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Cover Story | March 2016

Powering Smart Cities

The Smart Cities Mission that the Centre embarked upon is set to change the face of cities in the country. But this is a humongous task calling for a 3600 vision and effort.
Big Indian cities are known for their chaotic traffic, lethargic administrations, un-attended waste dumps, legacy power infrastructure and frequent power cuts. We have a prime minister who thinks big, this time he has dreams that are even bigger, building or retrofitting 100 cities into smart cities in the next 10 years, that is, by around 2025.

The Smart City initiative would be a game changer in raising the standard of infrastructure in the cities. Can this become a reality? Experts say, ´yes´, with some caveats, including that beseeches holistic approach and realistic targets.

Unlike its preceding generations, the growing population is also shifting to top tier cities of the country, giving rise to new megacities estimated to generate 80 per cent of economic growth, with potential to apply modern technologies and infrastructure, promoting better use of scarce resources. With rapid expansion of urban areas, cities need to become intelligent to handle this large scale urbanisation. This is driving city operators to look at smarter ways to manage complexities, increase efficiencies and improve quality of life. Today, we need cities that monitor and integrate infrastructure to better optimise resources while maximising services to its citizens.

As per estimates, about 25-30 people will migrate every minute to major Indian cities from rural areas in search of better livelihood and better lifestyles. With this momentum, about 843 million people are expected to live in urban areas by 2050. To accommodate this massive urbanisation, India needs to find smarter ways to manage complexities, reduce expenses, increase efficiency and improve the quality of life.

The concept of smart cities revolves around internalising some of the modern urban features like smart energy, smart transport, smart water and waste management, e-governance and smart buildings, to say the least. With each one of these subjects calling for expertise par excellence, the dream of turning metros into smart cities itself looks a tall order, but it is not an impossible task. Even as some are discussing about the feasibility of smart cities initiative for India, many others, including foreign investors, are getting ready to invest in this dream and turn it into a reality.

Future cities
The Prime Minister, Narendra Modi´s
vision ´Digital India,´ has set an ambitious plan to build 100 smart cities across the country. Announcing the scheme, Modi said, ´Cities in the past were built on riverbanks. They are now built along highways. But in the future, they will be built based on availability of optical fibre networks and next-generation infrastructure.´

The Centre allocated Rs 70.6 billion (US$1.2 billion) for Smart Cities in Budget 2014-û15. Given the sheer scale of the development plan, the public resources would largely be insufficient and the government is working on envisaging new financing routes to boost the program.

Speakers at the third Smart Cities Summit 2016, held in Mumbai, lauded the Central government´s initiatives on smart city vision and the pace at which it is being taken forward. The event, organised under the auspices of Smart Cities Council India (SCCI), witnessed participation from over 70 distinguished speakers and a high-powered, 50-member Smart Cities Trade Mission led by Bruce Andrews, Deputy Secretary, US Department of Commerce, over 40 mayors, commissioners and urban officials from India and over 300 delegates.

On June 25, 2015, the mission was announced, in August the names of 100 qualifying cities were announced, in September the empanelment of consultants took place and in December, 97 of the 100 cities submitted their city development plans for the smart cities challenge. Further, in January 2016, the names of 20 winners have been announced. To ensure at least one city from each state, a fast-track channel has been created for 23 cities provided they resubmit their revised plans before April 15. ´The unprecedented pace with which the government is moving reflects the seriousness with which it is pursuing the task´, said Pratap Padode, Founder Director, SCCI.

Power
Nothing works without energy in today´s scheme of things, particularly in any urban set-up. And this accords prime importance to ensuring a sustainable power supply to make cities smarter and that is the starting point. So, how will India power these 100 smart cities, is a critical question.

