Urban Reverb: REPowerEU

Anthony Colclough: Hello and welcome to Urban Reverb, the official podcast of the Smart Cities Marketplace, a European initiative financed by the European Commission. I'm Anthony Colclough. Most commonly, as in rewind, reincarnate and re-imagine the prefix, ‘RE’, ‘re’ holds the meaning of going back or doing something again. However, those two letters also have an intensive function to reinforce, reinvigorate and recommend. It is surely this latter use that is intended in the ‘re-power’ of the European Commission initiative, REPower EU, as the idea here is not to summon the nostalgia of a return to some imagined former glory but to progress to achieve a greater future state of being. 

On today's podcast, we're powering up with some real heavy hitters here to unveil the many aspects of REPower EU. What is it? What does it look like on the ground? And what makes it so essential, not only in practical terms but for the very idea of Europe and the European future. Today we're joined by the Director of the European Commission's DG Energy.

Paula Pinho: I'm Paula Pinho I'm the Director at DG Energy at the European Commission responsible for just transition consumers, energy security, energy efficiency and innovation.

Anthony Colclough: The Mayor of Heidelberg.

Eckart Würzner: I'm Eckart, Mayor of the city of Heidelberg in Germany, over 17 years now. So, a long tradition of European cooperation, international cooperation, and local engagements. Now, globally, I'm working on the Europe Board of the Global Covenant of Mayors, I'm working with the C40 cities. I’m the Vice President for Energy Cities.

Anthony Colclough: And the Director of Regulatory Affairs for a European energy services company.

Sofia Barbosa: I’m Sofia Pinto Barbosa. I am an economist. I lead the Regulatory Affairs Department of GreenVolt.

Anthony Colclough: So, let's start with the burning question. Just what is REPower EU?

Paula Pinho: Well, REPower EU is an ambitious plan from the EU to quickly reduce its dependence on Russian fossil fuels and accelerate the green energy transition, saving energy by investing in renewable energy sources, diversifying our energy supplies and all of it, of course, as a response to the Russian invasion of Ukraine, which made us accelerate what we already had in mind with the European Green Deal. The vision was to become the first climate-neutral continent in the world by 2050, setting us on the path to reduce by 55% our greenhouse gas emissions by 2030.

All of this was in the making last year when Russia invaded Ukraine. There was a clear need not just to stick to this plan, but to accelerate this, because we've seen the vulnerability of being exposed to such a big share of the imports of gas in this case, and also oil fuels from one single supplier.

Anthony Colclough: Of course, achieving this independence across Europe also means achieving it in Europe's cities.

Eckart Würzner: When we think about global topics like climate change, we have to take into account not just the general policy. We have to change our behaviour to achieve a more carbon-free perspective in the economic field. We have to work. And this is mostly always local. Therefore, we need better cooperation, better engagement of governments in European policy, in international policy. And if this is not the case, we won't reach any targets, any goal we wanted to achieve. So, we mostly have much stronger political standards on the local level, which we implement than in the European scale, in the Global Covenant of Mayors, the local government initiative of more than ten thousand cities.

Anthony Colclough:  As repeat listeners to this podcast have heard many times before. Collaboration between cities and the private sector is an enormous boost to the energy transition and achieving energy independence.

Sofia: I mean, we want to contribute, of course, to the climate objectives. We think that is critical. We need to do this as a society. So, this is also part of our DNA. Today in the renewables projects, we are talking about solar PV or wind. I mean, we have tools to take care of our energy security and energy independence. But even from an economic point of view, it makes sense to switch to renewables. We have a market demand for them. The EU has been a frontrunner in this climate transition and by setting these carbon neutrality goals, renewables targets for 2030, energy efficiency targets, reduction of GHGs. We know that Member States will have to comply with this. So, this is another driver, of course, for having more investment in renewables.

Anthony Colclough: An energy services company can take many forms, but the root idea is usually to provide renewable infrastructure like solar panels, with payments for the installation tied to savings from going green. GreenVolt, where Sofia works, is one such company.

Sofia: GreenVolt is a Portuguese company, 100% Renewables, which has had a very fast growth. In 2021, we were around 40 people and today we are almost 700. We operate in different segments. The development of utility-scale solar and wind. What we offer is like one-stop-shop solutions both in the residential and for companies to deploy solar rooftops. Sometimes it can be combined with batteries or electric vehicle charging, and we offer this one-stop solution, meaning that they can have this without doing any financing.

