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Cities increasingly sourcing own energy supply, finds Arup

13 October 2016

by Jonathan Andrews

New financing options like green bonds and crowd funding are helping open up new opportunities for cities to fund their own energy initiatives, reveals the latest report by engineering and consultancy firm, Arup.

Titled Innovating Urban Energy and released at the 23rd World Energy Congress, it cites as an example the growing confidence of German local authorities looking to secure their own cleaner energy supply. Technology drivers, such as advanced power electronics, smart metering and local generation, are allowing this to happen and in the process helping cities diversify their energy portfolio.

“It is an exciting time because there are big technological and political shifts that are giving cities the opportunity to take control,” said Ian Gardner, Global Energy Leader, Arup making reference to cities moving into realms traditionally taken by national governments. “And, increasingly, for businesses there is an opportunity to become energy prosumers; producing their own energy and even supplying cities.”

Even in the US, where many municipalities have privatised their energy utilities, the report mentions that around 25 percent of the electricity supply is still provided by municipal energy companies. And around 80 percent of distribution networks are owned and operated by public regional and municipal energy companies.

The report finds that new methods of buying and selling energy, like ‘transactive energy’, are allowing cities to develop lower cost and more stable networks capable of handling a greater share of renewable sources. However, the report warns that not all energy can sensibly arrive as electricity from renewable sources, meaning district heating and gas networks still have a role to play.

There is also a growing recognition of the relationship between urban planning and energy efficiency. The report urges rapidly growing cities in Asia and Africa to look to spatial planning to help reduce energy use.

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