SMART URBAN ENERGY SYSTEMS

Session 1: Conceptualization of smart urban energy systems.

 
And we will do this in In three steps. 
First, we identify the drivers towards smart urban energy systems. 
Then we will conceptualize the evolution of the urban energy system. 
And finally, we will present the three layers of transition. 
Now let's look at the drivers.
Start transcript at 33 seconds0:33
So the smart urban energy systems are the result of three main drivers. 
And they are all at the same level. 
But let's first mention that the evolution of urban infrastructure technologies, 
there are energy technologies that are changing and we will talk a little bit 
later about that, but with decentralized productions, renewable energies. 
There are technologies in transport that are changing that affect 
urban energy like electric vehicles, 
electric busses, electric bicycles, and charging stations that go with it. 
There are housing technologies that are changing. 
Houses become more self sufficient, are producing, 
themselves, energy or electricity. 
There are changes in district heating, in pump storage. 
So the first important driver is really the fact that technologies 
around the energy sector are changing. 
The second driver is of course, climate change resource efficiency.
Start transcript at 1 minute 46 seconds1:46
Cities are big polluters, and 
one of the drivers towards Smart Urban Energy Systems is, of course, 
the desire to reduce CO2 emissions and to become more energy self-sufficient. 
And the third driver is as a core of our MOOC, of course digitilization. 
Actually digitalization as we will see is the vehicle by 
which urban energy systems can become smart. 
Now let's look at the main dynamics of these urban energy systems. 
Now traditionally, energy works like this. 
It is produced in a very centralized way by big power plants, 
then electricity is transmitted into the city, and 
into the city it is distributed to a household and 
to farms, to area, to airports, to shopping malls. 
It is a very linear from centralized production 
to decentralized distribution process. 
Now, what is changing?. 
The first thing that changes is [COUGH] The production process. 
We are moving from centralized production to decentralized generation. 
Of course there is still centralized production but 
it becomes less important as areas, factories, 
households are generating their own electricity.
Start transcript at 3 minutes 31 seconds3:31
And are feeding some of this electricity back into the grid at certain times.
Start transcript at 3 minutes 38 seconds3:38
The second major change is from plant production to intermittent generation. 
And this is basically the result of production of electricity, 
thanks to renewables here in the examples of solar and wind. 
Now, these kind of electricity production can happen at a decentralized level. 
But it can of course also happen in very massive 
plants at the centralized level and then, fed back into the grid.
Start transcript at 4 minutes 19 seconds4:19
The third major dynamics is one that relates to prices. 
Rather than having fixed prices, 
increasingly, we have price signals. 
And this relates to consumption in the sense that consumers household areas, 
they can now store their energy at decentralized batteries, 
feedback the energy and maybe it's stored in a dam somewhere. 
That, when prices are high, the energy 
is fed back into the grid, when prices are low, it is consumed again. 
And all this is being automatized and this is one of the core features 
of smart urban energy systems is this automatic reaction of 
devices to price signals like the fridge turning off at moments when prices 
are passing a certain threshold and turning on again when prices get cheaper.
Start transcript at 5 minutes 28 seconds5:28
Now what are the main layers of transition? 
Now here we have theuUrban electricity system first. 
As I presented before it's an integrated systems where firms, areas, 
households are self generating, feeding into the grid and 
of course there is still electricity coming from outside. 
But what is interesting in urban energy systems is the fact 
that there is a larger environment that is all related 
to energy and electricity, the urban socio-technical system. 
Let us take examples. 
Factories, not only do they produce and store but they can 
themselves be active in energy matters, 
cars are running on electricity. 
They charge electricity at certain hours. 
The same for electric buses, for electric bicycles. 
Households are toddler. 
Houses are related buildings, are related to the electricity system. 
By consuming and feeding back in, 
the gas production is related to the electricity system. 
Water, wastewater, you can make energy from waste, 
and all this together forms sort of the urban 
ecosystem that influences the smart urban electricity system. 
Now the layers of transition are the ones that we have already identified 
in the previous week, namely first the layer of infrastructure and 
here, we start to now talk about smart grid. 
This is the grid that is capable to handle all this intermittency. 
A grid that is capable to handle flows, bi-directional flows. 
Then we talk about the services layer, smart urban energy 
services basically meaning that we don't just have a consumer. 
Consumers are at the same time prosumers and 
the services become much more complex, not just simply
Start transcript at 8 minutes 0 seconds8:00
buying electricity, but it also about saving electricity, 
about managing balancing electricity over time. 
And then, at the core of it is of course the digital or 
the data layer which makes this kind of things possible, 
which makes smart urban energy systems possible. 
So we would from here go to into these three layers in detail. 
Stay tuned.

