Cities As the Drivers of Energy Transition: Here’s How
The number of cities making commitments to accelerate their energy transition keeps growing in the United States and worldwide. Only at the Global Climate Action Summit last month 73 cities committed to becoming carbon neutral by 2050. The enthusiasm and expectations of cities as the drivers of the energy transition — also known as the full decarbonization of the energy systems — is thus not going away.
What can we realistically expect from cities?
There is not one formula that works for all the cities. Different cities have different resources available to them. Similarly, their success depends on their regulatory powers to drive the energy transition, which not every city has. For instance, the U.S. energy sector is broken up state by state. Each state has different laws and utility sector regulations that cover how renewables are deployed. The Obama administration tried to harmonize state regulation on the utility sector by setting low carbon standards through the Clean Power Plant. But the Trump administration has tossed it out.
Yet, there are common strategies that cities can mobilize to cut emissions and encourage the scale of renewables, and this applies to cities beyond the United States.
Even if cities cannot regulate on the utilities, they can set the target that will send the message that they are working toward this goal and hoping that electric utilities are going to join the city in that offer.
Leading by example in the sectors that fall under their competences
Many cities are looking at how they can transition to covering 100 percent of the municipal facilities’ consumption by renewable energy. 60 municipal buildings with photovoltaic generation systems and a dozen pergola generators have been installed in city parks and squares. Solar thermal energy systems have also been installed to provide several sports facilities with sanitary hot water.
Setting finance schemes that incentivize or support the scaling of renewables
Portland is in the process of voting the “Portland Clean Energy Jobs Fund.” If passed, it will charge additional taxes to corporations on a scale of over $1 billion, which are typically international conglomerate, to tax them on their sales in Portland. The money would go to a fund that then can be distributed out to get additional renewable energy developed in the community. (Normally there are not as many political barriers as financial barriers for progressive states).
Reducing the soft costs of installing renewables
Here cities have a lot of control. With renewables you have all the costs associated with developing and putting the deal together, the materials and equipment that go into the panels, the labor to install it, and all the associated costs with permitting. This is expensive for solar installers. The more local governments can simplify and expedite the processes of installing — with clear guidelines so that applicants know exactly what to do in advance — and the extent to which cities can bring these costs down and make it more affordable, the better for the scaling of renewables.
Making energy efficiency a priority
Cities acknowledge that they cannot succeed in the 100 percent renewable energy target without energy efficiency. They have the power to encourage denser urban development, shape infrastructure, update building codes, launch zero waste programs, set specific energy efficiency targets for the power, heating, and transport, and pass regulation that establishes efficiency as a guiding principle.
There should also be a focus on the process of how cities plan and implement the energy transition.
Transitioning from a top-down model powered by fossil fuels to a horizontal one powered by renewables requires the collaboration of all the stakeholders. If only because oftentimes cities are only responsible for 10 percent of the energy supply in their territories.
Some cities have more power over where they get their energy, such as Copenhagen, which owns its own municipal utilities, or Hamburg, which after a successful referendum in 2013 voted to buy back the grid. But generally, cities need more control over their energy production and stronger support for local generation. That is why cooperation with stakeholders is crucial so that relevant stakeholders, from utilities to civil society, join the city in its efforts to scale renewables.
Second, it is important that the energy transition is an inclusive process, bringing the public and local industry into decision-making to ensure everyone participates and shares the benefits of the energy transition. This means not only that citizens and civil society are recognized in the process of setting the strategies toward the energy transition but also enabled and protected, for instance, in their role as prosumers, and ensuring energy resources get democratized and are available to all.
The Community Solar Program is expanding throughout the United States and is a good example of how citizens can share the benefits of solar power even if they cannot or prefer not to install solar panels on their property. In this model, citizens receive credit on their power bills for their share of the energy production or capacity they have purchased in produced. Aside from this program, it is important to ensure that the low-income sectors of the population can get access too, as oftentimes they cannot bear the costs for the payment up front.
Third, building understanding around the complex issue of energy transition is important to help accelerate the pace of action. Cities need to invest in programs that bring awareness of the benefits and opportunities brought by the energy transition and how could citizens bring value and contribute to accelerate the process.
In this context, GMF and Energy Cities are launching “Energy Allies,” a project funded by the European Union under the program “EU–U.S.: Transatlantic Civil Society Dialogues (TCSD),” which will connect and leverage the expertise of city representatives and civil society from Cambridge, Massachusetts; Charlotte, North Carolina; Nantes, France; and Heidelberg, Germany to identify strategies for successful partnership models in the energy transition for coordinated policy planning and action between local governments and civil society to support and accelerate cities’ commitment to accelerate their energy transitions.
Cities acknowledge both the opportunities and challenges before them, and the expectations that come with their commitments. For this reason, focusing not only on what they can deliver, but on how they can they can deliver and with whom will be key for cities to lead and foster change for themselves and for others.
This publication was produced with the financial support of the European Union. Its contents are the sole responsibility of the German Marshall Fund and do not necessarily reflect the views of the European Union.
The views expressed in GMF publications and commentary are the views of the author alone.