Sustainable and Smart Energy Systems for Europe’s Cities and Rural Areas

Do you know the definition of a smart city? You don’t? Well, that’s hardly surprising – there’s no official definition setting out specific objectives. So you have to create your own. With our help, if you like. But more about that later.

Energy and energy exploitation have been at the heart of communities since the agricultural revolution – they are the drivers of progress (Pimentel and Pimentel, 2008). And this progress is based on technologies. For example, steam technology powered the automation of manufacturing processes, which in turn triggered the start of mass production. We are now seeing progress of computing power and connectivity, which are creating a highly connected and digitalised society.

To make it easier for you to read this book, we are presenting three model municipalities, as shown in Figure 3.1. They are based on Eurostat’s definitions (cf. Part I, Chapter 1). Throughout this book, we use these categories to highlight the different challenges and opportunities the three types of municipalities, i. e. large, medium and small, each face.

Municipalities face the continuous challenge to balance a large number of interests from different stakeholders while remaining focused on their targets and improving the quality of life for their citizens. They are often tasked with prioritising various options, making decisions across different topics and operating different systems simultaneously.

The global energy system needs to decarbonise significantly, to achieve the strate-gic objective set by the worldwide community at the UN Climate Change Confer-ence held in Paris in 2015, limiting global warming to well below 2 °C compared with pre-industrial levels. Climate researchers have since warned that global warming should be limited to a maximum of 1.5 °C, so as not to jeopardise the long-term stabilisation of the climate (Steffen et al., 2018). If such an objective is to be met, climate change strategies for Germany to become CO₂-neutral by 2035 are required, reducing greenhouse gas emissions by 60 % compared with 1990 levels by 2025 and by 85 % by 2030 (Wuppertal Institut, 2020). Recent findings of the Intergovernmental Panel on Climate Change (IPCC, 2018) support these require-ments analogously for the whole of Europe. Concepts for energy generation, exist-ing buildings, and industry and mobility at the local level must be elaborated and implemented as part of a collaborative process, including the involvement of (local) civil society initiatives and experts (RLS, 2020).

Power grids ensure that electricity actually gets from the producers to every consumer. This makes a stable electricity grid the prerequisite for a successful energy transition in Europe (Child, 2019). A comprehensive transformation of the generation and the consumption landscape requires not only the mere extension of the existing grid infrastructure but also new approaches to make the grid more intelligent and therefore smarter. The current chapter explains the components and challenges of these types of smart grids in some detail. But what is the technical and process-related background to our electricity grids? The pages below will answer this question.

In Part II, Chapter 2, we have argued that grids are essential for the success of the energy transition. Without the grids, electric and thermal energy flows cannot reach their destinations. Figure 3.1 shows energy grids as a bridge between renewable energies and the points of use.

The following sections set out a fundamental approach to increasing energy efficiency. Information is then provided on the potential of cross-cutting technologies and successful measures deployed. At the end of each section on technology, a summary is given of the main recommended actions. The chapter then goes on to explore energy efficiency for industry, commerce and buildings.

Many companies are now aware of the significance of energy efficiency. What’s more, a growing number of companies are keen to commit to climate neutrality (SBTi, 2021). One of the top priorities in this respect is exploiting existing potential to increase energy efficiency. With this aim in mind, the European industry initially increased its efficiency rates by 1.6 % per year until 2008. However, from 2008 onwards, the rate of progress has slowed down to 1 % (Ademe, 2021). As Figure 1.4 of the previous chapter shows, there is still a lot of untapped potential for efficiency gains.

In this chapter, we focus on the energy efficiency of buildings. First, we present several interesting facts that demonstrate why this issue is important. This is followed by an in-depth look at cross-cutting technologies with a clear focus on commercial buildings and an explanation of digital building management systems. We then set out the regulatory framework in which municipalities operate or which they can adapt to local conditions before presenting general findings in relation to them.

Earlier in the book, we took a closer look at electricity generation and the importance of electricity grids for the energy transition. In the general discourse on the energy transition, the term decarbonisation is often used. This term describes the shift away from carbon as an energy source. However, some approaches continue to use carbon (e. g. biomass or synthetic fuels). The carbon must come from renewable sources and non-fossil sources in the corresponding processes regarding climate change. This is expressed by the term defossilisation (cf. FfE, 2021). In this book, however, we use the more common term decarbonisation. We need to decarbonise other (energy) sectors besides the electrical system to achieve the climate targets. This means that we stop the material and energetic use of fossil energy sources across sectors and replace them with renewable alternatives. Current scenarios for the decarbonisation of energy supply see increasing electrification as precisely this alternative to previous fossil energy sources such as natural gas and oil. The smart (electricity) grid is thus only one crucial part of the entire smart energy system, which in addition to the electricity sector, also includes the mobility, heating and cooling or water supply sectors, among others. An example of such a regional smart energy system with different sectors is shown in Figure 1.1.