Sachin Jain, Co-Founder, Oriano Clean Energy said, ´Energy is a key component of a sustainable plan for a city. When you think of a city, use of fossil fuels for generating electricity should be completely eliminated. Renewable energy should be the key for power generation. For example, 10 per cent of the energy could be supplied by solar energy. Transmission and distribution (T&D) losses can also be reduced by smart monitoring.´

Dhawal Pandya from Algo Engines, says that renewable energy should be available on tap, like Software as a Service (SaaS). The rooftops of buildings can be used to generate solar energy. India´s choices abound in conventional energy sources like coal, oil and gas, and in renewable and clean energy sources like solar, wind, hydro, biomass based electricity and nuclear energy.

In fact, in Germany, around 80 per cent of solar energy is generated from rooftops. The government initiatives towards increasing solar generation will help this cause. When the city master plan is being prepared, a society can put up solar panel, and it can be fed into the grid. One may not consider carbon reductions to pair well with economic growth for a country so heavily dependent on coal. India´s power generation is dominated by coal with about 70 per cent share. But an effort should be made in the direction of reducing carbon footprint, particularly in urban areas.

Monitoring & saving
Smart energy systems include installation of smart meters to monitor consumption levels at any particular time for enhancing demand response and to curtail distribution losses, renewable energy generation will be appropriate. It will also help in keeping the pollution levels under check, in improving citizens´ health and thereby improving the living conditions in the urban conglomerates.

Piyush Goyal, Union Minister of State (IC) for Power, Coal, New and Renewable Energy says that the government was thinking of making it necessary that every new connection given should have a smart meter, and in the days to come India should be totally ´smart´ in every sense of the word. In response to a media query on power theft at ELECRAMA 2016 expo (held in Bengaluru in February 2016) recently, Goyal told Power Today, ´If you go to the exhibition, some wonderful equipment is on display like smart meters. I had originally thought, we will install about 3.5 crore smart meters at users who consume more than 200 units per month. But after seeing them, today I am feeling that we should change 25 crore legacy meters to smart meters in this country.

Smart building blends engineering, architecture and technology to incorporate sustainable design features and energy performance metrics. Carbon dashboards are installed throughout the city showing energy consumption, raising awareness and putting staff in a position to improve a building´s energy performance.

Even as the Smart Cities idea is being mooted by the Centre, Indian industry is gearing up to provide automation and integration solutions to make life easier for the people. Innovations that marry the digital and energy disciplines are widespread, including technology that controls the energy consumption of buildings.

Referring to the focus of L&T Electrical and Automation division, Pradeep Kumar Bajaj, executive vice-president of the division says, ´We believe a lot more smartness, integration and capability, lot more solution-oriented approaches have to happen to give customers more empowered solutions and I think to me, that is the direction. Now empowerment can go down to the last man, for example, we have only a single tariff applicable all through the day and not dual tariff and no peak time tariff. If the government changes the metres and gives you this approach on your mobile phone then wherever you are you can use time of the day metering. Now it is empowering you to choose what you want to do.´ This time-of use pricing will encourage end-users to use energy in off-peak times when it is cheaper.

L&T has unveiled at ELECRAMA the state-of-the-art SCADA solution called SmartComm, which is a communication or networking or integration platform of multiple devices. It makes electrical devices smart, that means remote command, remote switch on, remote switch off, whole lot of monitoring parameters. ´So, it is more like empowering customer with the data so he can pick and choose from a control room or from a mobile phone or from an Ipad, depending on how he would want to control his plant. So what we have tried to do is capability of the system and products which can be operated this way in a very smart and seamless manner,´ claims Bajaj. This software connects a range of devices - meters, MCBs, MCCBs, ACBs, relays, AC drivers, soft starters, I/O modules, building automation devices and sensors.

It is also scalable and customisable and has in-built drivers for multiple industrial communication protocols. Its areas of application include energy management; integration, monitoring and control; building management solutions, sub-station automation, smart grids, smart cities and renewable resource management.

Information Technology
India is currently at the beginning of a revolution enabling the aggregation of energy production and its consumption, and it is rapidly gaining momentum. The burgeoning field of smart cities and the Energy 3.0 era will be made possible by two technological breakthroughs, close to root of the concept of ´internet of things´ (IoT): more efficient and miniaturised sensors and networks that interconnect all objects to one another.

