Buildings currently account for 40% of global emissions, according to the International Energy Agency. But that does not have to be the case in the future. What if I told you that - by taking advantage of existing technology - we can create smart and connected buildings which produce rather than consume energy?

This is indeed possible and there are plenty of examples, ranging from the Danish city of Aarhus, where water management is used to create heat for buildings and energy is sold back to the grid, to supermarkets reducing peak loads and steel plants providing entire cities with heat.

The Ellen MacArthur Foundation, through its own research, has found that smart energy management technologies and other circular economy initiatives could help us to create buildings that generate rather than consume power within the European Union. Also, their 2015 report, ‘Growth within: A circular economy vision for a competitive Europe’ indicates that the energy use of buildings can be reduced by as much as 20-40 % while creating growth at the same time.

In any ambitious transformation of our energy systems, we will need to rethink how buildings are integrated and connected, as well as how we collaborate. We also need to rethink the concept of “Smart Cities”. I would argue that the next big change will come from new ways of collaboration and seeking new levels of energy efficiency. Connected buildings are central to this.

Let’s start from the beginning

The concept of connected buildings dates back more than 5,000 years, when civilizations in the Indus Valley prototyped and installed sewers and provided households with fresh water. Later on, Greek and Roman city planners provided sophisticated access to fresh water, even transporting it over great distances. Why does it matter?

It matters because water and energy are intrinsically linked, and without fresh water and the effective treatment of waste-water, smart and livable cities are not achievable. Today, water and waste-water treatment is one of the most energy intensive sectors. So water, and waste-water treatment, was one of the early indicators of connected cities – and a key enabler for sustainable urbanisation.

In Manhattan and in neighbouring New jersey in the 1880s, Thomas Edison and partners pioneered what later became electricity grids. By connecting water and electricity, the modern city was born.

We have known for a long time that when it comes to smart and sustainable cities, meeting our demands for water, sewers, heating, cooling and electricity is most efficiently served collectively.

And here you might think that providing buildings with online connectivity is the next big thing. It isn’t. The next big thing is, in fact, to rethink and connect water, heating, cooling and electricity in a two-way intelligent conversation. And yes, online technology will definitely help. But it is merely an enabler. In order to seize the opportunity, we need to change our mindset and focus on creating systemic cost effective solutions by collaborating across sectors.

Hence, in order to reap the benefits of truly connected buildings. We need need three components:

  • Integrated water, waste-water, heating, cooling and electricity in one system
  • Flexibility through intelligent pricing signals and demand response
  • Most importantly, we need to connect people across sectors

Let the water utility produce heat and electricity

Allow me to share examples of how we can dramatically improve our overall efficiency through truly connected buildings by using existing technologies, and at the same time integrate high shares of fluctuating energy from wind and solar.

Water and waste-water facilities represent 25-40% of total power use in a city. In the city of Aarhus, they operate the world’s most energy efficient water utility. The waste-water treatment facility produces 90% more energy than what is needed to fuel the entire operation. Waste-water in Aarhus is not just energy efficient but also a net energy producer. It’s a power producing waste-water plant!

This is only possible through true two-way connectivity – whereby Aarhus Water can provide neighbouring buildings with surplus heat and at the same time sell electricity to the grid.

But it doesn’t stop there. Imagine that you take the connectivity even further and synchronize the production and distribution of water and the waste-water treatment with the peak loads in the grid and fluctuating energy like wind. In Denmark, Germany, Spain and parts of the US, with increasing wind and solar energy use, water infrastructure can function as storage and demand response.

Supermarkets should be the backbone of smart cities

Another grand opportunity lies in the thousands of supermarkets in our cities. Keeping our food cold or frozen requires a great deal of energy; in Germany it is estimated that 3% of all electricity is used for cooling purposes. Furthermore, all this cooling produces significant amounts of heat, and recovering that heat constitutes a huge untapped potential. Several existing projects have shown that heat recovered from supermarkets can easily supply the supermarket itself and many neighbouring buildings with heat. But it requires that the buildings are connected.

In fact, the potential is even bigger: modern cooling equipment also offers demand response capacity and can help reduce peak loads and increase the efficiency of fluctuating energy sources like wind and solar. Working with demand response incentivises a true collaboration between the supply side and the demand side. For supermarkets the gain is a significant reduction of their energy bill. For the grid operators and energy producers the benefits are reduction in peak loads through reduced cooling demand during peaks, storage of renewable energy in terms of increased cooling when there is an abundance of wind and solar – all together adding flexibility and efficiency.

The cooling battery in supermarkets makes the uptake of wind and solar more efficient. From a technology point of view, it is fairly straightforward but it requires connectivity, collaboration and a future-proof regulatory framework.

The opportunity to create efficient cities

When it comes to residential buildings and office buildings, using smart energy technology to foster connectivity will increase the integration and balance of various energy sources, from renewables, geothermal, wind and solar to conventional energy sources. This will add more flexibility to the overall system; and improve overall efficiency whilst reducing peak load. Reducing peak load through connected buildings and supermarkets can save the modern city enormous costs up-front and on a day-to-day basis.

We need to ensure that new buildings are equipped with state of the art heating, cooling and ventilation technology. This also includes technology that caters to the daily rhythm of the buildings inhabitants – ensuring that we have the right temperature and comfort when we are home or at work and also not wasting energy on heating and cooling when the building is not used. Adding online services and monitoring will increase the comfort and ease of use.

From a macro perspective online connectivity can also assist in monitoring energy performance, detect malfunctions and give early warnings that maintenance is needed. This will save energy and money. This will also enable new business models where the energy savings can be packaged and monetized. The same goes for big data, allowing for better and smarter planning of our water and energy systems.

Smart cities mean smart thinking

Connected buildings equipped with smart technology will help reduce peak loads via demand response contracting, and the smart connected building at as an incentive for tenants. But, we need to incentivize a new thinking where we keep the radiators, air-conditioners, freezers and refrigerators, dryers running when there is an abundance of wind and reduce their usage when we are short on energy – this can be done building by building, across sectors like supermarkets, schools, office buildings, but also managed across an entire city.

The opportunities are enormous. Through smart and connected buildings and strong collaboration we can create more efficient cities. This requires that we are not solely focusing on the connectivity offered by the internet, but on a truly smart use of water, heating, cooling and electricity. This will help cater for a future with fluctuating energy supplies and a more fragile base production.

Since Thomas Edison revolutionized the energy sector we have come a long way in providing more energy and increased our efficiency enormously. Taking the energy sector to a new level of efficiency, however, will require a new type of governance.

Smart cities arise from smart thinking.

For more information, read our reports, Top 10 Urban Innovations and Inspiring Future Cities & Urban Services.