German Marshall Fund Convenes Transatlantic Delegates to Explore the Ecosystem of Amsterdam’s Energy Economy May 05, 2014 / Amsterdam, the Netherlands
What is an Energy Ecosystem?
What exactly is an energy economy ecosystem, and how can a city support it?
That’s the question that the German Marshall Fund set out to explore in May 2014, when it convened a delegation of Americans from Pittsburgh, Pennsylvania, and Charlotte, North Carolina, and Italians from Torino to participate in the Amsterdam Energy + Smart City Tour.
Over a period of five days, delegates toured government planning offices, startup incubators, private companies, and utilities with the goal of understanding how Amsterdam is developing a sustainable energy economy. Through their experiences, delegates had the opportunity for extensive dialogue both with their peers in Amsterdam and among themselves to explore the ways the ideas and projects being implemented in Amsterdam may apply in their respective home cities.Amsterdam’s Energy Ecosystem Infrastructure
Throughout the tour, delegates were able to observe how the various pieces of Amsterdam’s energy economy infrastructure worked together to form the basis for a strong and progressive energy economy. The ecosystem is supported by a coordinated policy direction from EU, national, and local levels. It is built on a “smart city” framework that prioritizes innovation and efficiency and is anchored by energy innovation centers that connect academic research and the marketplace. Knowledge, information, and capital are able to flow freely throughout the ecosystem to where they are needed most via open data, cross-sector collaboration, and public-private partnerships.
Amsterdam and the Netherlands created a solid foundation for smart city development through coordinated planning at the EU-level, national level, and municipal-level. Several layers of government policy underlie Amsterdam’s energy strategy from above and below: European Union directives enforced by the European Commission, the Dutch Energy Agreement, and the National Topsector economic development strategy are all aligned with city policy. Having the policies in alignment makes it easier for entities at all levels and in all sectors to understand the framework within which they operate, and provides a clear direction for advancement.
Legal enforcement mechanisms also exist at several layers to advance policy in the Netherlands. For example, the European Commission has the power to take action against EU countries that do not comply with EU energy law, while Dutch law requires the private sector to implement energy improvements with a return on investment of five years or less, with enforcement at the municipal level.“Smart City” Framework
Sarwant Singh of the consultancy Frost & Sullivan, writing in Forbes, calls smart cities a “$1.5 trillion dollar market opportunity.” His firm’s 2013 report studies 26 “smart cities” within an eight-part rubric: smart governance, smart energy, smart building, smart mobility, smart infrastructure, smart technology, smart healthcare, and smart citizens. Singh notes that of all cities studied, Amsterdam’s model is the most complete and formalized:
“..... the most interesting aspect of Amsterdam is that it has created a formal channel and mechanism through which such projects can be catalyzed, funded, and implemented. Amsterdam (Smart) City Project follows a 50:50 public-private model jointly funded by the EU, city government, and private participants.”
Amsterdam Smart City is a platform for coordinating smart city activities within its jurisdiction. The initiative was founded by Liander (a network operator arm of Alliander, Amsterdam’s grid operator), the Amsterdam Economic Board (Amsterdam’s consortium of industry and business leaders), KPN (Amsterdam’s telecommunication company), and Gemeente Amsterdam (the municipality of Amsterdam). The program is organized around five overarching themes: living, working, mobility, public facilities, and open data. The project focuses on three districts within the city, and includes 49 individual projects that fit geographically within the three districts and topically within the five themes.
Each city represented by delegates on the tour is also working to implement aspects of the smart city concept. Torino, Italy, has developed a municipal SMILE program that sets sustainability goals, targets, and metrics around the smart city theme. The city has also participated in several EU tenders totaling €3.5 million in investment to strengthen the city’s ability to leverage public demand for goods and services to support business innovation in the area of social innovation, with a focus on technological solutions applicable to the issue of energy management in public buildings, and on themes of info-mobility, waste management, and water.