Anil Bhasin, senior vice-president, Havells India Ltd says, ´Implementation of smart cities initiative involves many things, including automation and integration at various levels and increasing comfort level of people living in urban areas. And in automation one good thing is our focus is on energy monitoring and saving at home too.´ These new technologies will make possible energy self-production and customisation of energy usages and consumption.

Havells has developed a device integration and monitoring system through which one can monitor and control various household gadgets or devices. ´It can enable one to operate any of his/her household devices like fridge, air conditioner, washing machine etc. It can also enable opening and closing of main entrance door too. This can also be applied to street lights - to switch them on or off. Earlier for street lights you had to manually go and switch it on and off. If he had to go on a holiday then the street lights would not even be switched on for the entire night. It is still happening. This solution can solve the problem,´ Bhasin added.

Industrial corridors
The Smart City plan is part of a larger agenda of creating industrial corridors between India´s big metropolitan cities in India. These include the Delhi-Mumbai Industrial Corridor, the Chennai-Bangalore Industrial Corridor and the Bangalore-Mumbai Economic Corridor. It is hoped that many industrial and commercial centres will be recreated as Smart Cities along these corridors. The Delhi-Mumbai Industrial Corridor (DMIC), which is spread across six states, seeks to create seven new smart cities as the nodes of the corridor in its first phase.

Most of these corridors are developed by the Indian Government in collaboration with foreign governments who are keen to find their domestic private enterprises new avenues of investment. Japan is helping India develop its smart cities by investing US$4.5 billion in the first phase of the DMIC project through lending from the Japan International Cooperation Agency (JICA). JICA has also taken up master planning for three ´Smart Cities´ - Ponneri in Tamil Nadu, Krishnapatnam in Andhra Pradesh and Tumkur in Karnataka - in the Chennai-Bangalore Industrial Corridor. The UK is collaborating with India for developing the Bangalore-Mumbai Economic Corridor project with the help of private companies from Britain.

Finance
Speaking at an event in New Delhi in February 2016, Union Urban Development Minister Venkaiah Naidu said that Rs 6 lakh crore investment was required from private sector over and above the central and state commitments, for building 100 smart cities, which is a small chunk when compared to a total of Rs 73 lakh-crore required from private sector for urban infrastructure sector in the next decade or two. The other components are basic urban infrastructure, which requires Rs 56 lakh crore and building two crore houses for urban poor, which needs another Rs 11 lakh crore.

The minister pointed out that since there is lack of resources at both Central and state government levels, private sector investments and PPP are the alternative sources of resource mobilisation to meet the needs of urban infrastructure in the country.

At stake is the financing provided by the centre and state to the tune of Rs 200 crore per year, USD $35 million for next five years. Most plans submitted have ranged between project costs of Rs 1000 crore to Rs 5500 crore.

Sumit Banerjee, Chairman, ASAPP Info Global, raised a pertinent question, if the interest in the Smart Cities mission was spreading beyond the vendors and contractors to actual long-term investors. ´Projects have to be bankable, because therein lies the key in ensuring the economic viability of infrastructure projects,´ Banerjee said. His argument was that the country does not boast a good track record of ensuring their economic viability and that the infamous governance gap that exists in India needs to be plugged. Nevertheless, he said the special purpose vehicle (SPV) structure envisaged for the project does inspire confidence.

NDS Chari, Director, SREI and BNP Paribas, saw gradual maturity in India with respect to investors, but admitted that there is a need for a new set of investors for long-term infra projects.

Speakers at the Smart Cities Summit suggested a few key points that the government can consider while implementing smart city projects in the country. They upheld the need for level playing field and proper eco-system pattern and doing away with the age-old regulations and procedural wrangles in the way of making India smart. The other suggestions for the success of smart cities projects include, financial sustainability and innovative revenue models; proper utilisation of infrastructure and backup thereafter; identifying the limitation of technologies, and the need for regular engagement of civilians.

