Smart Cities Can Be Smart Business for Utilities

“What Makes A City Smart?”

The answer to this question is broad but the smart infrastructure is surely the first thing that a city smart has. Smart infrastructure is has a direct connection with utilities. Utilities such as gas, water, grid, or lighting play a significant role in building a smarter city.

  • Two-thirds of the U.S. population live in cities, and by 2050, over 70% of the population of the world will be in cities (T&D World).
  • According to Gartner, almost 1.4 billion connected things will be used to create efficient and sustainable cities by 2020.
  • Statista predicts that the Global spending into smart city initiatives is expected to reach 189.5 billion U.S. dollars in 2023.

The correct solutions can enable utilities to work and connect with pertinent city services to offer amazing new applications. Utilities have a chance to bring value to the table as far as the development and maintenance of the digital and physical transformation of cities is concerned.

The days of meter readers and the struggle that they bill you correctly are gone. The need to walk or even drive house to house has been eliminated by AMI (Advanced Metering Infrastructure).  Nowadays utility networks have progressed, enabling a huge number of smart applications, and eventually smarter cities.

Living in a smart city means having an improved quality of life. Smart thermostats and customer portals make sure that you get the most out of the services you use. But all of it is impossible without the correct network.

It is the right utility communication network if it supports several uses. It needs to be resilient, fast, and cost-effective. Since it is going to be there for a very long time which means it has to be scalable, robust, and ready for anything. There is a variety of options out there, however, some are more suitable for utility-specific usage such as point-to-multipoint networks.

Since the population is flocking to urban areas, government and business leaders must keep in consideration the citizen and real outcomes to reinvent their cities, improve services and build the infrastructure of the digital age.

Utilities along with municipalities have been working to develop the quality of life for citizens as well as businesses. Mobility, energy, water, and waste management are some of the primary areas that will be critical to the foundation of smart city initiatives.  These areas are heavily dependent on utilities’ involvement and leadership. An agile business model is essential for the development and maintenance of the digital and physical transformation of cities.

Utilities can help city leaders handle their future challenges as well as produce tangible benefits for their customers and shareholders. Many utilities are pursuing new sources of earnings growth other than traditional rate-based growth, smart cities are evolving as the main avenue for future growth.

Smart city applications can produce additional revenue if utilities offer adjacent services such as providing smart meter services to local water and municipal utilities and monetizing data streams from all these smart city applications. Smart city programs have been slow to scale even though there is visible compatibility between utilities and municipalities.

Utilities, within smart cities, usually focus on pilots that extend their smart infrastructure (for example, smart streetlights) or targeted civic enrichment programs that can produce small revenue streams (for example, smart kiosks, public Wi-Fi). Utilities wanting to flex their “smart city muscles” have been dealing with real issues such as finding sources of funding (beyond rate base infrastructure), defining and harvesting shared value across different stakeholders, and navigating political uncertainties.

There is a risk of utilities being left out or relegated to a limited role as communications and technology giants are presenting themselves as smart city leaders. To avoid such scenario, utilities can position themselves to take advantage of smart city opportunities:

  • Develop a smart cities vision. Utilities have to work on their approach to see how they fit into their business models and explicitly define the role they would like to play in community leadership and powering the future economy.
  • Make a list of all the infrastructure assets and capabilities. Utilities should be clear about what they may be able to use to provide services to other smart city ecosystem partners.
  • Defining and prioritizing the use cases. Utilities need to know what will have the highest probability to create value for the utility and “shared value” for smart city stakeholders and citizens.
  • Define and prioritize the use cases. Utilities need to recognize what will have the greatest potential to create value for the utility and “shared value” for smart city stakeholders and citizens. Launching pilots will be helpful in demonstrating value and viability.
  • Recognize opportunities to create or take a leadership role. Utilities have a chance to be the main player in ecosystems to bring smart city services to life. Develop new, structured processes to find, attract, vet, negotiate, handle and sustain public-private partnerships, with the goal of creating value for partners, the utility, the city and citizens.
  • Take smart traditional infrastructure replacement/upgrade decisions. Make utilities’ infrastructure strategy decisions and upgrades with an eye toward generating an infrastructure that can support future smart city programs.
  • Make a list of potential partners for public-private partnerships. Utilities should look for partners that are able to provide inputs into a smart city program in return for shared value.

The concept of smart cities is not far away from becoming a reality, however, there are lots of challenges. Utilities can help municipal leaders to handle their complex systems, balance their budgets and engage with citizens more efficiently. It will make them indispensable city partners, and open new opportunities for growth and relevance.

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