Why Utilities are Building Smart Cities

June 15, 2020 - For utilities, the days of incentivizing consumption to drive revenue growth are long gone. Instead transmission and distribution companies are investing in intelligent solutions to survive in a dynamic marketplace where their customer are devoted to saving energy and money. For many utilities across the globe, that means turning to smart city technologies to improve energy efficiencies and build unregulated revenue streams.

As demand for city data and operations metrics has increased, the streetlight pole has become a valuable asset - a key piece of real estate that is the launching point for new "smart city services". No stakeholder is more motivated to unlock that value than a utility.

Why?

a) Utilities owns and operates A LOT of streetlights (typically). 
b) They are incumbent network operators, therefore well-positioned to realize returns from deployed assets.
and
c) Utilities are highly regulated, forced to build creative, complicated business models which drive energy efficiencies but also keep them in business (a difficult task seeing as their main business is selling energy). 

So its no wonder that utilities are emerging as key partners driving smart city transformations. We're seeing utilities take numerous action that benefit their bottom-line while simultaneously creating smarter service areas. The result is greener, cleaner and safer streets. 

Let's talk about some of the most common actions we're seeing from utilities.

Retrofitting Streetlights and adding IoT controls 

Investor owned utilities are driving many of the largest LED upgrades across the United States. Some of these projects involve hundreds of thousands of streetlights and a wide network of stakeholders. The benefits of an LED retrofit are well documented at this point. LED streetlights offer enormous efficiencies over HPS or metal halide lights, and controls add additional savings, together they can result in 60-80% energy savings for any light (read more in our whitepaper The Business Case for Intelligent Lighting Controls). So for a utility, who owns and operates a enormous amount of streetlights, that savings is nothing to scoff at. 

Running multiple applications on the utility smart grid (AMI) network.

For years, utilities have been building, managing and maintaining advanced metering infrastructure (AMI) to drive efficiencies in their business. Sometimes referred to as the "smart grid", AMI is an integrated system of smart meters, communications networks, and data management systems that enables two-way communication between utilities and customers (learn more at energy.gov). Utilities are experienced and heavily invested in these networks (they've known for a while that connected devices are a big deal, even before IoT was cool). To get the most out of these networks, utilities are starting to communicate more than just energy metering and billing data, they're starting to use these networks to deliver data about other assets, for example: the streetlight. On our utility partners' request, we've made a version of our intelligent streetlight controller that talks over the most popular AMI networks. This way, the utility can monitor multiple assets with minimal infrastructure additions.  


Selling utility-owned assets (aka selling streetlights back to municipalities) 

We've already covered this, but to make the point very clear, utilities own a lot of streetlights. One way they're realizing value on that asset is to sell it. Who might be interested in buying that streetlight you ask? The municipality who's streets are being lit! Typically cities pay a flat rate tariff to the utility to keep the lights on and can save a lot of money by purchasing those lights, having more control over the management and maintenance of the fleet. Not all states allow municipalities to buy back their streetlight poles. But states that do often provide supportive programs and resources, like rebates or prearranged discounts. 

Leveraging streetlight infrastructure to monetize other applications, expanding into new areas of business in unregulated markets.

As the utility owned lighting fleet is refreshed, utilities have additional opportunities to install systems that increase the utilization of their infrastructure. The savings provided by LED technology can help to fund these improvements. We've even seen utilities launching subsidiaries that lease attachment rights on the pole for private customers to run surveillance applications or mount 4G/5G small cells. CIMCON's NearSky smart city platform  can help utilities easily leverage the streetlight, to deploy new sensors, cameras and other devices without requiring more wiring or network infrastructure. 

Want to learn more?

You're in luck! Later this month we will sit down with our Advisory Board Member, Scotty Hutto to discuss in detail role utilities play in building smarter cities. 

Register Now!