Session 2: Interaction
Welcome back to the course. 
It is my pleasure today to discuss with Yves Corrodi. 
He's the Head of Strategy of IWB, which stands for 
the utility of the region of Basel. 
This utility is original in the sense that it is integrated, 
it covers several infrastructures, water, 
telecommunications, district heating, and, of course, electricity. 
Another key feature of this utility is 
that they source 100% of their electricity from renewables. 
So welcome Yves. 
>> Thank you for your invitation. 
>> So as an integrated utility, what kind of links do you make or 
do you foresee between the electricity, the smart electricity system and 
the other urban infrastructure systems?
Start transcript at 1 minute 4 seconds1:04
>> There are a lot of interferences within a lot of dimension, 
regarding a technical dimension, there are phenomenon you can observe 
within the electric rift itself such as an increase of PV, local PV systems. 
But also between other infrastructures, such as heat pumps, 
as a new heating source, or storage systems of different medias, 
or, as example, electro mobility. 
This will interfere with all each other. 
And it is our role to combine these trends. 
>> So those are the technical linkages you see but we always, 
in this course, talk also about socio-technical systems. 
The institutional aspects? 
What other linkages on the institutional side? 
>> There are a lot of other dimensions such as the political dimension. 
I'm thinking of the CO2 agreement or the Paris Agreement about CO2 
emissions, which sets clear goals which are aligned with our company goals. 
Or I'm thinking about the economical dimension. 
There are market liberalization in the electricity market, 
such as we have observed in Germany, which will affect us. 
Or there are simply social, the social dimensions, we want to provide a good 
living quality, a good infrastructure, and services to our inhabitants and customers.
Start transcript at 2 minutes 35 seconds2:35
>> So, for an integrated utility like yours, I mean, 
what kind of opportunities do you see in linking the smart urban 
electricity system with the other infrastructures?
Start transcript at 2 minutes 49 seconds2:49
>> There are lot of trends now a days. 
I mentioned previously the centralization but 
there might also be the digitalization which has to be mentioned.
Start transcript at 2 minutes 59 seconds2:59
For example, we have this initiative together with the local 
trade association the Smart Regio Basel, Smart Region Basel. 
But we want to increase the sustainability, 
the living quality, the efficiency within the area of Basel. 
And probably there might be, in general, free initiatives at the beginning. 
So of course, we want to increase the smartness of our infrastructure, 
the interconnections between these infrastructures. 
But we might also want to provide data based on this infrastructure. 
We might also provide data, openly, which could attract new businesses. 
But, first idea might be to establish a new marketplace, 
a digital marketplace, where there can be services locally exchanged.
Start transcript at 3 minutes 52 seconds3:52
In order to keep the value chain within the reach. 
>> So in order to seize all these opportunities, 
what kind of challenges do you foresee?
Start transcript at 4 minutes 1 second4:01
>> There are a lot of challenges. 
There are financial challenges, there are regulatory challenges, 
there are challenges about competences. 
But probably, at the beginning, at the very beginning of this association, 
the goal should be to bring the people together to 
have a collaboration between all these actors and stakeholders. 
>> So you say that we should start with collaboration, but 
there are many actors that could organize collaboration. 
Why do you think a utility, an integrated utility like yours, 
is particularly well positioned to organize such collaboration?
Start transcript at 4 minutes 40 seconds4:40
>> Of course there a lot of stakeholders who can start such an initiative, 
however, and you can think about layers. 
So there is an infrastructure layer, 
there might be a data layer on top based on this infrastructure. 
And based on the data and the infrastructure you can provide
Start transcript at 5 minutes 0 seconds5:00
applications and projects with this information and data. 
So like a project or innovative layer, and of course, 
utility brings in a lot of infrastructure and a lot of data. 
So I think we are very well positioned to support this association.
Start transcript at 5 minutes 18 seconds5:18
>> Okay, thank you very much for your insights. 
>> Thank you very much.
Session 3: The infrastructure layer of smart urban energy systems

Welcome back to the course. 

