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District energy: A secret weapon for climate action and human health

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Banja Luka in Bosnia and Herzegovina is getting a new district energy system. Photo by City of Banja Luka.

If you’re sweltering in Delhi or shivering in Detroit and want affordable, environmentally friendly cooling or heating, district energy may be your best bet.

A district energy system is a network of pipes that heat and cool buildings across a neighbourhood or entire city. Modern district energy systems connect renewables, waste heat, thermal storage, power grids, thermal grids and heat pumps—delivering up to 50 per cent less primary energy consumption for heating and cooling.  Visionary cities and countries have been able to decarbonize heating and cooling and achieve high efficiency, renewable energy, and CO2 targets with modern district energy.

To replicate and scale up best practices worldwide, UN Environment launched the District Energy in Cities Initiative.

Consider just one of the District Energy in Cities Initiative’s 36 cities, Banja Luka in Bosnia and Herzegovina. With the help of the Initiative and the European Bank for Reconstruction and Development, the city updated its 35-year-old network. These refits increased the share of renewables by 75 per cent, cut harmful air pollutants by 94 per cent and saved US$1 million a year in fuel costs.

Well-designed district energy systems don’t just lessen climate change. They also bring benefits across the sustainable development agenda—improving human health by cutting air pollution, increasing access to affordable and clean energy, and creating green and decent jobs.

Similar benefits are being achieved across the District Energy Initiative’s 14 countries.

From India to Chile

District cooling is accelerating across India. Amaravati, the new state capital of Andhra Pradesh, is the first of the Initiative’s cities in India to receive investment from the Initiative’s partner Tabreed on a district cooling project for public buildings. The Initiative is supporting Amaravati to go further, innovating new technologies and expanding the mandate beyond public buildings in line with the objective of Chief Minister of Andhra Pradesh N. Chandrababu Naidu, who recently stated at the city’s annual Happy Cities Summit: “I want district cooling for all the buildings in Amaravati.”

Meanwhile, Rajkot is the first Indian city to include district cooling in its Smart City Plan: the US$49 million project will save up to 50 per cent of CO2 and electricity, significantly reducing harmful refrigerants and peak demand by up to 30MW.

 “We are working to make Rajkot a ‘Climate Resilient City’ and have already prepared an action plan and committed to reduce carbon emissions,” says Bina Acharya, the city’s mayor. “Rajkot’s energy consumption inventory shows that electricity consumption in the building sector is highest due to cooling and lighting. Rajkot is now moving forward with district cooling to reduce energy consumption in the cooling sector.”

Working with the Initiative, India has recently incorporated district energy into the Indian Cooling Action Plan as a priority technology to reduce the economic and environmental impact of the country’s skyrocketing cooling demand.  

Similarly, in Latin America, Chile has incorporated district energy under its National Heat Strategy and Presidential Plan to address air pollution. Recently, Chile’s Ministry of Energy signed a collaboration agreement with the District Energy in Cities Initiative and the county’s largest industry association to boost district energy.

“The importance of this agreement lies in bringing together public and private efforts,” says Ricardo Irarrázabal, Undersecretary of Energy for Chile. “We are beginning a long-term relationship with a common goal, to have more efficient energy and to reduce pollution levels in the southern cities of our country. In this way, we are advancing more and more in the energy modernization of Chile.”

A district heating project in the Chilean city of Coyhaique, led by the Regional Office of the Ministry of Environment with UN Environment, is part of an approach to cut air pollution. The regional government has set aside up to US$2.8 million for the construction and implementation of the first stages of the project.

These are all encouraging developments which show the potential to bring massive savings in energy use across the globe.

Heating, cooling and hot water mostly supplied by fossil fuels

Heating, cooling and hot water represent 60 per cent of energy demand in buildings, most of it supplied by fossil fuels. Cities contain over half the world’s population, consume over two-thirds of the world’s energy and account for more than 70 per cent of CO2 emissions.

Forward-looking cities are connecting district energy with efficient buildings, waste and renewables to create integrated urban systems and achieve resilience and circularity. This will be a topic of discussion at the Cities Summit during the 4th UN Environment Assembly. 

About the District Energy in Cities Initiative

In 2016, during the Habitat III conference in Quito, Ecuador, 197 nations adopted the New Urban Agenda, which recognizes modern district energy systems as a key solution to integrate renewables and energy efficiency in cities. The District Energy in Cities Initiative is coordinated by UN Environment with financial support from the Danish International Development Agency (DANIDA), the Global Environment Facility, and the Italian Ministry of Environment and Protection of Land and Sea.

As one of six accelerators of the Sustainable Energy for All Energy Efficiency Accelerator Platform, the Initiative aims to double the rate of energy efficiency improvements for heating and cooling in buildings by 2030, helping countries meet their climate and sustainable development targets.

The Initiative supports local and national governments to build know-how and implement enabling policies that will accelerate investment in low-carbon and climate-resilient district energy systems. It currently provides technical support to 36 cities in four pilot countries (Chile, China, India and Serbia) and 10 replication countries (Argentina, Bosnia and Herzegovina, Colombia, Egypt, Malaysia, Mongolia, Morocco, Russia, the Seychelles and Tunisia).

