Mobilising Climate Action towards COP21: The role of Energy Technology Innovation and Urban Energy Systems for Long-Term Energy Sustainability

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1 The STANDING GROUP ON LONG-TERM CO-OPERATION & The COMMITTEE ON ENERGY RESEARCH AND TECHNOLOGY Host a joint workshop on Mobilising Climate Action towards COP21: The role of Energy Technology Innovation and Urban Energy Systems for Long-Term Energy Sustainability 9 June, 2015

2 Background note for SLT-CERT Joint Workshop Background As part of the broad effort in the IEA, undertaken at the request of the Governing Board in its December 2010 meeting, to identify what priorities for the Agency and its work should be, the Standing Group on Long-Term Co-operation (SLT) and Committee on Energy Research and Technology (CERT) had a series of brainstorming discussions and prioritisation exercises through the 2011 and early 2012 SLT and CERT meetings. Since then a series of discussions took place on the potential benefits of increased collaboration between the SLT and the CERT. These discussions highlighted the I.E.P. Agreement mandate for the SLT related to energy research and development, as well as the links created by the Governing Board between the SLT and the CERT in the CERT terms of reference. Hosting workshops to tackle issues cutting across the energy technology and policy landscape was seen as a good opportunity to discuss best areas for collaboration and to look at mechanisms on how the two committees could best work together. On 4 June 2013, the SLT and the CERT held their first joint workshop and delegates confirmed its usefulness to enhance collaboration. A request was made to the Secretariat to organise a joint workshop every year, with a focus on analysis relevant to both committees. It was suggested that the focus of the yearly Energy Technology Perspectives (ETP), which deals with issues crossing the Technology/Policy/Markets aspects, would be a good focal point for how SLT and CERT can guide Secretariat analysis. On 3 June 2014, the SLT and the CERT held a second joint workshop on The Role of Energy Technology and Innovation in Combating Climate Change, a topic that was fully aligned with the thematic focus of the ETP 2015 report. Participating delegates confirmed the usefulness of the ETP theme as a topic of joint interest between SLT and CERT. At the 69th CERT meeting held on 18 November 2014 and in following conference calls between the SLT Bureau and the CERT Cabinet it was agreed that the joint SLT/CERT workshop to be held on 9 June 2015 topic should focus on two topics: energy technology innovation and urban energy systems. Workshop Objectives The main objective of this workshop is to enable enhanced communication and understanding between the SLT and CERT delegates to identify issues and mechanisms for collaboration between the two committees. Previous workshops have highlighted the benefits of focusing discussions on a limited set of issues, and the appropriateness of the yearly topics covered by Energy Technology Perspectives as items of interest to both SLT and CERT delegates. In addition, SLT and CERT delegates have recently stressed the importance of using the opportunity of the 2015 workshop to discuss how the IEA can potentially have a role in contributing positively to the forthcoming 21st Session of the Conference of the Parties to the UNFCCC (COP21). Hence, the 2015 workshop will address two topics, namely the importance of the IEA Technology activities in supporting innovation to mobilise climate action and, in a second session, the role that urban energy systems can have in fostering global and national sustainable energy transitions. In this context, the objective of the workshop is to enable SLT and CERT delegates to discuss (1) what could be the contribution of the IEA to COP21 with the aim of supporting a discussion on energy technology innovation that would effectively contribute to a positive outcome of the conference and (2) how national energy policies can more effectively support local actions on sustainable energy technology deployment so that cities can meet their sustainable development objectives while maximising their contribution at the national scale to climate change mitigation, energy security, and economic growth. 2

