By Gary Thompson, UK Sales Director – Siemens Industries and Markets, Siemens Financial Services (UK)

Transport and citizen mobility are high on the agenda of local communities. This is due to the financial costs of congestion and also, more importantly, the high levels of air pollution that directly impact citizen health. In 2018, it was reported that more than 40 UK towns and cities had exceeded or already reached the air pollution limits set by the World Health Organisation. Infrastructural decisions taken by local government over the next few years have the potential to contribute significantly to tackling the UK’s air quality crisis.

Several forward-thinking UK cities are looking to initiate smart transport projects to improve the efficiency of local services, enhance sustainability, and improve living conditions of their city while helping support economic and business growth. Many are doing so via smaller smart projects that help to generate savings and effectively pay for the initial investment. These projects, costing a few thousand to a few million pounds, can offer highly dependable Return on Investment (ROI), helping to ease continued pressure on public budgets.

Smart transport projects generally focus on four key areas for improvement: routing, parking, congestion, and buses. Effective and efficient transport provides a lifeline in many cities. Citizens rely on bus networks, commercial vehicles depend on accessible routes and drivers need parking. By digitalising these aspects of city infrastructure, local authorities can make use of salient data to streamline services and confidently manage the movement of vehicles.

Smart Routing

Smart vehicle routing aims to improve the management and flow of fleets of vehicles delivering public services such as waste collection and school transport across our cities. Geographical Information Systems (GIS), which can help to optimise the routing of services, are being installed across the globe so that better services can be delivered with fewer assets (vehicles, people and equipment). The investment cost for such routing systems can be rapidly recouped when compared to the savings gained.

For example, smart waste collection routes are planned to be more efficient so that local councils can look to reduce carbon emissions and save time and money. Milton Keynes Council has implemented smart wheelie bins that are linked to intelligent routing systems. Connected sensors let refuse collectors know when they are ready for collection, which improves waste management efficiency and, undoubtedly, the day-to-day lives of residents. Combined with route optimisation software with data from the Ordinance Survey to remap the city’s waste routes, this enables refuse collection fuel costs savings of £100,000.

Similarly, data can be analysed to identify areas where efficiency can be improved with regard to commercial vehicles; for example, identifying efficient drivers and routes. Optimising commercial vehicles routes has the potential to reduce emissions and improve air quality in city centres.

Smart Parking

Ample, easily-accessible parking is vital to improving traffic management which in turn is vital to increasing access to city centres. The installation of parking systems that simplify driver decision-making with the provision of valuable information on parking availability ultimately reduce congestion and frustration. The new systems can also maximise a city’s potential parking charge revenue – to underpin a clear ROI model. Drivers are guided to their final parking destination along the shortest possible route via in-car navigation or with the help of programmable dynamic message signs, giving commuters the current occupancy levels in the surrounding parking zones.

In early 2019, North Yorkshire County Council and Harrogate Borough Council introduced smart parking measures in Harrogate town centre. Using a combination of smart sensors and a phone application, drivers can identify available parking spaces and pay for them in real-time. Westminster Council in London introduced a similar system in 2014 to tackle high parking demand, congestion and poor air quality. The scheme has been such a success it has since been rolled out to the borough’s remaining 7,000 on-street parking spots.

Congestion & Road Pricing

British roads are the third most congested in Europe, and this overcrowding constitutes a significant financial burden that shows no signs of allaying; it is predicted that the annual cost of congestion in the UK will rise 63% by 2030 to £21 billion in line with a growing population. The implementation of road pricing systems helps to reduce the traffic flow in congested urban and interurban areas while also creating funds to reinvest in other environmental projects and pay for the initial project. Road pricing can work particularly well in small cities where a high concentration of traffic is an issue in a particular area. In Durham, a successful congestion charge system has been in place for fifteen years. The medieval city centre has narrow roads that are unable to cope with high volumes of traffic. The scheme has achieved an 85% reduction in vehicular traffic leading to a substantial drop in emissions. Revenues raised have been reinvested to support a frequent bus service to and from the charging area.

As of 8 April 2019, Transport for London has begun to phase in even tighter emissions standards within the Congestion Charge area in central London, with the aim of reducing the exhaust gas emissions of diesel-powered commercial vehicles in London. Heavy vehicles including lorries and larger vans will need to meet the new standards or pay a daily charge to drive within the zone. Cameras will automatically compare licence plate numbers to a digital database of registered vehicles and determine whether a vehicle meets the requisite standards.

Hybrid Buses

The 2017 Bus Services Act has given local authorities the power to take a front seat in deploying their bus networks. This includes increased control over fares, the ability to introduce multi-operator ticketing and to designate frequency and scheduling. Complementary to controlling how buses operate is ensuring that citizens have access to low emission solutions that will contribute to meeting air quality targets. Road traffic is responsible for around 40% of emissions of nitrogen oxides in the EU and around four fifths of nitrogen oxides which come from traffic emanate from diesel-powered vehicles. Electric vehicles produce no pollutants at street level and up to 40% less CO2 emissions as a whole, compared to similar-sized petrol or diesel vehicles. Upgrading bus fleets therefore has the potential to greatly impact a city’s air quality.

Edinburgh City Council has worked on a range of projects to encourage sustainable transport that are already showing promising results. Alongside traffic management and parking systems, the city introduced 65 hybrid buses on a number of routes in December 2014. In 2016, positive statistics from monitoring stations at key locations in the city showed a marked improvement in air quality compared to 2015 with 97% of streets meeting required standards.

Despite the obvious benefits of such projects, public sector budgets are often insufficient to implement the technology in the first place. Local councils are estimated to face an overall funding gap of £5.8 billion by 2020 and authorities are therefore looking to other forms of finance to help them invest in new equipment including technology to enable smart transport solutions. The reality is that cities need to access a blend of public and private sector finance to accelerate their smart initiatives in a timely way and benefit from the resulting savings, efficiency, quality and citizen service improvements as quickly as possible. A diverse range of public and private funding sources allows a city to make the full range of desired technology investments in a timely fashion. Different financiers can be sourced for the different types of technology investment. The sooner the smart investments are implemented, the quicker the savings (or revenues, or inward investments) begin to accrue.

Smart transport brings together a number of potential Smart City initiatives that can be financed by using funds from the private sector and have the potential to generate savings that effectively pay for the investment. Siemens Financial Services estimates that more than €2.9 billion could be available in funding from the private sector in the UK for these small-scale initiatives. By working with financiers who intimately understand how such smart city technology applications work and the benefits they produce, cities can effectively unlock more finance availability through these projects.

Tailored, all-encompassing financing packages tend to be offered by specialist financiers who have an in-depth understanding of energy-efficient technology and its applications. Specialist finance providers understand the importance of implementing new equipment and new technology to generate revenue and cut operational expenses, and can therefore provide customised financing solutions that deliver energy savings and lower expenses, for instance, flexing the financing period to suit cash flow. This contrasts with the standard financing terms usually available from generalist financiers.

Actively improving air quality and public services in UK towns and cities with the help of smart transport technology will drastically impact citizen’s lives. Local governments that approach smart initiatives intelligently can begin to transform their cities for the better. As many local authorities have already identified, combined access to private and public sector finance provides a sustainable avenue for investing in smart initiatives and fulfilling ‘smart’ ambitions.

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