SMART ENERGY. The fundamental role of the energy sector in the Smart City Concept, by Nicola Pochettino

• 1. SMART ENERGY. The fundamental role of the energy sector in the Smart City Concept. The EIB contribution Nicola Pochettino Senior Loan Officer European Investment Bank

2. SMART ENERGY. The fundamental role of the energy sector in the Smart City Concept. The EIB contribution Nicola Pochettino Senior Loan Officer European Investment Bank Sabadell Smart Congress. Fira Sabadell, Barcelona. 03.04.2014 1 3. The European Investment Bank Promoting European objectives Sabadell Smart Congress. Fira Sabadell, Barcelona. 03.04.2014 2 4. Long-term finance promoting European objectives The EU Bank European Unions long-term lending bank set up in 1958 by the Treaty of Rome Shareholders: 28 EU Member States Largest multilateral lender and borrower in the world Raise our funds on the international capital markets Pass on favourable borrowing conditions to clients Gross outstanding loans, equity investments and guarantees Source: Standard & Poors; Supranationals -Special Edition 2011 Data as of 31.12.2010 (World Bank, IFC as of 30.06.2011) EURbn Sabadell Smart Congress. Fira Sabadell, Barcelona. 03.04.2014 3 5. LENDING BLENDING ADVISING Loans (Corporate and Project Finance) Guarantees (Trade Financing) Equity participation (Infrastructure Funds) Combining EIB finance with EU budget (Project Bond Initiative) Higher risk projects for innovation (RSFF) Prepare & implement projects (JASPERS) Support to public/private partnerships (EPEC) EE&RE investment in urban environment (ELENA) Financial engineering to catalyse funds (JESSICA) Attracting funding for long-term growth Support for EU priority objectives Project quality and soundness assessment Financial benefits of EIB funding Sabadell Smart Congress. Fira Sabadell, Barcelona. 03.04.2014 4 EIB products and added value Tailor made finance 6. EIB loans: signed and disbursed Projections to 2015 Sabadell Smart Congress. Fira Sabadell, Barcelona. 03.04.2014 5 7. EIB lending to energy projects Overview of the 2007-2013 period Sabadell Smart Congress. Fira Sabadell, Barcelona. 03.04.2014 6 8. Smart and Sustainable Cities Concepts and EIB support Sabadell Smart Congress. Fira Sabadell, Barcelona. 03.04.2014 7 9. Increasing size and density of cities creates complex service delivery challenges for city authorities and increased demand on ageing city infrastructure Creation of new markets for goods and services tackling the challenges and exploiting the opportunities of city-scale development Increases in Renewable Energy generation and more efficient new and existing energy infrastructure, homes and appliances Persistence of inequality within and between European cities Increased exploitation of smart technologies by businesses delivering personalised services to customers EU commitments to reduce CO2 emissions (from 1990 levels) by 80% by 2050 Drivers for Smart and Sustainable Cities Sabadell Smart Congress. Fira Sabadell, Barcelona. 03.04.2014 8 10. Digital infrastructure ICT infrastructure high speed broadband fibre optic cables wireless technologies networked information systems Data Data collection, storage, and analysis (and open-data) at a city wide level, potentially through the Cloud, which can enhance a citys ability to predict and plan for the future Information processing Processing of information to service programmes Service development Development of service applications Smart Transport and Mobility Bike schemes Real time travel information Electric vehicle car pools Congestion charging Apps Renewable energy & energy efficiency Combined Heat and Power Renewables Electric vehicle charging points Sensors to monitor traffic, pollution, emissions Street lighting Waste collection systems Smart grids Smart and Sustainable Buildings Smart meters Energy efficiency measures: Insulation, low energy lighting, efficient boilers Building Integrated Renewables Electric Vehicle Charging Point Smart appliances Motion detectors Automatic weather forecasting Emerging typology of smart city projects for setting into integrated plans/strategies Sabadell Smart Congress. Fira Sabadell, Barcelona. 03.04.2014 9 11. JESSICA Urban Development Funds Potential role for UDFs : Long term financing Risk match Collaboration between public and private sectors Financial ROI + Socioeconomic and Environmental impact Support achievement of economic, social, environmental goals Sabadell Smart Congress. Fira Sabadell, Barcelona. 