3 STANDING GROUP ON LONG-TERM CO-OPERATION (SLT) COMMITTEE ON ENERGY RESEARCH AND TECHNOLOGY (CERT) Joint Workshop on Mobilising Climate Action towards COP21: The role of Energy Technology Innovation and Urban Energy Systems for Long-Term Energy Sustainability DRAFT AGENDA 14:00-14:10 Welcoming remarks SLT Chair: Mary Warlick, CERT Chair: Alicia Mignone 14:10-14:30 The IEA Role in Supporting Innovation to Mobilise Climate Action IEA Speaker: SPT Acting Director : Philippe Benoit 14:30-15:15 Discussion: Opportunities for IEA contribution to COP21 Moderated by Alicia Mignone, CERT Chair 15:15-15:30 Session 1 conclusion 15:30-16:00 Coffee 16:00-16:20 The Importance of Cities for National Energy Policies Outside Speaker: Dr. Paolo Bertoldi, Joint Research Centre, EC 16:20-16:45 Discussion: What Role Can Cities Play for National Energy Policy Objectives? Moderated by Mary Warlick, SLT Chair 16:45-17:00 ETP 2016: Building Sustainable Urban Energy Systems IEA Speaker: ETP Project Manager : Daniele Poponi 17:00-17:30 Discussion: How Can National Energy Policies Support Local Energy Sustainability? Moderator: Jean-François Gagné 17:30-17:45 Session 2 conclusion 17:45-18:00 Closing: How Can SLT/CERT Co-operation Impact Domestic Energy Policy Decisions? SLT Chair: Mary Warlick, CERT Chair: Alicia Mignone 3

4 Speaker s biography Mr. Paolo Bertoldi has gained a Doctor Degree in Electrical Engineering in 1985 at the University of Padova (Italy). He has been working with the European Commission since From 1986 to 1993 he was working in the EU nuclear fusion project, the Joint Undertaking Torus (JET) in the UK. For 1993 until April 2001, he was Administrator with the European Commission, DG Energy and Transport (DG TREN, Brussels Belgium), in charge of EU regulatory and voluntary programmes for energy efficiency in end-use equipment, buildings and industry. He was also in charge of voluntary agreements with industry and tertiary sectors and the GreenLight programme. Since May 2001, he is Principal Administrator and Action Leader at the European Commission Joint Research Centre (Ispra, Italy), in charge of research activities on energy efficiency policy analysis, the efficient use of electricity (in particular ICT, data centres, digital TV, LED lighting) and innovative policy instruments for energy efficiency (e.g. white certificates, financing mechanisms, ESCO, EPC, emission trading). He continues to manage the GreenLight, GreenBuilding, and Motor Challenge programmes and Energy Efficiency in ICT Initiative. He has published over 80 papers on energy efficiency in scientific journals and conference proceedings. 4

5 Background information on session topics THE ROLE OF ENERGY TECHNOLOGY INNOVATION TO MOBILISE CLIMATE ACTION All background information for the first topic of the workshop can be provided by the following IEA publications: Executive Summary of Energy Technology Perspectives 2015 report cutivesummaryenglishversion.pdf Energy Technology Initiatives html Executive Summary of Energy, Climate Change and Environment report The Way Forward Five key Actions to Achieve a Low-Carbon Energy Sector Suggested points for discussion What can be the role of the IEA technology and policy work in contributing to a successful package of decisions at COP 21, and successful implementation thereafter? How a more accurate vision of policy-makers on the potential of energy technology innovation to deliver carbon emissions reduction in the long-term can be translated into more effective policies domestically, and more ambitious targets internationally? What can be the opportunities to strengthen the international cooperation network on energy technology innovation? What are the key opportunities for the International Energy Agency to advance energy sector perspectives with climate negotiators? 5

