How cities will lead the energy future
By Peter Moskowitz
November 7, 2016
Last month, politicians, energy executives, and energy experts met in Istanbul for the 23rd World Energy Congress. The event gives global leaders a chance to coordinate energy policy, discuss new ideas, and seek solutions to issues like climate change.
At previous congresses, the role of cities in energy creation, consumption, and activism was rarely discussed. This year, a new report hoped to change that. Written by Arup at the behest of event organizer the World Energy Council, the document points out that cities consume the majority of the world’s energy and house the majority of its people, but have little control over how energy is produced, distributed, or used.
If the world hopes to battle climate change, the report argues, it needs to focus on cities.
“The people who are talking about energy and climate change tend to think along industry lines and focus on the car or the factory or the power station,” said report coauthor Stephen Cook, a London-based urban planner and energy consultant. “What they’re not seeing is that the way those energy vectors and behaviors and systems interact in urban areas is a huge part of how you get the changes in energy to happen. These aren’t separate problems to be solved one by one, but problems that need a holistic, community-based solution. That’s where cities come into the frame.”
Urban areas matter in global energy discussions for a simple reason: they use almost two-thirds of the world’s energy and account for more than 70% of all greenhouse gases. Buildings — most of which are located, of course, in cities — consume 51% of the world’s nonindustrial energy. And cities will become even more relevant to global energy planning as urban centers grow. According to the United Nations, two-thirds of the world’s population will live in cities by 2050.
Urban areas matter in global energy discussions for a simple reason: they use almost two-thirds of the world’s energy and account for more than 70% of all greenhouse gases.
Opportunities and constraints
Thankfully, according to Arup’s research, cities have unique opportunities to address climate change because they’re less limited by the complexities of national and international politics. But they also face a major challenge: most energy policy is decided at regional, federal, and international levels.
“Traditionally cities have had little power or responsibility over their greenhouse gas emissions from energy systems,” said Brian Swett, Arup’s director of cities for the Americas. “You wound up with this siloed approach to energy and carbon emissions, because that’s how the industry was structured. But I think cities are now stepping up.”
The report discusses five innovations that could give urban centers better control over their energy futures, ranging from financial mechanisms to new technologies. For example: transactive energy. Traditional power grids usually work in only one direction — a power company produces electricity, a distributor distributes it, a regulator regulates it, and then a consumer (say, someone in an apartment) uses it. Transactive energy allows for a much more flexible and equitable distribution of production and consumption. Houses with solar panels, for example, can store and push excess energy into the broader marketplace. That energy can then be distributed through a centralized market that, unlike today’s dominant systems, doesn’t favor large operators over small ones.
Such systems allow for more efficiency, which is good for the environment, and less downtime and unpredictability, which is good for the market. One study by Arup and Siemens found that switching to distributed energy systems such as renewable energy and energy storage reduced operational costs by 8 to 28%.
The transactive model could also allow more systems to switch from fossil fuels to grid electricity. Vehicles, for example: a switchover to battery electric vehicles could deliver major air-quality benefits for cities, but existing grid systems would struggle to cope with the addition of thousands of recharging vehicles. A transactive energy grid could keep the system in balance while facilitating the transition to electric vehicle fleets without putting too much peak demand on grid infrastructure.
City as advocate
While technological and infrastructural solutions are important, the report says that much of cities’ potential lies in the political and rhetorical realms. Because urban areas are at the forefront of climate change, they have a unique role to play in convincing the rest of the world to act. You can see that happening already, as mayors representing more than 600 million people come together under the banner of the Global Covenant of Mayors for Climate & Energy. Mayors have also been influential in UN climate talks and have led local campaigns for more green energy — New York City mayor Bill de Blasio, for example, last year announced plans to power 100% of the city government’s operations with renewable energy.
“Cities are the hotbed of innovation — it’s where all the action is taking place,” Swett said. “You can’t meet the commitments that nation-states have made to reducing CO2 and changing the way they produce and distribute energy without putting urban centers at the forefront.”
Swett points to Boston, where he lives, as an example of a city constrained by energy laws made at the state, regional, and national levels. The Massachusetts capital is reliant on regional energy providers regulated by the state. It doesn’t control production or distribution, and building codes are set at the state level. Boston doesn’t even control its mass transit system; that’s run by the Massachusetts Bay Transportation Authority. All this makes it hard to innovate on energy. But cities are starting to challenge that status quo.
In 1983, Saint Paul, Minnesota, launched a public-private partnership called District Energy St. Paul, which today supplies much of the power to the city’s downtown. Because the company is small and not beholden to shareholders, it can focus on green energy and its prices are relatively low.
Boulder, Colorado, is currently in a battle with the state and a private energy provider to municipalize its energy utility so that it can reach its goal of 100% clean, renewable energy by 2030.
And cities are becoming innovative energy centers in other ways: creating new financial tools for funding green energy projects, experimenting with hydrogen fuel cells in homes and public transit. These plans come back to the fact that cities, not nations or regions, are leading their own energy policies.
Swett and Cook told me it’s important for everyone else — world leaders, politicians, corporations — to understand what’s going on, or risk getting left in the energy past.
“Cities will have a different energy infrastructure by the midpoint of this century, and there will be winners and losers in that transformation,” Swett said. “So are people doubling down and digging in because they have a vested interest in the current infrastructure, or will they see the writing on the wall?”