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Medium Cost-Benefit Analysis Technology Implementation Investment Decision

Electric Walk

#Government #Utilities #Clean Technology #Smart City Infrastructure
ProHub Comment

This case tests the candidate's ability to conduct a comprehensive cost-benefit analysis while managing ambiguous data and multiple evaluation criteria. It requires synthesizing quantitative financial modeling (energy costs, installation costs, ROI over 3 years) with operational feasibility analysis (footstep volume required) and strategic considerations (smart city rankings, risks). The case rewards candidates who recognize that profitability can exist without meeting Year 1 savings targets and who proactively identify information gaps (daily energy generation capacity).

Estimated Time 15 minutes
Difficulty Medium
Source Darden
50 / 100
Cities have been vying for the top spot in the world’s smart city rankings for years. The NYPA (New York Power Authority) is under immense pressure to manage its expanding energy demand using sustainable technology, following the launch of the world’s first “smart street” in London. NYPA has expressed an interest in working with Electric Walk, a UK-based technology firm, to install kinetic pavements that convert pedestrian footprints into electricity. NYPA hired us as part of this campaign to determine if the contract with Electric Walk is worthwhile.

Clarifying Information

  1. What is NYPA’s goal? To be the no.1 smart city worldwide. However, with shrinking budgets post Covid-19, NYPA’s interim goal is to generate electricity through clean technology while achieving cost savings from first year itself.
  2. How does kinetic pavement generate electricity? Electric Walk’s patented tiles produce around 5 WH (watt hours) of power per footstep. As people step on the electro-magnetic tiles, their weight causes electric-magnetic induction generators to vertically displace, which results in a rotatory motion that generates off-grid electricity.
  3. Was the same tech installed in London or is this completely new? Electric Walk was involved in the “smart street” initiative in London, which is why NYPA is interested in them.
  4. Is there any time constraint? NYPA would prefer immediate decision as it wants to catch up on the trend before it turns obsolete and believes it will help them stay competitive with other smart cities.
  5. How does NYPA define worthwhile? Electric Walk has quoted a rate of $3000 per 1 square feet tile. NYPA wants to know if it would be a financially viable contract to say the least – in other words, they just don’t want to lose money.