6 SUSTAINABLE URBAN ENERGY SYSTEMS Background Almost two thirds of global primary energy is consumed in cities, 1 which, according to the recent 5th Assessment Report of the Intergovernmental Panel on Climate Change, 2 also account for more than three quarters of global carbon emissions. Because urban population and economic affluence are projected to grow, the share of global energy consumption and energy-related carbon emissions at the city level will increase as well. Urban policy makers can have significant leverage to foster a transition of urban energy systems toward greater sustainability while providing strategic contribution to national energy policy objectives on climate change mitigation and energy security, for instance. Urban energy systems are traditionally defined as the sectors and processes needed to satisfy the energy service demands of an urban area. Sustainable urban energy systems are those that not only meet service demand but also promote: economic and human development; healthy environment and people; and affordable, reliable and accessible energy. A transition towards more sustainable urban energy systems requires both diffusing a mix of clean energy technologies and energy users changing their behaviour. Sustainable energy options at the urban level can address all constituents of the urban energy system, from primary energy production, through transformation, and consumption. For example, cities can become more self-sufficient by transitioning to local clean energy sources, such as solar PV, solar thermal and waste energy. Additionally, greater conversion efficiency can be achieved in combined heat and power systems linked to district heating networks. Enormous increases in efficiency at the consumption stage can be achieved through technologies that target building insulation, vehicle fuels, and more. The importance of behaviour changes (e.g. a shift in preferences for public transportation and car sharing) should not be neglected, as a given technology might be available and cost-competitive but still fall short of achieving the desired level of adoption due to non-market barriers that shape behaviour. In addition, urban areas offer valuable opportunities for integrating different energy networks, such as electricity, heat, and transportation. The density and diversity of energy demand, sources and networks affords unique venues for maximising the use of energy infrastructure, optimising the use of low-carbon or low-cost energy sources when available. Opportunities for system integration can arise from options such as smart grids combined with distributed storage; district heating networks can also be a source of flexibility for accommodating variable renewables, as is already happening in Denmark. Linkages between local and national energy policies and sustainable urban energy planning There is a rich mix of policy options that can be leveraged by local policy makers to increase the sustainability of urban energy systems. Two examples of local policies that can effectively lock-in urban energy infrastructure into cleaner and more efficient systems are land use and transportation policies, which can be approached in a systems perspective through integrated planning. A step forward in approaching local energy policies holistically has been taken with the implementation of sustainable urban energy plans (SUEP) 3 or city climate action plans, which are based on a carbon emission reduction target for a specific city or metropolitan area associated with sectorial policies. Hundreds of these plans have been developed in the last decade across different countries and for 1 IEA (2008). World Energy Outlook, Paris 2 Seto, K.C., S. Dhakal, et al. (2014) Human Settlement, Infrastructure and Spatial Planning. Climate Change 2014: Mitigation and Climate Change. Contribution of Working Group III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change. Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA 6

7 cities of all sizes, however there is still very limited experience on their effectiveness as there has been limited monitoring of the different initiatives with respect to intermediate benchmarks. Overall, a more active role of national governments in terms of creating enabling national policy frameworks (including capacity building) could provide an important leverage to local governments. Local fiscal policies can also play an important role through the modulation of property taxes for the installation of clean energy technologies, for example; such is the case for solar PV systems in New York City. Innovative financing schemes such as the Property Assessed Clean Energy (PACE) or the Sustainable Energy Utility (SEU), successfully pioneered in the U.S., offer significant potential for replication in other countries. Another example of innovative financial mechanisms is land value capture, which consists of financing the construction of new transportation infrastructure with the profits derived from land premiums generated by the new infrastructure. Land value capture has been successfully implemented in several parts of the world, including emerging countries such as Brazil and India. 4 These innovative finance mechanisms often require a national legislation to set the bases for effective local implementation. Accurate data and information on urban energy flows and the constituents of urban energy systems is an important prerequisite for implementing effective energy policies, both at the national and local level. This importance has been recently recognised with several urban indicator frameworks developed or under development by international organisations, such as the Global Protocol for Community-Scale Greenhouse Gas Emission Inventories (GPC), a joint project from ICLEI-Local Governments for Sustainability (ICLEI), the World Resources Institute (WRI) and C40 Cities Climate Leadership Group (C40). In addition, a recent initiative aimed at reviewing existing urban indicator frameworks and co-ordinating their roll-out is being carried out within the Global Initiative for Resource Efficient Cities (GIREC) of the United Nations Environment Programme. A few tools have also been developed to support diagnostics of urban energy systems and also to help local policy makers to identify more suitable solutions, such as the TRACE (Tool for Rapid Assessment of City Energy TRACE) or the CURB (Climate Action for Urban Sustainability) tools developed by the World Bank 5. In general, the success of local sustainable energy initiatives is to a large extent dependent on institutional integration and alignment (i) across departments and agencies within the urban energy system (horizontal alignment), and (ii) between federal/central and state/local governments (vertical alignment). While urban governments have the authority to make decisions and implement solutions on the ground, these efforts can be either supported or constrained by national policies. A thorough policy mapping of national and local policy competences can facilitate the identification of the linkages between local and national policy and inform the dialogue about policy gaps and misalignment. A few national governments have already taken important steps to creating policy frameworks that effectively empower cities to drive sustainable energy transitions. One example is India s National Urban Transportation Policy, with which the central government directly supports municipalities in the preparation of sustainability-centered integrated transport and land use plans. National support can be expanded to other sectors of the urban energy system by formulating a national urban energy plan that is relevant to the challenges and aspirations of cities. This action, which should actively involve local governments, can be supported by the task force proposed under international co-operation. National governments can also play a pivotal role in increasing the effectiveness of local TRACE is a decision-support tool developed by the Energy Sector Management Assistance Program (ESMAP) of the World Bank to help cities quickly identify under-performing sectors, evaluate improvement and cost saving potential and prioritise sectors sections and actions for energy efficiency intervention. CURB is developed by the World Bank in partnership with C40 and Aecom to support local climate planners assess which strategies are most effective from a cost and performance perspective. 7

