Why low-carbon clusters are a model for the future
People have always been drawn to the places with the largest mass of resources, whether that’s water, timber, coal or crops. And the same law of commercial gravity is increasingly true for low-carbon energy and data.
Indeed, the commercial, residential and infrastructure hubs of the future are likely to feature office districts utilising renewable energy, as well as solar-powered data centres, green hydrogen transport systems, airports with a ready supply of sustainable aviation fuel, ports with access to green ammonia, and water infrastructure based on circular systems.
Why? Because the priorities of businesses, investors and the general public are changing, meaning this clustering of sustainable and digital infrastructure could end up being more competitive in the future. Climate mitigation and adaptation, as well as digital transformation, are drifting up the agenda. That’s driving a re-evaluation of the infrastructure we’ll need in 2040 or 2050.
Because it takes decades to build out the infrastructure for urban centres, that process is starting now. “It’s clear that we have to create low-carbon infrastructure ecosystems,” says Andrew Stanford, director of infrastructure at engineering consultancy Walsh. “In the future, carbon will have value, so low-carbon zones will be financially efficient and will exacerbate that gravitational pull.”
Infrastructure lessons from history
We are only at the beginning of our renewable energy, digital and data-led transitions, so we are yet to fully determine how these new infrastructure hubs could look. However, our major urban centres have proved resilient over the centuries, thanks largely to their ability to rebuild and transform their existing infrastructure.
For instance, the Great Stink in the mid-1800s spurred London to upgrade its sewerage system. Today, much of the fibre-optic data network runs along the roofs of these old sewer pipes, while parts of the capital’s power supply are connected via electricity cables that run along the Grand Union Canal towpath, the water-fed transport network of the Victorian age.
If we want a net-zero, data-fed future that doesn’t impinge on our prospects for economic growth, different elements of our new infrastructure will need to complement and service each other in precisely this manner. This will involve new levels of collaboration and urban planning within an ‘ecosystem’ approach.
But how can governments and businesses realistically achieve this? “Investment is a catalyst,” says Laurence Johnson, head of the utilities and energy infrastructure group at Hoare Lea, an engineering consultancy. “Infrastructure requires long-term investment that traditionally is connected and guaranteed with strike prices, say, in the case of electricity. Doing this speculatively without the customer yet in place will need some guarantees that only government can offer.”
If the right hubs can be created, providing low-cost, low-carbon infrastructure with plenty of renewable energy, access to water and digital infrastructure, the prize could be huge. These centres will have a new gravitational pull.
Why special economic zones are the next step
And it’s already starting. There isn’t a day that goes by without a headline about another new green hydrogen hub in the UK or around the globe, from Hull to Hamburg.
“These types of hubs will draw industries in by providing the most economic place for them to meet their needs,” says Johnson. “As engineers, we need to value our resources differently. It’s capacity, carbon and cost – the three Cs. This allows us to create a market around a cluster that can be measured and valued against rival traditional city locations.”
China is ahead of the curve. It already has green special economic zones, from Hainan to Beijing, with the specific aim of attracting green finance. The UK government has pushed freeports as a post-Brexit policy, offering tax incentives to draw businesses in. Two freeports in Scotland are also being touted as green: they’ll be powered by offshore wind and aim to develop green hydrogen.
“Special economic zones have huge potential,” says Gavin Watson, an energy and sustainable finance specialist at law firm Pillsbury. “We are talking about anything from ‘green clusters’ and ‘energy transition hubs’ to ‘sustainable innovation zones.”
Watson says the development of low-carbon infrastructure and ecosystems “should mirror the approach taken by economic free zones, whereby complementary infrastructure is developed side by side. Not only does this improve the potential for the practical application of energy sources, but it also encourages the sharing of resources and innovation.”
The value of going local
A more localised approach to infrastructure planning could also generate its own gravity. Businesses, employees and investors will be attracted by cheaper renewable energy generated on their doorstep, super-fast digital infrastructure or affordable transport networks.
“Their proximity would offer a range of benefits, including greater value chain integration, reduced costs and environmental impact,” points out Jonathan Moseley, head of infrastructure and strategic advisory at real-estate giant CBRE. “This could represent a complementary range of interdependent, co-located infrastructure assets.”
New hubs could also generate their own gravitational pull over time, drawing in innovative pilots or new applications of infrastructure technology. This has been seen in Seoul, South Korea, Masdar City in the UAE and in Kalundborg, Denmark, which has taken industrial symbiosis to the next level.
“Clustering enables the development of highly skilled resources, especially when connected to universities and research institutes,” says Dave Cole, programme director of product solutions at KBR, an engineering firm.
The opportunity is ripe. As ever, it will take that magic mix of commitment, funding and long-term vision for these nascent infrastructure clusters to reach their full potential.