UN Environment

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Urban Development

Bridge for Cities 2020: Mayors discuss urban development during COVID-19 crisis

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The Bridge for Cities 2020 event provided a forum for mayors and other urban stakeholders to discuss and exchange views on relevant experiences, challenges and opportunities related to the COVID-19 pandemic. The event placed particular emphasis on green, social and technological innovations which can assist cities to recover from the crisis and act as an accelerator for the Sustainable Development Goals.

Organized jointly by the United Nations Industrial Development Organization (UNIDO) and the Finance Center for South-South Cooperation (FCSSC), in close collaboration with the City of Vienna, the event attracted more than 500 attendees.

In his opening statement, UNIDO’s Director General, LI Yong, stressed that “the pandemic has forced us to think outside-the-box and identify innovative solutions. It is important for us all to work collaboratively towards an inclusive and climate-resilient recovery. Bridge for Cities aims to facilitate long-lasting city-to-city partnerships in the course of the COVID-19 crisis and beyond.”.

CAI E-Sheng, Chairman of the FCSSC, added that “in the post-pandemic era, urban development should be resilient. Resilient cities should have both the ability to deal with the crisis, and the ability to recover from the crisis.”

Discussing how digitalization can help to promote behavioral shifts in designing and imagining cities in the context of the COVID-19 crisis, Professor Carlo Ratti, Director of the MIT Senseable City Lab, highlighted that “to respond to the pandemic, cities must act fast, try new innovations, and obtain citizens feedback, as this constant feedback loop will allow the transformation of cities for the future.”

The first Mayors’ Roundtable brought together representatives from Almaty, Antananarivo, Dortmund, Manama, Shenzhen, Vienna, Zamboanga and Zhengzhou to present their cities’ response in ensuring an inclusive recovery from the crisis. The discussion focused on solutions to protect peoples’ jobs, especially those of vulnerable groups, and to support measures for MSMEs that will assist urban development in the long term.

The second Mayors’ Roundtable moved the spotlight onto the topic of a green economic recovery. Mayors and representatives from Amman, Budapest, Colombo, Damietta, Manizales, Sarajevo, Sihanoukville and Tunis offered diverse perspectives on the issue, including opportunities to decouple industrial production and urban infrastructure growth from environmental degradation by making the necessary investments now.

The event was enriched by a series of workshops and exhibition booths organized by partner cities, international organizations and innovative start-ups, showcasing ground-breaking solutions for the future of smart cities’ development.

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Rebuilding Cities to Generate 117 Million Jobs and $3 Trillion in Business Opportunity

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COVID-19 recovery packages that include infrastructure development will influence the relationship between cities, humans and nature for the next 30 to 50 years. With the built environment home to half the world’s population and making up 40% of global GDP, cities are an engine of global growth and crucial to the economic recovery.

Research shows that nature-positive solutions can help cities rebuild in a healthier and more resilient way while creating opportunities for social and economic development. The World Economic Forum’s new Future of Nature and Business Report found that following a nature-positive pathway in the urban environment can create $3 trillion in business opportunity and 117 million jobs.

“Business as usual is no longer sustainable,” said Akanksha Khatri, Head of the Nature Action Agenda at the World Economic Forum. “Biodiversity loss and the broader challenges arising from rapid urban population growth, financing gaps and climate change are signalling that how we build back can be better. The good news is, there are many examples of nature-based solutions that can benefit people and planet.”

Cities are responsible for 75% of global GHG emissions and are a leading cause of land, water and air pollution, which affect human health. Many cities are also poorly planned, lowering national GDP by as much as 5% due to negative impacts such as time loss, wasted fuel and air pollution. However, practical solutions exist that can make living spaces better for economic, human and planetary health.

The study, in collaboration with AlphaBeta, highlighted examples of projects deploying nature-positive solutions and the business opportunities they create.

Cape Town: Cape Town was just 90 days away from turning off its water taps. Natural infrastructure solutions (i.e. restoring the city’s watersheds) were found to generate annual water gains of 50 billion litres a year, equivalent to 18% of the city’s supply needs at 10% of the cost of alternative supply options, including desalination, groundwater exploration and water reuse

Singapore: Singapore’s water leakage rate of 5% is significantly lower than that of many other major cities thanks to sensors installed in potable water supply lines. Globally, reducing municipal water leakage could save $115 billion by 2030. Returns on investment in water efficiency can be above 20%.

Suzhou: Suzhou Industrial Park’s green development in China has seen its GDP increase 260-fold, partially through green development. The park accommodates 25,000 companies, of which 92 are Fortune 500 companies, and is home to 800,000 people. The park has 122 green-development policies, including stipulations on optimizing and intensifying land use, improvement of water and ecological protection, and the construction of green buildings. As a result, 94% of industrial water is reused, 100% of new construction is green, energy is dominantly renewable and green spaces cover 45% of the city.