Now, in this session, we are going to discuss the challenges that 
result from the transition to smart urban energy infrastructures. 
And we will do this in two steps. 
First we will put the urban energy infrastructures into context. 
And then we will outline the main actors that 
are involved in managing these infrastructures. 
Now let's look at the context. 
Now, we have already presented the three main drivers 
of smart urban energy systems. 
The decentralized generation, the intermittent generation, 
and then the changes in consumption due to the price signals. 
Now let's look at this in a little bit more concrete fashion.
Start transcript at 1 minute 3 seconds1:03
So, we have four things. 
First, we have alternative urban energy sources. 
We have talked earlier about wind energy per local wind production, 
local solar productions, but we should also mention 
geothermal energy that is becoming increasingly 
important in cities, as well as energy produced from waste.
Start transcript at 1 minute 32 seconds1:32
Then we have much more energy efficient consumption patterns. 
This results from more efficient houses, 
more efficient areas, more efficient factories, 
more efficient transportation, 
[COUGH] more efficient recycling and waste management. 
Third, we have semi or 
entirely off-grid electricity operations. 
That is, electricity operations that at times consume 
at times feed back into the urban electricity system. 
And finally, we have new emerging storage solutions that can be in vehicles, 
that can be in houses, that can be bigger, even in factories. 
Now all these four elements lead to
Start transcript at 2 minutes 38 seconds2:38
challenges in managing the urban energy infrastructure, 
the urban energy grid, something that is called smart grid today. 
So let us now look at the different actors that are involved 
in urban electricity systems. 
Now, we have already talked about the whole production chain from extraction to 
conversion to transmission, that would be outside of the city to distribution, 
storage, and producing and consuming inside the city. 
Those will typically be the urban energy infrastructure.
Start transcript at 3 minutes 17 seconds3:17
Now [COUGH] there are a series of actors that are involved here.
Start transcript at 3 minutes 23 seconds3:23
And these actors all interact with each other and 
ultimately have to be called ordinative. 
Let's start from bottom to top. 
So there are the prosumers, as we have said. 
The ones who consume electricity and produce electricity at the same time. 
Those can be households and industry.
Start transcript at 3 minutes 46 seconds3:46
Then we have decentralized electricity producers, who can be the same as 
prosumers, but they can also be producers on their own, 
in the sense of a waste facility that produces electricity. 
Then we have storage operators which can be transport operators or 
storage operators on their own. 
Then we have distributors, typically we have an urban 
electricity distributor but with off and semi-off grids. 
We may have new distributors that have to interact, that have to be coordinated.
Start transcript at 4 minutes 32 seconds4:32
But the challenge is not just limited to the city, because also the transmission 
system operator or operators, there may be several, are concerned. 
Namely, those are the actors that feed the electricity into the city, and 
at times may even take back electricity to be stored in one of the dams, 
as we have seen before. 
Then there are the centralized electricity producers that need to be coordinated. 
And finally there are the traders, the ones who fluidify consumption and 
prosumption of electricity by linking all the actors together. 
Now the challenge here is to manage these interactions and 
to coordinate all these actors among themselves. 
And digitalization is both the cause of this and the answer to this. 
It is thanks to digitalization that all these different actors can even emerge and 
play a role in smart urban energy systems. 
But it is also thanks to digitalization that these 
actors can now be coordinated and managed so 
as to make smart urban electricity infrastructures function.
Start transcript at 6 minutes 2 seconds6:02
Now, in the next session, you will hear from a colleague of mine at 
EPFL who is an expert on smart grids. 
Stay tuned.
Session 4 : interaction