The city of Charlotte, North Carolina, recently updated its Environment Focus Area plan and set an ambitious goal of becoming an international leader on the environmental stage and a leading energy hub. The city of Charlotte is also a partner in EPIC, an energy center housed within the University of North Carolina Charlotte campus and developed through public-private partnerships. In the downtown area, Envision Charlotte is another effort to engage non-profit, academic, corporate, and government entities to make the center city the most sustainable in the country. Finally, the city is in the process of developing a sustainability plan similar to Torino’s effort as part of Sustain Charlotte.
Pittsburgh is in the process of launching their Pittsburgh Energy Innovation Center in a disinvested historic neighborhood. The center uses the city’s energy innovation clusters and major research institutions to promote job creation, entrepreneurship, and urban economic revitalization. The city is also undertaking an effort, led by new Mayor Bill Peduto, to emphasize innovation and performance as methods of addressing social equity and economic development. Finally, the City of Pittsburgh adopted an open data policy in March 2014.
While each city represented in this delegation is taking steps toward smart city development, it is fair to say that none has yet achieved the level of comprehensive policy direction and programmatic implementation demonstrated by Amsterdam, making the case study of the Dutch city particularly inspiring and relevant for the delegation.Energy Innovation Centers
Energy Innovation centers are a critical infrastructure element for smart city initiatives by bringing together private, pubic, and private actors and using a city’s expertise in research and development to bring solutions to market.
The delegation was exposed to a number of energy centers both operational and under development. The Torino delegation is currently working to operationalize a Torino Energy Center at the Politecnico di Torino in partnership with regional government, foundations, other universities, and private industry. Delegate Johan Enslin directs the Energy Production and Innovation Center (EPIC) at University of North Carolina at Charlotte, an energy innovation center that partners with utilities and industry to develop and bring innovative energy technology to market.
In Amsterdam, the delegation met with representatives of the Amsterdam Institute of Metropolitan Solutions, a Dutch multi-sector sustainability innovation center now getting underway with the assistance of city funds. Pittsburgh is developing a Pittsburgh Energy Innovation Center in a disinvested historic neighborhood. Each of these examples exemplifies various approaches to creating an energy center with respect to scope, partnerships, and funding.Open Data
Open data is emerging as a key driver of smart city innovation. According to the Open Data Handbook, “Open data is data that can be freely used, reused, and redistributed by anyone — subject only, at most, to the requirement to attribute and share alike.”
The U.S. City Open Data Census, a partnership between the Sunlight Foundation, Code for America, and the Open Knowledge Foundation provides an overview of the open data resources available in 54 major U.S. cities in areas as diverse as public finance, restaurant inspections, and traffic data.
A 2013 McKinsey report describes the benefits of open data in cities; it not only empowers citizens, and improves government function, but also drives performance and innovation in the private sector:
“..(open data) could generate more than $3 trillion a year in additional value, which is already giving rise to hundreds of entrepreneurial businesses and helping established companies to segment markets, define new products and services, and improve the efficiency and effectiveness of operations.”
The delegation met with Patrick Lie of Amsterdam Smart City, who presented information about the many initiatives enabled through the city’s Amsterdam Open Data program. For example, one initiative allows entrepreneurs to develop applications using the data provided by the city. Amsterdam Smart City does not fund these projects directly; instead it creates value models by making data available and then letting the market take over.
As a result of this initiative, Amsterdam was able to develop and launch a GIS-based Amsterdam Energy Atlas based on data provided to the city by grid operator Alliander. The Atlas provides an invaluable planning tool by spatially identifying energy infrastructure, consumption patterns, renewables potential, and efficiency potential. This allows planners to target districts with appropriate solutions.
Alliander is also using open data to pioneer a toolbox methodology for sustainable area development called Project Tool for Innovative Communication and Design (PICO), an interactive online tool that allows consumers to visualize energy use at a district scale to identify “quick wins” and appropriate solutions. This will let local groups and cooperatives identify energy needs and wants in partnership with the company.