Conclusion
A few smart cities are already coming up across the country, including Kochi Smart City, Gujarat International Finance Tec-City (GIFT) in Ahmedabad, Naya Raipur in Chhattisgarh, Lavasa in Maharashtra and Wave Infratech´s 4,500-acre smart city near New Delhi.

Infrastructure development in India has a debilitating element to it. At first people decry the creation calling it a total waste of resources. They will also decry the charges sought for using the facility. Just when the courts and the power that be get ready to kill the project will there be a sudden surge of use for the facility. This is an avoidable trouble by taking the citizens into confidence about the infrastructure projects at the project planning stage itself and ensuring their participation. Smart Cities will have a direct bearing on citizens´ lives and they can easily determine whether the facility being offered is needed and at what price. General consensus has to be evolved on the projects to be undertaken and transparency in allocation and implementation of the projects should be ensured.

User charges are always a challenge in India, though it is a must for the long term benefit of the users and the survival of the institution/service provider. The government should evolve a country-wide policy on this sticky issue.

The government, in consultation with the states, should evolve robust standards for implementation of smart cities projects giving importance to the time-tested and upgradable technologies and their integration and automation. It should ensure that purchase or upgrade decisions should be taken on merit and nothing else. Usually, there are a lot of shortcomings on the part of the government in this regards in the past, which can be plugged.

Though the special purpose vehicle model suggested by the government has a lot of takers among experts and investors, public-private partnership model has to be evolved as another and potential alternative for funding long-term projects.

Smart Cities Programme - A few components
1.Smart Governance: Investments of about US$1.2 trillion will be required over the next 20 years across areas such as transportation, energy and public security to build smart cities in India. Highlights:

  • US$1.2 billion allocated for smart cities and FDI norms relaxed
  • US$83 million allocated for Digital India Initiative
  • PPP Model to be used to upgrade infrastructure in 500 urban areas
  • Smart City projects to create 10-15% rise in employment
  • Ministry of Urban Development has plans to develop 2 smart cities in each of India´s 29 states
  • Delhi Mumbai Industrial Corridor Development Corporation Ltd (DMICDC) plans seven ´smart cities´ along the 1,500 km industrial corridor across six states with a total investment of US$100 billion

2.Smart Energy: Three crucial dimensions of smart energy systems are:

Smart Grid

  • Electrification of all households with power available for at least 8 hours per day by 2017

  • Establish smart grid test bed by 2014 and smart grid knowledge centre by 2015

  • Implementation of 8 smart grid pilot projects in India with an investment of US$10 million

Energy Storage

  • Addition of 88,000 MW of power generation capacity in the twelfth five year plan (2012-17)

  • India needs to add at least 250-400 GW of new power generation capacity by 2030

  • The Power Grid Corporation of India has planned to invest US$26 billion in the next five years

Smart Meters

  • India to install 130 million smart meters by 2021 3.

Smart IT & Communications: Information & Communications Technology

  • Cloud computing will evolve into a US$4.5 billion market in India by 2016

  • Broadband connections to 175 million users by 2017

Security and Surveillance

  • Under the flagship ´Safe City´ project, the Union Ministry proposes US$333 million to make seven big cities (Delhi, Mumbai, Kolkata, Chennai, Ahmedabad, Bangalore and Hyderabad) to focus on technological advancement rather than manpower Disaster Management

  • The Government of India and World Bank signed US$236 million agreement for reducing disaster risks in coastal villages of Tamil Nadu and Puducherry

4.Smart Buildings:

  • ´India is expected to emerge as the world´s 3rd largest construction market by 2020, by adding 11.5 million homes every year

  • ´The Intelligent Building Management Systems market is around US$621 million and is expected to reach US$1,891 million by 2016

  • ´Smart Buildings will save up to 30% of water usage, 40% of energy usage and reduction of building maintenance costs by 10 to 30%

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