Time to encourage

a bottom-up EU energy policy based on ‘territorial cohesion’

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Helsinki – a member of Energy Cities since 1996

District energy and CHP should be on the agenda of any city authority seeking to improve energy efficiency and sustainability within its community. Indeed, an association of municipal authorities across Europe, Energy Cities, is already co-ordinating much work in this area, writes Gérard Magnin.

Energy is a newcomer to the Lisbon EU Treaty. But it is not the only one; it is accompanied by ‘territorial cohesion’, which now completes the economic and social cohesion from the earlier treaties. Energy and territorial cohesion have to do something together.

In addition to the traditional EU energy policy, mainly driven by the supply side that remains far from citizens’ concerns, a new paradigm is emerging. It is consistent with the trend at work in our early 21st century societies: the quest for greater autonomy. It comes from cities, towns and villages that are happily mixing ‘sustainable energy’ and ‘territorial cohesion’; thus showing the way towards successfully achieving EU energy and climate objectives.

With nearly 2000 cities involved mid-2010, the Covenant of Mayors1 is an unprecedented movement in Europe that gives the local dimension utmost relevance. Cities are indeed committed to going beyond the Energy & Climate Package objectives in their territories and therefore to implementing policies inspired by the most advanced examples. We are faced with the challenge of creating a low-energy city with a high quality of life for all and an energy supply predominantly based on renewable energy.

All energy policy decisions should boost innovation, business opportunities, employment and fight poverty. Far from being a constraint, sustainability should be seen as a new economic opportunity. Therefore, Energy Cities is willing to form an alliance for local energy with networks of local authorities, industry representatives, associations and interested stakeholders to promote a renewed EU energy policy.


The European discourse on energy policy has two dimensions that are used alternatively depending on the public concerned, a dichotomy that tends to sow confusion.

On the one hand, there is a discourse essentially based on a centralized supply-side approach, involving major energy operators, the internal electricity and gas market, large intra-European networks, proposed carbon capture and storage (CCS) installations, etc. This is where gas, coal and electricity are discussed, within the limits of what member states are ready to accept.

This discourse claims to meet the challenges raised by energy security and competitiveness, a dimension which receives low media attention but plays a fundamental role in structuring the European policy (whilst mobilizing most of DG ENER and national ministries’ staff). It has the advantage of concerning a rather limited number of specialized decision makers, which facilitates discussions. These decision makers are extremely powerful, and despite a few words of sympathy they consider the second dimension (see below) as just an accessory or barely tolerable. The underlying financial interests are huge. Such a dimension does not involve society as a whole.

On the other hand, there is also a discourse on ‘sustainable energy’, energy efficiency and energy savings, decentralized generation, especially of electricity (CHP, photovoltaic solar etc.), smart grids making the injection of locally produced electricity into the grid easier, as well as smart meters to facilitate peak management and provide information to final consumers to manage their energy consumption.

This dimension receives more media coverage but has far less influence, despite the increased attention it is getting due to climate objectives. For any big institution, it has the main disadvantage of involving a very large number of scattered players and strongly interacts with society as a whole, which makes policy making more difficult.

This explains why energy efficiency is generally addressed, and then side-stepped thus:

  1. à‚ This is the option with the best cost-benefit ratio;
  2. à‚ It is very complicated;
  3. à‚ We continue as before.

If energy efficiency policies have been a failure so far, it is mainly due to the fact that they are designed at a central level (EU plus member states), whereas their efficiency largely depends on the implementation of decentralized territorial policies.


Cities are inventing a new energy paradigm. One of the main innovations in recent years comes from cities which are implementing policies combining ambitious energy and climate targets and improved quality of life for their citizens.