Pittsburgh adopted an open data policy in March 2014, and is now convening an open data management team to assign representatives from each city department to help identify data assets and processes. Charlotte is partnering with Code for America in 2014 to host fellows to focus on utilizing data for improving city services and strengthening civic engagement. Torino has made much municipally owned data available to the public, but delegates acknowledge that this is an area in which much work still needs to be done.Cross-Sector Innovation
During the group’s visit to Green Metropole, a grassroots sustainability incubator located at New Energy Docks, the group had an opportunity to speak at length with Peter Dortwegt, director of New Energy Docks.
Dortwegt said that innovation requires cross-pollination of ideas across sectors and industries, a view that stands in opposition to the prevailing theory of cluster-based economic development. According to Dortwegt, the conventional wisdom results in missed opportunities and synergies, and attracts only large, established corporations at the expense of entrepreneurs and smaller-to-medium sized enterprises. In his view, innovation should be organized around societal problems, not industry clusters.
Dortwegt believes the Amsterdam Smart City program is a bright spot in this area. A key aspect of Amsterdam Smart City’s success is its capacity for cross-sector entrepreneurship and collaboration. The program engages partners from the public and private sectors and academia to collaborate on developing solutions to the five defined societal areas of living, working, mobility, public facilities, and open data.Public-Private Partnerships
Public-private partnerships play a large role in Dutch innovation. The Amsterdam Innovation Fund and Dutch Green Deal programs exemplify the government’s efforts to privatize, reduce bureaucracy, and catalyze innovation. Amsterdam and the Netherlands in general place a strong emphasis on privatization and public-private partnerships as drivers of smart city and innovation, but they also commit significant public resources to the effort, which can often be a catalyst to help launch a program.
European Union funding has also been critical to Amsterdam Smart City, particularly with respect to the TRANSFORM project, which has advanced projects ranging in scope from district energy planning to car sharing to street lighting. Public resources are also serving as a catalyst for innovation in Amsterdam, as exemplified a large pilot area in South Amsterdam, funded with EU money. Amsterdam Metropolitan Solutions (reference earlier) is also being seed-funded with city funds.Bringing Lessons Home
A main take-home message for delegates was that the key infrastructure elements available in Amsterdam can be developed elsewhere. Pittsburgh delegates strategized regarding ways to bring back some of these elements, such as increasing open data and meeting with innovators to better understand how city government can partner with them. Charlotte delegates gained an idea of the level of public commitment needed to advance ambitious sustainability goals. Torino delegates had new energy center models to consider and a renewed sense of the value of collaboration.
The delegates were universally impressed by Amsterdam’s formalized project management and funding channels for catalyzing projects via strong private-public partnerships. They were highly impressed with the degree of cross-sector collaboration focusing on solving complex societal issues. However, delegates were also cognizant that the level of public subsidy and coordinated planning in Amsterdam may not likely be as available to delegates from the United States or Italy.
The framework the delegates learned about will continue to inform their policy actions, and the relationships they developed through the tour will undoubtedly persist for years to come.About the German Marshall Fund’s Urban and Regional Policy Program
GMF’s Urban and Regional Policy Program facilitates a sustainable network of globally aware and locally engaged leaders by promoting the transatlantic exchange of knowledge and the incubation of innovative solutions for current urban and regional challenges.
A full report on the event can be found through the following:
- Day 1 and 2
- Day 3 and 4
- Day 5
- Final Participant Debrief
- Feature on Amsterdam Smart City
- Q & A with Eva Gladek, Founder, Metabolic
- Q & A with Robert Phocas, Energy & Sustainability Manager, City of Charlotte
- Q & A with Debra Lam, Chief Innovation and Performance Officer, City of Pittsburgh
- Q&A: Gianfranco Presutti, Head of Labour, Development, European Funds and Smart City Department, City of Torino and Stefano Pisu, Project Manager, Fondazione Torino Wireless