03.04.2014 10 EIB involvement : Advise and assist national, regional and local authorities in implementing JESSICA Promote the use of Urban Development Funds and best practice across Europe Act as a Holding Fund, when requested by Member States or managing authorities 12. EE&RE in public and private buildings public lighting and traffic light network, photovoltaics, heating/cooling systems; Efficient urban transport high-efficiency buses, electrically powered cars, logistical improvements; Local facilities support EE&RE smart grids, infrastructure for recharging electrically powered cars, information and communications technologies, etc. Support for local or regional entities: Additional personnel Technical studies Preparation of calls for tender Financial structuring Sabadell Smart Congress. Fira Sabadell, Barcelona. 03.04.2014 11 ELENA European Local ENergy Assistance Investment ProgrammeTechnical Assistance 13. Smart Grids A key role in the Smart City concept Sabadell Smart Congress. Fira Sabadell, Barcelona. 03.04.2014 12 14. Energy infrastructure is one of the biggest challenges for cities need to revolutionise the way of producing and distributing energy to tackle climate change growing city populations increases energy demand need for greater resilience from national electricity grids Smart grids: seek to manage peak energy demand to reduce the need of installed generating capacity incorporate distributed and micro renewable energy (solar PV, CHPs, wind, etc.) support the transition to a lower carbon energy mix require communication between users and suppliers of electricity require smart appliances and smart citizens using those appliances to allow for automated systems to regulate energy demand, also in the transition to electric vehicles Sabadell Smart Congress. Fira Sabadell, Barcelona. 03.04.2014 13 Smarter Grids Key to creating a step change in the sustainability of cities 15. Smart Grids The EIB approach Over the last decade, electricity networks have gained an increasingly important role in the EU energy infrastructure policy and, as a result, in the EIB lending activities Key role of electricity networks to meet EU energy policy objectives is being further strengthened for next decade EU Connecting Europe Facility to provide financial support of EUR 5.85 bn over 2014- 2020 for energy infrastructures, incl. smart grids. New Energy Efficiency Directive requires billing to be made on actual rather than estimated consumption (by 2015): encourages use of smart meters Smart grids in the EU: an extremely open concept a new concept of electricity grids aiming at facilitating the development of low carbon initiatives focused on reducing dependency on traditional network reinforcements and minimising the investments needed to adapt the pre-existing infrastructure implying wider use of communication, monitoring and control technologies and/or the integration of higher performance network equipment Sabadell Smart Congress. Fira Sabadell, Barcelona. 03.04.2014 14 16. Integrated management of responsive loads, distributed generation, system configuration, and distributed storage Enable to meet local system needs (voltage regulation, power flow control) and global system requirements (preserving system reliability or following RE fluctuations). Effectiveness/benefits still unproven; they depend on: customers behavioural adaptation availability of a cost-efficient form of distributed energy storage (as RE penetration increases) To support decision makers on whether to proceed with national roll-outs, demonstration projects have been launched in many EU MS EIB can finance these demonstration projects By 2020 up to 200m smart meters could be installed in EU requiring an investment of EUR30-40bn Over the past decade, EIB support to smart grids accounted for 6% of total investments financed by the Bank in electricity networks Active Distribution Grids Sabadell Smart Congress. Fira Sabadell, Barcelona. 03.04.2014 15 17. Sabadell Smart Congress. Fira Sabadell, Barcelona. 03.04.2014 16 A smart and sustainable city invests in human and social capital, manages resources wisely, has citizens which participate in city governance, and has traditional and modern infrastructure which supports economic growth to create high quality of life for its inhabitants. A sustainable city is one which develops in a manner which meets the needs of the future without compromising the ability of future generations to meet their own needs. Closing Remarks Sources: Report JESSICA for Smart and Sustainable Cities, 11.12.2012, composite quotations from Brundtland Commission Report (1987); Giffinger, R., Haindlmaier, G. and Kramar, H. (2010) The role of rankings in growing city competition; Caragliu, A., Del Bo, C and Nijkamp, P. (2011) Smart Cities in Europe; Deakin, M. (2010) SCRANs development of a transnational comparator for the standardisation of e-government services 18. http://www.eib.org/ [email protected] Tel: (+352) 43 79 - 22000 For more information Sabadell Smart Congress. Fira Sabadell, Barcelona. 03.04.2014 17