Smart Grid

October 10, 2012

'Connected City' Study Ties Smart Grid Use to Economic Drivers

Three key economic indicators of the strength of the commercial real estate industry—rising employment, gross domestic product (GDP) growth, and high office market occupancy—are correlated with municipal investment in, and application of, smart grid technologies, based on the findings of a study just released by Jones Lang LaSalle.

The Chicago-based financial and professional services firm specializing in commercial real estate services conducted the “Connected City” research to evaluate the North American averages for those three indicators against the figures for municipalities that have implemented smart grids. The analysts determined that “connected” smart grid cities have an annual GDP growth rate that is 0.7 percent higher, an unemployment rate that is a full percentage point lower, and office occupancy rates 2.5 percent higher than less advanced cities.

 “Cities that invest in smart grid technology and infrastructure, and that implement programs to enable energy-efficient corporate operations, are winning the competition for new businesses and job growth,” said Dan Probst, chairman, Energy and Sustainability Services, Jones Lang LaSalle. “This correlation speaks to the value of strong relationships between public sector infrastructure custodians and power suppliers and the responsibilities of private businesses to be smart users of energy and to work together to drive productivity improvements at both the city and individual corporation level.”

What Makes a Connected City?A smart grid is a power delivery system that uses advanced information technology to improve the effectiveness and sustainability of energy production and distribution, as explained by Christian Beaudoin, Jones Lang LaSalle vice president and director of Americas Corporate Research, in a video.

To evaluate the impact of smart grid investment on economic performance, Beaudoin compared the economic performance of connected cities with North American averages. He began with a list of smart grid cities from U.S. News & World Report, identified by a combination of regulation, financial commitments, time-of-use tariffs, reverse billing options and smart metering that enable companies and residents to manage energy usage more effectively. The 10 cities—Austin, Texas; Boulder, Colorado; Fort Collins, Colorado; Maui, Hawaii; Sacramento, California; San Diego, California; Tempe, Arizona, Toronto, Canada; Washington, DC; and Worcester, Massachusetts—were then compared as a group with national averages for employment, GDP growth and office market occupancy.

“The Smart Grid Cities were chosen on the basis of their investments in smart grid technology,” according to Beaudoin. “Their collective strong economic performance should be of interest to corporations locating new operations, as well as to municipalities considering an investment in smart grid technologies.”

Smart Grids, Smart Corporate Energy UsersBut what is a smart grid without a smart user? The vast majority of a city’s urban fabric comprises buildings owned or leased by private entities. To realize the full potential of smart grid technology, there has emerged a new approach to building automation and integrated facilities management, where data is aggregated across an entire portfolio, providing insights into achieving optimal performance. Remote, continuous monitoring of facility energy use provides the ability to effectively leverage connectivity with a smart grid to reduce energy cost and carbon footprint. In this way, on-the-ground service and automation technology offered through programs like the building energy management platforms provide a strategic interface with municipal smart grid technology.

Integrated building energy management systems, including Jones Lang LaSalle’s IntelliCommand, which facilitate real-time monitoring of energy use, can make it possible for corporations to better control their use of the public grid—achieving cost savings and carbon footprint reduction by proactively optimizing the power drawn off the smart grid. These systems make it possible to extend the benefits of the Smart Grid beyond the public infrastructure, and into privately held real estate.

These benefits are already widely anticipated. This week, at the CoreNet Global Summit in Orlando, corporate real estate executives are gathering to look at top current corporate real estate and facility management trends, including the evolving role of buildings and smart grid technologies. In the recent “Corporate Real Estate 2020” research, CoreNet Global experts predict that, by the year 2020, buildings will be contributors to the grid, not just consumers of energy. It will require both smart grid infrastructure and efficiently managed corporate facilities to achieve that synergy.

Edited by Brooke Neuman