In the transition towards a decarbonized energy system, we need city authorities to lead by example as public actors, to govern the actions of the private urban actors as local policy makers, and to conceive and manage the implementation of an integrated approach as coordinators, which we introduce in this paper as three levels of city smartness. Local governments however have institutional disincentives to act, and if they do act, they are confronted with urban actors that are reluctant to follow. This paper analyzes how city pioneers in Europe have been able to overcome these disincentives thanks to a combination of local circumstances and interventions by higher levels of government. We categorize the state of the art instruments that have been used by higher levels of government into "tambourines", "carrots", and "sticks", and reflect on how the state of the art could be improved.
The development of variable renewable energy (VRE) and their massive installation are some of the challenges that the economies of a large part of the world will have to face in the coming years to help ensure a reasonable sustainability of the planet. On the other hand, the advances that have been happening in recent decades in the telecommunications sector and the expansion of the Internet have helped to create a new scenario, giving way to growth opportunities in different economic sectors and new business models. One of the most disruptive tools that has emerged in this new digital ecosystem is what is known as Distributed Ledger Technology (DLT). The opportunity and applicability to strengthen VRE expansion is discussed in this article. To this end, selected case studies and main findings of interviews with experts are discussed. The introduction of blockchain technology, in particular in its use as a platform for smart contracts, offers a great potential, highly valued by experts, in addition to adding other relevant characteristics such as efficiency generated in operational terms and traceability, but also new opportunities for consumers and prosumers to build strong energy communities committed with a sustainable energy transaction. However, among the elements to be improved, we highlight the regulatory uncertainty regarding smart contracts´ security in terms of automatic mechanisms and its legal endorsement for use within the EU; adopting standards to facilitate scalability; and other issues of a more technological nature that should also be improved for a massive implementation in terms of optimizing energy efficiency of the model.
The overlapping impact of the Emission Trading System (ETS) and renewable energy (RE) deployment targets creates a classic case of interaction effects. Whereas the price interaction is widely recognized and has been thoroughly discussed, the effect of an overlapping instrument on the abatement attributable to an instrument has gained little attention. This paper estimates the actual reduction in demand for European Union Allowances that has occurred due to RE deployment focusing on the German electricity sector, for the five years 2006 through 2010. Based on a unit commitment model we estimate that CO2 emissions from the electricity sector are reduced by 33 to 57 Mtons, or 10% to 16% of what estimated emissions would have been without any RE policy. Furthermore, we find that the abatement attributable to RE injections is greater in the presence of an allowance price than otherwise. The same holds for the ETS effect in presence of RE injection. This interaction effect is consistently positive for the German electricity system, at least for these years, and on the order of 0.5% to 1.5% of emissions.
The overlapping impact of the Emission Trading System (ETS) and renewable energy (RE) deployment targets creates a classic case of interaction effects. Whereas the price interaction is widely recognized and has been thoroughly discussed, the effect of an overlapping instrument on the abatement attributable to an instrument has gained little attention. This paper estimates the actual reduction in demand for European Union Allowances that has occurred due to RE deployment focusing on the German electricity sector, for the five years 2006 through 2010. Based on a unit commitment model we estimate that CO2 emissions from the electricity sector are reduced by 33 to 57 Mtons, or 10% to 16% of what estimated emissions would have been without any RE policy. Furthermore, we find that the abatement attributable to RE injections is greater in the presence of an allowance price than otherwise. The same holds for the ETS effect in presence of RE injection. This interaction effect is consistently positive for the German electricity system, at least for these years, and on the order of 0.5% to 1.5% of emissions.
As of 2005, electricity generators in Europe operate under the European Union Emission Trading System (EU ETS). At the same time, European Member States have launched support mechanisms to stimulate the deployment of renewable electricity sources (RES-E). RES-E injections displace CO2 emissions within the sectors operating under the EU ETS and they reduce the demand for European Union Allowances (EUAs), therefore reducing the EUA price. This paper presents the results of an ex-post analysis to quantify the impact of RES-E deployment on the EUA price and CO2 emissions in the Western and Southern European electricity sector during the period from 2007 to 2010. This study shows that the CO2 displacement from the electricity sector to other ETS sectors due to RES-E deployment can be up to more than 10 % of historical CO2 emissions in the electricity sector. The EUA price decrease caused by RES-E deployment varies between zero and multiple times the historical EUA price.
QM-AI-11-002-EN-C (print)/QM-AI-11-002-EN-N (online) ; THINK Policy Briefs are abbreviated versions of THINK Reports. ; The EU is subscribing to the international trend of local governments becoming more involved in climate change policy-making and higher levels of government encouraging this trend. With the Covenant of Mayors, the EU has already been successful in voluntarily committing city authorities to reduce their CO2 emissions by at least 20% by 2020. The ambition of the Smart Cities Initiative is to speed up the transition towards local sustainable energy systems. A portfolio of smart cities that represents the population of European cities should be selected, consisting of cities with different energy fundamentals, a different political economy, and different institutional capacities. The cities in this portfolio need to be given the institutional flexibility (human and financial resources) to conceive and manage the implementation of concepts of city smartness, i.e. to lead by example (first level of city smartness: city as a public actor), to govern the actions by the private urban actors (second level of city smartness: city as a local policy maker), and to promote an integrated approach (third level of city smartness: city as a coordinator). To have an impact, the initiative needs to establish a strict performance reporting methodology (currently, city pioneer experiences are difficult to compare or replicate because of a lack of reporting, and pioneers that do report, use very different reporting methodologies), which would allow the creation of a good-practice forum or register. An EU level legislative initiative to require all cities to report about their progress or lack of progress is also recommended to further improve the impact of the initiative. ; The THINK project (2010-2013) is funded by the European Commission under the Seventh Framework Programme, Strategic Energy Technology Plan. (Call FP7-ENERGY-2009-2, Grant Agreement no: 249736). Coordinator: Prof. Jean-Michel Glachant and Dr. Leonardo Meeus, Florence School of Regulation, Robert Schuman Centre for Advanced Studies, European University Institute