8 sustainability actions by developing or making available urban energy planning tools 6. These tools can help urban policy makers to set up sustainable urban energy plans that effectively support the advancement of local and national goals. City authorities can serve as vehicles for implementing national strategies. Cities such as Cape Town; London; Salem (Oregon); Sydney; and Toronto, to name a few, have developed energy strategy plans that are driving significant changes towards sustainability. Early successes can inspire other cities and prompt national policy makers to engage with local initiatives and establish the mechanisms for national support. City plans and actions can inform national governments on how to accelerate the advancement towards sustainable and clean urban energy and maximise their contribution to national goals. International actions to mobilise cities in support of global sustainable energy goals The importance of cities for national energy goals is being increasingly recognised in many international fora. Networks and organisations of cities and local governments like the International Council for Local Environmental Initiatives (ICLEI), the C40 Cities Climate Leadership Group (C40), and the United Cities and Local Governments (UCLG) are gaining greater traction in mobilising local sustainability actions. The United Nations have also been supporting the uptake of sustainable energy initiatives at the local level through UNFCCC (where urban environment has been one of the topics of the Technical Expert Meetings), UN Habitat, UNEP, and other programmes. Peer-to-peer exchange - a known platform for this purpose has been successfully used for developing Sustainable Energy Action Plans (SEAPs). The business sector has recognised the importance of cities in the sustainability agenda. For example, global corporate leaders have joined forces under the umbrella of the World Business Council for Sustainable Development (WBCSD) to catalyse collaboration between cities and business on a global scale to deliver sustainable energy solutions at the local level. The private sector also plays a crucial role in transitioning to sustainable urban systems, for instance by providing critical urban infrastructure and financing for sustainability projects. Encouraging dialogue between the private sector and national and local governments is critical to ensure that the private sector is enabled to maximise investments in urban areas that meet clean energy goals. Suggested points for discussion How do delegates see the relevance of cities for national energy policy objectives and whether there is any perceived opportunity to improve vertical integration between the local and national level? What are the potential challenges in vertical integration? What limitations national policy makers have in their ability to intervene at the local level? What could be new venues for increasing collaboration between local and national decision makers? 6 An example of these tools can be Sustainable Urban Energy and Emissions Planning (SUEEP), provided by the World Bank. 8

