Urbanization 2.0 – technology for the challenges of the 21st century

There was probably no better location for the 16th Asia-Pacific Conference of German Business at the beginning of November than the Indonesian capital of Jakarta. A central theme of this year’s conference was urbanization, and urban densification can be experienced firsthand in the thriving metropolis of Jakarta – more intensely than almost anywhere else in the world.

Jakarta is the commercial center of the island kingdom of Indonesia and is undergoing a breathtaking development. The city currently has 10 million inhabitants, but is slowly merging with the suburbs Bogor, Depok, Tangerang, and Bekasi to form the megacity “Jabodetabek” with around 30 million inhabitants.

Jakarta – the opportunities and challenges of a megacity

The infrastructure is already unable to keep up with the rapid population growth. Almost 4 million cars clog the streets of Jakarta – that’s 26 percent of all cars registered in the country in only 0.03 percent of its area. This, too, is (literally) a breathtaking development.

Jakarta is representative of a worldwide development that’s becoming a megatrend.

The Earth’s population is growing, from the approximately 7.6 billion people who inhabit the planet today to around 10 billion by the middle of the century.

Population growth takes place in the city

The world’s population growth is almost exclusive to urban areas. Two-hundred years ago, only 3 percent of the global population lived in cities. Today it’s more than half, and the trend is accelerating. In 2050, it’s likely that seventy percent of all people will live in cities. The number of cities is steadily increasing. In 1950, there were 77 cities in the world with a population of at least one million. Now there are 548, and the number continues to rise.

Why are people moving to the cities? In cities they have opportunities for development, employment, and prosperity. Cities’ contribution to global economic performance is currently estimated at about 80 percent. But cities also reveal the dark side of progress and civilization: noise, insufficient space, slums, pollution, traffic jams. 

Electricity is the oil of the cities

In rapidly growing cities, the infrastructures are already reaching their limits and the demand for resources such as clean water, housing, and access to medical services is exceeding the supply. This is especially true when it comes to supplying cities with sufficient energy – which, particularly in cities, means electricity.

Electricity is the most prevalent type of energy in the world. Forty percent of the growth in energy consumption by 2040 will be the consumption of electricity, the same percentage as oil consumption over the past 25 years. Electricity is the new oil. In addition to growth in traditional areas, electricity requirements are increasing in the areas of heating and mobility. E-mobility being one of the main drivers. The number of electric cars worldwide could reach 300 million by 2040; currently, it’s just under 2 million. A majority of these electric cars will be in cities and will further increase the demand for electricity there.

Another growth factor is buildings. The global building sector is growing at an unprecedented rate and will continue to do so.

Over the next 40 years, new construction is expected to cover 230 billion square meters, which is the equivalent of building a new Paris every week.

Today, around 40 percent of electricity is already consumed by buildings, and there is tremendous potential for greater efficiency. 

Building Automation: a key technology

At least 30 percent of electricity in buildings is being wasted, when it could ideally be used for heating, cooling, or other applications. In addition, the intelligent integration of lighting, data, air-conditioning, and security systems could significantly reduce consumption. With “Desigo CC,” Siemens offers its customers an integrated platform for controlling, monitoring, and optimizing all building services – from heat, ventilation, air-conditioning, and fire safety, to security, energy management, lighting, and shading. This expanded building automation system can achieve energy savings of up to 20 percent.

"Smart Infrastructure": buildings and power grid merge together

Siemens sees further potential for greater sustainability in cities in the merging of buildings and power grids. Buildings are becoming increasingly smarter and more networked. They don’t just consume energy, but also store and distribute it. They’re also linked more and more closely to the grid through the exchange of energy and data. Grids, on the other hand, are becoming increasingly distributed. The grid doesn’t just end at the industrial plant or residential building, but is becoming a part of it.

This merging of grids and buildings will not only result in more efficient energy utilization and more sustainability. It will also open up new business prospects and new markets. Examples include distributed energy systems, charging points for electric cars on buildings, and energy storage systems. We at Siemens want to actively design these areas of growth from the very start – which is why we’re merging our existing business units from the areas of power grids, infrastructure, and buildings. On April 1, 2019, the new Smart Infrastructure operating company will be launched under my leadership. And in this role I ask myself: What can be done for society? What can be done for our kids? What kind of world are we going to create for them?

Our goal is no less than to design the future of infrastructure. We serve society with our technology. We want to make the world more livable – including, and above all, in cities. We’re not just facing the challenges of urbanization. We want to work with our customers to overcome them. We want to make cities sustainable and livable – and not just in Jakarta.