Best Practice for STP

WTR 2019;8:59-70 https://doi.org/10.7165/wtr19b0621.20

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Smart City Energy Inclusion, Towards Becoming a Better Place to Live

Sang-Ryong Cha☆ Professor, University of Nagasaki, Japan

Abstract Where is a better place to live? In the coming era, this should be more than simply a livable place. It should be an adaptable place that has a flexible system adaptable to any new situation in terms of diversity. Customization and real-time operation are needed in order to realize this technologically. We expect a smart city to have a flexible system that applies technologies of self-monitoring and self-response, thereby being a promising city model towards being a better place to live. Energy demand and supply is a crucial issue concerning our expectations for the flexible system of a smart city because it is indispensable to comfortable living, especially city living. Although it may seem that energy diversification, such as the energy mix of a country, is a matter of overriding concern, the central point is the scale of place to build grids for realizing sustainable urban energy systems. A traditional hard energy path supported by huge centralized energy systems based on fossil and nuclear fuels on a national scale has already faced difficult problems, particularly in terms of energy flexibility/resilience. On the other hand, an alternative soft energy path consisting of small diversified energy systems based on renewable energy sources on a local scale has limitations regarding stability, variability, and supply potential despite the relatively light economic/technological burden that must be assumed to realize it. As another alternative, we can adopt a holonic path incorporating an alternative soft energy path with a traditional hard energy path complimentarily based on load management. This has a high affinity with the flexible system of a smart city. At a system level, the purpose of all of the paths mentioned above is not energy itself but the service it provides. If the expected energy service is fixed, the conclusive factor in choosing a more appropriate system is accessibility to the energy service. Accessibility refers to reliability and affordability; the former encompasses the level of energy self-sufficiency, and the latter encompasses the extent of energy saving. From this point of view, it seems that the small diversified energy systems of a soft energy path have a clear advantage over the huge centralized energy systems of a hard energy path. However, some insuperable limitations still remain, so it is reasonable to consider both energy systems continuing to coexist in a multiplexing energy system employing a holonic path to create and maintain reliable and affordable access to energy services that cover households’/enterprises’ basic energy needs. If this is embodied in a smart city concept, this is nothing else but smart energy inclusion. In Japan, following the Fukushima nuclear accident in 2011, a trend towards small diversified energy systems of a soft energy path intensified in order to realize a nuclear-free society. As a result, the Government of Japan proclaimed in its Fifth Strategic Energy Plan that renewable energy must be the main source of power in Japan by 2050. Accordingly, Sony vowed that all the energy it uses would come from renewable sources by 2040. In this situation, it is expected that smart energy inclusion will be achieved by the Japanese version of a smart grid based on the concept of a minimum cost scheme and demand response.

Keywords Smart city; Energy flexibility; Resilience

1. INTRODUCTION: WHERE IS A BETTER PLACE TO LIVE? ☆Correspondence to : Prof. Sang-Ryong Cha Professor, University of Nagasaki, Sasebo, Nagasaki, Japan E-mail : [email protected] Where is a better place to live? Regarding this question, World Technopolis Review since 2007, the Economist Intelligence Unit has presented its Copyright©World Technopolis Association annual ranking of the world's most livable cities with respect This is an open-access article distributed under the terms of the Creative Commons Attribution Non-Commercial License (http://creativecommons.org/licenses/by-nc/3.0) which per- to urban quality of life based on assessments of stability, mits unrestricted non-commercial use, distribution, and reproduction in any medium, provided the original work is properly cited. healthcare, culture and environment, education, and infra-