Session 5: The services layer of smart urban energy systems

Welcome back. 
In this session we will talk about the smart urban energy services. 
In particular, we will talk about what these services exactly are and 
who can provide them. 
Let us look now at what these smart urban energy services exactly are. 
So we have already mentioned in session two the three 
main dynamics that are taking place in urban energy. 
The move from centralized production to decentralized generation, 
the move from plant production to intermittent generation, and then 
all these prices signals that relate to the whole automatization of this process. 
Now, there are four types of customers of such smart urban energy services. 
There are households, you and me. 
There are entire buildings with a lot of households in it. 
Then there are commercial or industrial areas, like for 
example, an airport or a shopping mall. 
And then there is another type of customer. 
Those are the distribution and 
transmission systems operators who will buy balancing energy. 
So here you have the three types of services, smart energy services. 
The first one very clearly attributable to the great 
operators is the balancing energy, the energy that this 
operators need in order to keep the grade stable. 
Then there are the services that relate to demand side management. 
At this point those are purely services in terms of electricity. 
Basically, you offer the services to households, buildings, commercial and 
industrial areas, in terms of managing their demand of electricity 
much more efficiently in relationship to price signals, for example.
Start transcript at 2 minutes 18 seconds2:18
And then a little bit broader are the smart and 
integrated urban energy services. 
Those are the services that now link the electricity, 
urban electricity system with other systems with the water system, 
with the transport system with the batteries for the car, 
with the waste, with the recycling. 
And also the same customers, households, buildings, commercial areas, 
can receive this kind of integrated, smart, energy services. 
Who are the providers of these services? 
Now, in the core we have of course as we have said the dynamics, 
the digitalization that favors all this. 
And you will see how that affects the providers. 
So typically, the traditional providers 
are the electricity distribution companies within a city. 
They can offer demand-side management to all the different 
customers that we have seen. 
And they can also to a certain extent offer smart and 
integrated energy services by venturing into other, into waste, into transport, 
for example, if they operate the charging station of the local bus system. 
Or if they operate some sort of batteries for shopping malls and 
other commercial areas, but those are legacy operators. 
Then we have urban utilities. 
By that we mean the type of companies that are not traditionally in 
the urban electricity business, but they are in our urban water distributors. 
Urban waste managers, urban public transport operators. 
And they can now offer these integrated energy services and 
offer also balancing services by linking the consumption patterns 
with the house, of the households and linking that to energy consumption. 
And then, there are what we call intermediaries. 
Those are new operators that have not been in the urban business at all. 
They basically produce devices or 
have information like telecom operators for example, 
they have information about your electricity consumption and 
they can manage that consumption and sale. 
The services, both to you as a customer or 
as an industrial area, and to the balancing, 
to the grid companies that need balancing energy. 
That is actually an interesting business model that we see 
appearing in many cities. 
But this is also possible, thanks to what we call peer to peer operators. 
That is also called energy commons or 
electricity commons where customers get together and 
do this kind of demand site management together 
sort of taking out the intermediaries themselves. 
Now, we can see newcomers in 
all of these areas, and so potentially
Start transcript at 6 minutes 11 seconds6:11
the smart urban energy services can be provided 
increasingly by operators that come from outside the city, 
operators that have no history in infrastructures. 
And I think that's the real novelty in smart, urban energy services.

