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National governments around the world face the urgent mission of keeping global warming well below 2°C, while ensuring growing populations can access affordable, reliable electricity. Key to this ambition will be transforming the way electricity is generated, managed and delivered.

Cities already account for more than two-thirds of global energy consumption. With the urban population on the rise and city governments showing immense climate ambition, cities provide the missing link in tackling climate change.

A new paper , from the Coalition for Urban Transitions — in partnership with Energy Unlocked, Stockholm Environment Institute (SEI) and the Overseas Development Institute (ODI) — outlines the critical need to incorporate local governments in national efforts to decarbonise the power sector. Such collaboration is essential for the ultimate success of both national and local policies.

A “3D” energy transition

The new paper builds on previous research from CUT’s Energy workstream on the “3D” transition of the power sector that is already underway in countries around the world. This earlier research explored how decentralisation enabled by digitalisation can transform power systems in urban areas. Through ten case studies, it showed the potential options for national governments to rapidly decarbonise electricity in support of climate goals. These three megatrends are collectively known as the 3Ds.

Building on the earlier analysis, this new paper looks at the ways national governments could explicitly enlist local governments in achieving a 3D transition. While every city context is unique – in terms of geography, governance, infrastructure and market structure – more can be done by all governments to successfully transform urban energy systems.

“Cities are where the 3D megatrends are converging. The high population density and physical proximity of people and buildings in cities give them a unique role in the digital transformation of national and local electricity systems... Cities are able to do more than invest in solar or wind generation – their role is critical in better linking electrified energy demand in buildings and transport to variable renewable supply. ”

— Molly Webb, Director of Energy Unlocked and co-author of the paper

National and local collaboration is key

National governments and city governments have a critical role to play in the energy transition. However, what’s often ignored is the importance of active collaboration and coordination between these different levels of government.

“Local governments can make decisions that help or hinder national energy transitions. Without collaborative approaches, local and national governments will not be able to effectively work towards decarbonisation. Cities can open doors for the extensive new local renewable infrastructure that a decentralised power system requires, and therefore are critical actors for ensuring that 3D transitions happen fairly, and work for communities.”

— Derik Broekhoff, SEI Senior Scientist and co-author of the paper

To be truly effective collaborators, many city governments will also need national government support.

“It is critical that national governments forge strong and enduring partnerships with city governments to drive the scale of energy revolution we need to see to support shared prosperity and climate safety. Supporting city governments though financial, legal, regulatory and governance measures will be key to this.”

— Nick Godfrey, Coalition for Urban Transitions Programme Director

Driving a sustainable and effective energy transition

Although contexts will vary, the paper indicates the types of local government policies that will drive a 3D energy transition. These could include reforming local regulation so new technologies can be more easily rolled out, investing in local renewable energy infrastructure and helping urban communities have their say on decisions.

City governments can also feed local energy data into national plans, and provide broader city-level data (such as data on air quality) to help measure whether energy transition goals are being met.

To support city governments, national government policies could include:

  • Identifying and addressing gaps in local government skills and finances
  • Facilitating governance reforms that will improve coordination
  • Implementing new legal and regulatory measures, such as data-sharing frameworks.

While a 3D urban energy transition may appear ambitious, the paper demonstrates that this goal is not out of reach. Declining costs of renewable energy and electricity storage, together with the growing use of digital technologies in power system design and operation, are making this kind of transformation increasingly possible and cost-effective – and an important strategy for post-COVID-19 economic recovery.