HomeChannelsNews“Let’s be clear: smart cities are expensive” – how Cardiff made the tech add up

“Let’s be clear: smart cities are expensive” – how Cardiff made the tech add up

Cardiff, the capital city of Wales, has just upgraded 18,000 street lights in its city centre. The new lanterns are hugely efficient, and supremely smart. And yet the business case for them, or for their ‘smartness’, at least, is hardly straightforward.

Indeed, Cardiff’s bright city lights, and their intelligent operation, capture perfectly the ultimate challenge for smart cities, at large – how to pay for the gear in the first place. This is the blocker, after all. Because the public sector is over-run and cash-poor, and, on a spreadsheet, smart cities do not add up.

But Cardiff’s experience with smart street lighting also describes how cities, everywhere, can start to approach the gnarly challenge of funding new digital projects.

Matt Wakelam, in charge of planning and transport at Cardiff City Council, assembled the original case for the city’s street-lighting upgrade. “Let’s put it on the table: smart cities are expensive. A lot of it is hard to make a return on. It’s intangible – you can’t get a hold of it,” he says.

He talks about the ‘loops’ on the city’s traffic signals, aligned to ease traffic flow. “It is great for the city. But for my department, which has paid for the system, there’s no financial benefit – apart from the fact citizens are happy because the traffic lights work in a magical way.”

The latest street lighting is different, of course. The business case – for the upgrade of the bulbs, alone – is plain. The standard line from lighting companies is cities will save about 50 per cent on energy costs by switching to efficient LED lights, and make their money back in a couple of years.

Cardiff has spent £6 million already on overhauling 18,000 street lights. It has 42,000 in total; the first tranche are scattered around the city centre, and on key roads, on eight-metre poles, or higher. It is turning its attention to its street lighting in residential areas next. Signify, formerly Philips Lighting, has been handed the work.

But the trickery comes with the central management system (CMS), also from Signify. Cardiff paid £800,000, on top of the £6 million, to connect its network of 18,000 LED street lights, each with a 2G SIM, to a back-office control platform. This system makes the lighting ‘smart’, and gives the authority control.

“Every light talks to me now. I can sit at my computer, and turn them on and off, dim them in the morning, know if there’s a voltage surge. I can see if a light has gone out, and if one is likely to go out,” says Wakelam.

But the financial impact of all of these new lighting controls – the dimming, the early warnings, the quick fixes – are hard to quantify. “If you procure it right, you’ve got a system that controls the lighting for 20 years. So the cost can be rationalised over a longer period. But the CMS is not the not the driver for savings – and trying to make that £800,000 back is not straightforward.”

Indeed, he suggests the city would not have been able to make the case for the CMS if it had already switched to LED lighting, and wanted only to cover the addition of adaptive control to a working system. In the end, the council only bankrolled it because of the energy savings from the bulb swap.

“Changing to an LED light gives me a tangible benefit. I’ve gone from the 150-200 watts to the equivalent of 60 watts on the lantern. I can see my energy bills coming down. The only way to make the CMS add up was to bundle it with the LED because that’s where the saving is. If we’d already transitioned, it would have been much harder to make the case.”

This is an excerpt from a report and webinar, titled How to buy / sell a smart city – procurement models to make every city smart, to be published on November 5. Sign up to the Enterprise IoT Insights newsletter here to get the full report, including the full story from Cardiff, as well as further news updates and features. Register for the webinar here to hear from speakers from AT&T, Cisco, the City of Cardiff, Cradlepoint and Navigant.

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