We take care of all the bureaucracy, the installation and all the maintenance. Basically, we have two types of business models: for the individuals or the company who has sufficient rooftop space, they can sign a contract with us. And basically, we do all the EPC, we take care of the permitting with the authorities. And what we offer them is that they can pay us with respect to the energy that they are consuming, a price, a fixed price, which is usually up to 30% lower than, what they would pay to the normal retailer or the market.

We also deploy other types of solutions, which we call the energy sharing solutions. We could have a company with a big rooftop space, and they would also get a contract where they pay an electricity bill with a huge discount with respect to the price that they were paying. And with the surplus energy, we are able to share it with the neighbours, which are in the local radius, of 2 to 4 kilometres. And those neighbours, they will also pay us a much lower electricity bill compared to what they are paying to their retailers.

So today, the rooftop only accounts for 5% of electricity consumption and it could account for 35%. And so, it is critical that cities rapidly deploy solar rooftop, which has no environmental issues or very low impact environmental issues. I was very impressed with this Smart Cities Marketplace because, in the REPower EU, they want to tap the huge potential that you have in rooftop buildings.

Anthony Colclough: Cities clearly feel the need for a green transition, but they don't want it to come at the expense of European jobs, competitiveness, and industry. Companies like Sophia's are just one of many the cities work with to boost the local economy with more green jobs.

Eckart Würzner: 15 years ago, we decided to build passive houses, zero emission city areas. Less than 20% of the commuters using cars in our city. A lot of change. Getting more bicycles. Getting more pedestrian solutions. But all of this is not giving the message to the citizens, is their perspective for the next generation also economically? That's what we have to work on. So, you have to use all of the benefits of this development in your city. If your solar cells are all coming from China, if all the wind power plants are coming from Asia or wherever, and it's not produced in Europe, it's not a solution. Lots of the programmes are focusing more on the local level and the engagement of local governments, like the Global Covenant of Mayors. It is like a self-commitment. We sign, yes, we want to achieve the goal to become a zero-emission carbon-free city in 2030 already.

REPower urban programs are very good, in the right sense, right direction, but still too weak. If you see how we are integrated, we are still sitting not at the same table. We are just asked to give some advice, to give some information into the political decision. No, we wanted to have a seat at the table. We wanted to be recognized as real partners. That's what we wanted. And therefore, we have to take into account that we are not an NGO, not a nongovernmental organization. We are the engagement of local citizens on a local level who wants to change something. And that's our power. And therefore, we're working on lots of those programmes. It's all going in the right direction, but still, we are too weak.

Paula Pinho: Local levels, local authorities, businesses, consumers. This is where the action happens. So if we want to implement and deliver on energy transition, we need to have the support of the local regions and the citizens. They should be reflecting what are the plans on the national level in terms of decarbonization, the involvement of civil society and the stakeholders in the preparation of these plans across the whole sector. So, this is a tool for multi-level governance.

We also have other types of what we call integrated participatory approach between the different actors of society. Be it through the Covenant of Mayors, but also the Big Buyers Initiative managed by ICLEI and Eurocities. These are good examples of how we are trying to make sure that these regulatory aspects are applied and implemented by all in society. Since we can have the most ambitious legislation in place and the biggest political will, all the financial means, but if the citizens don't embrace it and don't act upon it, we can forget about it. It’s absolutely crucial for this transition to have everyone.

The City of Ghent in Belgium runs a project with the North Sea Port Authority helping making this port carbon neutral. It’s an international port that stretches through Belgium and the Netherlands and serves several countries in the European Union. Now, the city has notably co-founded the Smart Delta Resources Initiative, the network of public bodies, industry, academia. Where all actors are cooperating for carbon neutrality, for circular economy, and for increasing use of renewable energy sources. It's creating a huge added value of about €12.5 billion every year, and more than 100,000 people are directly or indirectly working in the port. A very good example of the manifestation of REPower EU priorities being implemented locally and also serving as an example for the Smart Cities Marketplace Matchmaking Process.

Sofia: Smart Cities Marketplace is a platform that puts in context cities and investors. It is a place where you can find technical assistance, that you are able to access best practices. So, I think it is a very good initiative. We are not using public subsidies, but I think that it is an initiative is well-performing. The municipalities have a huge building stock. So, they indeed should be the leading examples for deploying renewables as fast as possible. I think there are two issues I would like to highlight.

On one hand, I think there is a lack of human resources and staff with the right expertise. But the big issue, the bottleneck, is public procurement. It is very difficult to have public procurement. We are losing a lot of time when we could already have been saving lots of bills and reducing our carbon footprint. We should have a public procurement-specific framework for public authorities to allow them to move fast. Because they have a huge potential with the building stock that they have. Because decision-making needs to be faster.

