Rise of renewables in cities

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Cities are the economic engines of our planet, home to 55% of the world’s population and representing 80% of the global gross domestic product (GDP) (UN DESA, 2018). Urbanisation has improved societal well-being by expanding economic activities and business opportunities, but it has also contributed to environmental damage and to global climate change, with fossil fuels powering most urban economic and social activities.

World population growth, 1961–2016

Currently, cities are responsible for 67–76% of global final energy consumption and for 71–76% of energyrelated CO₂ emissions (Edenhofer et al., 2014). Over the coming decades, the urbanisation process will necessarily coincide with the urgent need to decarbonise the global energy system, which is an essential undertaking if we intend to keep the average global temperature rise well below 2 degrees Celsius (°C), or 1.5 °C above pre-industrial levels – the
climate objective set in the 2015 Paris Agreement.

Role of renewables in global energy transformation at the city level
The global energy landscape is undergoing a fundamental change, driven by rapid growth in the use of renewables thanks to dramatic declines in technology and system costs, particularly for solar PV and onshore wind power. Key drivers include the digitalisation of the power sector, the increase in decentralised energy resources and the electrification of end-use sectors (most of which currently rely on fossil energy sources). Further fuelling this change is innovation in decentralised power generation technologies.

Global reduction of energy-related carbon emissions until 2050:
Current plans vs. energy transformation

About this report: Purpose, scope and structure
This report aims to provide fundamental knowledge about city-level renewable energy potentials, technology options for cities, and urban energy system planning to enable urban energy planners, municipal decision makers and their advisors to pursue strategic energy transformation at the city level. Renewable energy technology and project developers, financial institution professionals and investors, among other stakeholders, might also find some sections useful.


Potential opportunities for urban renewables This chapter highlights opportunities for accelerated uptake of renewables at the city level. Among the key points for cities to consider:

● A growing number of cities have set renewable energy targets, but more than 80% of these
targets are in Europe and North America. This geographic unevenness of targets could be
problematic in contributing to achieving, at the city level, the global climate target set under the Paris Agreement, given that Asia and Africa are projected to experience the most rapid growth in both their urban populations and energy demand.

● Cities with renewable energy targets fall most commonly in the population range of 100 000 to 500 000 inhabitants. The majority of large and mega cities that have set renewable energy targets have pursued only a modest share of renewables in their energy mix.

● The majority of the cities with renewable energy targets (551 out of 671 cities, or 82% of the total) are located in countries with high GDP per capita, revealing a clear correlation at present between cities that have renewable energy targets and their economic status.

● Hydropower, bioenergy and waste-to-energy already play a clear role in helping cities
achieve their renewable energy targets and in decarbonising the energy mix. The use of
solar and geothermal energy in cities is rising – although huge potential remains untapped – while the ability to harness wind power within cities is progressing but remains marginal. In some cities, peri-urban areas offer potential sites for renewable energy generation.

Geographic distribution of renewable energy targets and
100% renewable energy targets

The fact that more than 80% of the cities that have renewable energy targets are in Europe and North America, regions that typically have temperate or cold climate zones has a marked impact on energy demand and on the types of energy services needed – particularly heating in winter. Of the 980 renewable-related targets (of all types) assessed, only around 50 are dedicated heating targets5 or less than 5% of the total.

Global mapping of renewable energy target cities and climate zones

The analysis of targets also reveals a correlation between cities that have renewable energy targets and a city’s overall economic status. Most of the cities that have renewable energy targets (551 out of 671 cities, or 82% of the total) are found in the 30 countries with the highest GDP per capita, based on categorisation by the International Monetary Fund (IMF, 2019).

Spatial analysis of targets relative to local renewable energy resources and power plants
This section explores the potential spatial relationships between cities that have renewable energy targets (including targets for 100% renewables), the renewable energy potential and existing local renewable energy power plants. For comparison, fossil-based power plants located close to cities are also considered against the renewable energy resource potential and
the existing renewable energy targets to present the potential opportunities of substitution.

