Urbanization is a worldwide phenomenon. According to the World Bank, 54 percent of the world's population lives in urban areas today. By 2045, the number of people living in cities will increase by 1.5 times to 6 billion, adding 2 billion more urban residents. With more than 80 percent of global GDP generated in cities, urbanization can accelerate economic development, but it has to be managed in a way that decreases energy intensity (energy per unit of GDP).
Smart city technology is becoming an essential element in the development of the world's megacities. For example, the new Indian government's budget includes an allocation for initiating the development of 100 smart cities. Songdo IDB in Korea and Fujisawa in Japan are two smart cities already under development. China has 36 smart cities in development and a low carbon model city in Tianjin. Singapore plans to become a smart nation by 2015. Iskandar is Malaysia's first smart city. The Delhi-Mumbai Industrial Corridor (DMIC) incorporates smart city concepts.
According to a recent report, the global smart cities market is forecasted to grow from $410 billion in 2014 to $1.1 trillion by 2019 at a compound annual growth rate (CAGR) of 22.5%. This includes smart homes, intelligent building automation, energy management, smart health, smart education, smart water, smart transportation, smart security, and related services. Most of this activity is expected to occur in Asia and the Middle East.
Technologies and trends such as smart cities, smart grids, sensor webs, the Internet of Things (IoT), facilities and asset management, indoor and outdoor navigation, energy performance modeling and real-time, “big data” analytics are important for urban planners. In these technology domains, open standards encourage the sharing of information. The OGC Urban Planning Domain Working Group intends to discover requirements for open spatial standards in information systems involved in the planning, design, use, maintenance and governance of publicly accessible spaces.
According to the IPCC urban areas accounted for 67 – 76 % of energy use and 71 – 76 % of energy-related CO2 emissions in 2006. Cities are going to have to adopt a leading role in transforming to efficient, non-carbon energy, if we are going to be able to achieve a sustainable level of economic development.
In preparation for COP21 in Paris, all of the major developing nations have committed to decreases their energy intensity. For example, India has just released its commitments (INDC) to reducing emissions prior to the Paris COP meeting. The challenge for India is tackling climate change while at the same time improving the standard of living of its third of a billion poor.
According to Navigant worldwide 96 cities that have committed to becoming 100% renewable. These include Vancouver, Canada and San Francisco, California. According to the annual ranking by the Global Green Economy Index (GGEI) Vancouver is the world's fourth greenest city. According to the GGEI the top three greenest cities are Copenhagen, Amsterdam and Stockholm. The countries corresponding to these cities (Denmark, Netherlands, and Sweden) also rank high, in the top 5 country rankings. Canada is 12th. The Nordic cities have achieved their high standing with the help of their respective national governments, whereas Vancouver has achieved its high green ranking on its own with little help from the federal government. Two years ago the Dutch Ministry of the Interior initiated a joint project with the Municipal government of The Hague (Den Haag) to reduce and stabilize energy usage and costs in downtown Den Haag. The study area is roughly about a square kilometer where the buildings are large and owned for the most part by the National and Municipal governments.
Most of the world's electric power utilities have adopted a smart grid strategy at some level. This can involve distributed renewable energy (DER), reduced emissions from existing fossil fuel generation and various energy efficiency programs. Navigant Research has just released a report that investigates the fundamental shift in the way cities manage energy and their relationship with electric power utilities. It focusses on DER, demand management, EV vehicles and charging infrastructure and energy efficiency. The major technology suppliers according to Navigant are ABB, Accenture, AT&T, Cisco Systems, Hitachi, Huawei, Itron, Oracle, S&C Electric Company, SAP, Schneider Electric, Siemens, SSN, and Toshiba.
Navigant Research projects that the global smart energy for smart cities technology market will grow from $7.3 billion in annual revenue in 2015 to $20.9 billion by 2024. That represents a compound annual growth rate (CAGR) of 12.4%.
It should be noted that this analysis does not include energy efficient buildings the market for which Navigant has estimated in a separate study to be $307.3 billion in 2014 growing to $623.0 billion in 2023.