9 ETP2016 ANALYSIS Cities will play a critical role in achieving multiple energy policy targets for an efficient, sustainable future. Sustainable cities are possible, and cities across the globe are already taking charge to tackle the energy-climate challenge. Yet, there still lacks a broad understanding of the role urban energy systems can play in achieving energy and climate targets by aligning local initiatives with national policy ambitions, and vice-versa. These synergies can not only help to ensure policy success but can also help to channel resources where benefits are highest. In response, the Energy Technology Perspectives 2016 (ETP 2016) will be thematically focused on urban energy systems and their role in fostering global and national sustainable energy transitions, with a country analysis on Mexico. The objective of the thematic focus is to analyse how local and national energy policies can be more effectively aligned so that cities can meet their sustainable development objectives while maximising their contribution to national energy policy objectives of environmental sustainability, energy security, and economic development. ETP 2016 seeks to identify how sustainable energy transitions in cities can help national governments in achieving energy policy objectives fostering a transition towards more environmentally sustainable, secure, and economically efficient energy systems. Given the diversity and complex nature of urban energy policy frameworks, which are also embedded into different national environments, ETP 2016 seeks also to discuss the benefits of vertical policy collaboration and to raise awareness of the positive impacts of such integration to support the transition to more sustainable energy systems. The urban energy focus of ETP 2016 will look at how the growing demand for energy services in cities can be met in a way that local sustainability objectives such as reduced urban air pollution are achieved while supporting national energy transitions. Another aspect that will be analysed is the potential for urban energy systems to increase the resilience of the national energy system through greater flexibility. The project will look at the potential contributions to national energy policy objectives of urban energy efficiency options, urban energy supply, and system integration opportunities. The ETP 2016 analysis will seek to assess the potential of existing and new technologies (including system integration technologies such as district heating) in delivering sustainable urban energy transitions. This includes identifying the technologies that can deliver such transitions, and assessing their prospects for their accelerated development, deployment, and diffusion. The ETP analysis on technology deployment in cities will be framed within scenarios depicting different paths of evolution of the global energy system. The main outcomes of the scenario-based analysis on urban energy systems of ETP 2016 will be the estimation of current urban energy demand, urban energy supply, and their evolution under the ETP scenarios incorporating global urban carbon reduction wedges (GtCo2 avoided) from energy demand reductions and distributed low-carbon supply. The ETP urban scenarios will be based on a conceptual framework assessing the urban technologies (e.g., district heating) and the behavioural changes (e.g., shift to public transportation) required to drive the sustainable energy transitions along with the policy frameworks that can support these shifts and can be effectively leveraged by local and national policy making. The policy analysis will also seek to improve the understanding of the impacts of different policy tools and financing schemes that have already been applied in cities across the globe. This will help understanding what innovative policy and finance mechanisms can be disseminated worldwide. The impacts of policy frameworks will also reflect the effectiveness of alignment between the local and national policy levels. The ETP 2016 project will assess how local and national policy frameworks can drive sustainable energy transitions at the local level, and how a more effective integration of local and national decisionmaking can help achieving national energy policy objectives at both levels. For instance, a more sustainable urban mobility achieved through the avoid/shift and improve options could reflect urban actions (e.g., intelligent transport systems), national policies (e.g., subsidies to alternative fuels), as 9

10 well as measures that improve the alignment of the two policy levels (the phase-out of subsidies to high-carbon fuels that encourage the use of private vehicles). In recognising the growing importance of cities for national energy policy making, the ETP 2016 report will discuss the most important dimensions of urban energy systems as well as the specific venues for urban energy sustainability. It will do so by first looking at the specifics of urban energy systems, the drivers of urban energy demand, and the importance of urban energy systems for national energy policies. After this introduction, sectorial options for increasing the sustainability of the urban built environment will be analysed, including district heating and its prospects in locations with increasing energy efficiency of buildings. An analysis on urban mobility will assess what technology, behavioural, and policy options are required to realise sustainable urban transportation systems. The insights gained from the demand side will be complemented with an analysis of the supply dimension of urban energy, where the report will then look at the potential for distributed energy sources and at system integration opportunities in urban areas, and how they can increase national grid flexibility and reliability. Finally, in accordance with the ETP Vision of taking a deeper look at the energy transition opportunities in one of the IEA s Key Partner Countries, the 2016 thematic country analysis will be focused on Mexico s opportunities and challenges in meeting its ambitious energy reform, and the role its cities may have to play for its success. Suggested points for discussion What is the key message that could be brought forward by ETP 2016? How could local and national policies be better aligned to increase synergies and avoid counter productivity? How could land planning authorities, transport planners and energy policy makers work together to increase energy efficiency? What domestic case studies could be included in the ETP 2016 analysis? What innovative policy and finance mechanisms could be deployed at the local level? How to integrate resilience and climate mitigation policy objectives at the national and local levels? 10

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12 NOTES For further information: 12