Transforming urban energy systems: The role of local governments’ regional energy master plan

Abstract

Recent estimates suggest that cities account for approximately three-quarters of global energy-related carbon emissions. At the Paris climate agreement in 2015, major cities were identified as a key player to decarbonise the energy generation sector. Australia is one of the most urbanised countries in the world, within which the local government sector has a significant capacity to accelerate a transition to clean energy generation. Through a case study of a renewable energy master plan involving five urban-councils in Sydney, this study uncovers the underlying drivers and emerging project challenges behind a cooperative joint-council approach. Social and environmental responsibility was found to be the primary motivator to develop a regional renewable energy master plan. Leveraging the collective bargaining-power through a regional joint-procurement process was an equally significant motivation. The study also revealed five major challenges. Most projects are reliant on some degree of funding from commonwealth and state government grants which are often associated with political uncertainty and a lack of continuity in programs and funding. Different positions exist as to the preferred financing options for solar-systems among councils. The previous success of a collective bargaining by councils that secured below-market prices supply-contracts of fossil-based electricity, paradoxically, reduced the financial viability of the current renewable energy project. The installable roof-space of some sites was over-estimated when not considering an on-site demand and low feed-in-tariff dynamics. Insolvency risk of renewable energy suppliers was identified as a factor that could impact on the long-term success of the project. Looking forward there are opportunities for progressing clean energy generation transformation through collective action by local government. Revolving clean energy funds can be used to establish and support renewable energy and energy efficiency projects. Regional collaboration can draw on existing technical expertise and institutional and political learnings. Power supply arrangements between councils should be supported through innovative governance and financial arrangements. Combined, these initiatives should be framed to distribute risks, lessen uncertainty and support innovation.