With the help of the Smart Cities and Communities European Innovation Partnership (EIP SCC), 78 cities in Europe have undertaken smart city development. The EIP-SCC aims at a critical mass of 300 smart cities by the end of 2019, according to Andreea Strachinescu of the European Commission. The most difficult part, she says, is not the renovation of individual buildings, but the systems integration. The next step: positive energy districts.

“There is not one single definition, but life in a smart city is essentially about well-being,” says Andreea Strachinescu, Head of Unit for new energy technologies, innovation and clean coal at the European Commission’s Directorate-General of Energy,  in an interview with Energy Post. “All the technologies and services involved in smart cities have to be aimed at improving quality of life, and of course this can be linked with many different elements. Right now, the most important issue to address is air quality – and this is something that smart city planning, for transport, energy and green areas, can do a lot to address,” she says.

The European Commission formally announced the Smart Cities and Communities European Innovation Partnership (EIP SCC) in 2012, with a communication. Instead of directly providing funding, the EIP SCC is charged with fostering smart city development among cities, industry, citizens, financial institutions and other stakeholders, working together in six ‘action clusters’ (citizen focus; business models, finance and procurement; integrated infrastructures and processes; integrated planning, policy and regulations; sustainable districts and built environment; sustainable urban mobility).

The General Assembly 2018 of the European Innovation Partnership on Smart Cities and Communities (EIP SCC) takes place on 27 and 28 June in Sofia, Bulgaria. It will include a matchmaking space where promoters can present their projects and find partners to make investments. The aim is to support projects in at least 300 cities with up to € 1 billion of investment, involving public and private investors and banks. If you are interested in attending, you can register here.

“This was the beginning of the political initiative, the first time that we spoke about smart cities with an integrated perspective. This means looking at the energy flows in a city from a systems perspective and looking for synergies among energy, ICT and transport sectors,” says Strachinescu.

Some of the groundwork was already in place as a result of the Concerto programme, initiated by the European Commission back in 2005. Aimed at demonstrating the benefits of energy optimisation of districts and communities as a whole, Concerto provided co-funding of more than €175.5 million to 58 cities and communities across 23 countries. “Concerto was innovative for its time, and we still have today the database from those projects which is incorporated in the smart cities information system,” comments Strachinescu.

Lighthouses and followers

Although Strachinescu is coy about identifying the smartest city in Europe, “there are already cities that have made progress. Copenhagen is good, Vienna is good as well. These are cities that have been involved in projects through Concerto and other initiatives, and the results today are in part due to the systems approach of the projects.”

Alongside the EIP SCC, public funding is on offer for smart cities. Via the European Commission’s Horizon 2020 research and innovation programme, a total of twelve Smart Cities and Communities ‘Lighthouse’ projects have been funded, to the tune of €270 million, since 2014. The projects involve ‘Lighthouse’ and ‘Follower’ cities, working together to demonstrate processes, technologies and business models to transform urban environments into smarter and more sustainable places.

The lighthouse cities have to come with a plan already developed. The follower cities can then adapt the plan and use a model that then could be further replicated

Strachinescu explains: “All the lighthouse cities have to come with a plan already developed. The follower cities can then adapt the plan and use a model that then could be further replicated.”

With these lighthouse projects running for 5-6 years, it’s too early to assess concrete results, says Strachinescu. “We will be able to have an answer for this in two or three years when the first generation of projects are completed. We have already learned about how to restructure the projects – for example, the renovation of buildings takes up a lot of money, but it is not the most innovative part. The most innovative part is the systems integration, as we move towards the vision to create positive energy districts at the level of the city.”

Positive energy districts

From this year, the Horizon 2020 programme includes a call for proposals on ‘positive energy districts’. Strachinescu says: “This is about how we can create synergies among buildings in order to optimize the energy flows, to be able to arrive at the situation of a net positive energy district, or group of buildings.

“It is quite challenging to do this at the city level, because you have to involve not only people dealing with renovation and renewable energy, but also collaborate with industrial actors, and of course with building owners, or tenants. Hopefully the first demonstration project will provide a model to show that it works. A lot of banks will be interested too to see if the model can be further replicated,” she adds.

“This will be the challenge of the future – for the EIP SCC to broker deals between cities and the private sector, without any funding from the European Commission”

Although most of the 78 cities involved in smart city development are European, (mostly north west Europe), there are also project partners from Turkey and Japan. Now, the concept is being put to the test, as EIP-SCC aims at building a European market for bankable smart city solutions, reaching an investment of at least €1 billion and involving 300 cities by the end of 2019.

“We are moving from the phase of plans to the financing phase, which is the most difficult part. This will be the challenge of the future – for the EIP SCC to broker deals between cities and the private sector, without any funding from the European Commission,” says Strachinescu.

Private sector

There are some positive signals from the financial sector: since June 2014, Belgian bank Belfius in partnership with the European Investment Bank (EIB) has provided €660 million to smart city projects in local authorities across Belgium. Over two and a half years, the first programme (Smart Cities & Sustainable Development) financed 62 projects, benefiting more than 1.4 million people. In late 2016 Belfius and the EIB committed to releasing an additional €400 million to finance, support and assist more smart projects from cities and municipalities, inter-municipal groupings and CPAS (Public Social Action Centres), as well as education and health care sector organisations and institutions.

Says Strachinescu: “We know there is a lot of interest from the private sector, particularly open interest from the banking sector. As well as the Belfius programme, we have had preliminary discussions with KFW in Germany and how they can get involved, all around Europe. But it’s not that developed yet.”

“Even with the funding from Horizon 2020, this is just a drop in the ocean compared to the overall investment that is needed”

On 27 and 28 June, in Sofia, Bulgaria, the EIP SCC will hold the 2018 General Assembly, with the purpose of creating a matchmaking space where promoters can present their projects and find partners to make investments. “We are hoping for actual deals – there will be banks and venture capital firms present, so let’s see what happens. The goal is ambitious,” says Strachinescu.

“By 2020, my personal goal would be to have another 6-8 projects financed through Horizon 2020, with a more balanced geographical distribution of participant cities, especially from Central and Eastern Europe. We also need to get a critical mass of cities involved in this movement. Currently we have 78 cities involved, with the [Horizon 2020] calls for proposals coming up between now and 2020, we have the potential to increase this to 150 cities. To have 150 cities in Europe that are working on this vision for the future could really add momentum.”

“By 2030, I hope we will have more public money available to support these cities”, she adds, “because even with the funding from Horizon 2020, this is just a drop in the ocean compared to the overall investment that is needed – but hopefully it will be enough to plant the seeds.