The power of air conditioning. How to turn it down?

By Daniel Nunez Gonzalez

One of the cases in the course involved Zhang Yue’s Broad Group and the emporium he built by first developing a non-electric chiller unit in China. The case reminded me of the role of air conditioning in recent demographic and urban trends, and in the consumption of energy and resources. Lee Kuan Yew, former PM of Singapore, called air conditioning the “greatest invention of this century” [1]. The generalization of affordable systems in the 1970s was a major factor in the growth of the Sun Belt in the United States.

South Bridge Road, Singapore. Pre and post-air conditioned construction in the tropical city-state. Credit: Flickr.com

Air conditioning’s popularization has led to perverse effects. For decades, cheap energy made customers and builders worriless about energy savings. Today, buildings account for 39% of the CO2 emissions in the United States; higher than transportation at 26% [2]. Air conditioning has a major effect in temperature in large cities, contributing to the “heat island effect”; in a warm day in Paris, the effect of chiller systems alone can increase the average temperature by up to 2 degrees Celsius [3]. Black-outs due to excessive electrical demand are now commonly related to heat waves, when the demand for air conditioning peaks.

Global demand is expected to explode. Only two of the warmest 30 largest metropolitan areas in the world are in developed countries. 2% of Indian households owned one air conditioning unit in 2007, compared to 87% of the US [4]. Popularization of air conditioning in the developing world will only contribute to more energy consumption and, ultimately, to climate change.

Credit: Sivak, M. “Potential energy demand for cooling in the 50 largest metropolitan areas of the world: Implications for developing countries”, The University of Michigan, Transportation Research Institute, August 24, 2008.

What can be done to avoid those developing countries consuming indiscriminate resources, without falling into the cliché of Western nations blaming them about the increase in pollution? Continue reading

Smart Cities in Singapore and China

By Anonymous

In the case “Living PlanIT”, it is the company that proposed to build a “Smart City” that is committed to developing a series of sustainable features including the in-built green infrastructure, the usage of renewable resources and promoting the efficiency of energy and water consumption. Putting all these appealing environment-friendly features aside, this “Smart City” features technologies that integrate and underpin the communications of citizens, business partners and the government. It appears to be the perfect solution aligned with the inevitable trends of urbanization and sustainability. I consider this concept of “Smart City” overly idealized, facing a few significant challenges:

Attract target partners

In the case, Living PlanIT targets leading firms in a variety of fields focusing on electrical and informational engineering. Doubt arises about how to build up such partnerships with these industry leaders in addition to underpinning the bonds among them to create maximum synergies for the project as a whole. Thus, it is essential to come up with clear, both quantitative & qualitative measures to exhibit such synergies and the values they create, which potentially benefit all the business partners internally. This could be one of the points from those people who sense how efficient and scalable the concept of “Smart City” can be.

 Project location

In my opinion, if I were an investor, I would not invest in the proposed project in the case, after reviewing the location profile, supplemented with more detailed macro info about the country of Portugal. It simply is not the right lab site, taking the country’s economic and social positions into account. Even though keen supports from the government may be observed, the company may find more obstacles to persuade both of the partners and financiers that the proposed project site is promising, due to the facts that a) little existing transportation infrastructure from major cities which potentially requires a large amount of investments, and yet constitutes as a key required feature for developments; b) based on Pg.19, the country’s economy is particular weak due to the global recession, and in addition, the industry structure of the country determines that it’s not the right site for this project, as it cannot offer the respective human resources for the development of the project.

However, in Asian countries like Singapore and China, “Smart City” is one of the hottest urban planning concepts. The greatest difference between Living PlanIT and the ones in the aforementioned two countries, as I’d propose, is the initiator of the project, being the company Living PlanIT in the case, whereas the national government in Singapore and China. In the case of Singapore, there is a renowned project called “Mapletree Business City” (referred as “MBC”) by the leading real estate investment group Mapletree, a subsidiary of Temasek, the 100% state-owned enterprise. The MBC is located slightly outside of the city/country’s CBD area, in a renovated industrial park closed to the harbor and some existing residential projects. Featuring all the sustainable designs and technologies proposed in the Living PlanIT case, the MBC is positioned as an integrated office and business park for work, live and play, and has successfully attracted credit tenants such as Deutche Bank, HSBC, Unilever and etc. Whereas in China, the Ministry of Housing and Urban-Rural Development has just proved the list of the first labs for “Smart City” on Jan 29 this year, which consists of 37 cities and more than 50 rural towns, financially supported by the National Bank of Development. Subsequently, the release of the approval will surely be welcomed by the leading technologies firms which are undoubtedly anxious to incorporate with the government on both national and local levels for the developments of such cities.

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