What is the problem?
Citizens are more and more moving into cities because, as our economies continue to move up the value chain and become ever more knowledge-intensive, this is where they can find the jobs they need.
Cities, becoming thus even more focal points of our economies and societies at large, are exposed to a strong urbanisation trend. This means that the energy and climate change challenges of the 21st century will be won and lost in the cities (already responsible for ca. 70% of energy consumption in the EU and ca. 75% of GHG emissions). But more than this, cities also face challenges in the economic and social domains: they need to remain attractive to old and new citizens and to the businesses underpinning their economies.
Add to this that for many of our cities this is a time of economic crisis and the dimension of the challenge becomes obvious.
Why is EU action required?
The kind of smart city solutions that can help addressing the urban climate and energy challenges, whilst also helping to strongly positions the EU's industry in an international growth market, do not yet exist on the market. We are specifically talking about solutions here that cross sectoral boundaries and leverage synergies between the ICT, energy and transport / mobility sector (e.g. in terms of putting infrastructures to multiple uses).
Demonstrating such solutions at large scale hence brings with it certain first mover risks and costs, which is why we do not see sufficient dynamics in the market. To address this market failure the EU must step in, bringing stakeholders together to fully realise yet untapped synergy potentials as well as buy off certain elements of risks through public co-funding.
Moreover, in order to minimise up-front investments and thus alleviate the financial burden on cash-stripped city administrations industry must develop solutions that, as much as possible whilst taking into account the uniqueness of each city, leverage economies of scale – only to be had at EU level.
What has the Commission done so far?
FP7 initiatives such as the Energy-efficient Buildings PPP, but also the Green Cars PPP, always had an urban dimension (and in case of the former even progressively built up to eventually address large neighbourhoods and districts). Furthermore, through DG CONNECT's city network, the Green Digital Charter, the Commission has successfully lobbied major cities around Europe to voluntarily commit on not only cutting down on the environmental footprints of their ICT sectors, but also on rolling out large ICT-driven smart city projects. Also, ongoing work to refine international standards for measuring GHG emissions and energy consumption of ICT goods and services specifically targets projects in cities so to enable cities to get clearer ideas of the green benefits that can be derived from smart city solutions.
Last summer, the Commission further intensified its efforts around smart cities by announcing the European Innovation Partnership on Smart Cities and Communities; earlier this year we have obtained Council conclusions thus officially launching the Partnership, which has by now started its operational doings. The partnership will mobilise actors from the private and public sector and inspire policy and H2020 co-funding initiatives on achieving large-scale roll-out of smart city solutions at the intersection of the ICT, energy and transport / mobility sector. It is jointly implemented together with DGs ENER and MOVE.
(cf. DAE Action 70)
What will the Commission do?
The EIP on Smart Cities and Communities will continue its work producing a Strategic Implementation Plan in the autumn of 2013 that will advise the Commission on how to best achieve, through policy and H2020 as well as other co-funding, the goal to significantly contribute to the 20/20/20 energy and climate goals through large-scale deployment of smart city solutions.
Simultaneously H2020 preparations are already underway and it is likely, pending the legislative approval, that significant moneys will be leveraged to get demonstration, "lighthouse", projects under way that demonstrate and pilot smart city solutions at a large scale across Europe.