City of Los Angeles

A New Space Race in the USA

Policies, funding, and technologies align for an historic expansion and transformation of American infrastructure

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 USA?

In early November 2021, U.S. President, Joe Biden hosted a discussion on the margins of COP26 with several of the world’s most powerful leaders. The discussion was about how infrastructure development needs to align with climate change goals. It concluded with leaders endorsing five key principles, including a call for “climate-smart infrastructure development,” and a “new paradigm of climate finance,” to help pay for it.

 

Just two days after COP26 concluded, the United States Congress passed the historic, bipartisan Infrastructure Investment and Jobs Act (IIJA) – providing $550 billion to fund significant domestic investments in energy efficiency, electric vehicle infrastructure, grid modernization, and resilience.

 

While the Biden-Harris Administration and members of Congress are continuing to pursue additional climate policies the IIJA provides a key path in the to act now to combat climate change. 

We need to shift focus away from short-term savings, towards investments in reliability, robustness, and cleanliness. 
Michael Webber, Josey Centennial Professor in Energy Resources, Mechanical Engineering at The University of Texas at Austin 
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.

A challenging balance to strike for infrastructure stakeholders in the U.S.

Infrastructure stakeholders in the U.S. have a challenging balance to strike in their infrastructure priorities, with little room to compromise in any area. In our survey, cost efficiency, adaptability, market competitiveness, integration and automation all emerged as similarly important, leading priorities, closely followed by sustainability, comfort, and resilience.

 

More predictable and consistent legislative action would help infrastructure stakeholders manage this difficult balance of priorities but some of these – such as  sustainability and resilience – run at odds with the highly competitive commercial environment in the US, which is not set up to reward longer-term strategies.

 

“One of the challenges we deal with in the United States is doing the math beyond quarterly reporting cycles or two-year political election cycles – we need to get better at planning decades ahead,” says Michael Webber, Josey Centennial Professor in Energy Resources, Mechanical Engineering at The University of Texas at Austin and former chief science and technology officer at ENGIE, a multinational energy company. 

 

“The kinds of things we're dealing with now, such as climate impacts, demand it because they unfold over a century or more. We need to shift focus away from short-term savings, towards investments in reliability, robustness, and cleanliness. Those areas can save money in the long run in a variety of ways, such as ecosystem impact or avoided downtime,” says Webber

Where decarbonization and digitalization intersect

There is some evidence that this is starting to happen. Among U.S. respondents to our survey, 79% say that their organization will become a net zero contributor to global carbon emissions in, or before, 2025. A strong majority (69%) also believe that the world can transition to net zero without carbon taxes, which suggests that many have faith in a more market-driven transformation, perhaps steered by government initiatives, incentives, and regulatory supports.

 

One pillar of this needs to be an improved focus on energy efficiency. The Biden-Harris Administration has set a target to “retrofit four million buildings and two million homes” over four years, while also launching a drive to standardize and implement stronger building performance standards. In our survey, some 74% of U.S. respondents believe more attention and investment should be given to improvements to energy efficiency and demand side management, suggesting strong support for these initiatives.

 

Energy efficiency is one of many areas where decarbonization goals intersect with digitalization goals. According to research from the International Energy Agency (IEA), the growing role of digital tools is “set to enable policy makers to measure the value of integrated energy efficiency and distributed energy resources more transparently, to expand the energy efficiency ecosystem, and to allow new innovative market-based policy approaches”.

Data can help us to refine our existing capabilities so that energy is produced more efficiently and more reliably.
Michael Webber, Josey Centennial Professor in Energy Resources, Mechanical Engineering at The University of Texas at Austin 

There is, however, much work to do before that promise can become reality. Nearly two thirds of U.S. respondents (64%) to our survey believe that the digitalization of buildings and power networks is lagging the progress of digitalization in of most other industries. In addition, only 37% of U.S. respondents say that their organization is making full use of the data they have available, suggesting that there is an enormous volume of potentially valuable data going to waste.

 

In another industry, unused data might represent some revenue missed, or some customers less satisfied, but in the energy sector it can mean that energy is wasted, and consequently (if it is generated by hydrocarbons) greenhouse gases are being released without providing any benefit to anyone.

 

With better data and digital infrastructure, the U.S. can dramatically reduce wasted energy. “Over half of the energy that is produced is released as waste heat into the atmosphere or waterways,” says Webber, “The right data can help us extract value from that waste. Data can help us to refine our existing capabilities so that energy is produced more efficiently and more reliably.”

 

The U.S. now has bold targets to build a carbon emission-free power sector by 2035, and the Infrastructure Investment and Jobs Act is injecting billions of dollars into renewable energy, decarbonization, and new infrastructure over the coming years. There is much to do, but the U.S. has moved forward considerably in the past year, and now has policies designed to put the country on the path to a net-zero economy by 2050. The technology, funding and tools are available now to modernize energy grids, make communities more resilient, and make buildings more sustainable.

We are at a singularly unique moment in the history of American infrastructure. We have the opportunity to make the most of the investments being made to meet climate goals and remain competitive globally, while putting technology already at our fingertips to work for a more resilient, equitable and livable society. We have the right tools for the job, so it’s time to get to work.
Ruth Gratzke, President, Siemens Smart Infrastructure USA

Top 5 factors influencing future infrastructure development in the U.S.

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

Decarbonization perspectives from infrastructure stakeholders in the U.S.

Biggest impact technologies over the next five years

U.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%