San Francisco: San Francisco requires new buildings to have green roofs. The “green” roof market is expected to be worth $9 billion in 2020 and could grow at around 12% annually through 2030, creating an incremental annual opportunity of $15 billion.

Philippines: The loss of coastal habitats, particularly biodiverse and carbon-rich mangrove forests, has significantly increased the risk from floods and hurricanes for 300 million people living within coastal flood zones. A pilot project in the Philippines, one of the countries most vulnerable to climate change, is monetizing the value of mangroves through the creation of the Restoration Insurance Service Company (RISCO). RISCO selects sites where mangroves provide high flood reduction benefits and models that value. Insurance companies will pay an annual fee for these services, while organizations seeking to meet voluntary or regulatory climate mitigation targets will pay for blue carbon credits. Overall, restoring and protecting mangrove forests in human settlements can reduce annual flood damage to global coastal assets by over $82 billion while significantly contributing to fighting climate change.
The report identifies five complementary transitions to create nature-positive built environments and outlines the business opportunities and potential cost savings for programmes targeting urban utilities for water, electricity and waste, land planning and management, sustainable transport infrastructure and the design of buildings.

Office space the size of Switzerland
Global examples call out areas to be improved. For example, an estimated 40 billion square metres of floor space is not used at full occupancy during office hours – an area roughly equivalent to the size of Switzerland. The COVID-19 upheaval has prompted a surge in flexible and remote working models in many countries – greater application of such models could help reduce the need for private office space in the future.

Governments’ role to raise and steer finance
The report calls for both government officials and businesses to play their part in raising and steering finance for sustainable urban infrastructure. “Regulations in areas including urban master planning, zoning and mandatory building codes will be critical to unlocking the potential of net-zero, nature-positive cities and infrastructure,” said Khatri. “We are at a critical juncture for the future of humanity. Now is the time to treat the ecological emergency as just that. A net-zero, nature-positive path is the only option for our economic and planetary survival and how we choose to use COVID-19 recovery packages might be one of our last chances to get this right.”

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City Climate Finance Gap Fund Launches to Support Climate-smart Urban Development

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Today, the City Climate Finance Gap Fund (“The Gap Fund”) was launched jointly by ministers and directors of the Governments of Germany and Luxembourg together with the World Bank, European Investment Bank, and Global Covenant of Mayors. It paves the way for low-carbon, resilient, and livable cities in developing and emerging economies by unlocking infrastructure investment at scale.   

The Gap Fund will support city and local governments facing barriers to financing for climate-smart projects. Filling a gap in available project support, the Gap Fund offers technical and advisory services to assist local leaders in prioritizing and preparing climate-smart investments and programs at an early stage, with the goal of accelerating preparation, enhancing quality, and ensuring they are bankable.

With a target capitalization of at least €100 million, the Gap Fund will accelerate investments supporting cities in developing and emerging economies, as they determine goals and objectives for low-carbon and well-planned urbanization. The Gap Fund investment is aiming to unlock at least €4 billion of final investment in climate-smart projects and urban climate innovation.

“What cities do today will forever shape our climate tomorrow,” said Mari Pangestu, World Bank Managing Director for Development Policy and Partnerships. “Cities in developing countries urgently need resources to realize their climate ambitions. Through the Gap Fund, the World Bank is supporting low-carbon, resilient, inclusive, healthy, creative, and sustainable communities for all.”

Cities are on the frontlines of the climate emergency and currently account for around 70 percent of global CO2 emissions. Urban centers’ share of emissions is expected to grow as 2.5 billion people migrate from rural to urban areas by 2050. Before the COVID-19 pandemic struck, it was estimated that more than $93 trillion in sustainable infrastructure investment was needed by 2030 to meet climate goals. As cities strive to recover from the economic impacts of COVID-19, investments in clean energy, climate-resilient water and sanitation, and urban regeneration projects will play an important role in eliminating pollution, improving local food systems, and creating green jobs. They will also lead to cleaner, healthier, and more equitable communities – conditions that can help prevent future pandemics.

Climate investment projects are an indispensable opportunity to improve lives of the millions who live in cities around the world. However, cities frequently lack the capacity, finance, and support needed for the early stages of project preparation – especially in developing and emerging economies. This leads to impasses where cities cannot move project ideas to late-stage preparation and implementation. This hurdle is frequently overlooked by national and international support – a challenge the Gap Fund will seek to overcome.

The Gap Fund is an initiative of the governments of Germany and Luxembourg together with the Global Covenant of Mayors for Climate and Energy (GCOM), in partnership with several other key players in the climate finance arena (including C40, ICLEI – Local Governments for Sustainability, and Cities Climate Finance Leadership Alliance). It will be implemented by the World Bank and the European Investment Bank. The Gap Fund was announced at the UN Climate Action Summit 2019 as a key initiative of LUCI, the Leadership for Urban Climate Investment, which promotes financing for ambitious urban climate action until 2025. Core donors to the Gap Fund are Germany (€45 million – including €25 million from the Ministry for the Environment, Nature Conservation and Nuclear Safety, and €20 million from the Ministry for Economic Cooperation and Development) and Luxembourg (€10 million).

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