Copenhagen, Stockholm, Vàƒ¤xjàƒ¶, Malmàƒ¶, Helsinki, Odense, Heidelberg, Frankfurt, Munich or Freiburg are often cited as renowned European destinations for increasing numbers of visitors keen to learn from their experiences. Some cities are aiming at ‘zero fossil fuel’, ‘100% renewables’ or want to become ‘carbon neutral’. They are retrofitting existing buildings to significantly reduce their energy use, they are building passive and positive energy buildings, they are using thermal energy resources from the ground and sea, as well as biomass and waste to feed heat networks. They are using various scales of CHP to optimize electricity and heat generation and developing solar thermal and PV installations.

They are building cycling paths and tramways, creating public spaces, encouraging soft modes of transport, setting up new districts with low fossil energy use, reducing energy poverty and creating sustainable jobs; thus paving the way for the much sought-after green growth.

These famous cities are mainly in countries where national legislation facilitates local action: feed-in tariffs, energy and carbon taxes, strong local power and responsibilities, etc.

These cities have been the subject of enthusiastic reports in the media. They are overwhelmingly appreciated by their inhabitants as well as by those companies who like to know in which direction their territory is developing and want to operate within a framework that preserves them from unforeseen market ups and downs. They are reconsidering their mode of development on the basis of a progressive transformation of the existing energy paradigm. They are implementing a form of bottom-up, citizen- and user-oriented ‘energy subsidiarity’ which consists of looking for solutions as close as possible to the problems to be solved. They are mobilizing local energy saving and energy efficiency potentials in an integrated way, before turning to external complementary supplies in a concentric manner. They are making use of favourable national and European legislation.

This emerging new paradigm is consistent with the trend at work in our early 21st century societies: the quest for greater autonomy. These cities are happily mixing ‘sustainable energy’ and ‘territorial cohesion’; thus showing the way towards achieving the EU energy and climate objectives. How can we not see beyond these pioneering cities a deeper movement able to propose new solutions to the EU, and that deserves to be considered as a major solution, not to say the only possible solution, to the problems we are currently facing?


Acting locally is all well and good. But realizing we are part of a massive movement is an irreplaceable source of encouragement. This is precisely what the Covenant of Mayors1 is aiming at in Europe. Such a voluntary commitment of local decision makers to supporting and sharing a European policy is probably a first in the history of the European Union.

Movements on this scale are usually set up to protest against EU policies, not to approve them. With the Covenant of Mayors, it is quite the opposite. Mayors are unilaterally committing themselves to exceeding the EU objectives set for 2020 by reducing carbon dioxide emissions in their territories by 20%, reducing their energy use by 20% and increasing the share of renewable energy to 20% by 2020.

With nearly 2000 cities and towns involved mid-2010, the Covenant of Mayors is an unprecedented movement. It gives the local dimension utmost relevance. Cities are indeed committed to going beyond the Energy & Climate Package objectives in their territories and therefore to implementing policies inspired by the examples below.

This does not just involve municipal infrastructures: citizens, businesses, the housing sector, transport and all economic and human activities are also concerned. A challenge for sure! Mayors are committed to measuring the energy used in their territories, its uses and origins, etc., as well as the corresponding carbon dioxide emissions, so as to establish a baseline for defining objectives and evaluating results. Then, the signatories prepare an action plan in liaison with local players and citizens. These plans must be finalized within one year of signing the Covenant. Two years later, a first progress report is to be presented on the measures carried out so far.

It is indeed up to the European society as a whole to come to grips with the European objectives and face up to the energy and climate constraints, now and in the future, by making the necessary trajectory adjustments. The time of pilot-actions must now be followed by massive changes.

We all know that old frameworks are still too often obstacles to change. Beyond strictly local aspects, this commitment of cities also provides member states and the European Union with a unique opportunity to learn from these initiatives to achieve their objectives in terms of legislation, taxation, financing etc., whilst encouraging the transition towards low energy cities with a high quality of life for all.


Therefore, Energy-Cities has recently2 put three proposals forward:

1. Introduce a new Community Instrument: ‘URBAN – Sustainable Energy’

Based on the successful ‘URBAN’ Community Initiative of the European Regional Development Fund, this instrument should be set up as a support programme for cities engaged in the Covenant of Mayors. This new initiative could partly be fed by ETS auction sales. With regards to the procedure, direct contracts between the European Commission and the Cities would be the most favourable solution and they could be signed on the same basis as the Cities’ Sustainable Energy Action Plans.