WTR 2019;8:59-70 https://doi.org/10.7165/wtr19b0621.20

Fig. 1. Changes in livability scores from 2007 to 2017

Source: The Data Team (August 16, 2017) structure, as displayed in Figure 1, which shows changes in scores simply a livable place but also an adaptable place with a flexible sys- over a ten-year period. Besides this, numerous measurement tools tem able to suit any new situation in and about the place in terms of ranking cities in terms of livability have been developed. These in- diversity/diversification. clude some famous indices, for instance, the Mercer Quality of Living The ability to deal with diversity, to learn new situations, and to Index and the OECD Better Life Index. Although all of the indices preserve our living balance in unfamiliar situations will be of great consist of similar indicators and categories, each index places signifi- importance. In order to be prepared for the era to come, reinventing cant importance on a specific category of livability, for example, our whereabouts and adapting to changing situations is necessary. health in the EIU and Mercer indices, and the economy in the OECD However, dealing with diversification can be challenging because, in index, as presented in Table 1. This highlights the fact that the citi- general, it is invariably stressful. In fact, many people may simply dis- zens of a society pursue suitability and satisfaction simultaneously in like adapting to new situations caused by diversification, especially as determining a livable place. they age. If individuals lack the ability to adapt, it is difficult for them As globalization proceeds, the world becomes more diversified. to accept something new, and it may become tempting for such peo- Although it has been understood that diversity is a source of innova- ple to neglect or exclude diversity from their living places. This indi- tion and revolution, it is difficult to satisfy increasingly diversified de- cates that people try to be content with habituated present conditions, mands and suit countless new situations in an ever-changing and meaning that chances for innovation and revolution ultimately lead- uncertain world. Moreover, even the natural environment is changing ing to a better life may be lost. because of global warming. Therefore, in the coming era when Can technology help with acquiring an ability to adapt? Indubitably, change is the only constant (Harari, 2018), a better place to live is not technology can be of great help; however, what specific technology is

Table 1. Categories and indices of three major livability indexes

Source: Randhawa and Kumar (2017): pp.281-282.

Fig. 2. The transition of energy consumption and real GDP in Japan

Source: The Agency for Natural Resources and Energy (2017): p.134.

WTR 2019;8:59-70 https://doi.org/10.7165/wtr19b0621.20

Fig. 3. The history of energy in Japan: changes in the structure of energy demand and supply

Source: The Agency for Natural Resources and Energy (2018): p.8.

required is the main point to consider. Regarding this, customization a flexible system applying technologies of self-monitoring and self-re- and real-time operation are necessary to realize an adaptable place for sponse, thereby acting as promising city models towards becoming a better life technologically because the ability to deal with diversity is better places to live. simply the ability to adapt to more individualized needs caused by the diversified world. Customization aims to accurately meet needs; therefore, the collection, integration, and analysis of big data from each sensor making the best use of AI is necessary. On the other 2. HITHERTO: ISSUES CONCERNING ENERGY hand, real-time operation aims to manage needs immediately without DEMAND AND SUPPLY a time lag; thus, obtaining more lightweight OSs for the IoT is required. Both are primary technological characteristics of a flexible At present, it may be said that the essence of a smart city is system for an adaptable place. Smart cities can be expected to employ technology because it has never been emphasized like this in all

Fig. 4. Energy balance flow in Japan (FY 2015)

Source: The Agency for Natural Resources and Energy (2017): p.136.

WTR 2019;8:59-70 https://doi.org/10.7165/wtr19b0621.20

Fig. 5. The structure of the national grid and oligopolistic electricity market in Japan

Source: Wikipedia (July 12, 2018)

Fig. 6. Conceptual differences between two energy paths: hard and soft

Source: Shimoda (2014): pp.17, 19.

Fig. 7. Conceptual features of a holonic path

Source: Shimoda (2014): p.21.

directions in any new city models. If what is wanted for a better both stimulated energy consumption in the civilian sector. place to live is understood, smart city technology can assist with Moreover, energy consumption regarding passengers in the realizing this; however, if what is wanted is unknown, it will be transportation sector has risen because of developments in too straightforward for a smart city to shape lifestyles and take public transportation and the boom in private vehicle owner- control of life. More specifically, as a smart city improves its ship, which is closely connected with urban lifestyles. Accord- understanding of its citizens, people might increasingly find ingly, a relationship between energy consumption and the themselves serving it, instead of it serving them. Therefore, to quality of life in cities can be seen, as displayed in Figure 2. succeed in the development of smart cities, what is expected of To address the rise in the demand for energy, the use the flexible system of a smart city must be understood. of high density energy including coal, oil, and nuclear en- Energy demand and supply is a crucial issue concerning the ergy has been extended, and energy diversification, for expectations of a flexible system of a smart city because it is in- example, using a variety of energy sources in order to se- dispensable to everyday living, especially city living. For exam- cure the stability of energy supplies, has shown a ten- ple, it is the civilian sector, consisting of the commercial sector dency to be conspicuous since the oil crises in the1970s. and the residential sector that has influenced energy consump- In particular, since the Great East Japan Earthquake and tion in Japan since the 1970s due to urbanization and the ex- the Fukushima nuclear incident in 2011, it appears that pansion of the middle class, which has consumer spending the energy diversification of power supplies has been a power. That is, the formation of an industrial society brought matter of overriding concern regarding the energy de- about rapid urbanization and an emerging middle class, and mand and supply issue based on the understanding of

