Study Ties Cities’ Smart Grid Use To CRE Health
This Contributed Column is brought to you by the International Economic Development Council's 2015 Annual Conference. Join the largest international gathering of economic development professionals in the world. Click here to learn more about this important event.
A “Connected City” study by Jones Lang LaSalle revealed a correlation between municipal investment and application of smart grid technologies and three key economic indicators of the health of the commercial real estate (CRE) industry: strong employment, GDP growth, and positive office market occupancy. When Jones Lang LaSalle’s researchers compared “Connected City” smart grid cities with North American averages, they found that connected cities have an annual GDP growth rate that is 0.7% higher, an unemployment rate that is a full percentage point lower, and office occupancy rates 2.5% higher than less advanced cities.
“Cities that invest in smart grid technology and infrastructure, and that implement programs to enable energy-efficient corporate operations, are winning the competition for new businesses and job growth,” said Dan Probst, chairman, energy and sustainability services, Jones Lang LaSalle. “This correlation speaks to the value of strong relationships between public sector infrastructure custodians and power suppliers and the responsibilities of private businesses to be smart users of energy and to work together to drive productivity improvements at both the city and individual corporation level.”
A smart grid is a power delivery system that uses advanced information technology to improve the effectiveness and sustainability of energy production and distribution, as explained by Jones Lang LaSalle researcher Christian Beaudoin.
To evaluate the impact of smart grid investment on economic performance, Beaudoin compared the economic performance of connected cities with North American averages. He began with a list of Smart Grid Cities from U.S. News & World Report, identified according to a combination of regulation, financial commitments, time-of-use tariffs, reverse billing options, and smart metering that enables companies and residents to manage energy usage more effectively. The 10 cities (pictured in the chart below) were then compared as a group with national averages for employment, GDP growth, and office market occupancy.
“The Smart Grid Cities were chosen on the basis of their investments in smart grid technology,” according to Beaudoin, Jones Lang LaSalle vice president and director of Americas Corporate Research. “Their collective strong economic performance should be of interest to corporations locating new operations, as well as municipalities considering an investment in smart grid technologies.”