2.Empower local authorities with financial engineering assistance to implement energy efficient projects

Access to finance, both public and private, relies on increasingly complex procedures. As a result, a substantial amount of the available funding remains unused, whilst expectations from cities for financial support to implement sustainable energy projects remain high. Building on the success of ELENA3, it is crucial to create an instrument that puts all local authorities and local banks in a position to apply for such a financial engineering assistance facility on a large scale, and in a decentralized manner. A ‘network’ of local, regional and national banks to support sustainable energy projects in cities is also needed.

3. Initiate a public forum on the EU Energy Strategy through the prism of territorial cohesion.

A public forum could be a very innovative contributor to the ‘new Energy Strategy 2020 to further deliver on [EU] objectives’. Gathering together a wide spectrum of EU stakeholders, institutions, city networks, Covenant of Mayors signatories, NGOs, professional associations, businesses, etc., this forum could accompany the European Union’s Energy Strategy. It could form the basis of an alliance for local energy that would unite all stakeholders having a common interest around local authorities to promote a bottom-up energy policy.


1.à‚  www.eumayors.euà‚ 
2. à‚ www.energy-cities.eu/EU-2020-Energy-Strategy-Energy
3.à‚  www.eib.org/products/technical_assistance/elena/index.htm?lang=en




A ‘low energy city with a high quality of life’ for all is not just a slogan. It is the backbone of any territorial strategy aimed at optimizing the use of local energy resources, reducing emissions, improving the quality of urban services and comfort as well as the pleasure of living in a city, whilst creating new jobs and reducing poverty. It is about inventing sustainable solutions to the crisis, based on a long-term vision.

Large-scale exploitation of local thermal resources will never be possible without district heating. Whether based on biomass, geothermal energy, the energy potential of the sea or lakes, waste, heat recovery or sewage gas, district heating systems are the only viable solution. Only cities with district heating can pride themselves on using their thermal renewable energy potentials and can aim at significantly increasing the share of these local sources of energy.

By ensuring the provision of heat and/or cooling to end-consumers, as well as a smart and flexible way of combining local energy resources, heat networks are the living proof of this integration of demand and supply that is presented as one of the key factors to improving our overall energy performance. Provided, of course, that the performance of the buildings supplied beyond the sub-stations is taken into account, which is not always the case. In any event, a heat, and district heating policy remains to be built in Europe if we want to achieve our objectives.

CHP has the highest energy efficiency of all energy generation techniques. Its flexibility in terms of the fuels used, the range of application size, from private houses to district heating networks, and the fact that this local source is generated very close to consumers make CHP a vital pillar of energy supply policies in this first half of the century. It is, therefore, suitable for policies carried out by cities. But the nervousness of most member states towards this issue and the resulting low level of incentive cannot be denied. Traditional logics, largely based on macro-energetic decisions and a centralized supply-side approach prevail, putting us at risk of never achieving our energy efficiency targets.

In addition to companies using these technologies and their professional associations, we need to build a ‘local energy alliance’ uniting all those who are inventing and making a sustainable energy future possible, together with local authorities.



Energy Cities (www.energy-cities.eu) is an association of municipalities that helps cities to prepare their energy future. About 1000 European municipalities from 30 countries are involved in its activities. It is chaired by the Municipality of Heidelberg (DE). The board is formed of 11 municipalities from 11 countries. The association is based in Besanàƒ§on (FR) and Brussels and its staff is made up of 20 people of seven nationalities.

Energy Cities leads the Covenant of Mayors’ Office (www.eumayors.eu) together with other city and regional agency networks.

Gérard Magnin has been executive director of Energy Cities for nearly 15 years.Email: gerard.magnin@energy-cities.eu


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