Mobility, energy, and logistics sectors to get boost from Asian smart city plans

Distributed energy and drone deliveries are expected to drive demand for solutions in the coming decades.

As Asian cities seek to implement their smart city plans, more technologies and investment in the sectors of mobility, energy, and logistics are expected to incur greater participation from external vendors and companies, according to Fitch Solutions.

For cities with already well-developed public transport networks, smart city efforts have diverted to on optimising other mobility pain points such as bus and train arrival timings and ticketing solutions.

The Shenzhen Metro in China is currently piloting the use of advanced facial recognition technologies supported by 5G networks to allow commuters to pay for train fares by face scanning. Other cities in Shanghai have also followed suit, utilising facial recognition to help regulate traffic and identify drivers who commit traffic offences. Singapore on the other hand have trialled ‘on- demand’ buses, where buses are dispatched to areas and routes identified to have more commuters.

For lower-income countries where the public transport network is less developed, Fitch sees an opportunity for private companies to formalise transport data through mobile apps, and potentially provide better route information of these informal transport options. A lot of developing cities rely on private, informal paratransit solutions; examples include the ‘angkot’ in Indonesia, and ‘jeepneys’ in the Philippines. These types of transport serve largely marginalised neighbourhoods where the provision of public transport by municipal councils is financially unviable.

On the area of Smart energy, a growing demand for Distributed Energy Solutions (DES) is expected to come in the next decades. The current presence of Smart grids allow premise owners who generate their own power to switch from consuming electricity to selling electricity to the grid, and as a result, more companies are expressing interest to DES as the greater availability of small- scale, on or off-grid generation capacity and the deployment of battery storage makes it more attractive for greater adoption.

Technological advancement will also touch on present practices on buildings construction. A smarter, and more environmentally responsible and resource-efficient construction of buildings is sighted to become a standard over the coming decades. Buildings are increasingly built with low-energy use in mind, with Leadership in Energy and Environmental Design (LEED) certification being a key goal for many developers. At the same time, construction methods will evolve toward that which utilises the lowest energy and resources possible; for one, developers are slowly pivoting toward modular construction, together with other forms of offsite prefabrication construction methods.

In the landscape of smart logistics and distribution on the other hand, the use of drones are slowly drawing attention as a solution to boost efficiency in delivery.

E-commerce giants such as Alibaba and JD.com have similarly undertaken measures to upgrade operational efficiency, investing in smart warehouses. In JD.com’s case, a 40,000sqm warehouse facility was opened in Shanghai in October 2018, and was reported to have only employed four workers, but has attained production capacity of 200,000 orders per day, reducing overhead and labour costs.

In March 2019, European aerospace company Airbus has conducted trials of drone usage for the delivery of parcels to ships anchored off the coast of Singapore, and two months later, courier company DHL announced that it had begun making drone deliveries in China on a regular basis, reporting an 80% reduction in delivery time and costs and simultaneously achieving a lower carbon footprint. Although most of the drone initial trials were related to the delivery of purchases made by customers from e-commerce companies, other use-cases also included the delivery of post, food and medicine.