WTR 2019;8:59-70 https://doi.org/10.7165/wtr19b0621.20

Fig. 8. Minimum cost scheme

Source: Shimoda (2014): p.25.

the relationship between energy consumption and the tioned above based on fossil and nuclear fuels have al- quality of life in cities. In Figure 3, an overview of the his- ready faced difficult problems in terms of energy flexibility/ tory of energy in Japan can be seen. resilience in particular. Following the Fukushima nuclear However, the main concern is location, especially the accident in 2011, a trend toward alternative soft energy scale of place to build grids to achieve a sustainable urban paths (Lovins, 1977) supported by small diversified energy energy system. Scale with respect to the energy balance systems on a local level has intensified with the goal of between supply and demand needs to be considered. building a nuclear-free society in Japan. The origin of energy resources and where conversion However, a soft energy path based on renewable en- takes place must also be considered. For instance, re- ergy sources has some limitations regarding stability, garding Japan’s energy balance flow in FY 2015, there was variability, and supply potential in spite of the low eco- a loss of approximately 30% resulting from transmission/ nomic/technological burden acquired to realize it; see distribution loss and self-consumption of the power/con- Figure 6 for a representation of the differences be- version sector during the conversion of energy between tween the two energy paths. the primary energy supply and final energy consumption. It seems that further reconsideration of scale of place In Figure 4, the energy balance flow in Japan can be seen is necessary in order to minimize the loss rate of energy Above all, in the electricity sector, loss is generally conversion if improving the energy efficiency of pres- caused by the structure of the national grid and the mar- ent energy systems is a goal. From this point of view, a ket. Unlike most other developed countries, the national holonic path can be adopted (Kaya et al., 1988) as an grid of Japan is divided into eastern and western girds, alternative, incorporating soft energy paths with hard and ten regulated major power companies dominate the energy paths complimentarily based on load manage- domestic oligopolistic electricity market based on hard ment. Figure 7 demonstrates the features of such a energy paths supported by huge centralized energy sys- path. tems on a national scale. This is depicted in Figure 5. In the concept of a holonic path, load management is Besides loss, the traditional hard energy paths men- a way of raising the availability of supply facilities by

Fig. 9. A conceptual sketch of a local power-saving plant in Kitakyushu

Source: modified by author from City of Kitakyushu (December 12, 2011)

regulating demand patterns using an information sys- 3. HEREAFTER: ISSUES CONCERNING tem to inform customers of suppliers’ situations. This ENERGY INCLUSION is based on the mutual cooperation between suppliers and customers and is the same as the meaning of en- At a system level, the purpose of all of the paths mentioned ergy management in the context of a smart city. That is, above is not energy itself but the service it provides. Although the energy system of a holonic path has a high affinity the synergistic relationship between energy consumption with the flexible system of a smart city. and the quality of life in cities is already understood, energy

WTR 2019;8:59-70 https://doi.org/10.7165/wtr19b0621.20

Fig. 10. The Japanese version of a smart grid

Source: The Agency for Natural Resources and Energy (2010): p.149.

services actually expected in city life are fixed to some extent. Japanese)’ in Japan. If an expected energy service is fixed, the conclusive factor in The power-saving plant is based on the concept of a mini- choosing a more appropriate system for a better place to live mum cost scheme that requires supply companies to imple- is accessibility to energy services because an expansion in the ment all customer actions for energy conservation cheaper supply of energy and a reduction in the demand for energy than the energy supply cost prior to supply expansion (Shi- are identical with respect to energy management, which, as moda, 2014). Thus far, energy conservation investment re- stated by Lovins (1985), is the very concept of negawatt mains in the first and the second steps only, but if scale of power. Negawatt power seems to emphasize the effective- place to put an energy system into practice with relatively ness of energy conservation; however, the vital point of the small investment for energy conservation higher than for en- concept is the affordability of energy services in terms of cus- ergy supply can be found, energy conservation by the pow- tomer needs. That is, customer actions for energy conserva- er-saving plant can progress to the third step at a system tion based on the negawatt power concept are directly level. This concept is presented in Figure 8. rewarded by savings on charges. It becomes a cost incentive The power-saving plant at a system level involves various to encourage more customers to engage in the negawatt technologies and institutions reducing energy consumption movement called ‘the power-saving plant (Setsudensho in in society as a whole by using electricity more efficiently.

