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Energy as a smart cities starting place. Since government leaders are well aware of their own pain points, we said in the Introduction to this Readiness Guide that we won’t recommend which responsibility areas cities should tackle first. But given the critical role energy plays in just about everything that happens in a city, leaders uncertain where to start their smart city journey should consider making smart energy a priority.

That’s because the success of a smart city relies on creating and supporting a smart energy system. It's a system that knows in real time where a transformer has blown and automatically reroutes power to keep power flowing to homes and businesses. It’s a system that collects and manipulates data from sensors and smart devices to give operators a complete view of the energy infrastructure – for instance, how much power solar installations are generating or when they need to signal a demand response call (asking citizens and businesses to temporarily curtail their energy use in return for a reduction on their power bill) to help balance the load on the electric grid.

As we said earlier, urban populations are growing – and some are growing very rapidly. The population of the city of Seattle, Washington has been growing quickly for several years. Between July 1, 2015 and July 1, 2016 the city's growth rate was 3.1%, faster than any of the 50 largest U.S. cities. According to the United Nations, 54.5% of the world's population lived in urban environments, and that number is expected to grow to 60% by 2030. One in every three people will live in cities with at least 500,000 residents.

As the UN report noted, "In 2016, there were 512 cities with at least 1 million inhabitants globally. By 2030, a projected 662 cities will have at least 1 million residents. Cities with more than 10 million inhabitants are often termed 'megacities.' In 2016, there were 31 megacities globally and their number is projected to rise to 41 by 2030."

Also, cities with smart energy networks are economically stronger and, therefore, more competitive. Businesses looking for a place to locate or relocate their operations will be more drawn to a city with a reliable and sustainable energy infrastructure.

There is another economic reason cities that want to become smart cities should be looking at smart energy networks. As storms become increasingly severe and frequent, the financial impact of storm-related losses on citizens, businesses and city infrastructure becomes more severe, as well. Because of the technologies and self-healing capabilities of smart energy networks, they are better able to withstand severe weather and restore power when outages do occur than traditional electric grids.

In the next section we share examples of smart energy upgrade projects and how they are benefitting communities and their citizens.

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