. Cities face the danger of eventually becoming uninhabitable due to population pressure, with symptoms like traffic jams, crime, air pollution and accumulating waste streams.
In itself, this phenomenon is not new. Early in the 14th century, Edward I temporarily forbade the use of coal in London after complaints about air pollution. In the year 2017 these problems are still current, witness Beijing or Mexico City, with the difference being that modern cities are able to tackle these issues.
And that is where the Smart City comes into the picture. In rough terms this concept means that cities handle issues like mobility, energy, raw materials/residual flows and living/working in a smart way.
The ‘smart’ part is a matter of IT/Internet of Things (linking objects (cars, buildings, electricity, etc.) to IT systems) and human aspects, that is, organisation. Data, for example on energy consumption or traffic flows, supplies insights which can help reduce these phenomena. Apart from the technological aspect, the smart city also has a clear human side. You have to cooperate intensively. Governments, education, businesses and citizens will all have to supervise the city.
The Smart City is not a woolly concept: it is already an existing market. According to research agency ASDReports, a good 213 billion dollars is involved in this worldwide, a turnover which will reach more than 750 billion dollars in 2020. This turnover will be realised mainly in energy, construction and transport/mobility.
The ABN AMRO report reviews the opportunities and challenges in these subsectors.
In construction, the demand for sustainable buildings is one of the issues. Buildings have to be sustainable energy-wise, but their raw materials, such as biocomposites, are also expected to impact the environment less. The building methods will also change. By preparing better and coordinating building projects through so-called Cross Channel Control Centres, building companies can achieve considerable savings in their logistics processes and reduce the (traffic) nuisance to a minimum at the same time. ABN AMRO expects the impact to be substantial, considering that 30 percent of all freight traffic in the Netherlands is related to the building sector.
Cities are also energy guzzlers, as Ratti’s number series shows. Lighting in buildings and public spaces is part of this. Public lighting is responsible for only a minor share. According to the government, it makes up 1.5 percent of the total energy consumption. The government does encourage economising in this area.
That is grist to the mill of LEDsEnable. This company from Amsterdam, financed partly by ABN AMRO, supplies light as a service. The customer rents light via an operational lease structure and no longer has to worry about that issue, according to director Reinoud Lyppens. ‘There is a fundamental difference between operational lease and financial lease and hire purchase, where the customer buys the light in combination with a loan. We finance the purchase, installation and maintenance of the LED lighting and guarantee the customer sufficient light during the entire term of the contract.’
The potential of LEDsEnable for Smart Cities is obvious. And yet private parties seem to be more receptive than (local) governments, according to Lyppens. ‘Businesses can switch faster and they react earlier to financial and sustainable incentives. I believe this is because governments are often tied to tendering processes and decision-making is more complicated.’
A good example is Sitech, a service provider at Brightlands Chemelot Campus. LEDsEnable has replaced the conventional lighting of seventeen factories at this site by state-of-the-art LED lighting.
‘We guarantee optimal lighting for the next fifteen years. We only install lighting where it is needed. This enables us to achieve a maximum reduction of light pollution and reduce CO2 emissions by 80 to 90 percent.’
The fittings have remote control, individual and per group. Because those fittings also react automatically to daylight, no lamps are ever on unnecessarily, according to Lyppens. ‘The lease and power costs are lower than the total cost of ownership of the conventional lighting, which means businesses can start saving from day one. We can also prove this by reading out the LED lamps. It’s there in black and white!’