This means that the development of the power-saving plant response to suppliers’ situations. The Japanese version of a can be a catalyst for forming a quadruple innovation helix as smart grid is presented in Figure 10. a synthesis of top-down policies and practices from the government, universities, and industry, balanced and shaped by bottom-up initiatives and actions by civil society (Monteiro and Carayannis, 2017). Actually, in Kitakyushu, a model city 4. CONCLUSION: HOW A BETTER PLACE TO for green growth chosen by the OECD (OECD, 2013), the LIVE IN THE ERA TO COME BE BUILT? Kitakyushu smart community centered around the community energy management system (CEMS) as a local pow- On the 6th of September 2018, all of the citizens in Sapporo, er-saving plant has been developed at the site of the Nippon the largest city on Hokkaido Island, experienced the first major Steel Corporation Yahata Iron Factory by a quadruple helix blackout in Japan because the Tomatoatusma Coal Power Plant, stakeholder collaboration consisting of the City of Kitaky- the biggest power plant in the region, went offline due to the ushu (municipality), Nippon Steel Corporation, Kyushu Uni- 2018 Hokkaido Eastern Iburi Earthquake. Although Sapporo is versity, and residents from approximately 200 households, considered a greatly livable city in Japan, this city was com- etc., since 2011, as depicted in Figure 9. pletely unable to devise any appropriate measures to manage In this smart community, customers have the opportunity the situation in which the huge power plant covering half of the to be prosumers (Toffler, 1980), not only of the energy ser- demand for electricity on Hokkaido came to a sudden stop in vice itself but also of the energy system, utilizing tools for only two days. All of the lights in the city went out, and all of the open innovation, for example, urban living labs (Marvin et urban facilities powered by electricity ceased functioning. That al., 2018) or open data hackathons/ideathons such as the is, the livability of the city malfunctioned. Bristol case in the United Kingdom (Kohno, 2017). In a terri- What caused the blackout in Sapporo? The reason was an torial context, they can recognize and define energy issues, overconcentration of energy supply relying on a huge central- find appropriate directions for solutions, and decide the pri- ized energy system. There were sufficient renewable energy re- orities of energy services. Consequently, energy services can sources for energy diversification at a local level, but the small develop into more practicable and serviceable services for diversified energy systems to utilize renewable energies individ- most local customers, and this means that the reliability of ually such as smart houses/buildings were insufficient in terms energy services is improved. of technology. Furthermore, the flexible and multiplexing en- Affordability and reliability constitute the accessibility of ergy system adopting a holonic path to establish and maintain energy services. The former encompasses the level of energy reliable and affordable access to energy services for making an self-sufficiency. The latter encompasses the extent of energy adaptable place at a local level was still in the process of research saving. From this point of view, it seems that small diversi- and development. fied soft energy path systems have a clear advantage over The Government of Japan proclaimed that renewable energy huge centralized hard energy path systems. However, some must become the main source of power in Japan by 2050 in its insuperable limitations remain, so it is reasonable to state Fifth Strategic Energy Plan. In response, Sony has vowed that all that both energy systems should continue to coexist in mul- of the energy it uses will originate from renewable sources by tiplexing energy systems adopting a holonic path to establish 2040. In this situation, it is expected that smart energy inclusion and maintain reliable and affordable access to energy ser- will be realized by the Japanese version of a smart grid based on vices covering households’/enterprises’ basic energy needs. the concept of a minimum cost scheme and demand response If such a system is embodied in a smart city concept, it is for making a better place to live in the near future. nothing else but smart energy inclusion. Actually, since 2010, this has been embodied in the Japa- nese version of a smart grid initiated by the Agency for Natu- ral Resources and Energy, and the regulation of supply and References demand, known as load management, has been imple- mented as a demand response to induce the fluctuation of Harari, Y. N. (August 12, 2018) “Yuval Noah Harari on what the demand by announcing changes in the price of electricity in year 2050 has in store for humankind”, WIRED.

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