# LongBench v2 / 66fba2bcbb02136c067c8112

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The conclusion\nmarks a significant achievement for the co-Chairs, COP28 President Dr Sultan Al Jaber and Dr Fatih Birol, Executive Director of the IEA.\nThe fifth and final Dialogue, held during the World Climate Action Summit as part of COP28 in Dubai, was attended by Heads of State and Government and international\norganisations.\nOver 40 high-level leaders, including four Heads of State, concluded the dialogues with clear convergence on the building blocks of a 1.5 °C-aligned energy transition\nand strong support for an ambitious decision on the Global Stocktake at COP28.\nDr Birol set out an ambitious and integrated package across five pillars for COP28, for which there was strong support in the room:\nReflecting on the conclusion of the Dialogues, Dr Sultan Al Jaber told participants: “This series of dialogues has helped us to reach convergence on some of the critical\nelements of the energy transition. This work is crucial in building momentum to deliver the most ambitious response possible to the Global Stocktake, bridging the\ngaps to 2030, and helping us keep 1.5 °C – our North Star – in reach. I am encouraged by the practical actions brought forward by world leaders today at the final\ndialogue, and I hope that you take this open mindset and optimism throughout this COP.”\nTripling global renewable power generation capacity by 2030.\n●\nDoubling annual energy efficiency improvements by 2030.\n●\nAn orderly decline of fossil fuel use demand by 2030, starting with no new coal plants.\n●\nCommitment from the oil and gas industry to align their strategies and investment portfolios with 1.5 °C, with a focus on a 75% reduction in methane emissions by\n2030.\n●\nFinancing mechanisms for a major scaling up of clean energy investment in emerging and developing economies.\n●\n\n\nDr Birol commented: “I’m encouraged by the support by governments around the world during the dialogue for the IEA’s five pillars for success at COP28, including the\nneed by 2030 for tripling renewable capacity, for doubling energy efficiency improvements, for the oil and gas industry to meaningful commitment to clean energy\ntransitions, for a massive increase in financing for developing economies, and for an orderly decline of fossil fuel use. We now need to see this support translate into\nconcrete commitments and action.”\nAttendees highlighted the strong support for the COP28 Presidency’s Global Renewables and Energy Efficiency Pledge, which to date has been signed by 127 countries.\nThere was broad agreement on the need for urgent action on coal, not only on no new unabated coal plants, but also on accelerating the retirement of existing plants.\nThere was also acknowledgement that countries must seize the opportunity to develop and accelerate their own energy transition plans, while supporting developing\ncountries with finance and technology transfer. Initiatives such as the Just Energy Transition Partnerships (JETPs) were highlighted as an effective mechanism for\nenabling a just and orderly energy transition that supports developing countries.\nThe final Dialogue follows a year of engagements, where key elements of the energy transition including renewables, energy efficiency, financing, fossil fuel demand\nand supply, and decarbonization have been discussed. The series of Dialogues have been conducted in conjunction with the International Renewable Energy Agency\n(IRENA) and supported by the United Nations Framework Convention on Climate Change (UNFCCC).\nDuring the dialogue, world leaders displayed significant ambition to achieve concrete targets and accelerate deployment of renewable capacity and improve energy\nefficiency. \nThe Energy Mix\nGet updates on the IEA’s latest news, analysis, data and events delivered twice monthly.\nYour email\nSubscribe\nBrowse\nTopics\nCountries & regions\nEnergy system\nProgrammes\nLearn\nAbout\nNews and commentaries\nEvents\nGlossary\nConnect\nContact\nPress\nView sample\nExplore our other newsletters\nJobs\nDelegates\n\n\nExplore\nReports\nData & statistics\nFollow\nTerms\nPrivacy\n\n\nG7 ministers draw on wide range of IEA recommendations to strengthen energy security and accelerate clean ener\nNews\n30 April 2024\nCommunique welcomes and references IEA work on battery storage, clean cooking, COP28 tracking and more, as Executive Director meets with ministers from around the world in\nTurin\nClimate, Energy and Environment Ministers from the G7 group of advanced economies today gave strong and broad recognition to the work of the International Energy Agency as they pledged to further bolster\nenergy security and advance clean energy transitions.\nIn a communique following a two-day meeting in Turin under Italy’s 2024 G7 Presidency, the ministers vowed to strengthen energy security and keep the goal of limiting global warming to 1.5 °C within reach by\ntaking actions to achieve the ambitious energy goals set at the COP28 climate summit in Dubai last December. In doing so, they extensively cited the IEA’s analysis, recommendations and activities across all fuels\nand technologies and repeatedly called on the IEA to take a leading role in the delivery of recent energy security and climate commitments by outlining pathways forward and tracking progress.\nG7 Ministers in Turin underscored their focus on the implementation of the COP28 energy outcomes – part of what is known as the UAE Consensus, which includes goals such as tripling global renewable energy\ncapacity and doubling global energy efficiency improvements by 2030 and accelerating the transition away from fossil fuels in a just, orderly and equitable manner. They asked the IEA to leverage its unparalleled\ndata, analysis, policy advice and convening power to guide decision makers and ensure the security of energy supply through clean energy transitions.\nReferencing recent IEA analysis, the G7 ministers reiterated their commitment to the target of tripling renewables, as well as confirming their commitment to achieving a fully or predominantly decarbonised\npower sector by 2035 while making important new pledges to help meet that goal. Citing the Agency’s special report on Batteries and Secure Energy Transitions, they set the goal of increasing global power\nstorage more than six-fold between 2022 and 2030, which the report shows is crucial to ensure stable energy supply as more electricity is generated from renewables. Batteries are likely to account for the large\nmajority of the increase in power storage capacity. Additionally, the ministers pledged to “significantly scale-up” investment in electricity grids, noting IEA analysis that finds that investment needs to nearly double\nby 2030 to over USD 600 billion per year to meet the climate targets that countries have announced.\nMinisters also identified energy efficiency as an essential element of people-centred clean energy transitions and noted the need to speed up progress. They highlighted the role to be played by the IEA’s\nupcoming Annual Global Conference on Energy Efficiency taking place in Nairobi, Kenya, which will convene energy and climate leaders from around the world to share best practices and build momentum\ntowards the goal of doubling global energy efficiency improvements by 2030.\nImportantly, G7 ministers also asked the IEA to take the lead on determining what a secure global transition away from fossil fuels could look like in practice, calling upon the Agency to “provide recommendations\nin 2025 to decision makers on how to design a roadmap to implement the transition away from fossil fuels in energy systems, including the technology pathways and timeframes to enable this transition” and\nreductions in fossil fuels demand. They also specifically asked the IEA to report in 2025 on “actions to phase out unabated coal fired power generation globally.”\nFor critical minerals, another major area where international cooperation is vital for ensuring secure clean energy transitions, the G7 Ministers committed to accelerate the implementation of the IEA’s voluntary\nCritical Minerals Security Programme and said they would consult closely with the working parties and advisory groups on critical minerals that are convened by the Agency, ensuring appropriate steps are taken\nto balance supply with rising demand.\nThe IEA has long supported G7 countries – Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States – and their partners on energy and climate issues. Today’s communique agreed in\nTurin also referenced the IEA’s work on topics including natural gas security, decarbonising industry and transport, energy technology innovation, methane emissions, fossil fuel subsidies, smart cities, just and\ninclusive transitions, and sustainable energy development in Africa.\n\n\nIEA Executive Director Fatih Birol addressed leaders at both the opening and the closing of the meeting. He highlighted the urgent need to implement the energy outcomes from COP28, which provide a global\nframework for energy transitions – and emphasised that these transitions will only succeed if there is sufficient attention on developing diversified clean energy supply chains.\nHe also noted that the IEA will help maintain momentum on energy and climate between the G7 and other multilateral forums such as the G20 and COP – especially on vital issues such as ensuring fair and\ninclusive people-centred transitions and improving energy affordability and access. He pointed to the upcoming Summit on Clean Cooking in Africa, which the IEA will hold with Tanzania, Norway and the African\nDevelopment Bank Group in Paris next month and which G7 Ministers welcomed in their communique, as an important venue to continue high-level conversations.\nDr Birol met bilaterally in Turin with a wide range of ministers from around the world, as well as leaders of international organisations. These included COP29 President-Designate Mukhtar Babayev of Azerbaijan\nand Marina Silva, the Environment and Climate Change Minister from Brazil, which holds the G20 Presidency this year and the COP30 Presidency next year. Dr Birol also met with Algerian Energy Minister\nMohamed Arkab; Canada's Minister of Environment and Climate Change Steven Guilbeault; European Commissioner for Climate Change Wopke Hoekstra; Italy’s Minister of the Environment and Energy\nSecurity Gilberto Pichetto Fratin; Japan’s Minister of Economy, Trade & Industry Ken Saito; and UN Climate Change Executive Secretary Simon Stiell. The IEA is working closely with UN Climate Change to track all\nthe energy outcomes from COP28, launching a new online resource earlier this month.\nIEA Director of Sustainability, Technology and Outlooks Laura Cozzi, who was part of the IEA delegation with Dr Birol, met bilaterally with Mauritania’s Minister of Environment and Sustainable Development Lalya\nKamara to discuss plans for the Clean Cooking Summit on 14 May and how it can help deliver a turning point on the issue this year.\nThe Energy Mix\nGet updates on the IEA’s latest news, analysis, data and events delivered twice monthly.\nYour email\nSubscribe\nBrowse\nTopics\nCountries & regions\nEnergy system\nProgrammes\nExplore\nReports\nData & statistics\nFollow\nTerms\nPrivacy\nLearn\nAbout\nNews and commentaries\nEvents\nGlossary\nConnect\nContact\nPress\nView sample\nExplore our other newsletters\nJobs\nDelegates\n\n\nGovernments can help cities deliver innovative and people-centred solutions to drive clean energy transitions\nNews\n02 May 2024\nReport for G7 shows how urban planning, digitalisation and grid investment can help cities manage the impacts of climate change and growing energy demand\nReducing emissions in cities is essential for the world to meet its energy and climate goals – and digital solutions that manage consumption patterns and optimise infrastructure can play a significant role,\naccording to a new report by the International Energy Agency (IEA).\nEmpowering Urban Energy Transitions: Smart Cities and Smart Grids – the third report in the flagship series from the IEA’s Digital Demand-Driven Electricity Networks Initiative (3DEN) – was presented at\nthe G7 Climate, Energy and Environment Ministerial Meeting this week in Turin, Italy, and acknowledged by ministers in their communique. It explores a large range of innovative projects and initiatives to\nimprove power systems in cities around the world and provides insights on emerging best practices.\nThe report finds that cities need to raise their level of ambition in areas such as energy efficiency to meet the targets set at the COP28 climate change conference in Dubai. While a small number of cities\nare stepping up through sustainability and carbon dioxide (CO2) reduction targets, more need to come forward. Cities currently account for around three-quarters of global energy consumption and 70%\nof greenhouse gas emissions, and their contribution is set to rise. Despite this, only one in five cities has set a target to reach net zero emissions.\nMeanwhile, cities are getting bigger, with urban growth by 2050 set to be equivalent to adding the combined land area of Germany, Italy and Japan. Climate change is also posing new challenges as\ncities become larger and more densely populated – particularly during heat waves. In the hottest regions, electricity consumption can double in warm months versus milder ones, with cooling\naccounting for over 70% of peak electricity demand. This – in addition to the growing electrification of the energy sector in cities, as more people use technologies such as heat pumps and electric cars –\nplaces strains on electricity distribution infrastructure.\nThe report finds that digital solutions, including those that make electricity networks more flexible, can help. However, greater investment is needed. On a global net zero pathway, annual investment in\ngrids worldwide needs to more than double by 2030 to USD 750 billion. Approximately 75% of spending would need to go towards expanding, strengthening and digitalising distribution grids, including\nin cities, to improve system efficiency and manage more complex flows of electricity and data.\nAccording to the report, better alignment of planning timelines is important to reduce the risk of power outages and cut backlogs for new electricity connections for renewable assets, electric vehicle\nchargers, businesses and housing developments. Misaligned planning can delay the deployment of renewable energy, constrain efforts to improve energy efficiency and lead to higher electricity costs\nfor consumers, it notes.\nImproved access to and use of data for decision making would also support faster and more targeted implementation of energy and climate goals and help align city and power system planning. Digital\nsolutions and systems can be particularly powerful in cities, where high-density environments create economies of scale and can optimise infrastructure and create new opportunities. The number of\nconnected sensors and devices is set to rise sharply by 2030, according to the report.\nEmpowering Urban Energy Transitions highlights the role of G7 countries in fostering innovation through greater international collaboration. It suggests creating enabling environments at the city level for\nscalable pilot projects, and notes that integrated urban and power system planning – together with improved data sharing – are crucial to maintain electricity security and prioritise people in clean\nenergy transitions. The report also explores the value of 3DEN pilot projects administered by the United Nations Environment Programme (UNEP) in Brazil, Colombia, India and Morocco, which leverage\nadvanced digital technologies to improve energy management, enhance affordability and manage grid flexibility.\n\n\nAs national policy makers consider how to best enable secure clean energy transitions in cities, the report suggests four key themes for them to consider:\nThe IEA will host a webinar to present the report’s findings on 16 May.\n3DEN is the IEA’s initiative to accelerate progress on power system modernisation backed by Italy’s Ministry of Environment and Energy Security. After a successful first phase, the initiative will continue\ninto a second phase of work starting from 2025. \nEmpowering Urban Energy Transitions\nPlacing people at the centre of policy making in order to build for the future\n●\nSupporting data-driven integrated planning to ensure that grids are fit for purpose\n●\nAddressing specific areas of focus to create a supportive environment\n●\nPursuing the benefits of fostering strengthened international co-operation\n●\nExplore report\nThe Energy Mix\nGet updates on the IEA’s latest news, analysis, data and events delivered twice monthly.\nYour email\nSubscribe\nBrowse\nTopics\nCountries & regions\nEnergy system\nProgrammes\nExplore\nReports\nData & statistics\nFollow\nLearn\nAbout\nNews and commentaries\nEvents\nGlossary\nConnect\nContact\nPress\nView sample\nExplore our other newsletters\nJobs\nDelegates\n\n\nTerms\nPrivacy\n\n\nEmpowering Urban \nEnergy Transitions\nSmart cities and smart grids\n\n\nThe IEA examines the \nfull spectrum \nof energy issues \nincluding oil, gas and \ncoal supply and \ndemand, renewable \nenergy technologies, \nelectricity markets, \nenergy efficiency, \naccess to energy, \ndemand side \nmanagement and \nmuch more. Through \nits work, the IEA \nadvocates policies that \nwill enhance the \nreliability, affordability \nand sustainability of \nenergy in its  \n31 member countries, \n13 association \ncountries and beyond.\nThis publication and any \nmap included herein are \nwithout prejudice to the \nstatus of or sovereignty over \nany territory, to the \ndelimitation of international \nfrontiers and boundaries and \nto the name of any territory, \ncity or area.\nSource: IEA. \nInternational Energy Agency \nWebsite: www.iea.org\nIEA member \ncountries:    \nAustralia\nAustria\nBelgium\nCanada\nCzech Republic\nDenmark\nEstonia\nFinland\nFrance\nGermany\nGreece\nHungary\nIreland\nItaly\nJapan\nKorea\nLithuania\nLuxembourg\nMexico\nNetherlands\nNew Zealand\nNorway\nPoland\nPortugal\nSlovak Republic\nSpain\nSweden\nSwitzerland\nRepublic of Türkiye\nUnited Kingdom\nUnited States\nThe European \nCommission also \nparticipates in the \nwork of the IEA\nIEA association \ncountries:\nArgentina \nBrazil\nChina\nEgypt\nIndia\nIndonesia\nKenya\nMorocco\nSenegal\nSingapore \nSouth Africa \nThailand \nUkraine\nINTERNATIONAL ENERGY\nAGENCY\n\n\nEmpowering Urban Energy Transitions \nAbstract \nPAGE | 3  \nIEA. CC BY 4.0. \n \nAbstract  \nIn the context of the recent agreement at COP28 in Dubai and the current state of \nplay of urban power systems – from G7 countries to emerging markets and \ndeveloping economies – this report analyses the steps needed to achieve net zero \nemissions from electricity, and considers the wider implications for energy \nsecurity, sustainability and affordability.  \nThe decarbonisation of cities is a global priority, and local governments are \ninstrumental in achieving national commitments and objectives. Improved access \nto and use of data for decision making can support faster and more targeted \nimplementation and help align city and power system planning. Digital solutions \nand systems can be particularly powerful in cities, where high-density \nenvironments create economies of scale and can optimise infrastructure and \ncreate new opportunities. Exploring a wide range of projects and initiatives \nimplemented in power systems and cities around the world, the report provides \ninsights on emerging best practices, innovative approaches and how barriers and \nchallenges can be tackled. Our focus is on ways national governments can help \ncities accelerate clean, affordable and inclusive energy transitions, and ensure \nresilience and an ability to adapt to climate change. \nThe report also underscores how G7 members can foster innovation through \ninternational collaboration, creating enabling environments at the city level to \ndeploy scalable pilot projects, support integrated planning and promote data \nsharing, all while maintaining electricity security and placing people at the centre \nof clean energy transitions. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\nEmpowering Urban Energy Transitions \nTable of contents \nPAGE | 4  \nIEA. CC BY 4.0. \nTable of contents \nAbstract ..................................................................................................................................... 3 \nAcknowledgements, contributors, and credits \n..................................................................... 6 \nExecutive summary \n................................................................................................................ 10 \nGlobal agreement for renewed momentum to implement clean energy transitions \n............. 10 \nCities as catalysts for change ............................................................................................... 10 \nCities fostering innovative and cost-effective people-centred solutions \n............................... 11 \nMatching urban growth with increased ambition for inclusive clean energy transitions....... 11 \nPower grids feel the heat as climate change begins to take effect ...................................... 12 \nModernising and expanding power grids for sustainable urban energy futures .................. 12 \nThe power of digital-driven integrated planning \n.................................................................... 13 \nInternational collaboration is essential to address global challenges .................................. 14 \nChapter 1: Urban energy revolutions \n................................................................................... 15 \nKey takeaways \n...................................................................................................................... 15 \nInternational climate goals .................................................................................................... 15 \nCities and the climate \n............................................................................................................ 16 \nOpportunities for sustainable energy transitions in cities ..................................................... 19 \nThe role of grids in urban energy transitions ........................................................................ 22 \nChapter 2: Cities and grids on a heating planet ................................................................. 29 \nKey takeaways \n...................................................................................................................... 29 \nImpacts of a changing climate and energy system .............................................................. 29 \nActivating flexibility in cities \n................................................................................................... 36 \nChapter 3: Community at the heart of the city \n.................................................................... 45 \nKey takeaways \n...................................................................................................................... 45 \nCommunity energy projects .................................................................................................. 45 \nExamples of community-focused approaches for inclusive energy transitions in cities....... 47 \nBest practice to support inclusive local energy..................................................................... 51 \nChapter 4: Systemic approaches for a sustainable urban energy future \n........................ 54 \nKey takeaways \n...................................................................................................................... 54 \nThe case for change in urban energy planning .................................................................... 54 \nThe benefits and challenges of more data ........................................................................... 58 \nConnecting the dots: Overcoming interoperability challenges to support clean energy \ntransitions \n.............................................................................................................................. 62 \nSmart, integrated infrastructure investment planning \n........................................................... 68 \nUsing sound frameworks for data-driven urban planning \n..................................................... 71 \n\n\nEmpowering Urban Energy Transitions \nTable of contents \nPAGE | 5  \nIEA. CC BY 4.0. \nChapter 5: Creating the conditions for implementing smarter urban energy systems . 74 \nKey takeaways \n...................................................................................................................... 74 \nThe challenges facing smart cities \n........................................................................................ 74 \nNavigating regulatory challenges in energy innovation \n........................................................ 75 \nDeveloping digital skills and capacity for smart urban energy systems ............................... 78 \nStrategies and solutions for financing urban energy innovation \n........................................... 81 \nChapter 6: New approaches to pilots and experimentation for large-scale \nimplementation \n....................................................................................................................... 85 \nKey takeaways \n...................................................................................................................... 85 \nChapter 7: Conclusions ......................................................................................................... 90 \nPlacing people at the centre, building for the future ............................................................. 90 \nSupporting data-driven integrated planning \n.......................................................................... 91 \nCreating a supportive environment \n....................................................................................... 92 \nFostering international co-operation ..................................................................................... 93 \nPotential international actions spearheaded by G7 countries .............................................. 94 \n\n\nEmpowering Urban Energy Transitions \nAcknowledgements, contributors and credits \nPAGE | 6  \nIEA. CC BY 4.0. \nAcknowledgements, contributors, \nand credits  \nThis study was commissioned by the Italian government’s Presidency of the G7.  \nThe IEA gratefully acknowledges the Italian Ministry of Environment and Energy \nSecurity for its support of this project as part of its contributions to the IEA’s Digital \nDemand Driven Electricity Networks Initiative (3DEN) on electricity grid \nmodernisation and digitalisation and to the Clean Energy Transitions Programme. \nSpecial thanks go to Federica Fricano, Annalidia Pansini, Alessandra Fidanza, \nEmanuela Vignola, Stefano Raimondi and Alessandro Negrin. The IEA also \nthanks the Italian Ministry for Foreign Affairs and International Co-operation for its \nstrategic guidance and collaboration, in particular Stefano Salomoni and Valeria \nPiazza. The IEA thanks Ricerca sul Sistema Energetico, RSE Spa and Luciano \nMartini for their technical advice to the above Italian ministries since the 3DEN \nproject inception. We extend our sincere appreciation to the United Nations \nEnvironment Programme (UNEP) for their invaluable support throughout the \n3DEN Initiative and for leading the implementation of the pilot projects. Special \ngratitude goes to the dedicated team members, Myriem Touhami, Carolina \nMerighi and Aarth Saraph, for their efforts and expertise in contributing to the \nsuccess of the initiative.  \nThis report was prepared by the Office of Energy Efficiency and Inclusive \nTransitions (EEIT) of the Directorate of Energy Markets and Security (EMS) of the \nInternational Energy Agency (IEA). Vida Rozite and Brendan Reidenbach co-\nordinated the analysis and production of the report. Other lead authors of the \nreport were Emi Bertoli, Lucas Boehle, Silvia Laera, Jack Miller, Emma Mooney \nand Sungjin Oh. \nOther IEA colleagues who contributed to this work include (in alphabetical order): \nHeymi Bahar, Clara Camarasa, Marc Casanovas Simo, Jane Cohen, Michael \nDrtil, Darlain Edeme, Paolo Frankl, Pablo Hevia-Koch, Enrique Gutierrez Tavarez, \nNatalie Kauf, Martin Kueppers, Rena Kuwahata, Sacha Lachmann, Aloys Nghiem, \nAlessio Pastore, Ksenia Petrichenko, Isaac Portugal, Melanie Slade and Brent \nWanner, Jacques Warichet, as well as former IEA analysts Josh Oxby and Zoe \nHungerford. The work benefited from the expertise of consultants Andrei \nCovatariu, Chris Dunstan, Astha Gupta and Luis Munuera. \n\n\nEmpowering Urban Energy Transitions \nAcknowledgements, contributors and credits \nPAGE | 7  \nIEA. CC BY 4.0. \nThe work benefited from strategic guidance by Keisuke Sadamori, Director of \nEnergy Markets and Security, and Brian Motherway, Head of the Office of Energy \nEfficiency and Inclusive Transitions. \nThe IEA would like to thank the following experts who provided valuable inputs, \nreview and encouragement (in alphabetical order):  \nPankaj Agarwal (Panitek), Kwasi Akuffo (Energy Commission of Ghana), \nSavannah Altvater (Eurelectric), David Arinze (Diamond Development Initiatives), \nNiken Arumdati (Mining and Energy Provincial Office of West Nusa Tenggara), \nEduardo Avila (Revolusolar), Rahul Banerjee (Panitek), Miriam Badino \n(independent \nconsultant), \nMarine \nBaghdasaryan \n(European \nBank \nfor \nReconstruction and Development [EBRD]), Marion Bakker (Dutch Enterprise \nAgency [RVO]), Lucia Bakulumpagi-Wamala (Bakulu Power), Steven Beletich \n(Beletich Associates), Fabrizio Bonemazzi (RES4Africa), Clelia Fabiana Bueno \nGuedes (Brazilian Electricity Regulatory Agency [ANEEL]), Liliana Campos \n(German Society for International Cooperation [GIZ]), Giulio Antonio Carone \n(Acea Spa), Stelina Chatzichristou (European Centre for the Development of \nVocational Training [CEDEFOP]), Ercole De Luca (Areti), Lisa Diamond (Austrian \nInstitute Of Technology), Alberto Dognini (Fraunhofer), Stephen Dunphy (Planet \nSmart City), Meriem El Mernissi (Les Eaux Minérales d'Oulmès), Alejandro \nFalkner (Enel), Stefano Fava (Planet Smart City), David Flynn (University of \nGlasgow), Yann Fromont (Schneider Electric), Alberto Gaeta (Enel), Dario \nGarofalo (RES4Africa), Cristina Ghione (Planet Smart City), Kanak Gokarn \n(ICLEI), Francesco Guarino (University of Palermo), Efren Guillo (Grupo \nEnercoop), Andy Hackett (Centre for Net Zero), Waqas Hussain (Government of \nPunjab), Greg Johnston (Energy Systems Catapult), Ghislaine Kieffer (Global \nCovenant of Mayors), Aicha Kouraich (Les Eaux Minérales d'Oulmès), Massimo \nLa Scala (Politecnico di Bari), Sung Moo Lee (Korea Power Exchange [KPX]), \nDmytro Leskiv (Khmelnytskyi City Council), Luca Lo Schiavo (Italian Regulatory \nAuthority for Energy, Networks and Environment [ARERA]), Joaquín P. Mas Belso \n(Grupo Enercoop),Vincent Minier (Schneider Electric), Juan David Molina Castro \n(Colombia Inteligente), Juliana Andrea Moreno Daza (Enel), Sergio Olivero \n(Politecnico di Torino), Josh Oxby (Parliamentary Office of Science and \nTechnology, UK Parliament), Victoria Papp (International Telecommunication \nUnion [ITU]), Anna Carolina Peres Suzano e Silva (Brazilian National Energy \nConservation Programme [PROCEL]), Giovanni Ponti (Italian National Agency for \nNew Technologies, Energy and Sustainable Economic Development [ENEA]), \nVito Ponzo (Enel), Giorgia Rambelli (Mission Innovation Urban Transitions \nMission), Anil Rawal (IntelliSmart), Nick Regan (Australian Energy Market \nOperator [AEMO]), Jerson Reyes (Chile National Energy Commission [CNE]), \nGraziella Roccella (Planet Smart City), Laura Sandys (Challenging Ideas), Baris \nSanli (Ministry of Energy and Natural Resources, Republic of Türkiye), Dietrich \nSchmidt (Fraunhofer), Sanjay Seth (The Energy and Resources Institute [TERI]), \n\n\nEmpowering Urban Energy Transitions \nAcknowledgements, contributors and credits \nPAGE | 8  \nIEA. CC BY 4.0. \nHu Shan (Tsinghua University), David Shipworth (University College of London, \nEnergy Institute), Aksinia Sinko (Zhytomyr City Development Agency), Stavros \nStamatoukos (European Commission), Cassie Sutherland (C40), Fabiola Torres \n(Puebla State Energy Agency), Giulio Troncarelli (Energy of Things), Harry \nVerhaar (Signify), Viviana Vitto (Enel), Parag Vyas (Panitek), Molly Webb (Energy \nUnlocked), Selin Yilmaz (University of Geneva), Teslim Yusuf (South African \nNational Energy Development Institute [SANEDI]).  \nThe report was also informed by the insights gathered during the high-level \nroundtable “Can we deliver decarbonised, reliable and affordable energy without \nan internet of power?”, held on 27 November 2023. The IEA would like to thank \nthe following experts who participated in such discussions (in alphabetical order):  \nArash Aazami (Unify.energy), Savannah Altvater (Eurelectric), Jaiane Batista \nAlves Padilha (Brazilian Electricity Regulatory Agency [ANEEL]), Steven Beletich, \n(Beletich Associates, EDNA), Adeline Billard (ENGIE), Matthew Billson (PICLO), \nKate Burson (KCB Advisors), Bram Claeys (Regulatory Assistance Project [RAP]), \nDoug Cook (Ohme-EV), Andrei Covatariu (Freelance consultant), David Cuckow \n(BSI), Killian Daly (Energy Tag), Michele de Nigris (Ricerca sul Sistema \nEnergetico [RSE SpA]), Bertha Dlamini (African Women in Energy and Power), \nRichard Dobson (UK Catapult), Alberto Dognini (Fraunhofer), Simon Evans \n(Arup), Brian  Fitzgerald (EECA), Peter Fraser (Independent consultant), Yann \nFromont (Schneider Electric), Jaime Garcia Sepulveda (Chile National Energy \nCommission [CNE]), Olivier Genest (BRIDGE), Max Goijarts (Unify.energy), Jack \nGreenwood (Krakenflex), Hanna Grene (Microsoft), Astha Gupta (IEA consultant), \nAndy Hackett (Centre for Net Zero), Steve Heinen (EY), Steven Humphries \n(Australian Energy Market Operator), Greg Johnston (Energy Catapult), Taehun \nKim (Office of Strategic R&D Planning (MoTIE, Korea), Nina Klein (Ofgem), \nValérie Anne Lencznar (France's Transmission System Operator [RTE]), Patrick \nLiddy (energy web), Cheryl Martin (Harwich Partners), Luciano Martini (ISGAN), \nJuan David Molina Castro (Colombia Inteligente), Antonello Monti (Fraunhofer), \nJames Morgan (UK Department for Energy Security and Net Zero), Francis \nMosley (Ofgem), Holger Mueller (Siemens), Luis Munuera  (independent \nconsultant), Bruce Nordman (Lawrence Berkeley National Laboratory [LBNL]), \nIrina Oleinikova (Norwegian University of Science and Technology [NTNU]), \nAntonios Papaemmanouil (GO-P2P Task, Lucerne University of Applied \nSciences), Samuel Paul N. (Kanpur Electricity Supply Company Ltd [KESCO]), \nReji Kumar Pillai (India Smart Grid Forum), Giovanni  Ponti (Italian National \nAgency for New Technologies, Energy and Sustainable Economic Development \n[ENEA]), Somsak Prangthong (Electricity Generating Authority of Thailand \n[EGAT]), Shubhi Rajnish (UK National Grid), Anil Rawal (IntelliSmart), Chulwoo \nRoh (South Korean Ministry of Trade, Industry and Energy [MoTIE]), Nick Regan \n(Australian Energy Market Operator), Laura Sandys (Challenging Ideas, UK \nEnergy Digitalisation Taskforce), Milda Savickaitė (Infobalt), S. C.  Saxena (Grid \n\n\nEmpowering Urban Energy Transitions \nAcknowledgements, contributors and credits \nPAGE | 9  \nIEA. CC BY 4.0. \nController of India), B. N. Sharma (Rajasthan Electricity Regulatory Commission), \nEmeline Slye (Energy Regulatory Commission [CRE]), Stavros Stamatoukos \n(European Commission), Reena Suri (India Smart Grid Forum), Maud Texier \n(Google), Saijai Thatavakorn (Electricity Generating Authority of Thailand \n[EGAT]), Ruediger Thomas (Microsoft), Ioannis Vlachos (energy web), Molly \nWebb (Energy Unlocked), James Yu (SP Energy Networks), Roberto Zangrandi \n(Hightech Partners, formerly EDSO) and Audrey Zibelman (energy transition \nadvisor). \nSpecial thanks go to the IEA Communications and Digital Office for their support \nin producing the publication, especially to Jethro Mullen, Curtis Brainard, \nAstrid Dumond, Isabelle Nonain-Semelin, Clara Vallois,  Therese Walsh and \nPoeli Bojorquez. We thank Justin French-Brooks for editing the manuscript. \nThe IEA is grateful for the vision and work of Kathleen Gaffney on energy \nefficiency and digitalisation. She is dearly missed. \n\n\nEmpowering Urban Energy Transitions \nExecutive summary \nPAGE | 10  \nIEA. CC BY 4.0. \nExecutive summary \nGlobal agreement for renewed momentum to \nimplement clean energy transitions \nAs part of the UAE Consensus at the COP28 climate change conference in Dubai \nin December 2023, an historic agreement was signed signalling the “beginning of \nthe end” of the fossil fuel era. Governments agreed to double the annual rate of \nenergy efficiency improvement by 2030 and, in the same timeframe, to triple the \nglobal deployment of renewable energy capacity, putting the principle of energy \nefficiency at the centre of policy making. While these ambitions will be translated \ninto national action plans, cities are uniquely positioned to lead the way and serve \nas transition accelerators because of their high population densities and \npositioning as centres of commerce, productivity and innovation.  \nCities as catalysts for change \nUrban areas are the economic powerhouses of their nations. They are undergoing \nrapid development and contributing to higher energy consumption and rising \ngreenhouse gas emissions. Globally, cities account for around 75% of global \nenergy consumption and 70% of global greenhouse gas emissions – figures that \nare set to rise.  \nAlmost 10% of the increase in global emissions since 2015 can be attributed to \nurbanisation. It accounted for the record high urban-related emissions of almost \n29 billion tonnes of CO2. Despite this rapid escalation, many people in urban areas \nstill lack proper access to power grids. For example, of the more than 100 million \npeople living in cities without access to electricity, more than 90% are located in \nsub-Saharan Africa, the fastest-urbanising region of the world. \nFortunately, cities also present unique opportunities for transformative change. \nCities can leverage public procurement to create economies of scale and bring \ndown costs of clean energy technologies. More than 60% of public investment \noccurs at the subnational level, of which nearly a third is channelled into transport \nsystems, underlying the importance of cities investing in green and resilient urban \ninfrastructure.  \nThis important potential of cities to be front runners in the energy transition is \ngaining recognition in many regions, including in multilateral forums. Recently, the \nG7 recognised the transformative power of cities, and the G20 identified the need \nto finance the infrastructure of the cities of tomorrow. This is critical because, \n\n\nEmpowering Urban Energy Transitions \nExecutive summary \nPAGE | 11  \nIEA. CC BY 4.0. \nbased on existing stated policies, without further urgent action globally in cities \nand on grids, climate goals will be missed and economic growth could be affected. \nCities fostering innovative and cost-effective \npeople-centred solutions \nA people-first approach exemplified by community energy projects not only \npromotes environmental sustainability, but it also stimulates local economies, \nreduces energy bills and fosters public trust in clean energy transitions. These \nadvances are crucial to achieving the large-scale change needed to overcome \ntoday's status quo. Supporting city-level action has the potential to provide the \ngreatest carbon mitigation return on investment and accelerate inclusive clean \nenergy transitions. The evidence is that investing in infrastructure and technology \nto decarbonise the energy sector can reduce greenhouse gas emissions by up to \n75% by 2050 – as long as the right policies are in place.  \nMost urban residents around the world are breathing unhealthy levels of pollution, \na major portion of which is a by-product of using fossil fuels, which is responsible \nfor around 5 million premature deaths each year. City-led action can improve air \nquality, reduce energy demand, improve grid stability, and create savings for \nhouseholds and businesses. It can empower people to take on a greater role in \nmanaging their energy demand through user-centred initiatives. City-led action \ncan drive inclusive transitions with information campaigns, guidance and advice, \npolicy support for efficient appliances and support for energy communities. \nMatching urban growth with increased \nambition for inclusive clean energy \ntransitions  \nGlobally, urban populations account for more than half of the 8 billion people on \nEarth today, a share that is increasing. The total global urban population grew by \naround 400 million between 2015 and 2020 alone. More than 90% of this growth \noccurred in cities in emerging markets and developing economies (EMDEs). \nBetween 2024 and 2050 the share of the urban population is expected to increase \nfrom 56% today to around 70%, with the number of urban inhabitants increasing \nby around 1.8 billion. Projections show that urban land areas are expected to \nexpand by around 1 million km2 up to 2050, equivalent to the total land area of \nJapan, Germany and Italy combined. \nA small number of progressive cities are stepping up and setting sustainability and \nCO2 reduction targets that are bolder than those of national governments. \nGlobally, of the cities with more than 500 000 inhabitants, around 20% have \n\n\nEmpowering Urban Energy Transitions \nExecutive summary \nPAGE | 12  \nIEA. CC BY 4.0. \nproposed or pledged net zero targets, of which only half have stated policies in \nplace. Whereas there may be net zero targets at the national level, at the municipal \nlevel, more than 900 cities, many of which continue to grow in size, currently do \nnot have net zero targets. \nPower grids feel the heat as climate change \nbegins to take effect \nAs the world heats up, so the demand for cooling is increasing. The installed \ncapacity of space cooling equipment is expected to nearly double by 2030 from \n850 GW today, and then to double again by 2050. Demand for cooling also drives \npeak demand, which creates challenges for grid operators and poses access and \naffordability issues for customers. By 2040 cooling is expected to account for 30% \nof peak electricity demand in ASEAN countries, mostly concentrated in urban \nareas. This is up from around 10% today, and further studies suggest that globally \neach degree Celsius increase causes an average increase of almost 4% in peak \nelectricity demand.  \nThus, climate change is posing new challenges to grids in increasingly densely \npopulated cities. Around 70% of cities are already experiencing the negative \nimpacts of extreme temperatures and frequent storms of increasing intensity, \nwhich push power infrastructure to the edge of its operating limits. \nModernising and expanding power grids for \nsustainable urban energy futures \nThe transition away from fossil fuels, including by tripling renewable energy \ncapacity and switching to electrical demand-side energy assets, is vital for \ncountries to achieve their climate goals. This transition leads to an increased \ndemand for electricity in all IEA scenarios.  \nTo achieve the changes consistent with a net zero pathway, the EV fleet is \nexpected to increase tenfold, from nearly 30 million today to around 315 million by \nas early as 2030, while total heat pump capacity may triple from 1 000 GW today \nto 3 000 GW by 2030. Substantial electrification of transport and heat, as well as \nacross industry, will see demand for electricity increase. It could increase by up to \ntwo and a half times by 2050, depending on the pace of decarbonisation. Based \non existing announced national policies, electricity grids will need to expand \nglobally to manage the increased capacity, requiring up to 80 million km of new or \nupgraded lines by 2040. Crucially, grids will also need to become increasingly \nsmart to manage the increased share of renewable energy capacity. \n\n\nEmpowering Urban Energy Transitions \nExecutive summary \nPAGE | 13  \nIEA. CC BY 4.0. \nThese ambitious but essential plans to decarbonise the electricity systems, \ncoupled with rapid urbanisation, make it crucial to focus on investment in grid \nmodernisation and digitalisation. As cities become focal points for energy \nconsumption, efficient grid management becomes paramount in addressing urban \nenergy challenges. To be on track for net zero, global annual investment in grids \nneeds to more than double from around USD 330 billion per year to \nUSD 750 billion by 2030, and approximately 75% of this will be needed to expand, \nstrengthen and digitalise distribution grids. \nThe power of digital-driven integrated \nplanning  \nUrban areas contribute more than 80% of global GDP. Electricity has facilitated \nthe growth of industry and commerce in many regions, driving GDP and \ncontributing to development. As demand for electricity continues to grow, power \ngrids need to adapt rapidly to manage both today's grid constraints and the \nchallenges of tomorrow, particularly in cities.  \nBottlenecks in power grids delay housing developments, prevent the completion \nof new renewable energy projects and can put the uptake of customer-owned \nclean energy resources at risk, such as rooftop PV systems and EVs.  These \nbottlenecks could create further problems for up to 1.5 million households by as \nearly as 2030. In the United Kingdom, as an example, grid congestion costs may \nreach as much as GBP 2.5 billion each year in the same timeframe.  \nIn addition to investment in physical infrastructure, taking advantage of the \nproliferation of connected technologies, which are creating new data sources, \noffers the potential to better manage urban power systems and the increasing \nvariability on them. Cities have the right level of density and granularity for \ndemand-side energy assets to be optimised and aggregated at the building, \nneighbourhood and community levels.  \nAnalysis suggests that digitally enabled technologies could reduce the curtailment \nof variable renewable energy systems by more than 25% by 2030, increase \nsystem efficiency by 30% and reduce costs by up to 30% for customers. However, \nwhile regulatory and technological barriers stand in the way of maximising the use \nof data, many of these barriers could be overcome through closer international \ncollaboration. \n\n\nEmpowering Urban Energy Transitions \nExecutive summary \nPAGE | 14  \nIEA. CC BY 4.0. \nInternational collaboration is essential to \naddress global challenges \nMeeting the ambition to double the annual rate of energy efficiency improvement \nas per the UAE Consensus requires a 4% sustained improvement in primary \nenergy intensity through to 2030. While individual countries have achieved more \nthan 4% in certain years, collectively the world has not reached this target in a \nsingle year since the beginning of this century.  \nMeeting this goal requires global investment in energy efficiency to triple by 2030. \nHowever, there are large regional differences, as currently 9 out of every 10 dollars \nspent on clean energy since 2021 has been spent in advanced economies and \nChina. This regional imbalance means that, whereas in advanced economies \nspending must more than double by 2030, the increase in emerging economies is \ncloser to a factor of 3.5.  \nTechnologies and solutions exist to fast-track energy efficiency implementation \nand to support the integration of renewables in power systems; however, they are \nstill not being widely used. Similarly, best practices and innovative approaches \nexist, but opportunities are being missed due to a lack of co-ordination. \nIllustrated by more than 100 case studies, this report showcases the leading role \nthat cities can play in implementing faster decarbonisation and energy efficiency \ngains. The supportive roles that national governments and other stakeholders \nneed to play are highlighted. We suggest four specific areas where national policy \nmakers can take action to empower cities towards faster and more effective \nimplementation. We have emphasised the potential for cities and national \ngovernments: to place people at the centre of policy making in order to build for \nthe future; to support data-driven integrated planning to ensure that grids are fit \nfor purpose; to address specific areas of focus so as to create a supportive \nenvironment; and to pursue the benefits of fostering strengthened international \nco-operation.  \n \n\n\nEmpowering Urban Energy Transitions \nChapter 1: Urban energy revolutions \nPAGE | 15  \nIEA. CC BY 4.0. \nChapter 1: Urban energy revolutions  \nKey takeaways \n• \nCities contribute around 80% of global GDP and their associated emissions were \nresponsible for a record 29 billion tonnes of CO2 in 2023.  \n• \nMore than half of the 8 billion people alive today live in urban areas, and \nurbanisation is on an upward trend, with parts of Asia and Africa expected to \ncontinue to drive the proportion of the global population that is urbanised to around \n70% by 2050, with nearly 2 billion more people living in cities than there are today. \n• \nCities have an essential role to play in tripling the capacity of renewable energy \nsources, deploying energy-efficient technologies and the electrification of \ntransport and heating, commitments agreed as part of the UAE Consensus at \nCOP28.  \nInternational climate goals \nAt the COP28 climate change conference in Dubai in December 2023, every \nparticipating government signed an historic agreement, agreeing to transition \naway from fossil fuels in energy systems as part of the UAE Consensus. The \nlandmark pact also includes the call to collectively raise ambitions by doubling the \nannual rate of energy efficiency improvement by 2030 and accelerating the supply \nof low-carbon energy by tripling the total capacity of renewable energy sources in \nthe same timeframe. \nThe shift away from fossil fuels will see many sectors switch to electricity, \nincreasing the demand for power. The biggest consumers of electricity are the \nbuildings and industrial sectors, which together account for over 90% of global \nelectricity consumption. Appliances, lighting, cooking, cooling and heating account \nfor the bulk of energy consumption in buildings, and electricity demand increases \nfor each of these end uses in all IEA scenarios, especially in emerging markets \nand developing economies (EMDEs). By 2050 electricity demand increases by as \nmuch as 150% on a pathway that achieves net zero by mid-century. \nCities are major sources of energy demand for transport, industry and buildings. \nThey are currently responsible for around 75% of global energy consumption and \n70% of global greenhouse gas emissions.  \n \n\n\nEmpowering Urban Energy Transitions \nChapter 1: Urban energy revolutions \nPAGE | 16  \nIEA. CC BY 4.0. \nCities and the climate \nCities drive economic growth, but their emissions are \nclimbing \nCities are the engines of global economies and drivers of economic growth. While \nthey are home to around 56% of the world’s 8 billion people, they contribute more \nthan 80% of global GDP. Globally, the urban population grew by around \n400 million between 2015 and 2020 alone. Notably that more than 90% of this \nurban growth occurred in EMDEs, particularly in the regions of Asia and Africa, \nand above all in India, People’s Republic of China (hereafter, “China”) and Nigeria.  \nUrbanisation together with a rising global population is continuing to change the \nshape of society, and at an extraordinary pace. In 2024 more than half of the \nworld’s population already lives in urban areas, and this share is expected to grow \nto around 70% in 2050, an increase of around 1.8 billion people. In Asia, the total \npopulation is set to increase by around a third, while in Africa, the continent's \npopulation is projected to double between now and 2050.  \nHistorical and projected urban population by region, 1950-2050 \n \nIEA. CC BY 4.0. \nSource: IEA analysis based on UN World Urbanization Prospects 2018. \n \n0%\n10%\n20%\n30%\n40%\n50%\n60%\n70%\n0\n 500\n1 000\n1 500\n2 000\n2 500\n3 000\n3 500\n4 000\nShare of population \nMillions of people\nAsia\nAfrica\nEurope\nLatin America and the Caribbean\nNorthern America\nOceania\nShare of global population living in urban areas (right axis)\nPredicted population change\n\n\nEmpowering Urban Energy Transitions \nChapter 1: Urban energy revolutions \nPAGE | 17  \nIEA. CC BY 4.0. \nCombining the overall increase in population and the continuing shift from rural to \nurban living, the proportion of GHG emissions originating in cities climbed from \naround 62% in 2015 to around 70% today, taking urban-related emissions to a \nrecord high of almost 29 billion tonnes of CO2 in 2023. \nAnalysis by the IEA has identified that to double the annual rate of energy \nefficiency improvement as per the UAE Consensus requires a 4% sustained \nimprovement in primary energy intensity each year through to 2030. While \nindividual countries have achieved more than 4% improvement in certain years, \nthe world's countries have not reached this target on average in a single year since \nthe beginning of this century. \nThese factors make the decarbonisation of cities a global priority and of special \nsignificance to achieving national objectives. \nCities can play a central role in achieving international \nclimate goals, but more action is needed \nSeveral cities are frontrunners in national climate ambitions, leading the way to \nachieving net zero emissions ahead of nationally determined targets. For \nexample, London aims to be carbon neutral by 2030. In 2023 the city extended its \nultra-low emission zone to the entire Greater London area, contributing to further \nreducing air pollution.  \nVienna has published a revised smart city strategy, which includes a target of \nclimate neutrality by 2040 and interim goals to reduce per-capita energy \nconsumption, greenhouse gas emissions and the material footprint. The strategy \nis centred around people, focusing on inclusion and equality, and enabling \nparticipation and active engagement. Vienna has created opportunities for the \ncity’s inhabitants to collectively invest in clean energy through community-funded \nsolar plants.  \nMultilateral forums continue to recognise the important role of cities in the pursuit \nof net zero energy systems. The 2021 G20 Energy-Climate Ministerial \nCommuniqué in Naples (Italy) highlighted the role of urban areas in accelerating \nthe clean energy transition, while the 2023 G7 Ministers’ Meeting on Climate, \nEnergy and Environment in Sapporo (Japan) concluded with the announcement \nof the first ever G7 Roundtable on Subnational Climate Actions in collaboration \nwith Urban7. In their final communiqué, the G7 Ministers address “the vital role of \nsubnational actors in realising the transformation toward net zero”.  \nAt COP28 in Dubai, over 40 ministers committed in a joint statement to support \nand integrate climate action across every level of government. Moreover, \n \n \n\n\nEmpowering Urban Energy Transitions \nChapter 1: Urban energy revolutions \nPAGE | 18  \nIEA. CC BY 4.0. \n71 countries joined the Coalition for High Ambition Multilevel Partnerships for \nClimate Action to enhance co-ordination between national and subnational \ngovernments in the planning, financing, implementation and monitoring of climate \nstrategies.  \nCities with net zero targets in policy documents or laws, 2023 \n \nSource: IEA analysis based on data from Net Zero Tracker. \n \nClimate action in urban areas is essential for achieving ambitious net zero \nemissions goals, and internationally, many cities are emerging as leaders to take \na strong stance by supporting initiatives on climate action. The Cities \nTechnological Collaboration Programme is the newest IEA collaborative \ninternational cross-cutting initiative that helps cities speed up their decarbonisation \nefforts by providing scientific and evidence-based information and an international \nforum on urban energy and mobility system transformation. The Global Covenant \nof Mayors for Climate and Energy brings together 12 500 cities and local \ngovernments to push for climate action, with a view to driving down GHG \nemissions. Similarly, the C40 cities initiative represents 100 city mayors with the \nambition of limiting global warming to 1.5°C, while building equitable and inclusive \ncommunities. ICLEI works with more than 2 500 local and regional governments \non sustainable urban development. The United for Smart Sustainable Cities \n(U4SSC) a global UN initiative co-ordinated by multiple agencies, is an \ninternational platform for information exchange and partnership building to assist \ncities and communities in achieving the UN Sustainable Development Goals. The \nRace to Zero is coalition of non-state actors including companies, cities, regions, \nfinancial, educational, and healthcare institutions leading a global campaign to \nhalve global emissions by 2030. The CDP-ICLEI Track provides a platform for \nmore than 1 100 cities to report and track progress on climate action.  \n\n\nEmpowering Urban Energy Transitions \nChapter 1: Urban energy revolutions \nPAGE | 19  \nIEA. CC BY 4.0. \nHowever, despite some examples of subnational ambition, globally, only around \n20% of all cities with more than 500 000 inhabitants have proposed or pledged to \nnet zero targets. Further still, only 0.6% of these cities have translated net zero \ntargets into law, with a somewhat larger number mentioning targets in policy \ndocuments.  \nOpportunities for sustainable energy \ntransitions in cities \nExamples of city-led action provide a vision for others \nLocal governments wield significant influence in shaping urban sustainability \nthrough urban planning and policymaking. By adopting policies that support smart \nand inclusive sustainable energy solutions, they engender resilient communities \nand mitigate climate change. Through initiatives like district-wide renewables \ndeployment and low-emissions transport policies, cities accelerate clean energy \nadoption. They also play pivotal roles in implementing resilient power strategies \nand integrating clean energy solutions into regulations, fostering socially inclusive \ntransitions The following examples highlight the active role of cities in supporting \na more people-centred approach, while also delivering national climate action. \nCity governments can adopt policies that encourage smart and inclusive \nsustainable energy solutions. They can support neighbourhood- or district-wide \nrenewables deployment and implement low-emissions transport policies. \nCommunity bulk buying programmes can also accelerate the implementation of \nenergy efficiency and the adoption of local renewable energy sources. In 2023 Rio \nde Janeiro became the first Latin American city to use a renewable power \npurchase agreement to power public buildings with clean energy, through the Río \nde Energía Verde Initiative. By agreeing a long-term contract between the city and \na renewable energy generator, the arrangement allows the municipality to benefit \nfrom stable electricity prices and progress towards its environmental objectives \nwhile giving the developer visibility on future revenues and making the operation \nof the generating facility easier. This first stage of the project is expected to avoid \n40 000 tonnes of CO2 over the next five years and to allow the municipality to save \nmore than USD 6 million in electricity costs, which will be directed towards health \nand education projects. In Indonesia, the TransJakarta bus system tripled its \nroutes and doubled the number of buses in operation between 2016 and 2020, \nallowing the bus rapid transit system to reach one million passengers per day in \n2020. Achieving the target of complete electrification of the bus fleet by 2030 could \nadd 4 days of life expectancy per resident in the focus area. \n \n\n\nEmpowering Urban Energy Transitions \nChapter 1: Urban energy revolutions \nPAGE | 20  \nIEA. CC BY 4.0. \nAreas for city-led action on inclusive clean energy  \n \nIEA. CC BY 4.0. \n \n• \nCities have a powerful role in clean energy transitions by incorporating smart \nand clean energy solutions into regulations and codes. For example, the city \nof Vancouver now requires every residential parking space in new developments \n\n\nEmpowering Urban Energy Transitions \nChapter 1: Urban energy revolutions \nPAGE | 21  \nIEA. CC BY 4.0. \nto feature Level 2 electricity outlets to charge EVs. This change addresses the \nchallenge of accessing EV charging in multifamily residential buildings, which is \nusually harder than in single homes. Cities can also act as aggregators of demand, \nprocuring clean electricity in large quantities to cover the combined needs of \nresidents and businesses, increasing competition, reducing risk and negotiating \nbetter rates for local residents.  \n• \nCities can expand on their planning function and make use of geographical \ninformation systems to map renewable energy potential at the city level and \nidentify the best options for siting distribution network infrastructure. \nThrough its Clean Energy Program, the New York City government aims to expand \nsolar PV and other distributed energy resources across its portfolio of buildings, \nwith the goal of installing 100 MW of solar PV on city-owned buildings by 2025. To \nthis end, the city assessed all public buildings greater than 1 000 gross square \nmetres for solar readiness and identified nearly 55 MW of rooftop solar potential.  \n• \nThey can accelerate the development and deployment of new power system \ninfrastructure through local permit rules, municipal procurement policies, \nzoning ordinances and other bylaws. In some cases, municipalities are owners \nand operators of local utilities. In Germany, more than two-thirds of municipal utility \ncompanies use the roof surfaces of public buildings to locate their installations. In \nthe United States, there are more than 2 000 municipal utilities, serving 10% of \nthe country’s electrical needs. For example, the city of San Jose in California is \ncreating its own power utility, an early study showing potential cost savings on \nelectricity of between 15% and 25%.  \n• \nCities can develop resilient power strategies to ensure that critical public and \nprivate facilities can operate in the event of power disruption. Resilient power \ntechnologies, such as solar with battery storage, protect critical facilities from \npower outages. In the face of increasing heatwaves during summer, the city of \nUtrecht in the Netherlands is rapidly expanding its vehicle-to-grid (V2G) \ninfrastructure, thus allowing EVs to store electricity during the day and inject it into \nthe grid during the evening peak hours. The initiative aims to connect up to around \n10 000 bidirectional charging EVs to the grid, the estimated amount needed to \nsolve the city’s grid congestion according to Utrecht University. In 2022 South \nAfrica experienced over 100 days of rolling blackouts. Cape Town is working with \nthe C40 Cities Finance Facility to install a large-scale solar power plant that will \nimprove the city’s resilience. \n• \nCities can lead the way in implementing smart solutions to ensure that local \nenergy transitions are socially inclusive and people-centred. For example, Stirling \nCouncil in the United Kingdom plans to equip its entire social housing stock with \nsensors and tools to enable property owners to effectively address risks including \ndampness, mould and insufficient ventilation and help tenants better understand \nenergy usage and improve efficiency. \n• \nCities can use their powers to implement further solutions to reduce energy \ndemand and improve well-being. In Australia, Melbourne is planting 3 000 trees \nevery year to lower city temperatures by 4°C, thereby reducing the need for air \n\n\nEmpowering Urban Energy Transitions \nChapter 1: Urban energy revolutions \nPAGE | 22  \nIEA. CC BY 4.0. \nconditioning and providing additional recreation areas. Medellin in Colombia has \ncreated 30 green corridors and achieved temperature reductions of 2°C. A \ngrowing number of cities, including Paris, Milan and Athens, are providing \ninhabitants with apps to help monitor heat risks and provide guidance on how to \nreduce exposure. \nThe role of grids in urban energy transitions \nEnsuring that grids are fit for purpose is necessary to \nrealise decarbonisation ambitions \nElectrification is a critical element of reducing fossil fuel demand, alongside \nefficiency improvements and greater use of low-emissions fuels. The greater role \nfor electricity in the energy mix will have significant consequences for power \nsystems. In 2023 electricity’s share of total final energy consumption was 20%, \nand by 2050 this number increases to over 50% in the IEA Net Zero Emissions by \n2050 Scenario (NZE Scenario). Power systems are therefore facing the need for \nfar-reaching change.  \nShare of electricity in final energy consumption by sector, 2010-2022, and in the \nNZE Scenario, 2030 and 2050 \n \nIEA. CC BY 4.0. \nSource: IEA (2023), Net Zero Roadmap: A Global Pathway to Keep the 1.5°C in Reach: 2023 Update. \n \nThere are signs that the net zero transition is already well underway, such as the \nrapid adoption of efficient EVs that is taking place in many cities today, with sales \nof new EVs estimated to be 35% higher in 2023 than in 2022. EV ownership and \nthe deployment of electrical equipment (e.g. heat pumps and air conditioners) and \ndistributed energy generation (e.g. rooftop solar PV) are expected to continue to \nrise in coming years.  \n0%\n10%\n20%\n30%\n40%\n50%\n60%\n70%\n80%\nIndustry\nTransport\nBuildings\nTotal\n2010\n2015\n2022\n2030 NZE\n2050 NZE\n\n\nEmpowering Urban Energy Transitions \nChapter 1: Urban energy revolutions \nPAGE | 23  \nIEA. CC BY 4.0. \nGlobal sales of electric cars jumped from around 6.5 million in 2021 to 13.7 million \nin 2023, while in the previous two years, from 2018 to 2020, EV sales increased \nby only 950 000 units. In 2022 the global stock of electric cars was around \n27 million units and it is likely to increase almost ninefold by 2030 in the IEA \nAnnounced Pledges Scenario (APS) reaching 230 million units, driven mainly by \nChina, while it increases to up to 315 million units in the NZE Scenario. \nGlobal stock of electric cars by region in the Announced Pledges Scenario, 2020-2030 \n \nIEA. CC BY 4.0. \nSource: IEA (2023), Global EV Data Explorer. \n \nIn the recent IEA report Renewables 2023, almost 3 700 GW of new renewable \ncapacity is forecast to come online over the period 2023-2028, driven by \nsupportive policies in more than 130 countries. Growth continues in mature \nmarkets, but there is also new capacity coming online in emerging markets and \ndeveloping economies.  \nGlobal distributed PV capacity is expected to increase on average more than \n7.5 times by 2028 compared to 2018, and by an astonishing 68 times in Latin \nAmerica. Nigeria is expected to add 5 GW of distributed solar PV capacity \nbetween 2023 and 2028, with Angola and Kenya achieving 2 GW each. Brazil is \nexpected to deploy 7 GW each year through to 2028. In some regions the ramp-\nup of residential solar installations will play a particularly significant role, as in Latin \nAmerica where the share of residential solar PV in total distributed capacity – \nwhich includes commercial and industrial installations as well as off-grid solutions \n– will almost double, reaching 58% in 2028.  \n \n0\n 20\n 40\n 60\n 80\n 100\n 120\n 140\n 160\n 180\n 200\n 220\n 240\n 260\n2020\n2022\n2024\n2026\n2028\n2030\nMillions of vehicles\nIndia\nRest of the world\nUnited States\nEurope\nChina\n\n\nEmpowering Urban Energy Transitions \nChapter 1: Urban energy revolutions \nPAGE | 24  \nIEA. CC BY 4.0. \nDistributed PV cumulative capacity by region, 2018-2028 \n \nIEA. CC BY 4.0. \nSource: IEA (2024), Renewables 2023. \n \nSimultaneously, the electrification of heating is rapidly increasing, with global sales \nof heat pumps increasing by 11% in 2022, marking a second year of double-digit \ngrowth. In 2022 heat pumps met around 10% of heating needs in buildings, \ncorresponding to over 100 million households. According to the latest IEA \nanalysis, in the Stated Policies Scenario (STEPS) the share of heat pumps in total \nheating equipment sales more than doubles by 2030, and in the NZE Scenario \ntheir share increases fourfold, tripling the global heat pump capacity. Also, in both \nscenarios around one-third of the global stock of heat pumps is in EMDEs by 2030, \nwhile in 2022 these countries accounted only for 16% of the global stock. \nGlobal heat pump sales and stock, 2010-2022, and by scenario, 2030 \n \nIEA. CC BY 4.0. \nNote: GWth = gigawatt thermal capacity. \nSource: IEA (2023), World Energy Outlook 2023. \n \n0\n 200\n 400\n 600\n 800\n1 000\n1 200\n1 400\n1 600\n1 800\n2018\n2019\n2020\n2021\n2022\n2023\n2024\n2025\n2026\n2027\n2028\nGW\nLatin America\nNorth America\nAsia Pacific\n(excluding China)\nEurope\nRest of the world\nForecast \n20%\n40%\n60%\n2010\n2022\nSTEPS\n NZE\n2030\n1 000\n2 000\n3 000\n2010\n2022\nSTEPS\n NZE\nGWth\nStock\nAdvanced economies\nEMDEs\nShare of heating equipment sales\n2030\n\n\nEmpowering Urban Energy Transitions \nChapter 1: Urban energy revolutions \nPAGE | 25  \nIEA. CC BY 4.0. \nInvestment in grids is needed to deliver resilient grids \nand avoid bottlenecks \nSubstantial investment in grid development will be needed to facilitate the \nintegration of increased electricity demand and intermittent generation. There is \nalready evidence that power system operators need to invest substantially more \nin digitalisation and flexibility to meet the challenges of clean energy transitions. It \nis vital to ensure that grids are fit for purpose, not just for today’s demands, but \nalso for future challenges, enabling countries to follow their decarbonisation \npathways in an equitable and cost-effective manner.  \nDelays in grid investment and reform could substantially increase emissions, \nslowing energy transitions and potentially putting the 1.5°C goal out of reach. For \nexample, grid congestion due to increased electrification of heating and mobility \nin the Netherlands is causing more than 3 500 large consumers to be placed on \nwaiting lists for their applications for new or added grid capacity, and risks affecting \nup to 1.5 million residential customers in the coming decade. This is already \nhappening in several regions in the Netherlands.  \nDriven by soaring temperatures during May-August 2023, areas of Mumbai \nexperienced power outages due to escalating peak demand for air conditioning. \nAs African countries move towards the target of achieving universal access to \naffordable, reliable and sustainable electricity by 2030, cities are already facing \nchallenges. Lagos is projecting an increase in peak electricity demand of 400% by \n2040.  \nIn urban environments, grid upgrades will be particularly important. Grid \ncongestion due to clustered residential load can be exacerbated by the \ncombination of space heating and cooling demand, EV charging and distributed \nsolar. For instance, researchers found that the local distribution system in \nCalifornia would need to upgrade five times more feeder lines than originally \nplanned in order to accommodate EVs by 2030.  \nThe grids of the future will need to support cities to adapt to new conditions, deal \nwith greater complexity and manage significantly more actors and assets, all with \ndiverse impacts on the system. Modernised and digitalised grids can also deliver \nsignificantly more efficient systems, at lower cost, with greater resilience and while \nachieving decarbonisation goals simultaneously. This requires national and local \npolicy makers and utilities to act to deploy the technologies and establish the \ncapabilities and functionalities necessary to support future power systems. \nEfficient and resilient power systems require urban planning to be aligned closely \nwith power system planning.  \n \n\n\nEmpowering Urban Energy Transitions \nChapter 1: Urban energy revolutions \nPAGE | 26  \nIEA. CC BY 4.0. \nAccelerating clean energy investment in Africa’s cities  \nAfrica accounts for around 20% of the world’s population, but attracts less than 2% \nof its spending on clean energy. To achieve the region’s 2030 energy development \nand climate goals requires energy investment to more than double from \nUSD 90 billion currently, with around two-thirds going on clean energy. For \nexample, energy efficiency spending needs to increase sevenfold by 2030, in \nareas such as green and efficient buildings and consumer appliances. \nAt the same time, the unprecedented expansion of Africa’s cities is calling for \nmassive investment in urban infrastructure. It has been estimated that African \ncountries will need to invest about 5.5% of their annual GDP in their cities, \napproximately USD 140 billion per year. In particular, around 70 million new \nhomes will need to be built by 2030, almost equivalent to a quarter of the current \nresidential building stock in the entire continent. A substantial change in the \ntransport infrastructure will be essential as well, as the demand for road mobility \nalone is expected to increase by two-thirds by the end of this decade in the entire \ncontinent.  \nUnlocking green investment in Africa’s cities can result in a win-win situation. \nAccording to analysis conducted by the Coalition for Urban Transitions, the total \nbenefits from delivering compact, connected and clean urban development across \n35 major cities in Ethiopia, Kenya and South Africa are valued at USD 1.1 trillion \nto 2050 (up to 250% of their annual GDP). \nTo accelerate this process, the AfDB has recently announced that it will provide \nprojected lending of around USD 2 billion in 2024 to cities and municipalities. In \naddition, the AfDB will direct its Urban and Municipal Development Fund (UMDF) \nto support cities with a budget of USD 50 million for the period 2023-2027, to be \nspent on urban project preparation, urban planning and municipal access to \nfinancial support ecosystems. The Africa Investment Forum (AIF) is now starting \nto prioritise bankable projects that can secure investment for cities. The UMDF is \nalready supporting local governments in developing inclusive decision making \nprocesses and improving urban infrastructure, while addressing climate \nchallenges.  \n \nModernising power grids can contribute to doubling \nefficiency and accelerating decarbonisation  \nEnsuring that grids have sufficient capacity and flexibility to adapt to fluctuating \nelectricity demand will facilitate decarbonisation on a massive scale, reduce \nemissions, improve air quality and see individual efficiency gains across the power \nsystem contribute to huge overall improvements in energy efficiency.  \n\n\nEmpowering Urban Energy Transitions \nChapter 1: Urban energy revolutions \nPAGE | 27  \nIEA. CC BY 4.0. \nUrban travel accounts for 40% of the global carbon dioxide emissions from \npassenger transport and contributes significantly to urban air pollution. Electrified \npublic transport in cities plays an important role in reducing congestion and \ngreenhouse gas emissions. Analysis of 192 cities indicates that subways have \ncontributed to halving city population-related CO2 emissions from transport in \nthose cities. The transition from internal combustion engine vehicles offers the \nprospect of achieving large efficiency gains as EVs are between three and five \ntimes more efficient. This switch is already contributing to significant emissions \nreductions. In Norway, for example, where EVs account for around 80% of new \ncar sales, the positive effects are already being felt, with transport emissions falling \nby over 8% since 2014. This relies on a power grid that can manage significant \nflows of electricity on a bidirectional basis.  \nBuildings also offer great potential for efficiency gains, particularly for \ndecarbonising heat. In the United Kingdom, emissions from gas boilers are around \ntwice that of the entire fleet of gas power stations. The deployment of heat pumps \nto replace oil and gas boilers will drive electricity demand, but this is far \noutweighed by the savings in fossil fuels due to heat pumps’ much greater \nefficiency, with those currently available on the market three to five times more \nenergy efficient than natural gas boilers. The United States which has a high urban \nshare of the population at around 80%, has adopted a roadmap for the nationwide \nadoption of efficient grid-interactive buildings (EGIBs), that is energy-efficient \nbuildings with high-quality building envelopes and grid-connected smart \ntechnologies that leverage distributed energy resources to optimise energy use \nand energy flexibility. This could lead to energy savings from homes and buildings \nin predominantly urban areas in the range of 164-401 TWh per year and peak \ndemand savings ranging between 42 GW and 116 GW, depending on the efficient \nand grid-interactive solutions implemented.  \nGrid digitalisation by upgrading with new intelligent and energy-efficient \ntechnologies has the potential to bring significant benefits, such as improved \nvisibility of distributed energy resources for power system operators, co-ordinated \ncontrol and loss reduction. This is particularly valuable in EMDEs that are \nexperiencing high levels of transmission and distribution system losses, but is \ncentral to achieving potential energy efficiency gains in all settings. A recent study \nof the potential for digitalisation of the power sector found that by 2050, based on \nelectrification across all sectors, while electricity consumption would rise by up to \n20%, deploying cross-sectoral digitalisation would contribute to a 30% efficiency \ngain per year. A modern digitally enabled power system will be essential to \nachieve these efficiency gains and to contribute to the doubling of the annual \nimprovement in global average energy efficiency. It can only be enabled by \nconcerted action by national and subnational governments, regulators, utilities, \ncommunities and individuals. \n\n\nEmpowering Urban Energy Transitions \nChapter 1: Urban energy revolutions \nPAGE | 28  \nIEA. CC BY 4.0. \nIn this context, the Italian government is playing a transformative and far-sighted \nrole in accelerating clean energy transitions through its support of the IEA Digital \nDemand-Driven Electricity Networks (3DEN) initiative.  \n3DEN is developing analysis and guidance to help inform policy making in EMDEs \nand beyond on opportunities to scale up investment in smart power infrastructure, \nensuring the benefits associated with digital investment are widely shared. At the \nsame time, the IEA is convening a series of high-level and peer-to-peer exchange \nopportunities and supporting the creation of a community of practice around these \ntopics. The uniqueness of the 3DEN approach lies in strongly linking policy \nguidance with implementation and the wide dissemination of findings. The IEA is \nworking with the Italian Ministry of Environment and Energy Transitions (MASE) \nand the United Nations Environment Programme (UNEP) to support the \nimplementation of pilot projects on how digitalisation can contribute to flexible and \nresilient energy systems and to disseminate the results. \n\n\nEmpowering Urban Energy Transitions \nChapter 2: Cities and grids on a heating planet \nPAGE | 29  \nIEA. CC BY 4.0. \nChapter 2: Cities and grids on a \nheating planet \nKey takeaways \n• \nContinuous record-breaking heat events together with more frequent storms are \nplacing strain on people, cities and grids, driving the uptake of cooling appliances \nand challenging system reliability. China recorded a 70% year-on-year increase \nin air conditioner sales in 2023. Electricity demand for cooling in Africa could \nincrease 400% this decade. Grids in cities are on the frontline of these challenges. \n• \nGlobal final energy consumption is undergoing a shift towards electrification, with \na remarkable rise from a 20% share to more than 40% in 2050 on the basis of \nannounced government pledges, even surpassing 50% on a path consistent with \nnet zero. This shift is driving a significant increase in electricity demand, \nparticularly in urban areas, where studies suggest a potential tripling of peak \nelectricity demand by 2030. \n• \nTo meet these challenges and ensure security of supply, it will be necessary to \nexpand and reinforce grids, providing access for those currently underserved, and \nby 2050 to unlock more than four times the amount of new flexibility sources than \nexist today to manage peak demand and ensure continued affordability for \nconsumers. \nImpacts of a changing climate and energy \nsystem \nUrban areas are seeing changes in peak demand \nThe ongoing electrification of end-use sectors is poised to substantially increase \nthe share of electricity in global final energy consumption. Projections from the \nlatest IEA World Energy Outlook indicate a remarkable shift, with the share of \nelectricity expected to rise from its current level of 20% to 41% in the APS and \nsurpassing 50% by 2050 in the NZE Scenario.  \nPower grids in many countries have been pushed to their operating limits in recent \nyears due to climate change-related challenges, and increasingly beyond their \nlimits, leading to a loss of supply due to events such as storms, as experienced in \nthe United States, Europe and Japan. Furthermore, the power sector faces \ndisruptions due to extreme temperatures, intensifying concerns, particularly in \nregions where electricity demand becomes more sensitive to rapid increases in \n\n\nEmpowering Urban Energy Transitions \nChapter 2: Cities and grids on a heating planet \nPAGE | 30  \nIEA. CC BY 4.0. \nthe call for heating and cooling, primarily met by electricity. Urban areas are at the \nnexus of these grid-related challenges, with around 70% of cities already \nexperiencing negative impacts. Some studies have estimated a tripling of peak \nelectricity demand in cities by 2030, especially if the decarbonisation of heat and \ntransport occurs rapidly before grids adapt to the increased demands. While cities \nemerge as critical nodes where the adaptation needs of grids become significant \n(particularly at the lower-voltage distribution levels), they are also increasingly \nfocal points in providing flexibility.  \nSome cities that previously experienced a single period of peak electricity demand \nare now seeing a second peak period emerging. In cooler climates, the \ndecarbonisation of heating is driving electricity demand in winter periods and \ncausing higher peaks during cold spells. In the United States, peak demand was \nhistorically experienced during the summer, but many states are projected to \nbecome winter peaking systems. In February 2021, Texas was hit by a record-\nsetting winter storm, which resulted in power outages for more than \n4.5 million homes and disruption of the public water and heating systems. It \nimpacted almost 15 million people across the state and is considered the costliest \nwinter storm on record at over USD 20 billion.  At the same time, as global average \ntemperatures continue to rise, there is additional growth in demand for cooling \nduring persistent heatwaves. \nMore extreme and frequent heatwaves accelerate the \nneed for cooling  \nClimate change is exacerbating extreme weather across the planet. Record-\nbreaking heatwaves, storms, floods, droughts and wildfires are all becoming more \nfrequent and more intense, as are their impacts on power supply reliability. 2023 \nwas the hottest year on record, with summer temperatures exceeding 50°C in the \nUnited States, the Middle East and China. Europe is now the fastest warming \ncontinent on Earth.  \nOnline sales data from China in June 2023 revealed an almost 70% year-on-year \nincrease in air conditioner sales. There are continuing signs that temperatures are \non an upward trend. 2024 has already experienced the warmest January and \nFebruary on record, marking nine consecutive months of record highs. The global \nincrease in more frequent extreme temperatures is thus leading to rising global \ncooling needs.  \n\n\nEmpowering Urban Energy Transitions \nChapter 2: Cities and grids on a heating planet \nPAGE | 31  \nIEA. CC BY 4.0. \nDaily electricity load versus temperature, May to September 2019 versus 2023 \n \nIEA. CC BY 4.0. \nSources: IEA (2023), Weather for Energy Tracker; IEA (2023), Real-Time Electricity Tracker. \n \nIn the period 2000-2022, global final energy demand for space cooling rose at an \naverage of about 4% per year, twice as quickly as for water heating. Furthermore, \nthe number of residential air-conditioning units has tripled since 2000, reaching \nmore than 1.5 billion in 2022.  \nExtreme heat significantly boosts the purchase of air conditioners, leading to \nhigher electricity demand. In the hottest regions, the capacity of the grid needs to \ncover a doubling of electricity demand compared with milder months and cooling \ncan account for over 70% of peak electricity demand. In India, where air \nconditioner ownership is currently low, every 1°C increase in the average daily \ntemperature above 24°C drives an increase in electricity demand of about 2%, \nwhereas in Texas where ownership is much higher, it drives a 4% increase. \nIndeed, an assessment of 13 cities across different countries suggests that each \ndegree of temperature increase causes an average increase in peak electricity \ndemand of almost 4%. \n 20\n 40\n 60\n 80\n20\n22\n24\n26\n28\n30\n32\n34\n36\n38\n40\nMaximum daily electricity load (GW)\nMaximum daily temperature (°C)\nTexas (US)\n 80\n 100\n 120\n 140\n 160\n 180\n 200\n 220\n20\n22\n24\n26\n28\n30\n32\n34\n36\n38\n40\nMaximum daily temperature (°C)\nIndia\n2019\n2023\nTrend 2019\nTrend 2023\n\n\nEmpowering Urban Energy Transitions \nChapter 2: Cities and grids on a heating planet \nPAGE | 32  \nIEA. CC BY 4.0. \nFinal energy consumption and carbon emissions from space cooling by region, 2000-\n2022 \n \nIEA. CC BY 4.0. \nSource: IEA (2023), Tracking Clean Energy Progress on Space Cooling. \n \nLack of access to appropriate cooling technologies can have severe health \nimpacts. In Bangkok, for instance, heat stroke and food poisoning resulting from \nbacteria growth in unrefrigerated food have been seen to increase during heat \nwaves. Vulnerable communities are often among the most affected by the heat. \nFor example, in the United States heat-related deaths are higher in disadvantaged \ncommunities, revealing stark inequalities associated with rising temperatures in \nurban areas. Similarly in Buenos Aires, both the income and health impacts of \nextreme heat are expected to primarily affect its low-income residents.  \nBetween May and September 2023 power grids saw record levels of peak \nelectricity demand in more than 10 countries around the world, including China, \nthe United States, Canada, India, Brazil, Thailand, Malaysia and Colombia – \ntogether accounting for more than 60% of total global electricity demand. In some \nregions, such as in the Middle East and parts of the United States, space cooling \ncan represent more than 70% of peak residential demand on hot days.  \nIn the United States it is estimated that for each degree Celsius of warming at the \ncity scale, the energy used per square foot to cool urban buildings will increase on \naverage by nearly 14%. Researchers found that more extreme heat and larger \npopulations will have dramatic effects on energy use in US cities by 2050, pushing \nup the amount of electricity used to cool urban buildings per unit of floor area by \nat least 20% in some parts of the country. \n0\n0.2\n0.4\n0.6\n0.8\n1\n1.2\n0\n 1\n 2\n 3\n 4\n 5\n 6\n 7\n 8\n2000\n2002\n2004\n2006\n2008\n2010\n2012\n2014\n2016\n2018\n2020\n2022\nGt CO2\nEJ\nEurasia\nAfrica\nCentral and South\nAmerica\nMiddle East\nEurope\nNorth America\nAsia Pacific\nTotal carbon\nemissions (right\naxis)\n\n\nEmpowering Urban Energy Transitions \nChapter 2: Cities and grids on a heating planet \nPAGE | 33  \nIEA. CC BY 4.0. \nLooking ahead, energy demand for fans and air conditioning in Africa is expected \nto quadruple this decade as urbanisation and climate change rapidly increase the \nneed for cooling. In Morocco, the penetration of cooling devices in the residential \nsector is expected to grow from just over 9% in 2015 to nearly 50% by 2030.  \nAccording to the latest IEA World Energy Outlook 2023, based on stated policies, \npeak electricity demand in India rises fourfold by 2050 from the 2022 level, more \nthan half of this driven by cooling demand. This surge in demand has the potential \nto strain power grids, increasing the risk of energy shortages. In April 2022, India \nfaced its worst electricity shortage since 2016 in the middle of an extreme \nheatwave. Electricity supply fell short of demand by around 1.9 billion units, or \n1.6%. Some regions had to schedule power cuts in order to manage the surging \npower demand. \nSpace cooling demand by region in the Stated Policies Scenario and Announced \nPledges Scenario, 2021-2050 \n \nIEA. CC BY 4.0. \nSource: IEA (2022), World Energy Outlook 2022. \n \nWhile more frequent extreme temperatures are affecting both rural and urban \nareas, cities heat up disproportionally when compared to greener countryside \nlocations. With dense concentrations of buildings and paved surfaces absorbing \nand amplifying heat – especially in areas with little tree cover or green space – \ncities are increasingly becoming heat islands.  \nBy 2050, three times as many cities as today are expected to experience average \nsummertime highs of 35°C and many of them could experience substantial \nwarming of up to 4°C before the end of the century. The number of extreme heat \ndays by 2050 is expected to increase 15-fold in Freetown, Sierra Leone, compared \n4%\n8%\n12%\n2 000\n4 000\n6 000\n2021\nSTEPS\nAPS\nSTEPS\nAPS\nJapan\nEuropean Union\nAfrica\nCentral and South America\nRest of world\nSoutheast Asia\nMiddle East\nUnited States\nChina\nIndia\nShare of electricity demand\n(right axis)\nTWh\n2030\n2050\n\n\nEmpowering Urban Energy Transitions \nChapter 2: Cities and grids on a heating planet \nPAGE | 34  \nIEA. CC BY 4.0. \nto 2020, and fivefold in Miami, United States, where a loss of labour productivity \nof an additional USD 10 billion could be incurred.  \nAt the international level, many countries are already paying attention to heat-\nrelated risks. At COP28 over 60 nations signed a Global Pledge for Cooling, \ncommitting to take action across cooling sectors and applications in the context of \nachieving net zero emissions by 2050 by means of deploying passive cooling, \nincreased efficiency and low global warming potential refrigerants.  \nGrids need to expand to enable decarbonisation \nAt the same time that grids are under pressure from rapidly growing demand for \ncooling in cities, they are also required to handle the surge in renewable \ngeneration resulting from the energy transition. As international agreements such \nas the historic UAE Consensus at COP28 signal the beginning of the end of the \nfossil fuel era, they also signal a need for global ambition for concrete measures \nto accelerate the energy transition. This means a dramatic increase in renewable \nenergy development, with significant implications for electricity grids.  \nGlobal installed renewable capacity by technology in the NZE Scenario, 2010-2030 \n \nIEA. CC BY 4.0. \nSource: IEA (2023), World Energy Outlook 2023. \n \nIn recent analysis by the IEA, the potential growth in renewable electricity \ngeneration projected out to 2028 demonstrates that new renewable capacity \nexceeds the expected global growth in demand. This outpacing indicates a slow \ndecline in fossil fuel-based generation. In 2028 renewables would account for 42% \nof global electricity generation, with wind and solar PV making up 25%.  \n0\n2 000\n4 000\n6 000\n8 000\n10 000\n12 000\n2010\n2015\n2021\n2022\n2030E\nGW\nOther\nBioenergy\nHydro\nWind\nSolar\n\n\nEmpowering Urban Energy Transitions \nChapter 2: Cities and grids on a heating planet \nPAGE | 35  \nIEA. CC BY 4.0. \nElectricity generation by technology, 2000-2028 \n \nIEA. CC BY 4.0. \nSource: IEA (2023), Renewables 2023.  \n \nIn parallel with increasing shares of renewables, cross-sectoral decarbonisation \ncontinues through electrification. This evolving landscape of increasing electricity \ndemand and renewables requires substantial grid upgrades to manage peak \ndemand, not least in cities where the growing need for services, such as cooling \nand EV charging, coupled with distributed generation are having a particular \nimpact. Achieving national goals could require adding or refurbishing over \n80 million kilometres of grids by 2040 globally, the equivalent of the entire existing \nglobal grid.  \nGrids need to expand for universal electricity access  \nCurrently, sub-Saharan Africa accounts for 80% of the global population lacking \naccess to electricity. This issue not only affects rural areas. To achieve universal \naccess to reliable electricity in Africa by 2030, 20 million people living in urban \nareas need to gain access each year starting from 2022. Bringing access to \nmodern electricity could require an annual investment of USD 25 billion, of which \nUSD 22 billion would be needed for power grids (mainly distribution networks).  \nWhile mini-grids are an important vehicle for providing electricity access and \nimproving resilience among rural communities, grid-based electricity service plays \na major role in urban areas. For example, in Kampala, Uganda, the grid is the \nmain source of lighting for two-thirds of the city population. \nReinforcing and expanding the grid at the same pace of urbanisation will be a  \nunique challenge for utilities, national governments and municipalities due to \n0%\n5%\n10%\n15%\n20%\n25%\n30%\n35%\n40%\n45%\n2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028\nAll renewables\nVariable\nrenewables\nHydropower\nSolar PV\nWind\nOther\nrenewables\nPredicted\ngeneration\n\n\nEmpowering Urban Energy Transitions \nChapter 2: Cities and grids on a heating planet \nPAGE | 36  \nIEA. CC BY 4.0. \nobstacles such as insufficient access to finance, regulatory barriers, and political \ninstabilities in some areas. For instance, in sub-Saharan Africa, the cost of capital \ncan be several times higher than in advanced economies.  \nIn some countries, steps are being taken to expand and reinforce the power grid \nto improve access in cities. In Mauritania, grid expansion plans between the major \ncities of Nouakchott and Nouadhibou were announced in early 2023. Upgrading \nthe circuit capacity is likely to provide access to 12 000 additional customers. Mali \nis about to receive more than USD 200 million to upgrade the electricity grid in \ncertain areas, including Bamako and its surroundings. The investment is expected \nto reduce the city’s reliance on small and polluting rental power plants and \ndecrease transmission grid losses (from 8.5% to 4.5% by 2028). Also, expansion \nin secondary cities will provide electricity to about 400 000 people and more than \n1 000 public facilities.  \nShare of urban population with access to electricity in selected regions, 2000-2021 \n \nIEA. CC BY 4.0. \nSource: The World Bank (2021), Access to electricity (percentage of urban population). \n \nActivating flexibility in cities \nFuture grids need new sources of flexibility \nAt present, dispatchable thermal power plants and pumped hydropower, currently \nthe largest source of renewable energy, provide most of the flexibility required \nacross all timescales. Flexibility, in the most basic terms, is the ability to respond \nin a timely manner to variations in electricity supply and demand. New sources of \n50%\n60%\n70%\n80%\n90%\n100%\n2000\n2003\n2006\n2009\n2012\n2015\n2018\n2021\nWorld\nNorth\nAfrica\nSub-\nSaharan\nAfrica\n\n\nEmpowering Urban Energy Transitions \nChapter 2: Cities and grids on a heating planet \nPAGE | 37  \nIEA. CC BY 4.0. \nflexibility need to come online to maintain grid reliability as thermal power plant \nproduction declines as they are phased out in the coming decades.  \nThe main sources will particularly be batteries and other storage, and demand \nresponse. Demand response refers to balancing demand and supply on power \ngrids by encouraging customers to shift electricity demand to times when \nelectricity is more plentiful or other demand is lower. Electricity storage and \ndemand response are identified as critical services to power systems. Batteries, \nboth distributed (behind-the-meter) and larger grid-scale installations, can provide \nvaluable system flexibility, especially in systems with high shares of PV and peak \ndemand in evening hours, by absorbing excess generation during the day and \nreleasing it during the evening. Curtailment, the switching off of renewables to \nprevent grid exports, is a further source of flexibility, albeit an unwelcome one.  \nGlobal power system flexibility needs and supply in the Announced Pledges Scenario \n \nIEA. CC BY 4.0. \nNotes: Short-term and seasonal flexibility needs are computed for 2030 and 2050 taking into account changes in electricity \nsupply and demand and weather variability over 30 historical years. Demand response includes the flexible operation of \nelectrolysers. \nSource: IEA (2023), World Energy Outlook 2023. \n \nWhile curtailment is rising overall in an increasing number of countries, the \npercentage of wind and solar PV generation going unused remains relatively low. \nTypically, curtailment rates range from 1.5% to 4% in most major renewable \nenergy markets, although they tend to be higher in regions that need substantial \ngrid infrastructure expansion to connect renewable energy installations to \n 1\n 2\n 3\n 4\n 5\nFlexibility needs (2022 = 1)\nDemand\nWind\nSolar PV\nCurtailment\nThermal\nHydro\nBatteries\nDemand response\n2050\n2030\nShort term\nSeasonal\n2022\n2022\n2050\n2030\nFlexibility supply\nFlexibility needs driver\n\n\nEmpowering Urban Energy Transitions \nChapter 2: Cities and grids on a heating planet \nPAGE | 38  \nIEA. CC BY 4.0. \nconsumption centres. Failure to invest in infrastructure can contribute to increased \ncurtailment, with further financial consequences. \nIn the United Kingdom, the cost of wind curtailment hit a record high of more than \nGBP 500 million in 2021, while in 2022 consumers paid GBP 215 million to turn \nwind farms off. If this electricity could have been stored and dispatched when \nneeded, then the cost of almost GBP 720 million to buy gas-fired power to make \nup the difference in supply and demand could have been avoided, with the \nadditional GHG emissions also avoided. National Grid estimated that curtailment \ndue to grid constraints could increase fourfold, with costs forecast to reach \nGBP 2.5 billion a year by the end of this decade. IEA analysis suggests that \ndigitally enabled demand response could reduce the curtailment of variable \nrenewable energy systems by more than 25% by 2030, increasing system \nefficiency and reducing costs for customers. \nThe progressive electrification of end uses offers new opportunities for load \nshifting in cities, with EVs and electric heating/cooling playing a major part. To \nmake progress towards achieving a net zero energy system, the contribution \nneeded from demand response would need to rise to as much as 500 GW in 2030, \naround a tenfold increase from 2020 levels.  \nEVs are expected to make up nearly 40% of global new car sales by as early as \n2030 on the basis of announced policies. Integrating EVs into the grid requires \ncareful balancing with other distributed energy resources such as heat pumps, air \nconditioning, battery storage and rooftop solar. It is important to note that while \nurban demand response can offer significant system- and cost-related benefits, it \ntypically requires upfront investment to become available in the first place. \nConsequently, local grid upgrades become imperative, especially in urban \nenvironments where residential charging clusters or space conditioning can \ncontribute to grid congestion during peak periods. A cost-benefit analysis on EV \ndeployment in New York indicates potential challenges, with around \nUSD 2.3 billion more required in grid upgrades unless peak demand is managed \nefficiently.  \nIn the US city of Palo Alto, 80% of all vehicles need to be EVs by 2030 to meet its \nSustainability \nand \nClimate \nAction \nPlan \ngoals, \nequivalent \nto \naround \n100 000 vehicles. A recent impact study found that without improvements to its \ngrid infrastructure, more than 95% of the city’s low-voltage transformers would be \noverloaded. Similar challenges are faced in New York, where summer peak load \nleaves large urban areas with insufficient capacity to manage high EV demand. \nWhile not exclusive, many of the locations with low grid capacity are also \nassociated with disadvantaged communities. \nHowever, despite these challenges, smart technologies enabling demand \nresponse are capable of providing part of the solution to managing peak demand \n\n\nEmpowering Urban Energy Transitions \nChapter 2: Cities and grids on a heating planet \nPAGE | 39  \nIEA. CC BY 4.0. \nperiods, with their potential to reduce grid stress often being demonstrated in cities \nfirst. There are plans to expand the use of virtual power plants (VPPs) in which \ndigitally enabled technologies act as management systems to operate many \naggregated distributed systems as a single unit, to maximise their assets.  \nIn Australia, the University of Queensland installed the state’s largest behind-the-\nmeter battery, with 1.1 MW of capacity and 2.15 MWh of storage. By joining Enel \nX’s Virtual Power Plant, the university earned more than USD 47 000 in the first \nquarter of operations, while supporting renewable integration and grid balancing.  \nIn the city of Huzhou, China, an air conditioner demand-side management pilot \nwas the first of its kind aimed at the residential sector. Wi-Fi-connected air \nconditioners were enabled, allowing users to adjust their settings via a smartphone \napp in response to prompts from the system operator. The Chinese government \nhas developed demand-side management plans to cover at least 5% of the \ncountry’s electricity consumption by 2025, mostly from industry and cooling in \npublic sector buildings. The city of Pinghu is developing an air-conditioning flexible \nregulation and control system, with a controllable load of 15 MW to allow flexible \ncontrol of air conditioning. By modifying the local central air-conditioning \ntemperature regulation settings, the city can benefit from an additional 15 MW of \nflexible load.  \nThere is also the potential to boost efficacy by blending digital innovation with more \ntraditional measures. A renovation project in San Diego, California, combined \nenergy efficiency measures to reduce demand in the long-term and help to \nalleviate peaks, together with a VPP consisting of batteries and solar PV. The \nproject achieved a 30% reduction in the total energy demand and a notable \nreduction in peak demand. \nThe benefits of flexibility are multiple \nNew infrastructure is clearly necessary to respond to the growing peak load and \nensure that grids can manage greater amounts of electricity. In the \nEuropean Union cross-border interconnections between member states’ grids \nneed to double due to electricity demand rising by as much as 60% by 2030. In \nthe United States it is estimated that 10% of all infrastructure investment costs are \nincurred to manage 1% of the annual demand. However, deploying demand \nflexibility and energy efficiency, if properly leveraged, could reduce some of the \nneed for costly grid upgrades, with the potential to save USD 2-3 for each USD 1 \nspent on peak demand reduction.  \nFlexibility-related benefits extend beyond immediate cost savings, and offer the \npotential for continued economic benefit into the coming decades. In the \nUnited Kingdom recent studies have demonstrated that maximising energy \nsystem flexibility has significant benefits. By 2030 system flexibility from heating \n\n\nEmpowering Urban Energy Transitions \nChapter 2: Cities and grids on a heating planet \nPAGE | 40  \nIEA. CC BY 4.0. \nand transport could reduce renewable curtailment annually by around 30 TWh, \navoid the need to increase distribution system grid capacity by 25%, and save \nabout GBP 5 billion each year. Examples from the Centre for Net Zero underscore \nthe potential for cities to play a pivotal role in managing peak demand, aligning \nwith broader user-centred approaches. In Paris, in an ambitious scenario where \n80% of vehicles are EVs by 2030 and 10% of buildings are equipped with solar \nPVs and battery storage, 20% of heating and cooling peak demand as well as \n40% of EV charging demand could be shifted to off-peak hours of the day, with \nsignificant benefits to the system. \nStatus of demand-side flexibility options \n \nSub-hourly \nDaily \nWeekly \nSmart EV charging  \n \n \n \nElectric water \nheaters \n \n \n \nHeat pumps \n \n \n \nData centres \n \n \n \nNote: Ability to provide flexibility:  = yes;  = yes, under conditions/not mature;  = no. \nSource: Artelys (2023), Power System Flexibility in the Penta region, as modified by the IEA. \nThere is significant potential to deploy flexibility services in the form of demand \nresponse to offset some of the costs of increasing power generation capacity. \nFlexible assets can react to signals in the market to reduce or shift demand for a \nperiod of time until the load on the grid reduces. Alternatively, grid conditions may \nbe such that there is an excess of renewable energy available, and grid operators \nmay encourage customers to increase their demand to absorb abundant clean \nelectricity to reduce curtailing supply. By accessing a large, aggregated volume of \ncustomers to reduce demand and ensure grid conditions are met, more efficient \ngrid expansion could become possible. One estimate is that leveraging residential \ndemand flexibility in the United States could avoid annual grid investment of \nUSD 9 billion, representing more than 10% of the forecast total national \nexpenditure on grids.  \nThere is also an energy security consideration during periods of anticipated high \ndemand. In New York, the system operator offers several demand response \nprogrammes designed to reduce load on the system during grid emergencies or \nwhen shortages are anticipated. The Emergency Demand Response Program \noffers the opportunity to earn up to USD 500/MWh for curtailing energy \nconsumption, thus benefiting programme participants. As of July 2022, a total of \n4 630 end-use locations were enrolled in one of the demand-response \nprogrammes, representing a total capacity of 1 234 MW of demand response. \n\n\nEmpowering Urban Energy Transitions \nChapter 2: Cities and grids on a heating planet \nPAGE | 41  \nIEA. CC BY 4.0. \nDigital technologies and analytics enable flexible urban \nsolutions \nTapping into the latent demand-side flexibility and energy efficiency potential \nrequires a high level of digital integration to process large data flows in real time, \nwhich is not possible using traditional computational methods. The emergence of \nmachine learning and artificial intelligent models may help unlock more rapid \nprogress on efficiency by providing more granular information and timely \nprocessing of data. This could increase the visibility of information and maximise \nenergy savings for individuals, enable businesses to manage operations more \nefficiently, provide system flexibility and improve predictions and forecasting for \nsystem operators. Cities are often the first to implement new digitally enabled \nsystems and are poised to enable the development of smarter power systems. \nDigital technologies play a pivotal role in the evolving energy landscape, and \nsmarter power systems in particular. Smart charging (also known as responsive \ncharging), electric heating, battery storage and demand response are crucial \nelements in meeting flexibility needs. For instance, smart charging of EVs and \ndemand response in buildings and by urban and peri-urban industrial users could \nprovide up to 35% of the short-duration flexibility needed to manage the variability \nof renewables.  \nRecent IEA analysis illustrates the impacts of flexible resources in India’s future \npower system. By using digitalisation and flexible-load strategies for buildings \nappliances by 2030, the peak load (total load minus solar and wind generation) \nwould be reduced approximately by around 13% compared to the base case in \nwhich appliances operate under a fixed pattern. Additionally, the flexible operation \nenabled by digital tools in this model decreases variable renewable energy (VRE) \ncurtailment by around 78%. Reducing curtailment of renewables will be important \nto maximise the potential of assets as India strives to achieve 100 GW of installed \ncapacity in the same timeframe. \n\n\nEmpowering Urban Energy Transitions \nChapter 2: Cities and grids on a heating planet \nPAGE | 42  \nIEA. CC BY 4.0. \nIndia net load curve of sample days in summer in the Announced Pledges Scenario, \n2030 \n \nIEA. CC BY 4.0. \nNotes: Net load refers to total load minus wind and solar PV generation. In the Base case electrical appliances operate \nunder a fixed operation pattern. In the Flexibility case digital technologies determine the operational patterns of electrical \nappliances, considering market conditions (one-hour flexibility for heating and cooling assumed). In the Enhanced flexibility \ncase digital technologies enable electrical appliances to have more extended and larger-scale demand shifting than in the \nflexibility case (five-hour flexibility for heating and cooling assumed). \nSource: IEA (2023), Using Digitalisation in Emerging Markets and Developing Economies to Enable Demand Response in \nBuildings. \n \nHalf of the global potential for demand response is anticipated to come from \nbuildings, particularly those adopting zero-carbon practices that rely on \ndigitalisation and automation. Therefore, accelerating the deployment of grid-\nresponsive appliances is paramount to untapping demand response. As a part of \nthe IEA Technology Collaboration Programme Energy Efficient End-use \nEquipment (4E), the Efficient, Demand Flexible Networked Appliances \nAnnex (EDNA) is providing analysis and policy guidance to members and other \ngovernments aimed at improving the energy efficiency and the flexibility readiness \nof connected devices. For example, heat pumps equipped with smart technology \nplay an important role in more than doubling EU demand‐side flexibility by 2030, \ntheir share of total flexibility resources jumping from 8% in 2021 to around 12% in \n2030.  \nLeveraging distributed energy resources and microgrids \nin cities \nThere are many potential benefits to leveraging distributed energy resources such \nas rooftop solar PV, battery storage and other grid-connected assets. In the case \nof outages, one way to provide backup power is through distributed energy \nresources. City governments can consider adding distributed energy resources \n 20\n 40\n 60\n 80\n 100\n 120\n12am\n12pm\n12am\n12pm\n12am\n12pm\nIndex (100 = highest net load in the Base case)\nHour\nBase\nFlexibility\nEnhanced\nflexibility\n\n\nEmpowering Urban Energy Transitions \nChapter 2: Cities and grids on a heating planet \nPAGE | 43  \nIEA. CC BY 4.0. \nsuch as batteries to municipal buildings as a way of ensuring continuity of \ngovernment function during power outage. Incentives to encourage distributed \nenergy resources in other locations can also promote wider community resilience, \nespecially for buildings providing critical services, such as hospitals. \nSanta Barbara has installed a battery energy storage system at its water treatment \nplant that is projected to alleviate pressure on the power grid and save the city \nUSD 700 000 in energy costs over the next 20 years. In the US, AVA Community \nEnergy serves more than 14 cities, providing access to distributed solar PV \nsystems and batteries at no upfront costs and reinvesting earnings to create local \nclean energy jobs and projects.  \nMicrogrids can help improve resilience and provide power during outages. \nLos Angeles Department of Water and Power established a community-oriented \nmicrogrid facility at one of its fire stations. The project consists of a rooftop solar \nsystem combined with a 40 kWh battery energy storage system. In the event of a \ngrid outage, the facility can operate independently using the microgrid system. \nBeyond applications in urban areas, microgrids are an important vehicle towards \nincreasing access and improving resilience of communities as was demonstrated \nin August 2023 in Kenya, where despite a 24-hour power outage across the whole \ncountry, the village of Kitonyoni managed to keep the lights on thanks to a solar \nmini-grid. \nRome demonstrates urban flexibility for higher \nrenewables integration \nEffective system planning is thus crucial for well-integrated wind and solar PV \ngrowth and should encompass considerations such as the regional distribution of \ngeneration and the development of policies to encourage system flexibility. \nAdditionally, power markets can evolve beyond the traditional design and \nregulation models to create a more accommodating environment for higher \nrenewable energy integration, as demonstrated by the Romeflex project. In 2021 \nARERA, the Italian Regulatory Authority for Energy, Networks and Environment, \nset rules to allow distribution system operators (DSOs) to experiment with projects \nfor local flexibility markets, aimed at providing local ancillary services \n(e.g. congestion resolution, voltage regulation) to the distribution network. Among \nthe DSO projects approved by ARERA, Rome’s DSO Areti started to implement \nthe Romeflex pilot project, while Italy’s largest DSO, e-distribuzione, awarded its \nfirst round of tendering under its EDGE project at the end of 2023, with additional \nrounds planned for 2024. For this pilot project, e-distribuzione identified specific \nareas in Benevento, Cuneo, Foggia and Venezia provinces, characterised by the \npresence of users eligible for providing local flexibility services and thousands of \nprosumers connected to the medium- and low-voltage networks \n\n\nEmpowering Urban Energy Transitions \nChapter 2: Cities and grids on a heating planet \nPAGE | 44  \nIEA. CC BY 4.0. \nFlexibility needs and solutions in Rome \nA study carried out by the DSO Areti in the city of Rome estimated that peak load \ncould reach 3 300 MW by 2032, with periods of peak electricity demand above \n2 500 MW occurring for about 1 000 hours per year. Deploying demand-side \nflexibility measures during peak hours could help reduce peak demand and \ncontribute to slowing the need for grid expansion by leveraging up to 720 MW of \ndistributed resources by 2032, consisting of battery storage, EVs, and heating and \ncooling systems. \nEstimated flexibility potential in Rome, Italy, 2023-2032 \n \nIEA. CC BY 4.0. \nSource: IEA analysis based on data by Areti. \nTo explore the potential flexibility available, in partnership with the electricity \nmarket operator GME, Areti is implementing the Romeflex pilot project to test a \nlocal flexibility market that would allow 1.7 million customers to modulate their \nenergy consumption and production in return for remuneration based on the \ncapacity they make available and on the actual service provided, thus offering \nflexibility services to the electricity grid.  \nUnder Romeflex, customers ranging from 3 kW residential houses to industrial \nsites can individually or in aggregated form participate in auctions targeted at \nspecific urban zones and for an identified period. The first auction closed in \nNovember 2023 and saw wide participation among aggregators and prosumers, \nresulting in 3 MW of flexibility mobilised for the period February-April 2024.  \nThe open digital platforms used to procure flexibility in Romeflex were initially \ntested in a European pilot project (PLATONE). They have been scaled up and \nintegrated into the grid control systems and the market platform of Italy’s national \nenergy market operator, indicating their potential for replication in other energy \nmarkets. \n0\n 100\n 200\n 300\n 400\n 500\n 600\n 700\n 800\n2023\n2024\n2025\n2026\n2027\n2028\n2029\n2030\n2031\n2032\nMW\n\n\nEmpowering Urban Energy Transitions \nChapter 3: Community at the heart of the city \nPAGE | 45  \nIEA. CC BY 4.0. \nChapter 3: Community at the heart \nof the city \nKey takeaways \n• \nCommunity-focused initiatives can improve access to clean energy technologies, \nreduce costs and relieve strain on power systems. In the United Kingdom more \nthan 200 000 people are engaged in projects and have contributed to reduced \nbills for participants worth over GBP 3 million. \n• \nInterest in community and local energy projects is growing, with some countries \nproviding significant financial and technical support. In the European Union at \nleast 2 million people are engaged in more than 7 700 community projects. \n• \nImplementation of community projects is on the rise, creating opportunities to \nlearn and build on emerging best practices. Local solar development in the \nUnited States can create five more jobs on a per-megawatt basis than utility-\nscale solar generation. \nCommunity energy projects \nCommunity-focused initiatives can offer multiple \nbenefits \nIncreasingly, community-centred approaches are being developed and \nimplemented to accelerate the transition to clean and efficient energy systems, \nfor example, community procurement, people-led renovation, community \nmicrogrids, energy communities, community virtual power plants, and positive \nenergy districts. Community energy projects can be framed as part of a broader \neffort to promote environmental sustainability and social inclusion, by reducing \nreliance on fossil fuels and promoting clean energy technologies. At the same \ntime, these initiatives enable individuals and communities to take an active part \nin clean energy transitions and can also build trust, enhance public acceptance, \nand support affordability, equity and fairness.  \nMoreover, from a city and power system planning perspective, community or \nneighbourhood-focused approaches can offer economies of scale via \naggregation and enable more systematic approaches to achieving efficient and \nflexible electricity demand. Digital technologies such as smart meters, \nmanagement systems, trading platforms and systems to collect and share data \n \n\n\nEmpowering Urban Energy Transitions \nChapter 3: Community at the heart of the city \nPAGE | 46  \nIEA. CC BY 4.0. \nare also enablers opening up new opportunities. Digital platforms and tools are \nmaking it easier to set up co-operatives, engage stakeholders, make investments \nand exchange electricity. \nThere are many examples of initiatives worldwide where communities are taking \nownership of their energy resources, managing them collectively, and benefiting \neconomically and socially. These global movements of community-owned and \nmanaged renewable energy projects demonstrate that they not only contribute to \nthe fight against climate change, but also address social and economic \nchallenges within communities. Specific awareness campaigns and training on \ncommunity energy management, including for energy community managers, \nhave been established in Canada, France, Spain and the United Kingdom, as \nwell as by ICLEI in Europe.  \nCommunity-centred energy projects are also effective vehicles for more \ninclusive, equitable and resilient energy systems. They are showing clear \nbenefits across the globe by deploying renewable technologies as indicated \nbelow, by improving efficiency, supporting reliable power supply, reducing bills \nand generating local jobs.  \nCommunity-focused initiatives and their impacts \n \nIEA. CC BY 4.0. \n \nInterest in community approaches is growing \nAn increasing number of countries are allocating significant funds to support \ncommunity-based clean energy projects. The Italian National Recovery and \nResilience Plan has allocated EUR 2.2 billion to support energy communities \nand self-consumption, while the USD 370 billion US Inflation Reduction Act of \n2022 offers additional financial incentives for community-based clean energy \n\n\nEmpowering Urban Energy Transitions \nChapter 3: Community at the heart of the city \nPAGE | 47  \nIEA. CC BY 4.0. \nprojects. In January 2023 the US Department of Energy launched a \nUSD 50 million programme to help communities meet their clean energy goals. \nThe programme connects local governments, electric utilities and community-\nbased groups, and provides tools, technical partnerships and peer-to-peer \nlearning. The Australian government launched the AUD 40 million (Australian \ndollars)1 Energy Efficiency Communities Programme in 2020, offering grants to \nsmall businesses and community organisations to undertake collective efficiency \nand renewable projects. In Colombia, Las Comunidades Energéticas (the Energy \nCommunities) initiative was launched with the objective of promoting collective \nactions to improve access to clean and affordable energy for vulnerable \ncommunities as well as to decentralise and democratise energy. These \ncommunities generate, and efficiently use, clean energy and distributed energy \nresources. The number of registered communities in Colombia amounts to \nalmost 13 000 as of February 2024. \nLevels of interest in participating in energy communities is increasing as new \nopportunities are created and as awareness rises about the benefits that can be \naccessed. At least 2 million people in the European Union are involved in more \nthan 7 700 energy community projects. In Australia community energy groups \nnow have more than 44 000 members – a doubling compared to 2015. In the \nUnited Kingdom approximately 220 000 people are engaged in community \nenergy projects. \nExamples of community-focused \napproaches for inclusive energy transitions \nin cities \nLocal procurement initiatives advance clean energy \nCommunity-led or community-centred bulk clean energy procurement, when \neffectively planned, is an advanced way of integrating diversity, equity and justice \ninto the community’s energy transition, as well as improving the resilience of local \nenergy systems. Community-centred inclusive procurement and ownership yield \nmultiple benefits to the community, including strengthening clean energy \ninvestment in the area, enabling local vendors to provide better customised \nservices to the community, creating local jobs, and improving the affordability of \ntechnologies and energy. In a pilot project in the Indian city of Lucknow, residents \nwere able to sell their surplus rooftop electricity production to other prosumers \nand consumers through the use of a peer-to-peer (P2P) digital trading platform. \nThis allowed for surplus production to be sold to peers at a price higher than the \n \n \n1 Exchange rate: 1 Australian Dollar (AUD) = EUR 0.61 = USD 0.66 (as of 04 April 2024). \n\n\nEmpowering Urban Energy Transitions \nChapter 3: Community at the heart of the city \nPAGE | 48  \nIEA. CC BY 4.0. \nregulated one and for consumers to benefit from local clean energy while also \ncutting their electricity bills, as the electricity price in the trial was 43% below the \ncentral market price.  \nCommunity-focused approaches can help reduce the cost of technologies and \nimprove energy access. In the United Kingdom, Solar Together, a group-buying \nscheme for PV panels and battery storage, is helping bring down technology \ncosts to improve affordability and access in co-operation with local councils. In \nthe city of Liverpool, this approach reduced average installation costs by 26%. \nOther UK community energy projects targeted energy storage, new EV charge \npoints and a mixture of solar, wind and hydro generation, producing over \n500 GWh of electricity – enough electricity to satisfy the demand of almost \n175 000 homes. They also resulted in GBP 3.35 million of savings on energy bills \nin 2021 – equivalent to the annual average energy bills of more than \n2 500 households in that year – and created more than 180 new full time \nequivalent jobs.  \nIn the United States, a recent study indicated that a community solar pilot project \nin Ohio could yield earnings of almost USD 2.5 billion, with local tax revenue of \nand around USD 410 million over its lifetime. Community solar subscribers in the \nUS generally save 10-20% on their monthly energy costs, lowering the energy \nburden that many low-income households experience. In the United States, local \nsolar development can create five more jobs on a per-megawatt basis than utility-\nscale solar generation. Integrating, optimising and growing local solar and power \nstorage could create 1.4 million US jobs by 2050, increasing to 2 million if \nsupported by clean electricity targets. Creative and conscious procurement, \nalthough not directly operated by the community itself, ensures more equitable \nenergy transitions for local communities. These procurements are done by large \nbuyers, mostly leveraging corporate renewable energy purchases to enhance \nlocal communities’ engagement and benefits. For example, the Clean Energy \nBuyer Institute aims to support climate-resilient communities, focusing on \ncommunities of colour, rural communities, and coastal and island communities.  \nA local approach can deliver social benefits  \nCommunity-focused projects can also enhance access to energy and increase \nresilience. Peace Renewable Energy Credits (P-RECs) are an extension of \nEnergy Attribute Certificates, which are an internationally traded virtual \ncommodity representing 1 MWh of renewable energy generated to include \nenvironmental and social benefits from projects in fragile settings. Governments, \nutilities, companies and individuals can purchase credits to meet mandatory or \nvoluntary sustainability goals. The funding stream can provide developers with \nan additional revenue stream, enabling access to term finance that may not \notherwise be available. The major ICT company Microsoft secured two \n\n\nEmpowering Urban Energy Transitions \nChapter 3: Community at the heart of the city \nPAGE | 49  \nIEA. CC BY 4.0. \ninvestments in the Democratic Republic of the Congo, the first in 2020 and the \nsecond in 2022. One of the funded projects installed night-time street lighting \nconnected to the neighbourhood solar mini-grid, which enabled 70% of \nbusinesses to operate longer hours in the evening. Another expanded support \non energy access, such as first-time electricity connections for the community \nand contributing a new 3.7 MW solar metro-grid to benefit almost 20 000 people.  \nCommunity microgrids can also enable prosumers to exchange and trade energy \nvia P2P energy sharing. This sharing co-operation within communities minimises \nenergy imports from other suppliers outside the community while also minimising \nthe energy cost. The Community Microgrid Initiative in the United States aims to \nprovide indefinite renewables-driven backup power to critical facilities. It focuses \non enabling disadvantaged groups to meet emergency power and instant \nrecovery needs, and even to build back better after disasters such as wildfires \nand heavy rain.  \nAlso in the United States, the Valencia Gardens Energy Storage project was \ndesigned to support low-income and senior housing facilities consisting of around \n260 units in San Francisco. It is expected to deliver multiple benefits such as \nreducing peak loads, enabling ancillary grid services, and enhancing grid \nresilience and security. Over 20 years, it is estimated that the project will save \nUSD 1.3 million off electricity bills and achieve USD 4.6 million in economic \nstimulation.  \nIn Adjuntas, Puerto Rico, some residents were without power supply for almost \na year after Hurricane Maria in 2017. A new co-operatively owned solar microgrid \nproject harnessing 700 solar panels in the town centre and a 187 kW battery \nstorage system will enable 14 local businesses to produce their own electricity \nand to run for about 10 days, even when disconnected with the main grid. In \nBawley Point and Kioloa, two small, remote coastal towns in Australia prone to \nbushfires and strong storms, are in the process of developing self-contained \nmicrogrids where approximately 100 homes would purchase rooftop solar and/or \na battery with subsidies from the USD 5.3 million project.   \nCommunity energy initiatives can support power system \nreliability \nThere are obvious direct benefits to the local communities, as demonstrated, but \nsupporting community-based projects also offers wider grid benefits. Consuming \nelectricity close to the generation source can help avoid power system losses \nand enhance energy efficiency and can also provide additional grid balancing \nservices, further improving grid resilience. For example, in northern Perth, \nAustralia, a battery resource shared by around 120 households resulted in \ncollective savings of over AUD 81 000 during a five-year period. The battery also \n\n\nEmpowering Urban Energy Transitions \nChapter 3: Community at the heart of the city \nPAGE | 50  \nIEA. CC BY 4.0. \nhelped ease the strain on the grid by enabling an 85% reduction in consumption \nof electricity from participating households at peak times.  \nIn Italy, the Magliano Alpi energy community installed solar PV on the town hall \nroof, and in collaboration with the EU Joint Research Centre has developed \ndigital tools to forecast energy generation and demand and share electricity. This \ninvestment has enabled the community to use their solar PV systems more \neffectively and cover 35% of their electricity needs. Increased reliance on their \nown generation resources during peak demand periods alleviates grid stress and \nhas helped defer expensive infrastructure upgrades. Based on Magliano Alpi’s \nexperience, a local company specialising in solar PV installations and EV mobility \ncreated an operational group, GO-CER, to support the creation of renewable \nenergy communities. The network gathers a variety of local professionals and \nexperts to help set up and operate energy communities.  \nWhen configured as community-based VPPs, energy communities can further \ncontribute to the provision of flexibility to the electricity system. When coupled \nwith advanced digital technologies such as machine learning algorithms, they \nhave significant potential to improve the economic value to the community and \ncarbon emission reduction performance. A study in the city of Greater Bendigo, \nthe third-largest city in the Australian state of Victoria, showed that one project \nenabled by advanced digital technologies could halve the carbon emissions \nwithin the area in ten years with a probability of more than 70%, and lower the \nelectricity price by up to one-sixth of the current level. In the United Kingdom the \nFlex Community is bringing together households and businesses to trial new \napproaches to community solar projects, electricity trading between neighbours \nand managed EV charging to better match electricity demand and supply.  \nFlexibility contribution from energy communities \n \nSource: Regulatory Assistance Project (2021), Energy communities with grid benefits: A quest for a blueprint, as modified \nby the IEA.  \n \n\n\nEmpowering Urban Energy Transitions \nChapter 3: Community at the heart of the city \nPAGE | 51  \nIEA. CC BY 4.0. \nBest practice to support inclusive local \nenergy \nPolicy makers and utilities can support inclusive local \nenergy solutions  \nUtilities in several countries are providing support to local energy schemes, such \nas collective self-consumption and energy communities. In Italy, the distribution \nsystem operators collaborated with the state-owned energy service system \noperator, Gestore dei Servizi Energetici, to create an interactive map of primary \nsubstations, which allows interested groups to identify the boundaries of self-\nconsumption and energy communities under the agreement (current transitional \nmeasures set the boundary at secondary substations).  \nThe French distribution operator, ENEDIS, is collecting consumption and \nproduction load curves for collective self-consumption projects. This helps it \nallocate the quotas for self-consumed electricity among participants for billing \npurposes (including through a direct interface with energy suppliers) and \nprovides tools for operation and data visualisation. \nMunicipalities also play a key role in designing strategic public procurement \nschemes to incentivise communities, as identified in the Procurement Guide for \nCommunity Energy from REScoop. Municipalities can assist communities adopt \nrenewable energy and enhanced energy efficiency, supporting the creation of \nenergy communities. The municipality of Strasbourg, France, in its procedure to \nallocate concessions for rooftop solar, specified that only energy community \norganisations can participate in the tender. \nHowever, conducive frameworks and support from national governments have a \ncritical role to play in scaling up inclusive local energy solutions. From a technical \nperspective, it is important to ensure that the right digital technologies are in \nplace. The revised Swiss Federal Act on a Secure Electricity Supply from \nRenewable Energy Sources requires electricity operators to install smart meters \nat the request of participants in energy communities, thereby helping to ensure \nthat the right technology enablers are in place.  \nCapacity building in communities for socio-economic \ndevelopment \nSome projects focus on education, training and awareness campaigns to enable \ncommunities to actively participate in managing their energy resources \neffectively. These initiatives are not only about energy, but also about creating \njobs, providing training opportunities and reinvesting profits back into the \n\n\nEmpowering Urban Energy Transitions \nChapter 3: Community at the heart of the city \nPAGE | 52  \nIEA. CC BY 4.0. \ncommunity \nto \naddress \nissues \nlike \nunemployment \nand \npoverty \nThe RevoluSolar energy initiative was the first PV community founded in a \nBrazilian favela, enabling renewable energy access for many families, with more \nthan 170 kW of solar capacity installed, offsetting 16 tonnes of CO2, and directly \nbenefiting 2 000 people. The community opted to reinvest the profits from the \nprojects into charities, training 70 residents to tackle rising rates of local \nunemployment and supporting the education of more than 100 children. This \nability to determine where, how and to whom the revenues from the project are \ndistributed, improved overall welfare in the favela while also enabling the \ncommunity to protect people from rising energy prices, saving them around \nUSD 11 000 to date. \nBrixton Energy, the United Kingdom’s first community-owned social housing \nrenewable energy project, has evolved into a P2P network, allowing participants \nto reduce their energy bills by more than 20%, while also creating training and \nwork placement opportunities for residents including young people and \nunemployed electricians. In 2021 a three-month trial of a smart local flexibility \nservice was implemented, where they integrated new storage with existing solar \nand helped provide residents with more than 40% of their household electricity \nneeds. \nIn Italy, the Ministry of the Environment and Energy Security offers grants of up \nto 40% for energy communities and collective self-consumption projects in \nmunicipalities with less than 5 000 inhabitants. The programme has ambitions to \nachieve at least 2 GW of installed capacity by June 2026. These initiatives can \nalso help rehabilitate suburban and peri-urban areas. The first solidarity local \nenergy community was established in 2021 in the suburbs of Naples, Italy, \nactively involving, from the design phase, 40 families living in social housing. This \nenergy community was established to increase awareness of energy and \nenvironmental issues, to fight energy poverty and to train local young people in \nclean energy skills. The project is expected to save participants EUR 300 000 \nover a 25-year period. \nInstitutional support for community projects  \nInstitutional support and monitoring, in particular at the start of local energy \nprojects, is also important to accelerate progress and to ensure the right rules \nand incentives are in place and opportunities are leveraged. Best practice policy \nsolutions are starting to emerge. For instance, the European Parliament has \nrecently provided funding for the creation of an advisory hub and support service \nto help collect and disseminate best practices and provide technical assistance \nto community initiatives across the European Union. The European Commission \nhas published a short guide with examples of how to set up community energy \n\n\nEmpowering Urban Energy Transitions \nChapter 3: Community at the heart of the city \nPAGE | 53  \nIEA. CC BY 4.0. \none-stop shops to facilitate the process, and digital tools for energy communities, \nwith practical examples of how these are used in projects across Europe.  \nFrom a financial standpoint, instruments to channel national and international \nfunding can help further facilitate the creation of local energy projects. The \nEU-funded COMPILE Project designed a guide to support municipalities in \nchoosing the most appropriate funding mechanism for energy communities, and \nhas produced five pilot projects, of which four are in urban locations. In Spain, \nthe Community Transformation Offices have been established to support the \ncreation of energy communities through the empowerment of new energy actors \nsuch as residents, small and medium-sized enterprises and local authorities, \nproviding technical, financial, legal and administrative advice, and education and \ntraining.  \nIn Chile a platform called Comuna Energética has been established to support \nmunicipalities and local actors in implementing replicable and innovative clean \nenergy projects. Comuna Energética supports the creation of local energy \nstrategies, helps strengthen capacity in municipalities and ensures alignment \nwith other national initiatives and instruments. It has implemented around \n50 projects to date. In Italy the Energy Communities’ Observatory has been \nestablished to identify persistent challenges and to support the creation of \nconducive policies, to promote a national roadmap for the development of energy \ncommunities and to help local governments and residents setting up and \nmanaging such initiatives.  \nFurther mapping of initiatives and benefits is underway as part of the IEA People-\nCentred Clean Energy Transitions Programme and the Digital Demand-Driven \nElectricity Networks Initiative (3DEN). The IEA User-Centred Energy Systems \nTechnology Collaboration Programme, through its Global Observatory on Peer-\nto-Peer, Community Self-Consumption and Transactive Energy Models, is \ntracking developments across the world in the area of local energy models, \nmapping their implications for energy systems and collecting policy insights.  \n\n\nEmpowering Urban Energy Transitions \nChapter 4: Systemic approaches for a \nsustainable urban energy future \nPAGE | 54  \nIEA. CC BY 4.0. \nChapter 4: Systemic approaches \nfor a sustainable urban energy \nfuture \nKey takeaways \n• \nAgile, integrated planning processes are essential for meeting renewable energy \ntargets and addressing grid infrastructure challenges while aligning with urban \ndevelopment needs, avoiding delays and integrating distributed generation \neffectively. More than 3 000 GW of renewable power projects are currently \nawaiting connection globally. \n• \nGiven the increasing complexity of urban energy systems and the urgency of \nmeeting clean energy transition objectives, urban and energy planners and \noperators need more granular real-time insights. These can be derived from \nanalysing an increasingly wide range of data sets as the number of connected \nsensors and devices rises from 13 billion today to exceed 25 billion by 2030.  \n• \nBetter alignment of energy system and urban planning processes and supportive \npolicy action to help anticipate future changes and investment needs can result \nin reduced costs and assist energy efficiency implementation. In China, \nintegrated planning enabled a reduction in investment of USD 13.5 billion. \nThe case for change in urban energy \nplanning \nRapid and large-scale changes require more agile and \nintegrated planning \nIt will be necessary to move fast to implement projects at scale to stay on track \nwith international clean energy transition commitments. Many regions are already \nfacing challenges at the planning stage, which is leading to delays in deploying \nrenewable energy, with around 3 000 GW of renewable power projects currently \nin the queue for connection to the grid, alongside reports of energy efficiency \nschemes stalling. Analysis suggests that due to outdated grid planning in some \ncountries in the European Union, more than 200 GW of new solar capacity is \nbeing planned than accounted for by national grid plans, with a potential shortfall \nin planned infrastructure investment of at least EUR 5 billion. \n\n\nEmpowering Urban Energy Transitions \nChapter 4: Systemic approaches for a \nsustainable urban energy future \nPAGE | 55  \nIEA. CC BY 4.0. \nWith the global pledge to triple the capacity of renewables and to double annual \nenergy efficiency gains by 2030, it is imperative that governments – both local \nand national – overcome the current barriers and deploy new streamlined and \nintegrated planning processes.  \nPower systems must be expanded to manage the demand for increased \ncapacity, reinforced to increase stability, and hardened to withstand extreme \nweather conditions with a combination of both adaptation and mitigation \nmeasures. One challenge is that grid planning must now consider more diverse \nfuture operating conditions than historical data allow, so as to be resilient by \ndesign. When looking specifically at infrastructure requirements in urban areas, \nit is also important to recognise the density aspect, which offers potential but may \nalso create engineering challenges. While in general rural grids prioritise \naccommodating power generation, urban power grids focus on meeting the high \nelectricity demand of cities, driven by multiple customer connections and dense \nloads.  \nManaging the intersection between power systems and \nurban planning \nWith the dramatic growth in distributed generation and electrical equipment, such \nas distributed solar PV installations and EV charging stations, urban power \nsystems are increasingly required to manage dynamic multi-directional electricity \nand data flows, necessitating additional infrastructure. Given these profound \nchanges to the energy landscape, realising the potential for the intersection \nbetween power systems and urban planning is imperative to support successful \nclean energy transitions.  \nAs emphasised by the 2023 IEA Special Report Electricity Grids and Secure \nEnergy Transitions, governments need to further align and integrate planning for \ntransmission and distribution grids with broad, long-term planning processes. \nDeploying new power grid infrastructure often takes 5 to 15 years to plan, permit \nand complete, compared with 1 to 5 years for new renewables projects and less \nthan 2 years for new loads such as EV charging infrastructure, housing \ndevelopments and industrial facilities. Better planning can help ensure that these \ncontrasting timescales do not lead to a logjam in bringing projects to fruition.  \nCities are increasingly turning to integrated planning approaches to sustainable \nurban development, focusing on integrating policies and actions across sectors, \nmulti-level governance and stakeholder involvement in implementation. \nIntegrated energy planning is the systematic analysis of all the factors that \ninfluence the evolution of energy systems. It facilitates problem solving and \nmakes it possible to explore linkages, evaluate trade-offs and compare \nconsequences, thereby helping countries to develop an effective energy strategy \n\n\nEmpowering Urban Energy Transitions \nChapter 4: Systemic approaches for a \nsustainable urban energy future \nPAGE | 56  \nIEA. CC BY 4.0. \nthat supports national sustainable development goals. It increases transparency \nand provides information to stakeholders, informing project developers, grid \noperators and authorities and helping co-ordinate investment in generation and \ngrids. It is also useful for foreseeing the potential outcome of changes and events.  \nIntegrated planning plays a pivotal role in identifying and implementing energy-\nefficient technology policies, ultimately enhancing the overall performance of the \nurban power system. The benefits of a co-ordinated approach extend to \nimproving urban resilience in the face of disruption and ensuring a reliable \nresponse during emergencies. As cities anticipate increased energy demands \ndue to urbanisation, population growth and shifts in consumption patterns, \nintegrated planning becomes instrumental in addressing the associated \nchallenges. Efforts can be geared towards avoiding excessive power system \nredundancy, optimising resources and identifying synergies to provide cost-\neffective solutions. \nShort-term action is required to deliver long-term vision \nLength of planning horizons and update frequency for grid planning studies \n \nIEA. CC BY 4.0. \nNotes: Horizons are based on the main transmission planning study for each region, noting that some have additional \nlonger-term studies used to inform the main plan. CAISO = California Independent System Operator.  \nSources: IEA analysis based on Electricity Grids and Secure Energy Transitions; data from National Transmission Needs \nStudy for the United States; Ten-Year Network Development Plan for the European Union; Electricity Supply Plan for \nJapan; Plano Decenal de Expansão de Energia for Brazil; Transmission Development Plan for South Africa; Five-Year \nPlans for China; National Electricity Plan Volume II (Transmission) for India. \n \nChallenges arise in meeting clean transition needs as rapid renewable energy \nand technology deployment may outpace infrequent grid updates. Additionally, \nthe planning horizon for urban development is often shorter than high-level \nclimate targets, hindering efficient alignment with longer-term ambitions.  \n0\n 5\n 10\n 15\n 20\n 25\nCAISO\nEuropean Union\nJapan\nBrazil\nSouth Africa\nChina\nIndia\nGermany\nYears\nPrimary horizon\nAdditional perspective\nFrequency\n\n\nEmpowering Urban Energy Transitions \nChapter 4: Systemic approaches for a \nsustainable urban energy future \nPAGE | 57  \nIEA. CC BY 4.0. \nA recent study showed that strategic grid planning based on a longer-term vision \nenables existing low-voltage grids to support new charging infrastructure for EVs \nand heat pumps, addressing budgetary constraints. Dynamic load management \ncan partially mitigate or postpone investments in transmission and distribution \nsystems, proving cost-effective in about 90% of cases. Additionally, a study on \nEast China found that introducing integrated planning in a wider regional area – \nrather than focusing on local problem solving – could avoid infrastructure \ninvestment of USD 13.5 billion while maintaining a robust power system.  \nMain characteristics of traditional and integrated planning for power grids  \n \nTraditional resource planning \nIntegrated and co-ordinated \nplanning \nElectricity grid context \nLarge, centralised conventional \nelectricity plants, unidirectional \nelectricity flow \nIncreasing shares of variable \nrenewables including distributed \nPV, demand-side resources and \nbidirectional flow, transforming the \nenergy landscape \nLeader \nA company that owns the assets   \nA selected entity with a neutral role, \nideally with no conflict of interest \nObjectives \nMeet legal requirements \n(reliability, sustainability) and \nbalance sheet constraints or \nshareholders return \nMeet climate and energy policy \nobjectives and maximise overall \nmarket benefits at reasonable risk \nPlanning process \n(transparency) \nTop-down, transmission-\ndistribution system planning with \nlimited interactions; assumptions \nand details may be restricted, with \nonly headlines made public; public \nconsultation at the end of the \nprocess \nParticipatory and transparent \nprocess; continuous engagement \nwith relevant stakeholders to \ndevelop scenarios, select \nsensitivities and challenge \nassumptions; results made public \nand open to debate \nResources considered  Centralised generation, \ntransmission and distribution \nGeneration, both centralised and \ndistributed, transmission and \ndistribution, demand-side resources \nand system flexibility \nInput parameters and \nestimation tools \nApproximation, reserve margin \ncalculations \nMulti-dimensional analysis, \nincluding environmental and social \naspects \nOutputs \nA plan focused on investments \nSeveral outputs to guide decisions \nof policy makers and market \nplayers \nSources: IEA (2022), Steering Electricity Markets Towards a Rapid Decarbonisation, and US Aid (n.d.), Best Practices \nGuide: Integrated Resource Planning for Electricity, as modified by the IEA. \n \nCollaboration is central to aligning planning with cities’ \nneeds and timelines \nCollaboration between local governments and utilities is important to ensure that \nthe grid is expanding and decarbonising in line with each city’s needs and \ntimelines. Municipalities can engage directly with electric utilities and promote \n\n\nEmpowering Urban Energy Transitions \nChapter 4: Systemic approaches for a \nsustainable urban energy future \nPAGE | 58  \nIEA. CC BY 4.0. \nnew solutions, or influence utility strategy by providing long-term plans, updating \nthem on a multi-year basis while acting as representatives of their communities. \nSuch collaborative initiatives enable utilities and cities to leverage resources, \nimprove infrastructure reliability and reduce costs, thus resulting in a higher \nquality of service. In the United Kingdom, for example, the Infrastructure \nCoordination Service under the auspices of the mayor of London was able to \nidentify short-, medium- and long-term solutions to enable new housing \ndevelopments to proceed on a faster timeline by working closely with the grid \noperators.  \nSome local governments have partnered with utilities to develop renewable \nenergy, efficiency programmes and joint working to enhance energy metering \nand data access. In the United States, the city of Denver developed a Strategic \nEnergy Plan with the local utility to lay out a plan to achieve 100% renewable \nelectricity by 2025. Through this partnership the utility supported the local \ngovernment by providing analysis based on energy data and plan strategies, and \nstaff training. Another US city, Charlotte, created a strategy for co-operation with \nthe local utility, aimed at developing a plan to advance the Low Carbon, Smart \nCity Collaboration, and recently announced a High Energy Use Pilot to provide \nhomeowners incurring high energy usage with energy-efficient retrofits.  \nThe newly formed international Cities Technology Collaboration Programme \naims to optimise urban energy planning for improved living standards. It will focus \non gathering energy-related data, sharing knowledge, promoting data-driven \nplanning, and discussing legislative and socio-economic factors. This \ncollaboration has potential to guide national policy implementation to support \ncities utilise data for more efficient planning. \nThe benefits and challenges of more data \nManaging increased data complexity and volumes has \nbecome a priority \nAs the energy access sector undergoes deep transformation, a pressing need \nremains to better inform decision makers with actionable and targeted tools for \nintegrated electricity planning. This is especially important in locations where \ndata availability is suboptimal. The IEA has collected geospatial models and \ndatasets that are crucial for stakeholders across the African energy sector \nlooking to deliver an effective path towards universal electricity access. \n \n \n\n\nEmpowering Urban Energy Transitions \nChapter 4: Systemic approaches for a \nsustainable urban energy future \nPAGE | 59  \nIEA. CC BY 4.0. \nThe growth in data, both quantity and type, can be a powerful asset in effectively \nmanaging the evolving power system, but only when it is accompanied by \nenhanced data accessibility, utilisation and sharing, along with more robust \nanalysis tools.  \nDrivers of electricity data volume and increasing complexity \n \n \nIEA. CC BY 4.0. \nNotes: AC = air conditioning; DERMS = distributed energy resources management system; DSO: distribution system \noperators; IoT = Internet of Things; TSO = transmission system operator; VRE = variable renewable energy. \n \nWith technology adoption varying immensely in every location, each energy \nsystem faces unique challenges. A major challenge for system operators is that \nthey lack visibility of customer-owned equipment and its impacts on electricity \ndemand, known as “seeing behind the meter”. This currently necessitates \ntailored visibility solutions that also consider the urban context due to the density \nof energy demands, where most utilities today still have limited visibility and have \nto rely on bespoke digital tools such as DERMS. As many regions are seeing \ndecentralised energy systems grow at different rates, regulators can prioritise \naddressing system reliability, especially in urban environments, by increasing \nvisibility and data availability. The Australian Energy Market Operator established \na distributed energy resource register in 2020 that provides visibility on the \nlocation and capacity of devices installed in customer premises thereby \nsupporting power system planning and operation. In 2024 India has initiated a \nconsultation process towards developing a national registry.  \nPaving the way for innovative planning solutions \nLeveraging data from technological advancements, such as smart meters and \ndigital communication, is a key aspect of integrated planning. Insights based on \n\n\nEmpowering Urban Energy Transitions \nChapter 4: Systemic approaches for a \nsustainable urban energy future \nPAGE | 60  \nIEA. CC BY 4.0. \ndata and advanced analytics and improved data and information sharing can help \nforward planning for periods of high demand, lessening reliance on costly peak \ngeneration sources and enhancing grid reliability.  \nMisaligned planning timelines could increase the risk of power outages due to \npower system resource adequacy issues (i.e. the ability of a power system to \nsupply enough electricity at the right locations during all hours of the year), and \nthe inability to provide new electricity connections for renewable generation \nassets, data centres or housing developments. Misaligned planning can delay \nthe deployment of renewable energy, constrain the achievement of increased \nenergy efficiency and lead to higher electricity costs for consumers.  \nThere are means to better manage these risks. Data sharing mechanisms allow \npolicy makers to design more efficient power systems. For example, in the \nNetherlands, central government, local governments, utilities and planning \nagencies work closely together to share data on power systems. Since 2022 data \nhave been publicly available on electricity consumption and production by \nprovince and municipality, which allows planners to anticipate grid needs and \nadjust capacity installations accordingly. To help municipal planners, a specific \ndata tool shows on customisable maps the annual energy consumption by \nhousehold, the energy label of the house and the capacity of its renewable \nproduction that can be fed back into the grid. \nTowards resolving data challenges \nIntegrated planning fosters stakeholder co-ordination, but regulatory constraints \nand data management challenges persist. Cities and power systems generate \ncomplex data in varying formats, with much of the data currently unused or \nunreliable, presenting untapped potential. Establishing a common protocol and \nreference architecture for digitalisation and assumed open data sharing could \ncontribute significantly to reducing costs, help drive rapid innovation and expedite \nthe energy transition across diverse systems. This could help reduce the friction \ncaused by the increased system complexity.  \nGovernance gaps and digital skills gaps persist and impede data utilisation, \npreventing the development of innovative tools and methodologies. Power \nsystem data that are proprietary and fragmented across utility departments or \nentities hamper data interoperability, and access to data is also sometimes \nconstrained by data protection. Simplifying information sharing, co-ordinating \nmarkets and establishing robust data governance are essential for data \ninteroperability. Standards for data interoperability are key to achieving these \noutcomes.  \n\n\nEmpowering Urban Energy Transitions \nChapter 4: Systemic approaches for a \nsustainable urban energy future \nPAGE | 61  \nIEA. CC BY 4.0. \nExamples of standards and norms to control and monitor equipment \nRegion \nName \nDescription \nType \nEuropean Union \nNorm EN 50631-1:2020: \nEuropean Norm \nDescribes the necessary control and \nmonitoring for household appliances. \nNorm \nUnited Kingdom \nPAS 1878:2021  \nRequirements and criteria for electrical \nappliance to be classified as energy smart.  \nNorm \nAustralia \nAS 4755 – Demand \nResponse Standard  \nDemand response capability and modes of \nappliances and smart device. \nStandard \nUnited States \nANSI/CTA-2045  \nSpecifies a modular communications \ninterface to facilitate communications with \nresidential devices for applications such as \nenergy management. \nStandard \nInternational \nIEC 62746-10-1  \nOpen automated demand response system \ninterface between the smart appliance, \nsystem or energy management system and \nthe controlling entity. \nInternational \nstandard \nUnited States,  \nCalifornia \nSenate Bill 49 – The \nFlexible Demand \nAppliance Standards  \nAuthorises the Energy Commission to adopt \nstandards for appliances to facilitate the \ndeployment of flexible demand technologies. \nBill \nInternational \nOpenADR 3.0 \nOpen automated demand response system \nthat provides two-way information exchange \nbetween utilities and customers’ smart \nappliances. \nInternational \nstandard \n \nRegulations can define access rights, data formats and consent mechanisms, \nensuring consumers have control over their data. Cybersecurity guidance and \nstandards, such as the Cyber Assessment Framework, can help utilities mitigate \nrisks, and policy makers should remain vigilant about emerging technology \ncybersecurity gaps. \n \n \n\n\nEmpowering Urban Energy Transitions \nChapter 4: Systemic approaches for a \nsustainable urban energy future \nPAGE | 62  \nIEA. CC BY 4.0. \nConnecting the dots: Overcoming \ninteroperability challenges to support clean \nenergy transitions  \nOne of the main reasons that renewable projects are facing permitting delays is \nthe bespoke nature of each agreement. These permitting processes are highly \nmanual and involve co-ordination across many different authorities at local, \nregional and national level. The lack of standardisation of the process and the \npoor visibility of data and project tracking, together with the high volume of \nmanual input, risk missing the global pledge to triple renewable capacity by 2030 \nif they are not remedied. There is, however, the potential to overcome many of \nthese hurdles by leveraging digital solutions.  \nIn the European Union, the large ICT company, Amazon Web Services, has \nsought to overcome this impasse whereby around 80 GW of renewables are \nawaiting permitting. It is working with permitting staff across several EU member \nstates to develop a digital platform to: \n• \nReduce processing time. \n• \nAutomate data management to reduce manual input. \n• \nStandardise the process using automated checklists and workflow triggers and \nnotifications. \n• \nCollect, manage and process all documents in a single repository. \n• \nIncrease transparency on progress throughout the permitting process. \nSeveral pilot projects are underway, connected to the Horizon Europe \nprogramme, to develop solutions that the tackle data interoperability challenges \nfacing increased power system digitalisation. The Interconnect project brings \ntogether 50 European partners across 11 countries to develop a data and \ncommunication architecture to connect homes and buildings to the electricity \nsector. To identify ways to leverage flexibility, the OneNet project is developing \na communications architecture for demand response, storage and distributed \ngeneration. PLATOON focuses on smart grid services, increasing renewable \nenergy consumption, greater energy efficiency and optimised energy asset \nmanagement. Other projects are exploring ways for the private sector to create \nnew business models. To lay down the groundwork in understanding the state of \nthe market, BD4OPEM is developing products and services to improve the \nplanning, monitoring, operation and maintenance of distribution grids towards an \nopen innovation marketplace. Denmark has implemented DataHub, a digital \nplatform that centralises electricity consumption data and clearly defines use \ncases for access by third parties. \n\n\nEmpowering Urban Energy Transitions \nChapter 4: Systemic approaches for a \nsustainable urban energy future \nPAGE | 63  \nIEA. CC BY 4.0. \nData analytics can enhance the efficiency, resilience \nand sustainability of urban energy systems \nAccess to data is only the first step. It is then necessary to understand what the \ndata infer, for example by using advanced analytics such as artificial intelligence \n(AI) or machine learning models. Other means of data analysis are the creation \nof digital twins, which are virtual models of real-world systems. The coverage of \ndigital twins varies from an individual building or site to entire districts, systems \nand cities. They can help identify where interventions are needed, for example \nby identifying areas likely to become heat islands. They can identify where energy \nefficiency interventions can bring greatest positive impacts by mapping heat \nlosses and income levels. And they can be used to trial different options and \nunderstand possible outcomes to help inform planning processes and optimise \ninvestment.  \nSingapore, for example, started developing a 3D representation of the city in \n2012 in order to identify areas that were most at risk from flooding. The digital \ntwin is now shared across different government agencies and has many practical \nuses around green space management, urban planning, network coverage and \ntransport flows. A project to map EU-based local digital twins has been funded \nby the European Commission, both to consider the current state of the digital twin \necosystem and develop a roadmap towards use of data and advanced analytics \nfor enhanced planning and operation of urban systems. The cost savings from \nusing digital twins to make data-driven decisions in cities globally have been \nestimated at up to USD 280 billion globally through to 2030 from improved \nplanning. \nData-driven insights and advanced digital controls can contribute to enhanced \ngrid efficiency in urban locations by reducing power system losses, reducing \ncurtailment of renewables, and providing more control, greater resilience, \nimproved reaction times and consequently lower system costs. In the \nUnited States, a recent study by the Department of Energy simulated the grid \nconditions resulting from a 70% share of renewable sources by 2030. It found \nthat deploying advanced digital hardware and software could result in increased \nefficiency and a reduction in curtailment of between 23% and 43% through grid \noptimisation.  \nFor urban and power system decision makers, diverse, large and frequently \nupdated sets of energy data are increasingly available, and data volumes are \nincreasing significantly. IoT connection points are expected to reach 83 billion \nworldwide by 2024, and everything that is communication network-connected \nprovides data. Datasets can cover air quality, weather, energy consumption \npatterns in buildings, geospatial data and traffic control systems. The ability to \nprovide more insight through data visualisation is an emerging tool to aid decision \n\n\nEmpowering Urban Energy Transitions \nChapter 4: Systemic approaches for a \nsustainable urban energy future \nPAGE | 64  \nIEA. CC BY 4.0. \nmakers – it can simplify complex data by displaying large data sets in various ways \nthat can reveal patterns or trends or identify areas that need further attention. \nIn European Union, under the Horizon 2020 funding programme, the Hotmaps \ngeographic information system (GIS) toolbox has been developed as an open-\nsource platform for mapping heating and cooling demand in European countries \nto support authorities and energy planners in the development of a strategic \nheating and cooling plan for their region. \nTotal heat density of buildings in Paris, France \n \nSource: Reproduced from Hotmaps. \n \nAdvanced analytics can be used to merge diverse datasets to improve decision \nmaking in urban energy planning, enhancing asset efficiency and service \nprovision. Advanced spatial energy planning, with GIS and digital twin modelling, \nmaps local potential and measures impacts before implementation. The VESTA-\nMAIS model in the Netherlands is a spatial energy planning model that forecasts \nthe energy use and CO2 emissions of the built environment until 2050. The \npotential benefits and costs of building measures such as insulation and heat \npumps, and spatial measures such as district heating, geothermal and heat \n\n\nEmpowering Urban Energy Transitions \nChapter 4: Systemic approaches for a \nsustainable urban energy future \nPAGE | 65  \nIEA. CC BY 4.0. \nexchangers, can be calculated integrally. Effects on avoided CO2 emissions, \nenergy use, investment costs and financial benefits can be identified to improve \nplanning. The model is open source, so municipalities, utilities and others can \nalso access it. \nPlanning models like these aid in locating high-value energy efficiency \ninterventions and planning mixed-use zones to flatten demand curves and \nreduce CO2 emissions. Areas needing efficiency interventions in urban planning \ncan be identified by mapping heating and cooling demand and combining \nweather and demand data. There are an increasing number of assets that can \nprovide granular and more real-time data for decision making.  \nData challenges can be overcome by leveraging AI and \nmachine learning \nAs increasing numbers of digitally enabled technologies come online offering \ndata points from nodes all across the grid, the analytical methods traditionally \nused become overburdened by the sheer volume and speed of data availability. \nHowever, technological advances in the fields of AI and machine learning in \nrecent years are presenting the potential not only to overcome data bottlenecks, \nbut also to make great leaps towards new applications not thought possible even \nup until very recently. The major advancements are that AI drives down the time \ntaken to perform big data analytics and repetitive tasks can be done with the help \nof machine intelligence, reducing human input and error, and improving the \ndegree of precision. \nGlobal stock of smart meters, 2010, 2020-2023 \n \nIEA. CC BY 4.0. \nNote: For 2023 data “E” indicates estimated total. \nSources: IEA analysis based on data from Guidehouse and BloombergNEF. \n \n0\n 200\n 400\n 600\n 800\n1 000\n1 200\n1 400\n2010\n2020\n2021\n2022\n2023E\nMillion units\nMiddle East &\nAfrica\nLatin America\nAsia Pacific\nEurope\nNorth America\n\n\nEmpowering Urban Energy Transitions \nChapter 4: Systemic approaches for a \nsustainable urban energy future \nPAGE | 66  \nIEA. CC BY 4.0. \nPreviously, insufficient volume and quality of industry data hampered efforts to \nattain better insight, but modern digital transformations have driven progress, \nwith emerging uses of AI beginning to be considered. 2023 marked a significant \nmilestone as the global count of smart meters exceeded 1.2 billion, representing \na remarkable tenfold increase compared to 2010. In a wider context, the number \nof connected devices equipped with automated controls and sensors to monitor \nand measure energy use and flows is projected to exceed 13 billion in 2024. \nProjections further indicate that this figure could soar to 25 billion or more by the \nyear 2030. This extensive deployment of smart meters and advanced sensor \ntechnology is already generating large volumes of data. Making use of these data \nnecessitates the deployment of cutting-edge storage and analytical tools. \nAdditionally, there is a trend towards increased consumer engagement in energy \nsystems. Given greater data availability, and the will to capitalise on the data, \nthere is also a need to manage increasingly large and complex data sets and to \nensure strong data governance. However, many energy utilities currently do not \nhave analytics departments, suggesting that these organisations are missing out \non the opportunities better data offer. There is also a growing need for \norganisations to increase collaboration between departments on data and data \nmanagement. \nAI could be a useful tool to leverage consumption data, while preserving \nconsumer trust and safety. AI-generated synthetic datasets can produce realistic \nprofiles for each consumer archetype, not attributed to specific individuals. In the \nUnited Kingdom, the Centre for Net Zero has developed Faraday, a generative \nAI model trained on existing smart meter data and capable of providing realistic \nsynthetic consumer profiles. This allows for protection of customer data while \nenabling policy makers, planners and operators to model impacts of changes \nsuch as new types of tariffs, uptake of EVs, new building developments, and \nextreme weather.  \nIt is also possible to examine power system resilience. In Ireland, the state \nelectricity distribution system operator has partnered with an AI modelling \nplatform to mitigate the impact of extreme weather events on energy supply, with \nresults of the digital twin analysis available in weeks rather than months of \nmanual input.  \nThe Building Energy Efficiency (BEE) Pilot is a project developed in the cities of \nHelsinki, Finland, and Stavanger, Norway, to shift energy consumption to times \nof high availability of renewables. The system is linked to the building \nmanagement system (BMS), where it gathers data on energy consumption as \nwell as indoor air quality data. The AI-based system forecasts the next day’s \nenergy grid mix and weather conditions, and adjusts how energy is used in the \n\n\nEmpowering Urban Energy Transitions \nChapter 4: Systemic approaches for a \nsustainable urban energy future \nPAGE | 67  \nIEA. CC BY 4.0. \nbuilding. Based on the initial simulations, a 10-20% increase in use of renewables \nand 15-20% energy savings through optimised control are possible. \nWhile the use of AI in energy systems is still at a nascent stage, applications are \nemerging – from power generation through to supply, transformation and end \nuse.  \nUse of AI for urban energy system applications \nApplication \nImpact \nTexas utility ONCOR uses machine learning and AI \ntechnologies to identify overloaded equipment to \ntarget for predictive maintenance, and identify \ngeographic areas where vegetation poses a safety \nrisk to transmission lines. \nIn 2019, 2 000 power quality \nissues detected before causing \nan outage, avoided 5 000 \npotential outages from \noverloaded or damaged \ntransformers.  \nE.On’s self-learning algorithm predicts when medium-\nvoltage cables on the grid need to be replaced, using \ndata on power flows and weather. \nE.On research suggests the \ntechnology can reduce the \nnumber of outages by 30%. \nHepta Airborne uses a machine learning platform in \ncombination with drone footage of transmission lines \nto analyse images of the line for defects within \n15 minutes. \n250 km of lines analysed in \n5 minutes, and on average 11 \nmore defects per line-km \nidentified. \nNokia AVA Energy Efficiency – an energy \nmanagement system – uses a range of AI \napplications to reduce power demand in \ntelecommunications networks. \nUp to 30% energy savings and \nlower CO2 emissions from \ntelecommunications radio \nnetwork. \nOctopus Energy’s Kraken is a software platform, \nbased on advanced data and machine learning \ncapabilities, that allows management and optimisation \nof resources. \n40% reduction in cost to serve \ncustomers, according to \nOctopus Energy. \nThe United Nations Innovation Technology \nAccelerator for Cities (UNITAC) developed an \nAI-based tool to identify rooftops and evaluate \nstructure footprints in the city of eThekwini, including \na focus on informal settlements. \nHelp develop solutions for \ninformal settlements through \nability to map rooftops across \nthe entire city in 72 hours. \n \nIncreased use of AI warrants efforts towards monitoring and counteracting risks, \nincluding potentially increasing energy demand. Appropriate data safeguards \nalso need to be in place to ensure privacy and security. Furthermore, increased \nuse of automated and self-learning software raises questions about who is \nresponsible for the outputs or outcomes of these systems – if noncompliance with \nregulations occurred due to the failure of the analytical model, or if there was a \n\n\nEmpowering Urban Energy Transitions \nChapter 4: Systemic approaches for a \nsustainable urban energy future \nPAGE | 68  \nIEA. CC BY 4.0. \nprivacy leak, for example. In an effort to address some of these issues, the OECD \nAI Principles – adopted by OECD member governments and many non-member \ngovernments – provide guidance on pursuing a human-centric approach to \ntrustworthy AI. Efforts are also underway to understand and assess the impacts \nof AI in the urban context, map risks and explore governance considerations.  \nSmart, integrated infrastructure investment \nplanning  \nMany regions have understood the need to invest in power grids to enable \neconomies to continue to flourish, expanding and reinforcing them to anticipate \nfuture demand. The European Union, for example, recognised the need for \nanticipatory investment and is introducing regulatory incentives for forward-\nlooking grid build-out as part of the Action Plan on Grids announced in 2023. \nSubstantial investment is needed for the transformation of the energy system, \nand planning at the national and urban level plays an important role in managing \nthis investment to maximise benefits. Urban grid planning should extend beyond \nthe grid to consider the changing shape of customer load profiles and the \nincreased demand for electrification of transport, heating and cooling. \nSmart planning solutions are being tested in many locations, where decision \nmakers are taking a more inclusive approach to the energy transition decision-\nmaking process. The Local Inclusive Future Energy (LIFE) City platform in \nAmsterdam is testing innovative solutions for the clean energy transition. \nFocusing on Amsterdam Zuidoost, the project aims to reduce the need for grid \nexpansion through smart energy management. A digital twin covers charging \nstations, solar panels, buildings, heat pumps and a mobility hub, digitally \ninterconnected to explore system optimisation using data and AI.  \n\n\nEmpowering Urban Energy Transitions \nChapter 4: Systemic approaches for a \nsustainable urban energy future \nPAGE | 69  \nIEA. CC BY 4.0. \nLocal Inclusive Future Energy City Platform, Amsterdam  \n \nSource: Spectral Energy (2021), LIFE: A Holistic View on Energy Innovation, as modified by the IEA . \nIn Italy, the Bologna Digital Twin project was deployed with the aim of optimising \nexisting datasets, infrastructure and other solutions that were available but not \nfully utilised. The municipality is placing a strong focus on ensuring that the tool \nprovides value for people and communities, including improved local social \npolicies through better insights and using data to enhance services to inhabitants. \nIn the United States, the New York State Public Service Commission has initiated \na process towards an Integrated Energy Data Resource that securely collects, \nintegrates and provides access to a large and diverse set of energy-related data \nand information on one state-wide platform. It is expected that this data will be \navailable to support urban and energy planning processes towards higher levels \nof clean energy and demand-side flexibility, as well as to facilitate the \ndevelopment of new business models such as community solar and demand-\nside flexibility aggregation. Also in the United States, in California, efforts are \nunderway to explore electricity price-based grid co-ordination and an associated \nreference data model. The objective is to develop a simple system for data flows \nthat make it possible for consumers to have their devices react to changes in \nprice – the changes in price would be based on the grid’s need for flexibility.  \n \n\n\nEmpowering Urban Energy Transitions \nChapter 4: Systemic approaches for a \nsustainable urban energy future \nPAGE | 70  \nIEA. CC BY 4.0. \nSmart grids in Latin American cities: São Paulo and Bogotá \nEnel's Urban Futurability project in Vila Olimpia, São Paulo, represents the \ncombination of ground-breaking technologies for the power grid and the proactive \nengagement of local stakeholders and communities in a “living lab” to co-design \nand create an open data platform. This will help stakeholders to contribute to and \npotentially co-finance new solutions by providing better understanding of energy \nand other resource use, efficiency and savings opportunities, environmental risks \nand mitigation options. The technologies applied include self-healing grid \ncapabilities, safer and more resilient underground cables, smart lighting and \nelectric mobility initiatives. The project features South America's first network \ndigital twin, a 3D model using 5 000 sensors for real-time communication. It \nsupports grid resilience, a reduction in the duration and frequency of outages, and \nenhanced future power system flexibility by leveraging the potential of grid-\nconnected buildings and electric mobility. \nMore broadly, Enel has installed 500 000 smart meters in the São Paulo \nmetropolitan area, one of the largest deployments in Latin America, investing a \ntotal of BRL 470 million (Brazilian reals 2 ; USD 95 million). A third of the \ninvestment was supported by the Brazilian Regulator, ANEEL, as part of its R&D \nprogramme, aimed at stimulating innovation in the Brazilian electricity sector to \nimprove security of supply and reduce environmental impacts. Smart meters act \nas grid sensors, bringing benefits to the system and the consumers, such as \noperational efficiency thanks to remote operation, reductions in energy losses, \nshorter outage durations and more accurate billing. Tariffs based on time of use \nand dynamic tariffs can also be easily implemented allowing for energy use cost \nsavings and service differentiation. \nA similar Urban Futurability approach has been replicated in Bogotá, where Enel \nis implementing a digital circular city model as part of the Progresa Fenicia Project \nled by the University of Los Andes. This is a participative urban renovation project \nimplemented under the municipality’s Urban Renovation Partial Plan and will \nassist the municipality to improve the quality of life of residents from a social and \nenvironmental standpoint, strengthening the offer of affordable housing and \nsupporting the economic rehabilitation of the area. Currently, the digital twin of \nthe Fenicia project is being developed, connecting and analysing data from \nbuildings, roads and public spaces, streetlights, and weather and air quality \nsensors.   \n \n \n2 Exchange rate: 1 Brazilian Real (BRL) = EUR 0.18 = USD 0.20 (as of 05 April 2024). \n\n\nEmpowering Urban Energy Transitions \nChapter 4: Systemic approaches for a \nsustainable urban energy future \nPAGE | 71  \nIEA. CC BY 4.0. \nUsing sound frameworks for data-driven \nurban planning \nThere are many examples of good practices at the local and regional level that \nfocus on data-driven urban planning. These case studies highlight urban \nplanning that incorporates data ecosystems, data sharing and innovation, and \nwhich has the potential to be scaled up, sustained and further developed. \nClear data governance frameworks are essential for efficient data management, \nprotection and transparency. Data visibility, including well-described metadata, \nis crucial for effective use. The open source Energy Transition Model is one such \ntool for national and local agencies to perform energy simulations to enable \ninformed decision making. \nThe Energy Digitalisation Taskforce, commissioned by the UK government, \nOfgem and Innovate UK, published a report with recommendations on \nmodernising the energy system. The taskforce outlined the first step as unlocking \nsmart meter data and initiated a study to examine the opportunities, risks and \npotential architectures. Additionally, a feasibility study has been carried out to \nestablish a “digital spine” for the energy system in support of delivering \ninteroperability across the energy sector, through defined governance roles and \nresponsibilities that will enable the secure exchange of energy system data. \nThe European Union is monitoring the progress of cross-border interoperable \ndata services, to give priority to reuse of existing data and to initiate automated \ndata collection to reduce the reporting burden on member states through the \nInteroperable Europe Act proposal. Efforts are also underway to create a \ncommon data space for smart and sustainable cities and communities, with the \ndevelopment of the Common European Energy Data Space to design a \nmechanism enabling data sharing across energy and non-energy domains.  \nIndia has developed a Data Smart Cities framework in collaboration with city-\nlevel governments to enable cities to better handle data and solve complex urban \nchallenges. The Indian government launched an open data platform to centrally \ncollect datasets from cities. While it is continuously expanding, the platform \ncurrently contains over 3 500 data catalogues. The India Smart Cities Mission \nhas also developed a strategy and roadmap for data smart cities and a data \nmaturity assessment framework.   \nIn Australia, the scale and growth of rooftop solar has already exposed the \ncomplexities and challenges of operating a power system that sources a \nsubstantial portion of its energy from individual homes. The Australian Energy \nMarket Operator, in collaboration with several key organisations, is currently \nimplementing several projects to develop the data exchange, modelling and \n\n\nEmpowering Urban Energy Transitions \nChapter 4: Systemic approaches for a \nsustainable urban energy future \nPAGE | 72  \nIEA. CC BY 4.0. \nmonitoring tools to ensure better visibility of distributed energy resources and \ntheir impacts on the electricity system. Australia’s Project EDGE, developed in \ncollaboration with utilities, the system operator and the regulator, defines clear \nguidelines for data ownership, access, quality and completeness.  \nIn New Zealand the FlexTalk platform has been designed using Open Automated \nDemand Response (OpenADR) to trial how flexibility from EVs could be \naccessed and scaled up to include further demand-side assets. \nPlatforms, tools and regulation can help policy makers \nuse city data effectively  \nA range of initiatives and pilots are seeking to address part of the data challenge \nand demonstrate that the technical prerequisites for power system data \necosystems already exist. In recognition of the escalating complexity, various \njurisdictions have embarked on different approaches, acknowledging that \nentrusting utilities with developing bespoke solutions is insufficient. Instead, they \nare looking for comprehensive and collaborative solutions to tackle this evolving \nchallenge head-on. Over the past two decades, a wide range of national and \ninternational bodies have been developing interoperability standards for energy \nsystem assets, including customer-owned assets.  \nTo ensure sufficient communication network stability, security and coverage to \nsupport data-driven planning and processes, it is also important for cities to bring \ntogether telecommunication network operators and grid developers to build \ncommunications and data resilience. The International Telecommunication \nUnion, the United Nations specialised agency for information and communication \ntechnologies, is working with countries to improve access to digital technologies \nto underserved cities and communities. They additionally develop technical \nstandards that ensure that networks and technologies interconnect seamlessly, \nto support climate change adaptation and mitigation actions in cities.  \nDeveloping interoperable data registries is essential for effective electricity \nmarket functioning. Regulators can establish rules regarding data formats, \nexchange protocols, governance and consumer consent mechanisms. Initiatives \nlike the Norwegian Elhub data hub and the Green Button Data service in the \nUnited States demonstrate effective centralised and decentralised data \nmanagement. Cape Town's SmartFacility platform integrates smart meter data \nfor decision making. International co-operation, like the Data4Cities Initiative, \nfosters data access and standardisation. \nSteps are being taken to enable better access to energy data. In June 2023 new \nEU rules were adopted to regulate access to electricity metering and \nconsumption data. These rules aim to protect consumers, empower them in the \n\n\nEmpowering Urban Energy Transitions \nChapter 4: Systemic approaches for a \nsustainable urban energy future \nPAGE | 73  \nIEA. CC BY 4.0. \nenergy transition and establish common reference models for data in EU \ncountries, allowing consumers to permit third-party data access. In the \nUnited Kingdom, the regulator Ofgem has established that data best practice \nincludes a requirement for aggregated smart meter data to be presumed open \nas part of the Digitalisation Strategy and Action Plan Guidance.  \nIncreasing focus is being placed on developing platforms and tools for more \neffective use of city data. For instance, the Global Covenant of Mayor’s Data \nPortal for Cities is an open data platform that helps communities fill critical \ninformation gaps by providing estimates of previously unavailable data drawn \nfrom national and regional sources. \nAdditionally, moving from a one-off project mindset towards a planning approach \ndriven by key performance indicators (KPIs) can also enhance the effective \ndeployment of smart grid and city solutions. This shift involves moving beyond \nisolated initiatives and embracing a systematic framework that emphasises \nperformance metrics and how to leverage existing open-source or new data to \nbuild such metrics. Building on international best practices, the OECD is \ndeveloping harmonised indicators for smart cities across the dimensions of well-\nbeing, inclusion, sustainability and resilience. The United for Smart Sustainable \nCities (U4SSC) Initiative’s KPIs are a consistent and standardised method to \ncollect data on a wide range of economic, environmental, societal and cultural \nfactors “to assess the achievement of sustainable development goals”. Over 200 \ncities worldwide are already implementing these KPIs. \n\n\nEmpowering Urban Energy Transitions \nChapter 5: Creating the conditions for implementing  \n \nsmarter urban energy systems \n \nPAGE | 74  \nIEA. CC BY 4.0. \nChapter 5: Creating the conditions \nfor implementing smarter urban \nenergy systems  \nKey takeaways \n• \nA range of barriers are constraining large-scale implementation of smarter urban \nenergy systems.  \n• \nThe lack of an enabling policy and regulatory environment can constrain action \nand the development of new business models.  \n• \nWithout additional efforts in capacity building, reskilling and upskilling and \nattracting new talent, there is a risk that the implementation of new solutions and \napproaches will stall and that the full range of benefits from digitalisation will not \nbe captured. \n• \nCities and utilities are still facing significant challenges in accessing finance for \nsmart project implementation; policy makers can remove obstacles and promote \nthe development and use of new approaches. \n• \nSolutions to these challenges are starting to emerge and there is a growing body \nof promising approaches that are being developed and tested.  \nThe challenges facing smart cities \nDespite some progress, implementation is lagging  \nWhile some progress has been made in areas such as smart grids, smart urban \nsolutions and demand response, the widespread adoption of clean energy \nstrategies \nis \nlagging. \nOngoing \nchallenges \nare \npreventing \nlarge-scale \nimplementation despite a growing evidence base on the need for and benefits of \nsmarter urban energy systems.  \nPilot and demonstration projects have great potential, but may not always lead to \nfaster diffusion due to a lack of mechanisms to further develop a scalable solution. \nOften there is a lack of skilled personnel with knowledge of moving from \ndemonstration to larger deployment. Frameworks for data governance, data \nsharing and interoperability may be missing, and complementary infrastructure \nmay not be in place. Funding gaps are also a key blockage, reflecting the lack of \na transparent financial ecosystem.  \n\n\nEmpowering Urban Energy Transitions \nChapter 5: Creating the conditions for implementing  \n \nsmarter urban energy systems \n \nPAGE | 75  \nIEA. CC BY 4.0. \nThree key interrelated areas need addressing: \n• \nEnabling regulatory environments that allow for testing, investing in and deploying \nnew solutions. \n• \nSkills and capacity to develop projects and leverage new technologies. \n• \nAccess to finance.  \nSolutions to address these challenges are being developed and tested around the \nworld, as discussed in the following sections.  \nOverview of challenges facing smarter sustainable cities  \n \nIEA. CC BY 4.0. \n \nNavigating regulatory challenges in energy \ninnovation \nNurturing innovation in the energy sector encounters various challenges. They \nencompass intricate regulatory environments, a dearth of clear guidance for \ninnovators, restricted access to resources for smaller entities, risk aversion among \nregulators and policy makers, fragmented collaboration among stakeholders, and \nchallenges in assessing the impact of projects. But policy makers and regulators \nhave options for overcoming these hurdles, in particular:  \n• \nSimplifying regulatory procedures. \n• \nOffering transparent guidance and resources. \n• \nFostering collaboration. \n• \nEncouraging a culture of experimentation and risk-taking to cultivate a supportive \nenvironment for energy innovation. \n\n\nEmpowering Urban Energy Transitions \nChapter 5: Creating the conditions for implementing  \n \nsmarter urban energy systems \n \nPAGE | 76  \nIEA. CC BY 4.0. \nRegulatory experimentation can be instrumental in overcoming barriers and can \nbe pursued by using regulatory sandboxes, regulatory pilot projects and pilot \nregulation. These may often be necessary to reduce the potential for exposing bill \npayers to cost uncertainty. When developing new regulations, policy makers can \nhold public consultations and establish regulatory sandbox programmes to \nfacilitate temporary rule exemptions for innovators to trial promising new solutions \nthat require regulatory adaptations.  \nIn the United Kingdom, the regulator Ofgem has established a policy instrument \ncalled the Future Regulation Sandbox to test and trial changes to its energy \nrulebook in a controlled environment before implementing amendments. Among \nrecent developments to facilitate smart grid deployment, Brazil is testing new tariff \nstructures on more than 40 million customers across the country. \nThe European Union has recently established a regulatory sandbox to test \nblockchain applications, Portugal is currently focusing on local energy community \npilot projects, and Spain has just closed a first tender for projects to inform \nregulatory innovation in support of flexibility. \nCity-level sandboxes provide further opportunities to test innovative solutions that \ndo not fit into pre-existing regulation and policy landscapes. In Brazil, Rio de \nJaneiro has developed a sandbox to help innovation and the deployment of \ntechnology, and to understand what changes are needed to create receptive \nregulatory frameworks. All projects will undergo an impact assessment to \ndetermine what further actions are needed. In Korea, the Smart City Sandbox \nprogramme has been in place since 2020 under the Smart City Act, allowing the \ntesting of new technologies and services.  \nTo facilitate experimentation options, policy makers can create specific \nco-ordination and information offices at the national level to provide guidance to \nregulators on experimentation across different sectors, such as the Canadian \nCentre for Regulatory Innovation, and create resources for this purpose, as \nGermany has done.   \nToolkits and one-stop shops can also be created to help innovators understand \nregulation and options for experimentation and facilitate participation from smaller \nentities. Examples include Australia’s Energy Innovation Toolkit and Japan’s \nsingle point of contact for applicants at the Cabinet Secretariat. This need also \nemerged in the United Kingdom, where innovators applied for regulatory \nsandboxes to receive clarification and regulatory advice, finding out that in most \ncases a sandbox was not necessary for them to test innovation. This resulted in \nguidance for innovators and a point of contact to support them.  \n \n\n\nEmpowering Urban Energy Transitions \nChapter 5: Creating the conditions for implementing  \n \nsmarter urban energy systems \n \nPAGE | 77  \nIEA. CC BY 4.0. \nRegulatory experimentation in Italy \nSince 2010 the Italian energy regulator, ARERA, has been implementing a variety \nof innovative regulatory approaches for learning purposes and to adapt incentive-\nbased regulation in support of decarbonisation and power system transformation. \nThis has taken place across several distinct phases: \n \nPhase one (2010-2012) focused on testing smart grid technologies, storage \nand dynamic thermal rating in critical portions of the grid, to design appropriate \nincentives for mass adoption.  \n \nPhase two (2017-2021) introduced system-level experimentation through pilot \nregulation, adopting new and transitional regulatory schemes.  \nSeveral notable examples of pilot regulation include the following: \nIn 2017 demand-side resources began being able to provide flexibility services for \ngrid stability through virtual aggregation. Around 1.3 GW of aggregated resources \nhave been made available and lessons learned so far are informing new regulation \non dispatching, with implemented anticipated from 2024. \nIn 2020 pilot regulation allowed new tariffs and business models for self-\nconsumers located within the same building or multi-apartment block, enabled by \nsmart meters. Lessons from this transitional phase were reflected in the integrated \ntext for self-consumption, adopted in 2023. \nIn 2021 pilot regulation was introduced to incentivise private EV charging during \noff-peak hours. In parallel, the Italian committee for electrotechnical standards has \nbeen working on interoperability in the communication between aggregators and \nsmart wallbox EV chargers. \nDuring this phase, stakeholder engagement and public consultations were also \nstrengthened. \n \nPhase three (2022-2025) continues to promote innovation, focusing on the \nopportunities offered by digitalisation to empower consumers and improve \nservices, and on the innovative regulation of ancillary services, self-\nconsumption and energy communities. Further experimentation will assess \nwhether the current regulatory model sufficiently allows distribution system \noperators to take greater responsibility for ancillary services and grid \nmanagement. This will take place alongside several pilot projects carried out \nby Italian distributors, testing the use of distributed energy resources in local \nflexibility markets and a range of planning tools (see Chapter 2 for further \ndetails).  \n \n\n\nEmpowering Urban Energy Transitions \nChapter 5: Creating the conditions for implementing  \n \nsmarter urban energy systems \n \nPAGE | 78  \nIEA. CC BY 4.0. \nDeveloping digital skills and capacity for \nsmart urban energy systems \nWhile digital technologies create far-reaching opportunities for cities and the \nenergy sector, there is a risk that the lack of skills, including skills related to data \nand technology and soft skills, will constrain urban power system modernisation \nand may lead to investments in digital technologies being underutilised. Updating \neducation programmes and vocational training, designing tailored capacity \nbuilding, widening access to expertise and guidance, and ensuring inclusivity can \nall help address this risk. \nThe new foundational skills of the digital economy \n \nSource: Burning Glass Technologies, Center for Innovative Technology, The Business-Higher Education Forum (2019), \nFuture Skills, Future Cities, as modified by the IEA. \n \nThe demand for the digital skills needed for smart cities is predicted to increase \ntwice as fast as the overall national level. Implementation may stall because \nmunicipalities and critical organisations lack digital as well as traditional skills and \nthe necessary human and infrastructure capacity to develop comprehensive smart \ncity initiatives. This particularly relates to integrating systemic approaches to urban \nservices in municipal administrations, which are frequently structured in siloes. \nAlso, as cities evolve they will host increasing numbers of data flows, but many \nlocal governments do not yet have the skills and the infrastructure for collecting, \nstoring and analysing such data. In the energy sector, data science skills will \nbecome more important, and AI and machine learning understanding will become \nincreasingly necessary to fully achieve net zero ambitions. \n \n \n\n\nEmpowering Urban Energy Transitions \nChapter 5: Creating the conditions for implementing  \n \nsmarter urban energy systems \n \nPAGE | 79  \nIEA. CC BY 4.0. \nKey actions to fill the skills and labour gap in urban power system modernisation \n \nIEA. CC BY 4.0. \n \nSome cities and national governments are offering training to city officials. For \nexample, in South Africa a skills training programme was provided to \nJohannesburg city officials to support them in effectively implementing national \nand city-level policies in energy efficiency and green energy codes. Egypt has \ntrained more than 12 000 government employees to build the digital skills needed \nto move to the New Administrative Capital, with programmes on digital project \nmanagement as well as digital transformation to combat corruption. In 2020 the \nCities Today Institute, a global collaborative network for cities, launched an \neducation and training non-profit, the Urban Leadership Foundation, to support \nchief technology officers, chief information officers and their teams prepare for a \ndigitised future. In Colombia the Ministry of Information and Communications \nTechnologies launched training to close the digital skills gap  of professionals in \nthe ICT industry, where up to 90% of the tuition costs are covered. \nSharing knowledge and providing guidance and \ntechnical support drives urban energy transformations \nSeveral initiatives are underway to develop toolkits and initiatives geared towards \nassisting cities and communities adopt and implement smart city solutions, digital \ntransformation and sustainable practices. In Canada, a smart city toolkit has been \ndeveloped to provide guidance on a range of smart city applications and \n\n\nEmpowering Urban Energy Transitions \nChapter 5: Creating the conditions for implementing  \n \nsmarter urban energy systems \n \nPAGE | 80  \nIEA. CC BY 4.0. \ntechnologies with a focus on how data and technology can be applied to existing \nand new types of municipal services.  \nWith a view to promoting open-source data sharing, the Digital Cities Toolkit \ndeveloped by UN Habitat is a policy toolkit to help develop people-centred, \nsustainable smart cities. It covers policies, data for the public good and technology \nprocurement. Other capacity-building tools look to regions undergoing change. \nThe UN entity the International Telecommunication Union has developed the \nToolkit on Digital Transformation for People-Oriented Cities and Communities to \nprovide a comprehensive guide to the digital transformation of cities and \ncommunities, aimed at local government leaders, urban planners and city officials.  \nOne proven method of improving collective knowledge is sharing best practice \nadvice, highlighting successful projects that have tested new innovative methods, \nand also providing technical assistance in the early stages. Mission Innovation’s \nUrban Transitions Mission works to support cities to scale up innovative people-\ncentred solutions such as distributed renewables, digital solutions and zero-\nemissions mobility, and by collaborating with national governments, international \norganisations, the private sector and financial institutions. There is also benefit in \nlearning not just what worked, but also understanding what prevented wider or \nmore rapid success. The European Union has set up the Smart Cities \nMarketplace, which provides a map of European smart city projects, including an \noverview of results achieved, barriers encountered and lessons learned. It also \nprovides resources and support for implementation, including technical \nassistance. \nTo achieve the change that is necessary, and at the pace needed to stay on track \nwith a pathway consistent with achieving net zero by 2050, it will be necessary to \ntest many new solutions and technologies in many different regions and find what \nworks well in diverse locations. The Mission Innovation Green Powered Future \nMission aims to demonstrate that power systems in different geographies and \nclimates can effectively integrate up to 100% renewable energy and maintain a \ncost-efficient, secure and resilient system. The initiative is implementing 80 pilot \nprojects across different geographies, with an approach that avoids duplication \nand is focused on scalability and replicability. Other projects such as the \nEUR 345 million EU Horizon 2020-funded project, the Scalable Cities initiative, \nbrings together 18 smart cities and communities to identify and promote energy \nsolutions and business models that can be scaled up and replicated and lead to \nmeasurable outcomes. It has implemented more than 550 demonstrations of \ntechnological and social innovations in the areas of mobility and logistics, \nbuildings, urban data and digital infrastructure, people’s engagement and urban \ngovernance. \n\n\nEmpowering Urban Energy Transitions \nChapter 5: Creating the conditions for implementing  \n \nsmarter urban energy systems \n \nPAGE | 81  \nIEA. CC BY 4.0. \nInclusive programmes for skills development can break \ndown barriers to clean energy opportunities \nTargeted programmes and initiatives can help ensure that underrepresented \ngroups benefit from clean and digital energy transition opportunities. The UN \nDevelopment Programme and the Union of Municipalities of Türkiye have \nannounced an EUR 8 million four-year digital vocational training initiative targeting \na first round of 4 000 students and youth in cities across the country, while also \nupskilling municipal employees and working with youth-focused NGOs. In \nSouth Africa, in a larger-scale project, the city of eThekwini has recently set the \ntarget to train 1 million young people with IT skills in the next three years. \nSeveral cities have identified the potential for the new energy economy and are \ndeveloping green jobs programmes to train people, focusing on supporting \nunderrepresented, low-income and unemployed people. In Brazil the city of \nBelo Horizonte, in collaboration with the United States, has launched the Coding \nDreams in Vilas and Favelas initiative to foster digital inclusion by providing \nvocational training to residents of the vilas and favelas. Since 2019 the Coding \nDreams programme has trained over 1 000 people. In the United Kingdom, the \nGreen Skills Academy was launched in 2022 by London City Hall to provide \ntraining in green jobs to underrepresented groups, and aims to support 3 000 \nlearners into jobs and 3 700 people into new training and learning. \nStrategies and solutions for financing urban \nenergy innovation \nWhile both cities and electricity utilities face challenges in using their budgets to \ninvest in digital technologies and new solutions, they can also face challenges in \naccessing finance and participating in projects and partnerships. Risk perceptions \nand lack of methodologies to quantify the full range of benefits from projects can \nfurther limit access to finance.  \nPublic funding can help de-risk projects and attract \nprivate financing   \nPublic funds can be used to de-risk and attract private financing. In the \nUnited States, as a result of the US Infrastructure Investment and Jobs Act, \nfunding of more than USD 1.2 trillion will be available to help cities and \ncommunities build a range of smart city projects, such as the deployment of \nvehicle-to-grid technologies or the development of transport planning tools. In \nEurope, the Next Generation EU recovery plan allocated EUR 5.4 billion to its \nresearch and innovation Horizon Europe programme, which will contribute to \n \n\n\nEmpowering Urban Energy Transitions \nChapter 5: Creating the conditions for implementing  \n \nsmarter urban energy systems \n \nPAGE | 82  \nIEA. CC BY 4.0. \nfunding the Climate-Neutral and Smart Cities Mission. This aims to create \n100 climate-neutral smart cities by 2030, which would serve as pilots to enable all \nEuropean cities to follow suit by 2050. \nSharing financial knowledge and skills, offering direct financial aid for capacity \ndevelopment and facilitating connections between different funding sources can \nhelp improve access to finance. Robust methodologies to assess the full costs \nand benefits of options can help alleviate risks and facilitate access to finance. \nThe International Smart Grid Action Network has developed a smart grid \nevaluation toolkit that helps identify smart grid planning options through a techno-\neconomic assessment that integrates cost-benefit analysis within a multi-criteria \nframework. Similarly, cities can benefit from tools to better assess the full set of \ncosts and benefits.  \nTo overcome investment barriers and leverage the impact of public resources, an \nincreasing number of public green banks and green bank-like entities have \nemerged, offering green financial products to leverage public and private capital \nthat unlock access to funding for projects aiming to reduce emissions, improve \nefficiency and provide resilience. There are examples of many successfully funded \nprojects in the United States, India, Indonesia and France. \nInternational and multilateral financial institutions can provide funding and tools to \nsupport urban-led action. The European Bank for Reconstruction and \nDevelopment launched its Green Cities Framework in 2016 to systematically \npromote sustainable urban development in more than 50 cities in 25 countries, \nwith more than EUR 5 billion invested across around 90 projects, saving \n4.6 million tonnes equivalent of CO2, equivalent to removing over 1 million cars \nfrom the road.  \n \nAnalysis of G7 investment and priorities reveals trends in government energy \nspending \nTotal energy-related government spending, as monitored by the IEA’s Government \nEnergy Spending Tracker, has risen significantly since the start of the Covid-19 crisis. \nAs of June 2023 governments globally had spent more than USD 2.2 trillion since \nApril 2020, with G7 countries accounting for 63% of total investment. Germany and \nJapan spent around 73% of their total energy-related spend on supporting energy \naffordability, followed by France and the United Kingdom at around 60%.  \nEnergy efficiency-related investment – including spending on efficient buildings and \nindustry and low-carbon and efficient transport – accounted on average for around  \n\n\nEmpowering Urban Energy Transitions \nChapter 5: Creating the conditions for implementing  \n \nsmarter urban energy systems \n \nPAGE | 83  \nIEA. CC BY 4.0. \n33% of spending, approaching 53% and 75% respectively in Italy and Canada. The \nUnited States also spent 3%, equivalent to USD 16.3 billion, supporting people-\ncentred transitions programmes. \nGovernment energy-related investment support (left) and spending areas in G7 \ncountries (right), April 2020-June 2023 \n \nIEA. CC BY 4.0. \nSource: IEA (2023), Government Energy Spending Tracker: Policy Database, accessed February 2024. \n \nGreen, social and sustainable bonds create economies \nof scale \nSome cities, with support from national governments, the private sector and \ninternational organisations, are addressing barriers and developing new business \nmodels and approaches to fund sustainable energy projects and implementation. \nGreen, social and sustainable bonds are becoming an attractive instrument to \nfinance low-carbon projects in cities. By bundling into one investment multiple \nprojects that otherwise may have difficulty attracting investors due to low value, or \nuncertain returns, bonds can provide economies of scale and attract new \ninvestors. According to a recent market update by the World Bank, local \ngovernments have to date issued USD 21 billion in green bonds. Funds raised are \nbeing used for many different applications. In Canada, the city of Toronto has \nissued green bonds for investment in renewables, energy efficiency and green \nbuilding projects. The city of Reykjavik, Iceland, has issued a green bond \nframework focusing on the low-carbon economy, such as buildings energy \nefficiency, clean transport and adaptation measures. Navigating financial markets \ncan be challenging, but some governments are providing detailed guidance. \nColombia produced a comprehensive guide for municipalities on co-financing \n0%\n10%\n20%\n30%\n40%\n50%\n60%\n70%\n80%\n90%\n100%\nCanada\nFrance Germany\nItaly\nJapan\nUnited\nKingdom\nUnited\nStates\nEnergy affordability\nLow-carbon and efficient transport\nEnergy-efficient buildings and industry\nLow-carbon electricity\nFuels and technology innovation\nElectricity networks\nOther\nPeople-centred transitions\nRest of the world\nUnited States\nGermany\nItaly\nFrance\nJapan\nUnited Kingdom\nCanada\n\n\nEmpowering Urban Energy Transitions \nChapter 5: Creating the conditions for implementing  \n \nsmarter urban energy systems \n \nPAGE | 84  \nIEA. CC BY 4.0. \nsmart cities, which delineates national and local-level financial resources, as well \nas international co-operation and private funding, that can be used according to \nthe type of project, including smart grids and renewables in cities.  \nMixing and matching public and private funding creates \nscale  \nPrivate capital can help fill the investment gap, but challenges inherent in smart \ngrid and smart city projects may impede private investment, including the risk \nassociated with new technologies, difficulty in monetising socio-economic \nbenefits, and the lack of a clear path to return on investment. Analysis by the  \nEuropean Commission has determined that more than 40% of European smart \ncity projects were financed from both combined public and private funds. In Rio de \nJaneiro, Brazil, public–private partnership investment of almost USD 190 million \nwas used to replace more than 450 000 public lights with high-efficiency LEDs as \npart of the Smart Luz project. Around 70% included IoT sensors, enabling efficient \noperation through remote monitoring and control, with an additional \n20 000 sensors providing data such as rainfall levels.  \nAs part of the US Smart Cities Challenge, Columbus, Ohio, received a \nUSD 40 million Department of Transportation grant, along with USD 10 million in \nphilanthropic support, which enabled the city to attract more than USD 100 million \nof private sector investment. The municipality used the finance to transform the \ncity’s transport system, including deploying a digital tool and promoting ride \nsharing to reduce fuel usage and improve mobility for lower-income communities. \nThe initiative has reduced traffic congestion, has seen EV adoption above regional \naverages, and has created or induced more than 2 300 jobs. In Spain a model \nwas developed in Barcelona to combine clean energy and efficiency with rooftop \nsolar PV and building energy retrofits. This pilot project has led to a strong pipeline \nof projects for implementation, with around 1 500 individual participants \nregistering their interest in hosting PV installations on their buildings.  \nThe C40 Cities Finance Facility, funded by the German, UK and US governments, \nfacilitates access to finance for climate change mitigation and resilience projects \nin urban areas. Similarly, the City Climate Finance Gap Fund is supporting cities \nin emerging market and developing economies to design urban growth scenarios, \nand prioritise what sort of policies and investment mechanisms can support \nimplementation. The EU Smart Cities Marketplace provides support in developing \nprojects and matchmaking for the financing of urban projects and intensification of \npartnerships with existing initiatives. Since 2018, this initiative has been able to \nmatch approximately 130 projects with a value of more than EUR 600 million in \ninvestment. \n\n\nEmpowering Urban Energy Transitions \nChapter 6: New approaches to pilots and experimentation  \n \nfor large-scale implementation  \nPAGE | 85  \nIEA. CC BY 4.0. \nChapter 6: New approaches to \npilots and experimentation for \nlarge-scale implementation \nKey takeaways \n• \nPilot projects can be useful for testing and de-risking early-stage digital energy \nsolutions in emerging markets. They reduce subsequent costs and time while \nproviding valuable evidence and insights. The involvement and innovation of non-\ntraditional actors in regulatory aspects also support successful outcomes. \n• \nStrengthening international collaboration and knowledge sharing is crucial for \ndeveloping common practices and standards. Collaborative projects can \naccelerate urban energy transitions at a lower cost, providing evidence for the \nvalue of digital solutions. \n• \nThe 3DEN/UNEP pilot projects in India, Morocco, Brazil and Colombia showcase \nthe benefits of advanced digital technologies. They aim to improve energy \nmanagement, enhance affordability and manage grid flexibility, with quantifiable \noutcomes like energy savings and CO2 emission reductions. \nAccelerating implementation in emerging markets and \ndeveloping economies \nEmerging economies require further investment in early-stage digital energy \nsolutions to leverage renewable resources, enhance supply security and increase \nenergy access. Pilot projects can help de-risk such initiatives by testing \ntechnologies in limited areas, reducing implementation costs and time. New \napproaches such as demand response and community initiatives need not only \nnew technologies, but also involvement from non-traditional actors and innovation \nin regulatory, institutional and social aspects. Pilots offer real-life evidence and \nadaptability insights, while international collaboration and capacity building \nfacilitate best practice sharing and project scaling. \nStrengthening international collaboration and knowledge sharing is vital to \ndeveloping common practices and standards and identifying areas where \ninnovation can be leveraged jointly, accelerating progress in urban energy \ntransitions at a lower cost. Collaborative demonstration projects can provide \nvaluable lessons on how to manage digital technologies on a larger scale and \ncreate evidence for the value created by digital solutions and technologies, which \ncan, in turn, help de-risk future investments. \n\n\nEmpowering Urban Energy Transitions \nChapter 6: New approaches to pilots and experimentation  \n \nfor large-scale implementation  \nPAGE | 86  \nIEA. CC BY 4.0. \nTo accelerate action, UNEP and Italy’s Ministry for Ecological Transition are \nteaming up to support the digitalisation and development of flexible and resilient \nenergy systems for the urban context and beyond. They have developed a novel \nsmart grid pilot programme that is providing insights and evidence for the IEA’s \nDigital Demand-Driven Electricity Networks (3DEN) Initiative, on the policy, \nregulatory, technology and investment context needed to accelerate progress on \npower system modernisation and effective utilisation of demand-side resources. \nFour pilot projects are currently underway, which together aim to test new \napproaches to demand-side and distributed energy resources across a range of \ncontexts, revolving around the principles of replicability and scalability.  \nDigital twin for enhanced electric distribution grid \noperation and management (India) \nA pilot project, led by Panitek Power, is implementing digital twin technology for \nthe first time in a fast-changing low-voltage distribution network in a southern part \nof New Delhi, India. Digital twins can efficiently integrate diverse data sources, \noffering distribution companies valuable insights for effective grid operation and \nmanagement, and strategic planning for optimal asset deployment and upgrades. \nAt the same time, the increasing penetration of rooftop PV and EV charging points \npresents additional challenges in grid operations. This initiative aims to provide \ncrucial visibility on the network, empowering utilities to make real-time informed \ndecisions on the one hand, and on the other to help defer the need for substantial \ninvestment in grid infrastructure, which is particularly significant considering the \nescalating number of electricity consumers in India. In the 19 months preceding \nJanuary 2024, 29 million new household connections were added to the existing \nresidential customer base of 267 million in 2022.  \nThe distribution sector in India is grappling with financial and operational \nsustainability issues, with significant technical and commercial losses in parts of \nthe Indian distribution network. Pinpointing the sources of these losses is crucial \nfor remediation efforts.  \nThe project covers 3 600 residential and commercial consumers, and measures \nvarious metrics, including implementation, performance, environmental impact \nand cost savings. The goal is to establish the tangible value of digital twin \ntechnology and provide recommendations for best practices. This comprehensive \napproach generates high-quality evidence that can guide policy makers in \nsupporting the widespread implementation of this technology across India and \nbeyond.  \n\n\nEmpowering Urban Energy Transitions \nChapter 6: New approaches to pilots and experimentation  \n \nfor large-scale implementation  \nPAGE | 87  \nIEA. CC BY 4.0. \nImplementation of advanced digital industrial and energy \nmonitoring systems (Morocco) \nDecarbonisation of industry is a strategic priority for Morocco and the country is \ntargeting a 20% reduction in energy consumption by 2030. However, current \nenergy management systems only display consumption in real time, without \nstoring and analysing data for decision making or providing energy performance \nindicators. This hinders the effective identification of opportunities to reduce \nenergy usage. The pilot project, implemented by Les Eaux Minérales d'Oulmès \n(LEMO), addresses these issues through digitalisation and the use of AI modules \nat two bottling sites to forecast energy consumption (by location and by production \nline), identify energy losses and predict maintenance actions to reduce energy \nconsumption.  \nThe two lead project bottling sites alone have an electricity consumption of almost \n56 GWh (2021), with a peak capacity of 10.25 MW (Tarmilat) and 7.5 MW \n(Bouskoura). Such high energy consumption, combined with the current state of \nthe equipment, requires more advanced and intelligent solutions for measuring \nenergy in real time and analysing large amounts of data to produce tangible \nsavings. The project should result in energy savings of at least 30%.  \nThe data generated by the project will be used to develop energy efficiency action \nplans. These will serve as a roadmap for the entire sector. The project is intended \nto contribute to reducing CO2 emissions in line with the LEMO low-carbon strategy, \nwhich aims to achieve a 50% reduction in greenhouse gas emissions by 2030 \ncompared to business as usual. This would contribute to the national emissions \nreduction target of 45.5% by 2030. \nThe project will also address the sector’s infrastructure gap, specifically smart and \ninterconnected energy metering systems, and the limited levels of awareness, \nfunding and technical assistance.  \nDigital districts for flexible energy services (Brazil)  \nAn estimated 96 000 new affordable houses will have to be built every day globally \nby 2030 to meet growing housing needs. At the same time, low- and moderate-\nincome households are less likely to adopt rooftop PV. They may face barriers to \nactively participating in and reaping the benefits of the energy transition. \nThe Digital Districts for Flexible Energy Services (D2FX) project, led by Planet \nSmart City, aims to demonstrate how digital solutions can improve housing \naffordability by optimising energy usage and reducing the associated costs. It \nintends to demonstrate how digital solutions can seamlessly integrate distributed \nenergy resources with energy storage systems and orchestrate dispatchable \nloads at consumers’ premises to support the grid and avoid disruptions. This can \n\n\nEmpowering Urban Energy Transitions \nChapter 6: New approaches to pilots and experimentation  \n \nfor large-scale implementation  \nPAGE | 88  \nIEA. CC BY 4.0. \nenable consumers to actively participate in the electricity system and benefit from \nremuneration schemes for energy production and for providing ancillary services.  \nThe project is optimising demand response and load-shifting mechanisms while \nproviding seamless services and enhanced comfort for residents in the large-\nscale, affordable housing neighbourhoods of Aquiraz and Laguna near Fortaleza, \nBrazil. The project Smart City Laguna is expected to involve 18 000 residents and \nto benefit around 10% of the resident population. More than 60 houses out of 623 \nwill be equipped with solar PV (1.1 kWp) and home storage system (5 kWh) and \neach house is expected to produce and consume respectively 1 970 kWh and \n1 570 kWh per year. The innovation hub of Smart City Aquiraz will be equipped \nwith solar PV with a nominal power of 80 kWp and a storage system of 15 kWh, \nand is expected to produce 140 MWh per year. A digital layer of sensors \nconnected to the Energy of Things Platform seamlessly gathers real-time data \nfrom distributed renewable energy production plants, energy storage systems and \nsmart meters at the housing unit level. The platform optimises energy use and \nidentifies the best actions the community can implement to maximise the use of \nlocal renewable sources. It also relays crucial insights to residents through an app. \nThis direct communication channel empowers residents to tailor their energy \nconsumption to individual needs, reducing waste and curbing expenses.  \nBy harmonising technological innovation, environmental stewardship and societal \nwell-being in energy usage and urban planning, the project aims to provide \nevidence of the profound environmental, social and economic benefits that digital \ntechnologies can unlock across smart affordable districts globally.   \nOne of the project’s goals is also to support the scaling-up of these solutions and \ntheir potential use in affordable housing programmes, such as Brazil's Minha Casa \nMinha Vida, to allow low-income consumers and other stakeholders in the value \nchain to benefit from clean energy transitions. \nDistribution system operator’s grid flexibility project \n(Colombia)  \nThis pilot project, led by Enel Grids, aims to implement a flexibility scheme \nstrategically designed to alleviate grid congestion and guarantee the reliability of \nservices in the Sabana Norte region, within Enel’s concession area in Colombia. \nThe anticipated impact extends to over 320 000 customers. \nThe region is currently grappling with congestion events, resulting in outages, \nexacerbated by the surge in electricity demand resulting from a major expansion \nof the industrial and commercial sectors, with a potential for further future growth. \nTo address these circumstances, the project laid out plans to reinforce the affected \ngrid, to be completed in the medium term.  \n\n\nEmpowering Urban Energy Transitions \nChapter 6: New approaches to pilots and experimentation  \n \nfor large-scale implementation  \nPAGE | 89  \nIEA. CC BY 4.0. \nThe project’s digital solutions will facilitate near-real-time dispatching and \nseamless interactions between customers and the distribution system operator. \nIndustrial and commercial entities with significant energy consumption will be \nempowered to adapt their consumption through monitoring and control devices \nand an app for bidirectional communication, and they will be remunerated for \ncontributing substantial demand response. \nThis project leverages available demand-side flexibility and the smart grid \ncapabilities of the distribution system operator to maximise the utilisation of \ndistributed energy resources and contribute to the overarching goal of digitalising \nboth the network and end users, thereby advancing the decarbonisation agenda \nin the energy sector.  \nThis project will test innovative methods for fault prediction and loss reduction \nwithin the electricity distribution system. It will provide policy makers with a \nblueprint for potential mechanisms to activate demand-side flexibility in similarly \ncongested areas nationally and beyond.  \nApproaches to maximising the value of pilots  \nThese pilot projects have been designed to provide valuable data and insights to \ninform policy making and future projects. Further implementation in different \nlocations will enable the development of strategies to adapt to local circumstances \nand demonstrate how projects can be tailored to achieve more successful \noutcomes. An important aspect related to scaling up and replication is that the \nconditions need to be right for projects to realise their ambition, particularly in \nEMDE regions where persistent barriers to finance exist due to the high cost of \ncapital. Co-ordinated international support and mechanisms to enable \ninternational sharing of learning and insights offer the prospect of achieving scale \nand speed, and lower costs. \n\n\nEmpowering Urban Energy Transitions \nChapter 7: Conclusions \nPAGE | 90  \nIEA. CC BY 4.0. \nChapter 7: Conclusions \nNational policy makers have an essential role to play in implementing new \napproaches and leveraging human, technological and financial resources to \nachieve net zero energy transitions in cities. This report looks at four priority areas \nfor national policy makers when approaching their own climate action plans. These \nkey areas place people at the centre of clean energy transitions in cities, support \ndata-driven integrated planning, create a supportive environment for \ninnovation and change, and foster international co-operation. By paying \nattention to these essentials, national policy makers can craft inclusive policies, \nprioritise efficiency and empower communities.  \nFour priority areas for national policy makers \n \nIEA. CC BY 4.0. \n \nPlacing people at the centre, building for the \nfuture \nSocial licence, consisting of people’s acceptance, approval and trust, is essential \nfor advancing clean and equitable energy transitions at the necessary scale and \npace to achieve climate and energy goals. Community-centred clean energy \ninitiatives play a crucial role in securing this social licence by enabling individuals \nand communities to actively participate in adopting more efficient and sustainable \npractices and investing in clean energy technologies. These initiatives offer \nseveral benefits, including providing demand-side flexibility, reducing costs, \n\n\nEmpowering Urban Energy Transitions \nChapter 7: Conclusions \nPAGE | 91  \nIEA. CC BY 4.0. \npromoting affordability, equity and inclusion, and generating local employment \nopportunities.  \nBy prioritising a people-centred approach to urban net zero transitions, national \npolicy makers empower cities to champion local and community-centred clean \nenergy efforts while investing in education and capacity building. \nNational policy makers can promote equitable measures through the following \nactions.  \n• \nSupporting community-led initiatives for sustainable development: \n• \nCraft policies that provide financial incentives and regulatory support for \ncommunity-driven initiatives such as community procurement, people-led \nrenovation, energy communities and positive energy districts. \n• \nSpecifically include vulnerable communities to ensure they benefit from these \ninitiatives, promoting inclusivity and equity in urban development efforts. \n• \nPromoting integrated urban planning with stakeholder involvement: \n• \nIntegrate multi-dimensional analysis, including environmental and social aspects, \ninto urban planning frameworks. \n• \nSupport stakeholder involvement in decision-making processes to ensure \ncomprehensive and inclusive urban development strategies. \n• \nExamine multi-level governance mechanisms to facilitate co-ordination between \nlocal, regional and national authorities in urban planning efforts. \n• \nDesigning benefit-sharing mechanisms for clean energy access: \n• \nDesign benefit-sharing mechanisms such as group-buying schemes and \nsubscription models to reduce the cost barrier for accessing clean energy \ntechnologies. \n• \nProvide incentives and support for the implementation of these mechanisms, \nenabling equitable distribution of clean energy benefits, particularly among \nunderrepresented and vulnerable groups. \n• \nFoster collaboration between governments, utilities and community organisations \nto implement and scale up benefit-sharing initiatives effectively. \nSupporting data-driven integrated planning \nData-driven integrated planning is crucial for transitioning to cleaner energy \nsystems in urban areas. National policy makers can support sustainable energy \nobjectives in all planning phases. City governments can accelerate progress by \nengaging people, prioritising efficiency and renewables, providing regulatory \noversight and aligning utilities with urban objectives to ensure resilience and \nflexibility in power systems.  \n\n\nEmpowering Urban Energy Transitions \nChapter 7: Conclusions \nPAGE | 92  \nIEA. CC BY 4.0. \nNational policy makers can support strategies for data-driven integrated \nplanning by taking the following actions: \n• \nIntegrating energy and climate objectives into urban planning: \n• \nEmbed energy and climate objectives into zoning and permitting regulations, \ninfrastructure development plans and urban land use planning frameworks. \n• \nEnsure that energy and climate considerations are central throughout all stages \nof urban planning and development, promoting sustainability and resilience. \n• \nAligning grids with urban objectives: \n• \nEncourage electricity utilities to align their planning processes with urban \nobjectives, fostering collaboration and engagement with energy users. \n• \nPromote co-ordination between utilities and urban planners to ensure that energy \ninfrastructure development supports broader urban development goals. \n• \nIncentivising optimisation of grid infrastructure and demand-side management: \n• \nIn addition to investments in grid expansion, create incentives to optimise use of \ncurrent grid infrastructure and leverage demand-side assets to enhance efficiency \nand flexibility. \n• \nEncourage investment in grid modernisation technologies and demand response \nprogrammes to improve grid reliability and resilience. \nCreating a supportive environment \nDigitalisation empowers data-driven decisions for city-led net zero transitions. \nReal-time data inform target setting and assist in the identification of opportunities \nand monitoring of progress. National policy makers can create a policy \nenvironment that enables data access, fosters the sharing of best practices and \npromotes open standards. To address financing challenges, they can incentivise \npartnerships and innovative mechanisms, transform regulations and foster \ncollaborative financing at the regional level. \nNational policy makers can enable data-driven decision making by taking the \nfollowing steps: \n• \nEnhancing data accessibility and utilisation for effective power system \nmanagement: \n• \nEnable city and utility access to relevant data to effectively manage the evolving \npower system, particularly by increasing visibility of distributed energy resources. \n• \nFacilitate data sharing through trust frameworks and open data standards, \nensuring all stakeholders, including government and utilities, can use data to \ninform decision making and drive innovation in business models. \n• \nPromoting interoperability and digitalisation for informed decision making: \n\n\nEmpowering Urban Energy Transitions \nChapter 7: Conclusions \nPAGE | 93  \nIEA. CC BY 4.0. \n• \nBuild on open data and interoperability principles to establish a common protocol \nand reference architecture for digitalisation. \n• \nEnable more informed decision making and better integration of new technologies \nand business models into urban energy systems. \n• \nSupporting innovation and financing for sustainable urban development: \n• \nReshape governance and regulatory frameworks to promote digital-driven \ndecarbonisation in urban areas, fostering innovation and sustainability. \n• \nEncourage collaboration and experimentation through city-level sandboxes and \npilot projects to test innovative business models in electricity grids and other urban \nsectors. \n• \nImprove access to finance by leveraging public funding, fostering collaborative \nfinancing schemes, and building sustainable finance mechanisms to support net \nzero pathways in urban contexts. \nFostering international co-operation \nImplementing effective pilot projects and fostering international collaboration on \ngrid modernisation are important for advancing sustainable energy solutions. \nStrategies such as knowledge exchange, allocating funding and replicating \nsuccessful pilots could drive widespread adoption of clean energy solutions in \nurban settings.  \nFacilitating international co-operation, sharing technical expertise and mobilising \nfinancial resources are essential for enhancing grid modernisation efforts globally. \nTo achieve these goals, it is important to address common challenges. Managing \nclimate change and ensuring energy security require collective action through \ncollaborative research, innovation and solutions. Strong international partnerships \nwill contribute towards establishing resilient and sustainable energy systems that \nwill drive global economic growth and development. \nNational policy makers can ensure effective pilot project implementation \nthrough these actions: \n• \nDisseminating knowledge and accelerating innovation: \n• \nFoster knowledge dissemination and learning exchange from urban pilot projects \nto identify areas for further innovation in urban energy transitions. \n• \nPromote collaborative demonstration projects to accelerate progress in urban \nenergy transitions at a lower cost, leveraging insights gained from successful \npilots. \n• \nSupporting financially for scaling up smart energy technologies: \n• \nAllocate supplementary funding for successful pilot initiatives to facilitate the \nscaling-up of smart energy technologies, particularly in urban contexts. \n\n\nEmpowering Urban Energy Transitions \nChapter 7: Conclusions \nPAGE | 94  \nIEA. CC BY 4.0. \n• \nSupport the expansion of proven solutions to a larger scale, contributing to the \nwidespread adoption of clean energy technologies. \n• \nReplicating successful pilot projects for wide adoption: \n• \nDevelop strategies for replicating successful pilot projects to drive widespread \nadoption of clean energy solutions across diverse urban settings. \n• \nBy replicating successful models, ensure that the benefits of clean energy \nsolutions are accessible to a broad spectrum of urban communities. \nPotential international actions spearheaded \nby G7 countries  \nG7 countries have an important role to play in incentivising and accelerating smart \nurban clean energy transitions by acting on several different fronts. These \ncountries can provide financial incentives, resources and learning opportunities to \nhelp cities fund and implement their smart city initiatives. They can help create \ncommon visions for low-emissions transitions, improve co-ordination across \ngovernment levels, and help deploy enabling technologies and infrastructure. \nG7 countries can play an active role in speeding up the global transition by \nenabling developing economies to access the benefits that digitalisation can \nunlock through knowledge exchange, capacity building, technology transfer, and \nprojects and programmes aimed at developing and trialling innovative approaches \nand dedicated financing mechanisms.  \nMoreover, G7 countries can help set up broad international communities of \npractice, support research and development, and enable cities to take advantage \nof advances in innovation. G7 countries can also provide common resources, \nframeworks and standards and foster collaboration between cities. \nFinally, G7 countries can further strengthen co-operation with EMDEs, \nsupporting in particular Africa’s clean energy ambitions and advancing progress \non inclusive and people-centred clean energy transitions, dovetailing with G20 \nefforts, namely the Brazilian G20 Presidency’s key priorities.  \nThe 3DEN Initiative can play a key role in synergising international collaboration \non the topic of urban energy transitions and facilitating knowledge exchange, from \npolicy guidance to on-the-ground implementation. The IEA and the Italian \ngovernment welcome further countries and organisations joining the 3DEN \nInitiative and actively contributing to the development of analysis, tools, \nengagement and guidance in support of clean energy transitions around the world.","difficulty":"easy","domain":"Multi-Document QA","length":"medium","question":"Given the information, what measures can be inferred to be applied to China's energy transition?\n① Phase out outdated capacity and promote clean energy: Retire out existing polluting power plants and unabated coal plants, while increasing capital expenditure on clean energy infrastructure, such as renewable energy storage batteries.\n② Encourage community-based clean energy investment: For example, communities can collectively purchase solar photovoltaic panels or establish mechanisms for trading excess electricity within the community. These actions benefit both urban energy transitions and consumers/residents.\n③ Advance urban energy digitalization: Develop digital solutions for urban power systems and invest in the construction of digital distribution networks to improve electricity utilization efficiency, particularly by applying artificial intelligence to reduce costs and increase efficiency.\n④ Address financing challenges: Establish public green banks or similar entities to provide dedicated green financing. In addition to public funding assistance, it is also necessary to attract social capital.","sub_domain":"Multi-news"}

Source: https://huggingface.co/datasets/zai-org/LongBench-v2

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