The provision of electricity, water and transportation forms a vital underpinning to urban development. Despite this importance, the mode by which infrastructure services are provided has been largely taken for granted and has attracted relatively little interest from urban studies and policy- making communities. This research reconnects urban policy to infrastructure management by highlighting how the adoption of supply-led or more demand-responsive modes of infrastructure provision critically shapes the intensity, and so the relative environmental impact, of networked services in contemporary cities.
The development of more sustainable cities critically depends on a style of urban infrastructure provision that encourages more efficient patterns of resource consumption. Conventional practices of network management - Facilitating Infrastructure Supply (FIS) - have a powerful tendency to 'predict and provide' service provision with forecasts of increasing demand met in advance through supply oriented options such as new power station, road or reservoir construction. In contrast, Demand Side Management (DSM) approaches attempt to avoid environmentally and economically expensive supply investment by managing both the level and timing of demand placed on networks through the implementation of energy and water efficiency measures and the re-shaping of transport patterns. Figure 1 illustrates the key features of supply and demand led approaches to infrastructure management. Traditionally the electricity and water sectors have practiced a FIS oriented approach to network management. Road buildings programmes have also been driven by a strong supply orientation. Recent shifts have, however, stimulated new approaches - innovative electricity and water companies and local authorities have started to embrace more DSM oriented methods of network management.
Figure 1 Approaches to Urban Infrastructure Management
The past decade has seen a remarkable shift in the regulation and management of infrastructure networks. Privatisation and liberalisation of water, electricity and transportation networks has transformed the United Kingdom into a vast laboratory. New technologies, regulatory regimes, management styles, marketing strategies, environmental priorities and commercial goals have emerged which are dramatically re-configuring patterns of infrastructure provision. A new logic of network management is emerging which presents a serious challenge to the supply-oriented logic of the nationalised period of utility ownership.
The emergence of DSM in the electricity sector is largely due to a powerful combination of regulatory, economic and commercial factors. First, the Office of Electricity Regulation (OFFER) has weakened the 'demand driver' - that translated increasing sales into higher levels of profit - in the pricing regime at the same time as granting Regional Electricity Companies an additional revenue allowance of one pound per customer to fund energy efficiency projects. Second, and critically, this has led to an internal industry debate about the economic costs of continuing to expand infrastructure networks. With suppliers concerned to avoid supply capacity that cannot be translated into profit, privatisation has focused utilities' interest on the efficiency and commercial effectiveness of their distribution networks. Third, DSM activities have emerged as an important response to these concerns, a process further reinforced by the commercial benefits of utilities engaging with their most lucrative customers. These three shifts have also been mirrored by growing awareness of the environmental costs involved in a supply-led context and pressure groups, such as Association for the Conservation of Energy and Friends of the Earth, have highlighted the environmental benefits of DSM strategies in both CO2 and SO2 abatement.
In contrast to electricity, it is mainly powerful regulatory shifts of an economic and environmental nature that have promoted the emergence of a DSM logic within the water sector. The Office of Water Regulation (OFWAT) is measuring the economic efficiency of water companies against rigorous standards of performance, judged via the comparative regional 'cost' of water delivered by each company. Equally, the National Rivers Authority are tightly controlling new abstraction licenses to encourage water companies to increase the efficiency of their networks, mainly through the reduction of leakage which can amount to 25% of total water supplied. At the same time environmental groups have pointed to the environmental impact of new reservoir schemes in terms of lost land, diminishing green belt area, natural sites and buildings of scientific interest. Social resistance to proposed reservoir developments such as Broad Oak in Kent have also highlighted the difficulties of pursuing supply-oriented options.
