With more cities embracing environmental protection and investments increasing in technologies that curtail energy consumption and greenhouse gas emissions, the “cleantech” market opportunity is enormous.
Roland Busch, CEO of Infrastructure & Cities sector at Siemens AG, explained to VIR why his company sees profits in creating a more energy-efficient world.
Why do cities play a central role in sustainable development?
Cities have always set the pace for human progress. From ancient to contemporary megacities in cities have traditionally been the centre of art, culture, trade, craftsmanship, science and technology.
Two hundred years ago, only three per cent of the world’s population lived in cities.
Today, due to rapid urbanisation, the total has grown to over half, and the trend is accelerating.
According to statistics from the United Nations, urban population has risen by 29 per cent in the Asia-Pacific since 2010, more than any other region. In Southeast Asia alone, an estimated 45 per cent of the population live in urban areas in 2010, and at 2.2 per cent per year, South East Asian countries boasts one of the fastest urban population growth rates.
Urban problems have also kept pace with this growth. Even though 50 per cent of the global economic output is generated in the world’s 600 biggest cities, the negative effects of progress have also been evident in these centres, namely noise, limited space, environmental pollution and congestion. Cities now account for two-thirds of global energy demand and up to 70 per cent of the world’s greenhouse gas emissions.
In view of the steady growth of city dwellers, coupled with recent urban disasters in the region, achieving sustainable development is imperative.
To secure our continuing development, we must substantially reduce our consumption of energy and resources and address issues such as transportation and logistics, building technology, as well as water and waste management. And we must begin these efforts in cities.
Buildings now use about 40 per cent of the world’s energy, but cleantech systems can dramatically reduce that figure and save money
How is it meaningful to the business community?
Many cities around the globe have acknowledged this fact and have set goals for protecting the climate. This includes cities in the fast-developing region of South East Asia, where for example, has pledged to reduce its CO2 emissions by 26 per cent from the current 2.1 gigatons by 2020, and may even achieve 41 per cent with international support. Neighbouring Malaysia also aims to cut emissions by 20 per cent by 2020.
These goals are not utopian. Energy consumption and CO2 emissions can already be drastically reduced with today’s technologies. Buildings, for example, use roughly 40 per cent of the world’s energy, and intelligently integrating lighting, data, climate and security systems can scale back this consumption by up to 40 per cent.
Consultants at Booz Allen Hamilton estimate that planned worldwide investments by communities in the development and expansion of road and rail links, communication networks, water and power supplies will amount to about 27 trillion Euros over the next 20 years. The potential for environmental technologies, as even a modest part of this solution, is clearly enormous.
Having recognised the far-reaching potential for urban infrastructures, many companies are looking at these markets. For Siemens, which established a new infrastructure and cities sector in 2011 to offer cities solutions for mobility, environmental protection and energy saving, the addressable markets for urban infrastructure investments total around 300 billion Euros a year.
But providing technologies is not enough?
Yes, the application and optimised integration of existing technologies are not enough. There also needs be developing visionary ideas for the future of cities.
Today, technological advancements have made solutions such as smart grids an important tool in promoting green urban growth. Today’s technologies can set many levers in motion to move cities toward eliminating their CO2 emissions.
If urban developers rigorously adopt environmental technologies, they could achieve a viable balance between growth and the sparing use of resources. And this even helps save costs over the long term. Moving into the future, cities should consider investments in green technology that not only reduces energy usage and emissions, but are also cost-effective.
Offering tailored solutions means not only exploring new technical paths, but providing innovative and flexible financing options within cities. In Singapore, a variety of co-funding schemes provided by the National Environment Agency as well as the Building and Construction Authority (BCA) help businesses integrate energy and resource efficiency improvements at their offices and factories.
There is also a need for technology providers and implementers of green solutions to foster a synergistic partnership. To this end, companies like Siemens has helped implement measures to improve the energy efficiency of around 6,700 buildings worldwide. This has so far enabled customers to save around 2 billion Euros in energy costs. Half of this was achieved with more than 1,400 energy saving contracting projects involving 4,700 buildings, which relieved the environment of around 9.8 million tonnes of CO2.
In South East Asia , the energy-savings potential from buildings makes the built environment a key consideration for urban management. With this in mind, cities like Jakarta have recently pledged a new regulation to implement environmentally friendly measures in their building developments to help the city meet reduced emission targets. In Singapore, the BCA has recently unveiled rulings to make 80 per cent of buildings green by 2030.
Clearly, it is not impossible to achieve sustainable living through the implementation of the right technology and strategic industrial partnership.