An Ignoble Experiment

2. Without communication infrastructure, there is no smart city

The Electric Reliability Council of Texas (ERCOT) has reported that during the Polar Vortex, which caused outages at several power plants in early January, demand response participants performed better than expected -- and in excess of their contracted commitments.

ERCOT control room. Credit: Dpysh W/Wikimedia Commons

The severity of the January storm put ERCOT's grid in jeopardy of significant failure. In ERCOT's report to its board of directors, the organization reported that hundreds of Texas businesses, schools, local governments and individuals participating in demand response -- in which consumers reduce their energy usage in return for compensation -- provided 496 MW of capacity to the grid within 46 minutes of being called, an amount equal to the output of an average sized coal fired power plant.

The report found that demand response programs exceeded expectations by delivering 127 percent of the power contracted, demonstrating that demand response can be a quick, effective resource that can help independent system operators and electric utilities maintain grid reliability.

"This event shows that demand response is not just a summer resource," said Rick Counihan, chairman of the Advanced Energy Management Alliance (AEMA), a coalition of demand response consumers and providers advocating for policies that empower and compensate customers to manage their energy usage and making the electric grid more efficient, reliable, and environmentally friendly, as well as less expensive. "As a proven year-round resource, demand response will be available to reduce pressure on the grid today and in the future, while empowering consumers to make choices about their energy consumption."

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By Barbara Vergetis Lundin

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By their very definition, smart cities are connected cities. But these cities rely on the availability of universal communication services to connect energy, transportation and public services in order to become a reality. Thus far, the smart city communications layer has largely been taken for granted and become somewhat of an afterthought, with the main focus on the higher IT and data management layers. But the trend of the Internet of Things will require cities to move beyond just connecting people and businesses, to objects and sensors, toward more integrated smart city solutions and improving the interoperability, security, data privacy, and scalability of communication networks.

The first office building in the Smart City Malta project. Credit: Urban Malta/Wikimedia Commons

These cities appear to be ramping up as worldwide revenue from communication nodes for smart cities -- and the infrastructure and services to support them -- is forecast by Navigant Research to grow from $2 billion in 2014 to $3.55 billion in 2020. Further, Navigant predicts that global shipments of smart city communication nodes will grow from 17 million in 2013 to 55 million in 2020.

However, there are challenges that need to be overcome in the meantime. Bandwidth, latency, security, privacy, scalability, and flexibility are all important considerations when selecting the appropriate technology for smart city applications. However, the decision often comes down to the availability, cost, and degree of comfort with the technology, according to the report, leading to a highly fragmented communications environment that is inhibiting the development of more integrated smart city solutions.

"Most attention in the smart city community has focused on the upper communication layers and applications -- including IT and data management -- that govern how a smart city operates and enables the collection and analysis of new data sources," said Eric Woods, research director with Navigant Research. "Without the underlying communication infrastructure, however, the smart city vision cannot be realized."

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3. Allocating ICT budgets

By Barbara Vergetis Lundin

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4. Renewables making smart grid a top priority

The global energy sector has been facing major challenges, such as the decline in crude oil demand, price fluctuations, and delays in major energy investments owing to global economic uncertainties. In the current economic climate, energy companies are planning to make reasonable investments in Information Communications and Technology (ICT) to become more competitive, according to Kable Global ICT Intelligence interviews with energy company CIOs and CTOs regarding their ICT budget allocation.

The research found that with the economy showing signs of recovery, energy companies are increasing their ICT investments in 2013.

Hardware continues to be a key focus, as energy companies' require high-performance computing -- which helps them decrease the time required to retrieve and analyze data, and generate forecasting models leading to intelligent business decisions. Consequently, budget allocations for data centers have increased by 2 percent in 2013 compared to 2012, according to Kable.

The service support and help desk function is seeing high average allocation -- 28 percent -- as energy companies want to respond quickly to conditions that disrupt business services, and improve incident and problem management processes, according to the research.

Energy companies are spending a major portion of their IT services budgets on application development and integration in order to develop custom applications to suit the changing requirements and regulations in the energy sector, according to Kable, as well as allocating an average of 18 percent of their total ICT budgets to technology vendors. Further, 16 percent is going to networking and communications equipment, the research says.

The average allocation of software budgets amongst energy companies is centered around licenses driven by supply chain management, enterprise resource planning, content management, business analytics, and systems security software, according to Kable.

Further, energy companies are allocating a large proportion of their telecommunications budgets to mobile voice due to the size of their mobile workforces, the research concludes.

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By Barbara Vergetis Lundin

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