Building Back Better: Creating Sustainable and Resilient Cities

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Eric Woods's picture
Research Director Guidehouse Insights

Eric Woods is a research director leading Guidehouse Insights’ coverage of smart cities. In this role, he brings together his research experience across energy, mobility, buildings, and...

  • Member since 2020
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  • Aug 12, 2020

City priorities have changed dramatically in 2020, and many of those changes will have long-term consequences. Accepted ideas on how cities are organized, managed, and monitored have been overturned. In addition, there is the huge issue of depleted budgets and reduced tax bases. Citizen health and economic survival have become existential priorities for city leaders. Despite these urgent and unpredictable challenges, city leaders realize the need to rebuild better to ensure resilience to future pandemic events, accelerate the shift to zero-carbon cities, and address the gross social inequalities in many cities. These aspirational priorities must be considered even as cities continue to deal with the current existential threats.

Accelerating the Energy Transformation

The importance of cities in meeting global climate targets is undisputed. Since the Paris Agreement, city leaders have been making commitments to deliver the necessary reduction in urban emissions to meet global climate goals, offering leadership that is often lacking at the national and international levels. Many cities already have plans to be carbon-neutral or zero-carbon cities by 2050 or earlier.

Strategies for the creation of sustainable cities are well aligned with changes in the energy sector as utilities and other players adapt to the requirements of a low carbon economy. Guidehouse characterizes the transformation in the energy sector as the emergence of the Energy Cloud. The Energy Cloud represents the shift away from centralized energy generation and distribution toward a highly distributed, networked, and dynamic grid in which technology-rich platforms such as Integrated Distributed Energy Resources, Building-to-Grid, Transportation-to-Grid, Transactive Energy, and Smart Cities are emerging. This transformation of the energy sector provides the bedrock for the creation of the zero-carbon cities of the future.

Accelerating the energy transformation also offers cities an attractive route to building back better by combining decarbonization programs with economic programs to create jobs and ensure all communities share in the benefits. They can do so by:  

  • Accelerating the shift to renewable energy: Cities are increasingly proactive in setting targets for their power utilities to shift from fossil fuels to renewable energy in generating electricity to help meet carbon emissions targets. Many are embedding these goals in their recovery programs.
  • Driving the adoption of smart grid technologies: Support for renewable generation by city authorities increases the pressure on utilities to deliver an infrastructure that can integrate these new resources in a manageable way and accelerates other changes in a city’s energy services. Investment in new grid infrastructure will be essential to help manage the shift to renewable energy and to increase the resilience of power networks to extreme weather events.  
  • Boosting energy efficiency initiatives: Collaboration between city departments and local energy utilities to improve energy efficiency is one of the simplest and most effective measures for reducing a city’s energy footprint. Coordinating programs for energy efficiency improvements is an obvious step and enables cities and utilities to target the most appropriate residents, businesses, and communities for retrofit and rebate programs. It is also a way to create local jobs and build skills in economically disadvantaged communities.

Building Resilient Cities

Another area where city goals and energy sector programs intersect is the need to build more resilient communities. Resilience has become increasingly important as the impact of extreme weather events and other consequences of climate change became evident. Cities are highly vulnerable to increased temperature, drought, and storms but the most direct threat comes from rising sea levels. Approximately 360 million urban residents live in coastal areas less than 10 meters above sea level. The top 20 cities identified for both population and asset exposure to coastal flooding include Miami, New York, Tokyo, Kolkata, Mumbai, and Shanghai. The coronavirus outbreak has added another dimension to resilience planning as cities consider how they need to manage the threat from COVID-19 and be prepared for future pandemics.

Resilience can be characterized as the ability of cities and communities to bounce back from catastrophic events. It also covers the ability to adapt to more gradual changes that disrupt the well-being or economic stability of a community. Resilience is not just a question of identifying and acting on specific impacts. It also requires an assessment of a city’s complex and interconnected infrastructure and institutional systems that span the physical, economic, institutional, and sociopolitical environment.

Smart infrastructure is an important element of any resilience strategy. Flood and storm protection, grid security, water management, public safety systems, transportation management, and emergency service integration can all improve a city’s ability to respond to events. Sensor technologies, meteorological systems, and predictive analysis can improve warning systems, emergency response operation, and risk assessment. More generally, a focus on resilience encourages new ways of designing and implementing technical solutions—with more distributed systems, greater redundancy, and a focus on loosely coupled integration.

