Annual utility revenue opportunities in smart cities is expected to exceed $100bn by 2027 with areas such as EV charging and smart street lighting offering new streams
Utility companies are integrating with smart cities to generate new revenue opportunities.
The annual utility revenue opportunity in smart cities is expected to grow from almost $45bn in 2018 to more than $100bn by 2027, a new study finds.
Utility Opportunities in Smart Cities from Navigant Research also reveals that there remain key barriers to utiities such as regulation and operational challenges.
Smart city applications such as electric vehicle (EV) charging infrastructure and services, smart street lighting, smart buildings, distributed energy resources (DER), and smart city communication networks all offer significant new business opportunities for utilities.
“With increasing energy efficiency and utilisation of DER cutting into their bottom line, utilities must position themselves as innovators and generate new revenue streams to remain profitable in the 21st century,” said Ryan Citron, senior research analyst with Navigant Research.
“Smart cities represent a significant opportunity for utilities to develop new business lines, extend their partner ecosystems, and establish new bonds with local communities.”
While utility interest and involvement in smart city deployments is increasing, several key barriers to greater market participation remain, the report states.
“Smart cities represent a significant opportunity for utilities to develop new business lines, extend their partner ecosystems, and establish new bonds with local communities”
These barriers include regulatory challenges, utility business culture and organisational structure, technical and operational challenges, and the lack of a business case for some smart city applications.
The configuration of these challenges is unique to each utility given its history, location, culture, and current asset base. However, there are many lessons to learn from early leaders already establishing their footprint in the smart cities market, said Navigant.
The study focuses on smart city use cases such as EV charging, smart street lighting, smart buildings, DER, and smart city communication networks. It includes an assessment of regional trends, utility case studies, and key barriers and opportunities in the market. Global market forecasts, segmented by region and smart city technology type, extend through 2027.
Navigant’s focus is on markets and clients facing transformational change and significant regulatory or legal pressures. The company primarily serves clients in the healthcare, energy and financial services industries.
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