Session 6: The data/digital layer of smart urban energy systems

Welcome back. 
In this session we will now talk about the urban energy systems data layer, 
that is the real novelty in smart cities, in smart urban energy systems. 
And we will do this in three steps. 
Fist, how to think this data layer. 
Then the two visions that one can apply to this. 
And then, thirdly, the questions that these two visions raise.
Start transcript at 39 seconds0:39
So, let's first look at how to think the urban energy system's data layer. 
Now this picture we have already seen in week one, 
where we said that the digital or the data layer is the novelty 
of smart cities or smart urban energy systems in this case. 
Now first, there are data being generated
Start transcript at 1 minute 9 seconds1:09
and these data are basically generated from three different sources. 
There are data about user behavior. 
There are data about electricity or energy generators behavior. 
How much is consumed? 
How much is produced? 
And then very importantly, there are data about the behavior of the grid, 
in this case the distribution grid, as a function of user and generator behavior.
Start transcript at 1 minute 42 seconds1:42
On the basis of this data, 
there are smart urban energy services providers. 
And this looks like this, the services as we have seen in the previous session 
are offered to different types of customers, 
and there are different types of services that are being offered. 
But all they have in common is that they use the data that has so been generated.
Start transcript at 2 minutes 16 seconds2:16
Now, let's look at the two visions that are possible for this. 
And the first vision, really pertains to the,
Start transcript at 2 minutes 28 seconds2:28
it's an integrated view of data generation and data usage for services provision. 
This is typically the vision that is held by 
electricity utilities that have the data about generation and 
that also want to provide the services on the basis of this data. 
There may be some related companies that have access to the infrastructure but 
basically here division is that this is integrated. 
All the data generation and services are integrated. 
And the different companies that own this data and 
offer the services are competing against each other not sharing this data.
Start transcript at 3 minutes 21 seconds3:21
The second vision is totally different in the sense that there are data 
platforms and the different data generators 
feed all these data into the platforms and then the services providers 
take the information from these platforms and develop 
different types of services to different types of customers as a result of that.
Start transcript at 3 minutes 52 seconds3:52
Now this leads to very different questions.
Start transcript at 3 minutes 58 seconds3:58
The first question on the left side, if we have integrated data generation and 
services, this basically considers data as a good.
Start transcript at 4 minutes 13 seconds4:13
It's something that somebody has produced, 
that somebody uses in order to create services. 
And basically the question here is: Who owns the data? 
The users? 
The utility? 
The device producers, for example. 
And this raises the question of regulation. 
But from this point of view, regulation is basically a competition regulation. 
You need to make sure that there is sufficient competition here and 
that ownership rights are respected in this type of competition. 
No market distortion, no tendency to monopoly, things like that.
Start transcript at 4 minutes 58 seconds4:58
On the other side, if we have data as a shared platform, 
the question is, who owns this platform? 
Or not even necessarily owns the platform, but who manages this platform? 
And in terms of regulation, the approach also is totally different because 
you will end up with some sort of infrastructure type regulation, 
access to the data, availability of the data, transparency of the data,
Start transcript at 5 minutes 31 seconds5:31
prices of the data, all question of that sort. 
So we can see that there are really two different types of visions leading to two 
different types of regulating, dealing ultimately with this data. 
Now that we have discussed the three different layers, 
let's ask Schneider Electric how they see the smart urban energy system. 
So stay tuned.
Session 7:
Welcome back. 
Now to conclude this second week, we are gong to talk about 
the managerial and policy takeaways 
from our discussion about smart urban energy systems. 
Let's first talk about the managerial takeaways. 
And we have structured this along the three layers 
and the main relevant dimensions. 
So the first big challenge for managers 
from a technological perspective is of course 
the question of great stability. 
Because of intermittency, 
because of renewable decentralized production, 
because of price signals and increasingly volatile price signals, 
the whole grid stability becomes, I would say, 
the main challenge for urban, smart urban energy systems managers.
Start transcript at 1 minute 2 seconds1:02
Then from an economic perspective, 
there is the whole question of allocating the cost 
of moving to smart urban energy systems. 
The upgrading that need to be done, 
who ultimately pays for what? 
On the services layer, it's normally an economic question 
in the sense of these smart urban energy services, 
what are the underlying businesses of these services, 
who will pay for these services, 
who wants to pay for the services, 
is there a market for the services? 
And more from a social perspective, 
this is the question of user acceptance 
or ultimately, user uptake. 
Will they use or buy these kind of services? 
On the data layer, there are technological questions 
in terms of status standards, 
interoperability of data and questions of data security 
that managers have to face. 
And finally, also from an economic perspective, 
this is the whole question of the pricing of the data. 
What is the right pricing of this data 
so that ultimately the market will uptake the services 
and at the same time, the cost for upgrading, 
for moving into a smart urban energy systems are covered.
Start transcript at 2 minutes 34 seconds2:34
So let's now look the takeaways for policy makers 
along the same structure as previously; 
the different layers, the different dimensions. 
I think the first challenge for policy makers 
are the whole question of legacy cost. 
We have traditional energy systems, big power plans, 
transmission grid, costly transmission grids, 
and as a result of smart urban energy systems, 
more independent may be less consumption, 
the question comes up as to who bears these legacy costs 
and how to finance these legacy costs. 
Then, more from a jurisdictional perspective, 
it is of course also the question of the relative independence 
of an urban energy system, 
We know that all energy and electricity systems 
are interconnected with each other 
and so the question, the policy question here 
is really what is the relevant entity? 
Is it the city in itself, but we know that the city 
is a political entity and often from a system perspective 
does not necessarily make sense. 
May be more the metropolitan area here.
Start transcript at 3 minutes 57 seconds3:57
On the services layer, 
and from an economic perspective, there is the whole question 
of regulating certain services 
and certain prices of services, for example, 
we have seen that balancing services 
is one of the smart urban energy services 
that is being offered, but balancing energy 
is heavily regulated, and so there is policy action 
and policy is challenged also in this area. 
From the social perspective, there's the whole question 
of Universal Services Obligation. 
Is there a minimum amount of energy, smart urban energy services, 
that the citizens are entitled to, 
at what price, how affordable is it, 
when can they be cut off, for example? 
And then on the data layer, there are a series 
of policy questions 
The question from a technological perspective, 
it's also the question of access to data, 
rights of access to data. 
On economic, from an economic perspective, 
it's the whole question of data ownership. 
Who owns the data? 
What are the prices for that data, 
and then, of course, the whole question of financing 
the different digital infrastructures 
that have to be put into place. 
On the social side, I think the big policy challenges 
are privacy, which of course, will affect 
whether the users will ultimately use the services or not. 
And to conclude, I think the most fundamental questions 
that policy makers have to ask themselves 
is whether they want consider in an urban system 
that the data on smart urban energy data as a good, 
as a commercial good, or as a platform, 
and this kind of question will have the answer 
to this kind of question, 
will have huge regulatory implications 
which then policy makers will have to follow up on. 
To conclude this second week, 
we have seen the three main layers of smart urban energy systems. 
We have talked about the infrastructure layer, 
the services layer and the data layer 
and have illustrated this with a series of presentations 
and interviews with experts. 
Then, we have seen what the main managerial and policy 
takeaways are form this. 
Now, in the next week, we will talk about 
smart urban transportation systems. 
So stay tuned.