The Role of Utilities in Smart, Sustainable, and Resilient Cities 

There are many opportunities for utilities to engage in city recovery and innovation programs. Utilities looking to develop or expand their city activities should focus on the following actions:

  • Engage with local smart city stakeholder groups and leadership teams, and actively participate in the development of low carbon city strategies. Energy companies can help chart viable programs to turn ambitious city energy and emissions targets into reality.
  • Deliver benefits for all communities. Utilities have a unique connection to all city residents, which provides a strong basis for furthering community goals around social equity and helping improve and redefine customer relationships.
  • Create platforms for the delivery of new energy services that can also be a launchpad for innovative urban service offerings. Thinking holistically enables existing assets and services to become a base for expansion into other areas.
  • Develop partnerships with technology providers. Utilities are important conduits to the market for many players, and the combination of sector and service knowledge with technology leadership is a strong proposition.
  • Establish themselves as key orchestrators of new urban energy platforms and the ecosystems they support. Playing a central role in these new networks is key to the development of new services and business lines in the city of the future.

The energy sector has a responsibility and an opportunity to work even more closely with local governments to ensure that out of recent tragic events emerges a renewed focus on building more resilient, more sustainable, and more equitable cities. To understand more about these issues, join Guidehouse experts for an engaging discussion on the challenges facing cities and their partners as they look to build back better.

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Thank Eric for the Post!
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Rami Reshef's picture
Rami Reshef on Aug 17, 2020

The Energy Cloud represents the shift away from centralized energy generation and distribution toward a highly distributed, networked, and dynamic grid in which technology-rich platforms such as Integrated Distributed Energy Resources, Building-to-Grid, Transportation-to-Grid, Transactive Energy, and Smart Cities are emerging. This transformation of the energy sector provides the bedrock for the creation of the zero-carbon cities of the future.

I agree with you Eric, achieving a sustainable and resilient future is well served by the expansion and reinforcement of the Energy Cloud, both in smart cities and across businesses and industry sectors. Broad deployment of a mix of renewable energy resources with complementary energy storage assets will best enable grid stability while in parallel achieving decarbonization targets. By leading the transition to the Energy Cloud, incorporating microgrids and hybrid energy systems including long-duration backup systems, progressive utilities ensure their customers more reliable service and contribute to more resilient communities, better prepared to withstand the impact of extreme weather events and other consequences of climate change. What incentives do you see policy makers providing that would encourage utilities to accelerate their transition to the Energy Cloud?

Eric Woods's picture
Eric Woods on Sep 2, 2020

Hi Rami,

Thanks for your comment. It feels like a big question to try to answer here. We are spending a lot of time tracking various regulatory innovations, particularly in North America and Europe - and suggest you check out our web pages for regular commentary. I would say that policy makers need to understand the new dynamics (including new forms of collaboration/cooperation) that are shaping the energy cloud and need to be mindful of how they can remove barriers and disincentives that are a legacy of the fossil-fuel, centralized energy model. But it's never easy to understand the exact needs of emerging businesses/operating model - so flexibility and adaptability are key - and a willingness to learn quickly from what works and what doesn't.

Best regards


Henry Craver's picture
Henry Craver on Aug 24, 2020

Thanks for the post, Eric. I was wondering if the sprawling, low-density layouts of so many American cities (think Phoenix) make implementing your solutions more difficult than in a more prototypical city like London? 

Eric Woods's picture
Eric Woods on Sep 2, 2020

Hi Henry

Thanks for your question. I think it is more that different types of city have different strengths and weaknesses in terms of the shift to a low carbon economy/infrastructure. And so each city needs to assess what it has in its favour (and work with that) and what tougher structural (eg regulatory, market, or infrastructure) issue it will need to address eventually. Big cities like London and New York for example may look to have significant advantage in terms of finance/skills etc but they are incredibly complex in terms of governance and legacy infrastructure. Sprawl cities may be challenging but also any improvement are likely to have a big impact - eg changing transit pattern or  introducing more community-scale improvements for example.

Best regards


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