There appears to be a comparable shift in the assumptions underpinning the management of road space in urban areas. There is growing recognition of the economic costs of continued road network expansion and wider questioning of the efficacy of constantly building more roads which seems merely to accelerate car-use. Environmental concerns are also playing a part as transport, in particular car travel, accounts for 20% of the overall CO2 emissions in the UK. Demonstrations of public opposition to road building projects, such as at Twyford Down, mark a new chapter in the political debate around infrastructure planning and send influential signals to the Department of Environment and Department of Transport on the acceptable scale and form of future infrastructure investment. In light of such economic, political, social and environmental concerns funding applications from local authority planners to the Department of Transport have been re-drawn to cover integrated 'packages' of public and private provision, steering local transport planning policies away from narrowly engineering-inspired road building initiatives. Similarly, the Department of Environment has issued planning guidance commending local land use plans which spatially harmonise domestic, leisure and working patterns.
Awareness of the economic and environmental costs of supply oriented investment has prompted widespread social resistance to new infrastructure plans. This new climate of social and political concern over infrastructure management strategies has mirrored a transformation in the regulatory framework governing infrastructure decision-making across all three case study sectors. The rate of emergence of this new demand-oriented logic of infrastructure planning varies between sectors, depending upon the physical, technical, regulatory and commercial contexts governing each network's development. Despite these differences, similar social and spatial issues seem to be surfacing across each infrastructure system.
Vital to the culture of DSM, across sectors, is renewed sensitivity to changing user needs via more accurate demand profiles and more flexible network management through refined customer and service differentiation. Such innovative practices are profoundly altering established assumptions about the role of networks in the management of territory and the relationship between users and infrastructure systems.
Figure 2 illustrates the profound implications the new DSM logic of infrastructure provision has for the territorial management of cities and regions. The techno-economic performance of particular segments of an infrastructure network is likely to result in different forms of network management. Utilities are looking closely at the technical and economic performance of each part of their distribution networks and planning improvements rather than simply expanding networks irrespective of cost. Infrastructure networks are likely to be treated in very different ways according to the local demands placed upon them, with DSM most likely to be adopted where systems are under most stress. On these "hot" parts of the network, providers may seek to calm demand by sponsoring energy and water efficiency and conservation measures, or finding alternatives to the private car. By contrast, where the network is running "cold", with spare capacity, initiatives may well be developed to stimulate demand. Electricity and water companies may stimulate local economic activity by promoting inward investment, while transport planners seek to improve the accessibility of under-utilised commercial and industrial areas.
DSM requires a closer form of engagement with particular types of user. The traditional linear relationship between production and consumption interests is increasingly blurred as new reciprocal and synchronous relationships are formed to balance infrastructure supply and demand more accurately. The managers of infrastructure networks are now differentiating between users on their networks focusing on their commercial attractiveness, their impact on the technical efficiency of the network and their potential for maximising DSM opportunities. Once providers have identified the major users on their networks they are developing new ways of engaging with them to re-shape patterns of demand. Increasingly extra demands are placed on particular types of users as the network providers seek to develop new ways of balancing supply and demand on their networks.
Figure 2 Territorial Management and the DSM Logic
Strengthening DSM - Accelerating the Logic Urban environmental policy-making communities are largely disconnected from these new infrastructure management processes. While conflicts and tensions between public and private goals clearly exist there are presently significant opportunities for utilities, developers, regulators and policy-makers to develop together novel ways of minimising the environmental costs of infrastructure provision. Understanding how changing institutional contexts encourage the development of local demand management initiatives could provide the basis for a new community of interests around DSM. Our research suggests that policy-making communities must begin to:
Such an approach would powerfully reconnect policy-makers to environmentally sensitive development decision making and significantly accelerate the spread of the DSM logic, within and across sectors.
Further papers from: Simon Guy, Tel: +44(0) (191) 222 5408, s.c.guy@ncl.ac.uk or Simon Marvin, Tel: +44(0) (191) 222 7282, s.j.marvin@ncl.ac.uk, Centre for Urban Technology, Univ. of Newcastle Upon Tyne, Fax: 0191 222 8811 http://www.ncl.ac.uk/~ncut