The energy transition will not be able to succeed without energy storage solutions. Energy storage is becoming an increasingly important factor in energy systems with a high share of electricity fed in from volatile renewable energy sources and changing usage structures, for example, due to electromobility. Storage technologies have evolved at a fast pace over the last few years. Given the above-average intensity of research, many further innovations and a continued reduction in costs are expected in the future (IEA, 2020).

We need fuels such as hydrogen if we are to achieve the target of climate neutrality in Europe. You just have to look at Ijmuiden in the Netherlands or Gijón in Spain, where steel plants still burn millions of tonnes of coal each year, to realise why. BASF’s chemical plant in Ludwigshafen, Germany alone requires as much energy as the state of Denmark.

Since the days of crude oil and other fossil fuels must and will gradually come to an end, the transformation will also proceed in the mobility sector. In this chapter on sustainable mobility in our municipalities, we focus on electric drives – including hydrogen solutions – for micromobility, passenger cars and heavy-duty vehicles. Micromobility relates to devices such as bicycles, pedelecs or scooters – i. e. motorised or non-motorised micro and lightweight vehicles in the broadest sense for single passenger transport (ivm, 2019). Firstly, you can read about the development in this field. We cannot predict any research breakthroughs, for example, in relation to compactness and weight, or the price of fuels. The people responsible in our municipalities, therefore, face a challenging task: preparing the infrastructure and making lots of effort without knowing which technologies will prevail and when exactly. We try to help with this in Section 4.4. Leading up to this point, we present the key challenges for this sector (Section 4.1). We present the latest facts about battery and fuel cell-based vehicles (Section 4.2) and explain how customers can contribute to making our energy system more flexible – while at the same time benefiting financially – by connecting their vehicles to the grid (Section 4.3).

An application example based on sector coupling is the flexibilisation of energy demand. In this chapter, we first go into the fundamental mechanisms and then show you practical examples of implementation for industry, commerce, trade, and services as well as households.

Both urban and rural areas are faced with strong transformation processes that affect a whole number of issues: As the number of residents in towns and cities rises, so does their energy demand. At the same time pressure to act more sustainably increases and available space decreases. On the other hand, rural areas face migration to cities, an ageing population and an increasing decline in local supplies and services, unless new approaches are taken here.

Digitalisation involves using technologies and data to improve business processes, reduce costs and overheads, identify new sources of income and create new digital business models. The power of digitalisation is its connectivity, providing a network that links users and systems in an ecosystem. The network, in this case the internet, provides exponential scalability and access to new customers (Ghobakhloo, 2020).

As the energy transition progresses, there is a growing interest in smart power grids and digital technologies. Many municipalities are now faced with how to upgrade their conventional energy system into a smart system cost-efficiently. In this chapter, we will continue the discussion from the previous chapter and examine various aspects of the transformation with respect to network effects, trading platforms, technologies and what all this could mean for customers.

The possibility of having a connected network of systems exchanging almost realtime information over the internet (referred to as the Internet of Things, or IoT for short) is critical for enabling the green energy transition. As you will have read in the previous chapters, our energy system is undergoing a substantial transformation. With respect to conventional energy systems, where only a few powerful generating plants were responsible for meeting the overall energy demand and could easily be controlled by adjusting the amount of fossil fuel to be burned, energy generation today is increasingly incorporating a growing share of intermittent, volatile and decentralised renewable energy sources, further boosted by regulatory changes and governmental decisions, such as the phasing-out of coal and nuclear power.

One of the key differences between conventional and smart cities, towns or rural areas is the use of data and technology to make better decisions and the ability to implement these decisions efficiently, effectively, and, when possible, autonomously. The rapid development and roll-out of IoT technologies, the ability to store and process data at an ever-shrinking cost and the widespread adoption of cloud technologies enable the gathering of high-quality data with true richness, frequency and resolution. But without the technology to turn this data into intelligence, it would not be possible to harvest this added value. Artificial intelligence (AI) provides a set of techniques to extract the right insights from the existing data to enhance decision-making and lay the foundations for smart services. In this article, we first explain how AI works, which kinds of problems can be solved by applying intelligent algorithms, and how AI is already transforming the most relevant disciplines in the scope of a smart city. Then, we suggest a set of recommendations for municipalities to enable and manage the adoption of AI to make cities, towns and rural areas increasingly smart.

Now that you have read about the reasons for change and the challenges and chances of smart city projects, we hope you would like to act as a responsible person in a municipality. You might ask yourself: How do we finance all that? This chapter will provide several hints, introduce you to the latest financing and funding options, and outline ways to operationalise those for smart city projects. Applying for loan-based funding is possible, but there are more innovative ways than loans.

Wunsiedel in Germany’s Upper Franconia region of Bavaria is a small town with approximately 9300 residents.

As you have probably realised from reading this book, our cities, towns and rural areas face significant challenges. The transformation of living spaces should bring improvements in this context. It should be conducted with the awareness that the municipalities are part of our legacy to future generations.