Tamworth could be Australia's first "fully integrated smart city" after the council formed a partnership with the University of New South Wales and the Providence Asset Group.
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The partnership was announced by the UNSW professor Joe Dong, who said the trial would be the first based on Internet of Things (IoT) technologies, and include applications across transport, energy, health, telecommunications and other community services.
"The aim for the Tamworth Smart City project was to build IT systems that would monitor and control data flowing through 'smart' services, using the wireless network," he said.
"Imagine having an app on your computer or phone that gives you your electricity usage and cost information in real time, and also tells you how some slight change of usage pattern of appliances, such as the washing machine, could most effectively save electricity bills."
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Tamworth Regional Council general manager Paul Bennett said UNSW researchers would investigate opportunities across a range of local industries.
"We are in the very early stages, but it is exciting to be a part of such an innovative project: Australia's first fully integrated smart city trial," he said.
"It will take some time before it is clear what the tangible outcomes may be, but right now we do know the partnership is looking to bring significant investment to our region and is committed to securing a project which benefits council, our community and local industry."
While the project is still in the development stage, two aspects being looked at are methane capture and use from waste by-products, as well as hydro-solar power technology.
"There has been no financial commitment being sought from council at this stage," Mr Bennett said.
"The memorandum of understanding is essentially council opening our region to researchers so they can come and learn about the real-world issues experienced by a regional city and to find technological solutions."