In Cascais Municipality, in Portugal, there is a very nice Kindergarten, GreenVolt was able to install the 73 kilowatts in their rooftop space. This allows the kindergarten to reduce their electricity consumption by 50%. And 57% in terms of electricity bills. And for the surplus energy, the holiday seasons, or weekends, they were able to share, for free, with up to 60 households in energy poverty located in a two-kilometer radius. And so, I think this was a very good example because without using any subsidies, you were able to deploy a project which reduces the carbon footprint, has economic benefits for everyone, and is helping reduce energy poverty. And we would like to replicate this model across other municipalities.

Paula Pinho: To put it into perspective, we need to refer to the fact that three-quarters of the EU's population live in cities, 75%, and from those nearly 70% actually live in small and mid-sized cities. So, smaller city administrations often lack the credit ratings, the budget, and the human capacity to actually design sustainable local plans and to have the administrative capacity to engage in the community. So, building a landscape of urban initiatives which can lend support to the cities is important. That's what we have been doing through these urban-related initiatives for helping upscaling, putting various cities together in terms of pooling resources to make it more interesting for financial institutions. Take, for instance, the renovation of buildings. If you go for it individually with one building it is not as interesting as if you take a whole lot of the neighbourhoods. So again, it's about matchmaking and turning very good ideas into bankable projects that can see the light and can materialize.

Eckart Würzner: We as a city work together with more than 125 companies in Heidelberg. We help them to set up local energy management programs, concepts, give them subsidies. They learn they earn money by changing their structures. For example, if you have a bakery and you can use the hot air of the ovens. And that there is a perspective for economic growth if they invest some money, that in two years the payback is there and then they are the leading partner of your city. This drives a lot of companies, and this is what we have to give a strong voice to in business.

In my opinion, what was the main question? We set up organizations ICLEI, Energy Cities, Climate Alliance, always to get better awareness in the local governments in the green and white paper discussion. There’s the paper to produce the next European standard, if you are thinking about the zero-emission building standard, and we have to integrate into those processes. And we have we have achieved already quite a big awareness on the European level.

We always talk about sustainable movement, bringing the economic and ecological benefit together. But in reality, it's not the case. Mostly we have many programs or social programs, or economic programs and we are too weak in giving the clear message that we have the solution for a new economic strategy for the future. We have to also get the revenues for this industrial change. And if this is not the case, we are not creating the employment structures, we're not creating the social structure and funding programmes between them. 

Anthony Colclough: In the past, the question of sustainable energy sources was often framed as relating exclusively to climate change. While this alignment remains paramount, the energy crisis, which we saw unfold last year, has made another essential and for many people, more concrete elements apparent. I'm sure you felt it, just like I did.

Paula Pinho: For me, as a policymaker, as a European citizen, as a consumer, last year was really very challenging because I was facing, along with all my colleagues sitting DG ENER, the most challenging work year of our lives. We had to make sure that there would be no blackouts, that there would be no gas supply disruptions, despite the fact that we were losing our main supplier. At the same time, as an EU citizen, I felt proud of what we managed to achieve as Europeans: that we were able to all come together and bring down the consumption of energy, of gas, of electricity, to stick together in solidarity for the whole of the EU. And thirdly, as an energy consumer, I saw how much I can actually be shaping, how I'm not just a passive consumer of energy, but that my behaviour can have a tangible effect. Between August last year to March this year, we managed to reduce 18% of gas consumption, and half of it has been from households. So, it's pretty impressive. And that was very, very rewarding.

Anthony Colclough: To reiterate what I said at the beginning, REPower EU is about practical change, but it's also about philosophical change, about looking differently at Europe and what Europe can be as a people, as a territory, and as an important patch on our shared planet.

Sofia: So, at the kindergarten in Cascais, this lady who's 74 years old, she's amazing. And she was really driving for this project. And when we were inaugurating the project, she said, today, when I look at the sun, I look at the sun in a different way. And this is inspiring, I think this is super inspiring. And this is what we want to do: We want to have more political leaders, more decision-making people to look at this differently.

Anthony Colclough: That's it for this episode of Urban Reverb. To find a full transcript of this episode, learn more, or join the action, check out smart-cities-marketplace.ec.europa.eu. The Smart Cities Marketplace and this podcast are an initiative of the European Commission made possible through European finance. Thanks for listening.