Distribution of solar PV power plants by GHI and geographic region

There is less correlation between a city’s solar resource potential and the existing distribution of solar power plants. Of the total 10 138 solar PV power plants located near cities, around 57% are in areas with GHI in the lower range of 2.8 to 4.2 kWh/ m². Nearly half of the solar power plants are in Europe, despite the region’s relatively low average GHI, and Asia and North America each account for around one-quarter of plants; combined, these three regions represent 95% of the global total of solar power plants.

Geographic distribution of solar power plants near cities

This suggests that solar PV power plants for cities can be justified even in areas that have less-favourable solar resources. Non-technical factors – such as the political ambition of local governments, growing electricity demand driven by strong economic activity, supportive policy and regulatory frameworks, and public acceptance – play a key role in scaling up solar PV applications in cities. Moreover, the analysis indicates that economies of scale are a comparatively minor consideration for solar PV plants near load centres.

The integration of renewable energy technologies in cities faces various challenges, including legislative, policy, regulatory, financing, human capacity, aesthetic, design and urban planning barriers. A suite of instruments – including renewable energy procurement, ordinances and mandates – serve as effective policy measures to address these challenges, as identified in a set of case studies in Scaling up renewables in cities: Opportunities for municipal governments, published by IRENA in collaboration with ICLEI and the German Agency for International Cooperation (GIZ).

The global installed capacity of solar PV has increased rapidly over the past decade, from around 40 GW in 2010 to 580 GW in 2019). Most of this is utility-scale solar power plants, although in some countries, such as Germany, smaller-scale distributed solar PV systems in and around cities have dominated deployment. Within cities, solar PV systems are usually installed on, or integrated with, the roofs and façades of buildings. These systems are generally smaller in scale than ground-mounted systems located on the outskirts of cities.
The median size of installed residential PV systems in 2018 was around 6.4 kilowatts (kW), which was 8% larger than in 2014 due primarily to falling costs.

Global median installed residential solar PV system size

Despite the many advantages that solar PV systems bring to cities, unique challenges exist to scaling up PV applications in urban areas. First and foremost is the land constraint. In most cases, either cities do not have the available land suitable for on-ground solar PV plants due to competing uses such as agriculture or ecological reserves, or the cost of the land is prohibitively high.

Urban energy systems are unique in that they involve not only the physical energy infrastructure, but also important social elements such as public acceptance, consumer preferences and behaviours, willingness-to-pay and affordability. Establishing effective local
power generation and meeting targets for renewables depend on employing a sound process and tools for urban energy system planning. The planning process allows the formulation of a well-informed, sustainable urban energy system plan. Many institutions have developed effective frameworks and practical tools to guide local authorities throughout the planning process.

Data challenges: Required data, temporal and spatial granularity, and accessibility
All energy system models require at least some data, and many require large input datasets. The output quality of any model is, to a great extent, dictated by its input data. Reference databases can address data gaps to some degree, but significant challenges remain. In urban energy system planning, more granular data are required compared to large-scale models, which are often more challenging to collect or obtain. Data gaps exist due to limited data availability and accessibility for various reasons, ranging from non-existence to non-disclosure.

Modelling tools
A wide range of models and tools are available for urban energy systems planning, spanning
different spatial scales, temporal scales, technology representations, underlying methodologies and analytical scopes. A comprehensive study was undertaken to evaluate these models and tools, identify prevailing gaps and challenges in the field, and propose recommendations to improve the tools/ methods and their uptake by urban energy planners.

Modelling challenges for developing countries
Most developing country energy system models adopt modelling methods from industrialised countries. Since these approaches are mostly designed by and for developed countries, they tend to neglect several characteristics pertinent to developing countries. Neglecting these factors limits the efficacy of these models for energy planning purposes. The sections that follow detail the various challenges that existing methods face in representing energy systems
(including urban energy systems) in developing countries. A summary of contributing factors and barriers is given at the end of the section.

Looking forward in urban energy system planning
Looking forward, with rapid urbanisation and the growing impact of global climate change at the local level, cities should pay greater attention to the following elements in long-term urban energy systems planning, including urban densification, local energy resource integration, efficiency in the built environment, microclimates and climate change, and transport infrastructure changes.

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