Amsterdam has recently begun implementing a wide-ranging "smart city" program, which will involve energy saving systems in households, including a new "smart grid" platform, household solar panels and wind turbines, as well as power hook-ups for electric cars, making its already carbon conscious infrastructure more eco-friendly, says BusinessWeek. In some of the first steps of a larger program, 1,200 households installed an energy saving system designed to cut energy costs, writes BusinessWeek. "Others were given fresh access to financing from Dutch banks ING (ING) and Rabobank to buy everything from energy-saving light bulbs to ultra-efficient roof insulation. And on Utrechtsestraat, a major shopping avenue in the center of the Dutch capital, solar-powered panels on local bus stops were installed to transform the road into a 'Climate Street' piloting clean technology."

According to BusinessWeek, Amsterdam aims to complete its first round of investments in creating a "smart city" by 2012. By 2012, Amsterdam's energy providers, city government, and private firms are expected to invest more than "€1.1 billion ($1.5 billion) in Amsterdam's smart city programs over the next three years. That includes a €300 million ($420 million) investment by local electricity network operator Alliander in "smart grid" technology that uses network sensors and improved domestic energy monitoring to trim electricity use. Also part of the plan: up to €200 million ($280 million) to be spent by local housing cooperatives on boosting household energy efficiency, and €300 million from companies including Philips (PHG) and Dutch utility Nuon to be invested in other energy-efficient technology."

While creating the basic technology platform — a smart grid– for energy efficiency is a key part of the plan, Amsterdam hopes to then use this smart grid infrastructure to boost energy production – a "virtual power plant" will enable households to sell excess energy from house and community solar panels, wind turbines, and biomass plants back to the city for a profit. "All told, the plan could add 200 megawatts of renewable energy, roughly the size of a large wind farm, to Amsterdam's electricity generation." Other plans include "remote energy management" technology to enable Amsterdam's households to access the smart grid using their cellphones and control energy usage remotely. The Economist recently wrote about the great potential of smart grids to empower consumers, cut energy usage and reduce C02 emissions: "The cure, many believe, is to apply a dose of computer power to the grid. Adding digital sensors and remote controls to the transmission and distribution system would make it smarter, greener and more efficient. Such a "smart grid" or "energy internet" would be far more responsive, interactive and transparent than today's grid. It would be able to cope with new sources of renewable power, enable the co-ordinated charging of electric cars, provide information to consumers about their usage and allow utilities to monitor and control their networks more effectively. And all this would help reduce greenhouse-gas emissions."

In terms of creating the infrastructure for electric vehicles, Amsterdam will create 300 electric vehicle charging points by 2010. "The first one already has been installed, with the remaining hookups—set to be placed in local parking lots and other public spaces—on track to be ready by mid 2010." A smart grid is critical to making electric vehicles a reality. The Economist recently wrote: "And when it comes to electric cars, a study by America's Pacific Northwest National Laboratory (PNNL) found that there is already enough generating capacity to replace as much as 73% of America's conventional fleet with electric vehicles—but only if the charging of those vehicles is carefully managed."

BusinessWeek contends other cities are now looking to Amsterdam as a model for how to reduce C02 emissions. As more of the world's population moves into cities, and into mega-cities in developing countries, city governments will be more responsible for reducing overall C02 emissions, and under greater pressure to find sustainable ways to produce energy and sequester carbon. Reducing C02 will cost, but the planners involved also hope will reap efficiency gains and lead to more innovation. According to BusinessWeek, Amsterdam's plans, which are expected to cut emissions by 40 percent by 2025, will "cost $438 per household over 15 years to install smart grid technology alone. Additional outlays, particularly costs of up to $280 million needed to make the city's homes more energy-efficient, could be a tough sell for consumers already suffering in the economic downturn."

Read the article and an article from The Economist on the political economy of smart grids

Image credit: The Economist