Devolution is the shift of competences for public services from central government to sub-national or quasi-independent organisations. These organisations enjoy varying degrees of autonomy and have their own budget.
In Scandinavian and federal countries, municipalities are responsible for the energy supply of their territory. They have created local energy companies to do this job. Ideally, this encourages them to adopt a responsible attitude and generates revenues. In other countries, local authorities do not have this ability. This competence has always been a monopoly of the State, before becoming a private one in some countries. Local authorities sometimes own energy networks and are free to build district heating networks. However, large energy companies drive the market and reap the benefits.
In a city of 250,000 inhabitants, the amount spent annually on heating, domestic hot water and electricity by households, the service industry and SMEs comes to around 250 million euros.
Does this money go to Qatar, Russia or large industrial groups ?
Innovation, the harnessing of local resources and the development of Combined Heat and Power (CHP) are clearly encouraged in countries where cities have substantial competencies in the energy field.
For Energy Cities, devolution is a key success factor for the energy transition. Local authorities alone are capable of identifying and harnessing the many sources of local energy savings and local resources of renewable (geothermal energy, biomass, wind energy, solar energy, etc.) or recovered energy (waste energy from industrial processes, wastewater and waste). They also have the tools to support and involve citizens and local stakeholders.
Decentralising the energy system would not only enable local authorities to keep the money spent on energy at home ; it would also pave the way for fairer energy governance in which citizens would have a full role to play.
Munich’s one-stop-shop for urban services
With its objective of reaching 100% green electricity by 2025, Munich is strongly supporting the government-driven energy transition. This city located in the very south of Germany and with 1.5 million inhabitants has a longstanding tradition of municipal energy production and distribution. It was already promoting the use of renewable energy sources long before anybody talked about the Energiewende.
Today, a single company provides most of Munich’s urban services : the SWM, Stadtwerke München, wholly owned by the city. With a EUR 9 billion plan, the Stadtwerke is not only investing in renewables in and outside of the city area, but also abroad.
When asked by Energy Cities INFO about SWM’s priority for Munich and its citizens, Florian Bieberbach, CEO of what has become Germany’s largest municipal utility, said : “For us, as a municipal company, our focus is on sustainability and long-term benefits for the citizens instead of short-term profits or the return assumption of shareholders. The residents of Munich can enjoy Europe’s best public transport service, spring-fresh drinking water from the foothills of the Alps, an energy supply that is based - as much as possible - on renewables, as well as a state-of-the-art glass fibre grid.“
Discover Munich’s actions toward a Low-energy future