City of London

A New Space Race in the UK

Market demand and public policy align towards more sustainable infrastructure in the UK

A worldwide race to decarbonize is on, and each country’s performance relies on policy, ingenuity, and smart infrastructure. What does the race look like in the UK?

Six months before hosting the COP26 event in 2021, the UK Government made what it described as “the world’s most ambitious climate change target”: to cut emissions by 78% before 2035 (relative to 1990 levels).

 

This ambitious target follows considerable progress on energy decarbonization in recent years. Only 1.8% of the UK’s electricity was from coal-fired power plants in 2020, down from 40% a decade ago,

while wind power has grown by 715% over a similar period.

 

Infrastructure owners, developers and operators have played a key role in the UK’s progress, both in the development of more sustainable assets and in greening their own practices. In our survey, 64% of UK respondents say their organization adopted significant low-carbon or net zero targets for the first time within the past five years, and a similar proportion (66%) believe their organization will become a net zero contributor to global carbon emissions in, or before, 2025.

 

“Attitudes to sustainability, environmental performance and renewable energy have probably changed in advance of legislation in recent years,” says Ewan Jones, Partner at Grimshaw, a multinational architectural firm, headquartered in London. “In the building context, developers have adopted their own targets, while buyers and tenants have also started demanding more sustainable places in which to live and work.”

 

In fact, UK respondents to our survey consider carbon emissions and sustainability to be the joint second highest priority for future infrastructure investments and/or projects (alongside market competitiveness and behind only cost efficiency).  

Attitudes to sustainability, environmental performance and renewable energy have probably changed in advance of legislation in recent years.
Ewan Jones, Partner at Grimshaw
Kid on a kickboard between smart buildings

What is the New Space Race?

A New Space Race is a Siemens Smart Infrastructure thought leadership study about how infrastructure stakeholders view the immediate and longer-term future of our built environment and energy systems.

 

It is based on a survey of 501 senior infrastructure stakeholders from 10 countries as well as in-depth interviews and desk research. The research covered mainly commercial real estate (e.g. office towers, campuses, hospitals, data centers, or factories), public sector assets (e.g. community centers, transport hubs, education assets, or healthcare infrastructure), and energy assets (e.g. electricity grids, gas networks, wind farms, etc). Respondents were involved in infrastructure as owners, developers, or operators.

Scope to invest in greater digitalization, automation, and data-driven operations

Across all the countries we surveyed, two thirds (67%) of energy industry respondents said that net zero energy is impossible without digitalization. This makes it somewhat concerning that a moderate majority of UK respondents (63%) believe that the digitalization of buildings and power networks is lagging the progress of digitalization in of most other industries, while only 21% say that their organization is making full use of the data they have available – a figure that is quite a lot lower than the all-country average of 31%.

 

This result indicates that there is enormous potential for digitalization and data-driven strategies to start to – or continue to – transform infrastructure performance. UK respondents expect blockchain secured data flows, contracts, and transactions to have the biggest impact on infrastructure assets, projects, or investments over the next five years. There are several roles for blockchain in energy trading and grid coordination as the UK continues to evolve towards a distributed, decarbonized, and digitalized energy system. These include authenticating renewable energy, helping consumers trade electricity with each other directly, and allowing for two-way, dynamic tariffs between prosumers and the wholesale energy market. 

 

Greater data availability, exchange, and integration are fundamental to the digitalization of infrastructure, but these are also areas that involve several industry-specific challenges. Simulations exemplify this: “Building information modelling is often pretty crude compared to, for example, what you might find in the automotive industry, because buildings are not mass-produced and the scale of buildings also means that it takes a massive quantity of data to create a detailed, digital model,” says Jones. “At the moment, there are multiple models built for different purposes by different stakeholders – it is a fragmented industry, and so we have fragmented models. There is a lot of scope for that to get better.” 

Top 5 factors influencing future infrastructure development in the UK

Infrastructure stakeholders in the UK say these are the most important factors influencing future building and energy infrastructure projects.

Decarbonization perspectives from infrastructure stakeholders in the UK

Biggest impact technologies over the next five years

The UK’s energy and building industry leaders rated these areas the most impactful on infrastructure development over the next five years.

We would like to extend a special thank you to the diverse set of industry leaders and experts who shared their ideas and insights with us as part of this study.

This thought leadership study is based on a survey, in-depth interviews and desk research. It is not an academic or scientific research paper. Our goal is not to provide any final answers, but rather to start conversations, stimulate thought, and encourage infrastructure stakeholders to reflect on what today’s megatrends mean for the future of our energy system and built environment.

 

The survey included 501 respondents from 10 countries. The countries involved include those large-scale and/or highly advanced infrastructure assets and ambitions. It was fielded in June and July 2021.

Country                                                                                       
 

USA

20%

UK

16%

China

12%

France

12%

India

10%

Germany

8%

UAE

8%

Singapore

6%

Austria

4%

Sweden

4%

Primary role

 

Leadership, management, strategy

24%

Operations and maintenance

15%

Architecture and design

12%

Information technology, cybersecurity, software development

12%

Engineering or construction specialist

10%

Financial management or investment professional

5%

Sales, marketing, PR

5%

Data science, analytics, AI

4%

Consultant (e.g. management, sustainability, technology)

4%

Risk management, legal or regulatory compliance

3%

Property development

3%

Sustainability and/or efficiency specialist

2%

Industry

 

Architects, developers, construction, engineering

18%

Heavy industry and manufacturing

14%

Retail, hospitality, corporate, residential

12%

Public sector and education

12%

Energy (generation, transmission, distribution)

11%

Light industry (Food/beverage, data centers, transport)

10%

Healthcare and pharma

8%

Property/facility management

8%

Investors (trusts, funds, etc)

6%

Organization size                                                                  

 

50 - 249 employees

20%

250 - 499 employees

20%

500 - 999 employees

25%

1000 - 4999 employees

20%

5000+ employees

15%

Seniority

 

C-suite executive (or equivalent)

32%

I report directly to a C-suite executive

38%

My boss / manager reports directly to a C-suite executive

30%