Cities across the globe have embraced their instrumental role in tackling climate change. For example, in the lead-up to last November's COP26 climate summit in Glasgow, Scotland, leaders from many of the 1,000-plus cities that have joined the United Nations' Race to Zero initiative announced pledges to slash carbon emissions drastically.
These public commitments are critical for establishing a city's aspirations and, importantly, setting the tangible benchmarks necessary for accountability.
The truth is that establishing aggressive decarbonization targets is the easy part for city leaders. Far more challenging is setting the policies, strategies, budgets and responsibilities needed to make steady progress toward deep decarbonization. Even more daunting for city leaders is creating a cost-efficient decarbonization pathway, promoting resilience and maximizing the wide range of achievable benefits as communities navigate the transition away from fossil fuels.
Why the energy transition is so complex
It's a task that requires a level of technical, financial and market knowledge that many cities haven't needed in the past. One example that helps highlight the complexity cities face is electrifying their vehicle fleets, including municipal buses. It's a market forecast to surge from $490 million in 2021 to nearly $2 billion in 2026, thanks to significant orders for transit and school buses from cities such as New York, Los Angeles, Minneapolis and many others.
For those in charge of managing city bus fleets, electrification requires a lot more than supplying gas and performing maintenance at a bus depot. "It's changing their operations by adding a significant load on-site and not having space to accommodate the charging infrastructure they need," said Candice Yu, a business development advisor at Shell Energy, which works closely with cities to develop, finance and operate solutions that help move them toward achieving their decarbonization goals. "You need to have the energy expertise to build out the new electrical infrastructure. You need to understand the intricacies of the energy market and the rules and tariffs that apply in each region so that you can participate in ancillary service markets and get the most benefit out of the investments in electric buses."
Electric transportation is just one of many examples. Cities need to understand how to decarbonize their power supply, buildings and industry. And the hard fact is that successfully navigating the energy transition and achieving decarbonization goals in a way that benefits all of a city's residents is not a matter of following any single blueprint. Instead, it's about clearly understanding a city's unique locations and assets and optimizing the mix and match of resources, deployment timing, and markets that need to be accessed to make meaningful and efficient progress toward deep decarbonization.
Why an integrated approach is so important
An integrated approach is best because there is no single solution for any city to decarbonize. "An integrated approach is when we think of the whole system, from the load to the site to the distribution grid to the markets," Yu said. "The underlying technology architecture is thought through in an integrated and inclusive way so that cities can leverage different technologies and integrate new ones as they become available."
The integrated approach requires collaboration across city departments and leaders. It's also helped by having an adviser with deep knowledge and experience in markets, finance and new technologies to help formulate, implement and evolve decarbonization strategies. For example, Shell Energy has a team dedicated to working with cities worldwide to develop decarbonization road maps composed by clearly understanding a city's priorities and current operations and then creating a menu of options for advancing their goals.
In particular, this group analyzes what is possible to drive decarbonization in three areas: energy, mobility and environment, which include carbon credits and other discounts for sectors that are hard to decarbonize. In each area, the road map considers the technologies and solutions available today and future trends. By taking this approach, cities can make quick and cost-effective progress toward their decarbonization objectives while still being in a position to leverage the many advances taking place in the economy.
"It's a phase-based road map exercise that we work on with cities. It identifies near-term solutions, like switching to low-carbon fuels like biodiesel or renewable natural gas at a transit agency to start that transition," said Travis Sheehan, the lead for the Shell Energy City Solutions team in North America. "And when the cost of electric buses and batteries come down, cities will be ready to take advantage of that. Effectively, it comes down to understanding where you want to be in 2030, 2040 and 2050 and phasing in solutions today that are cost-effective and meet your near-term climate goals."
Turning road maps into reality
Not only does Shell Energy help develop that long-term road map for cities, it also can offer specific solutions that begin to implement a decarbonization strategy. "Operating these assets can be very complex," Yu said. "We've talked to transit customers that don't want to deal with the operational headaches that come with electrifying their fleets, so they seek out an operational partner who has the technical capabilities to ensure they're getting the most out of all of their new assets."
The City of San Diego is a good example of how cities are turning their sustainability road maps into reality. In 2015, the city adopted a climate action plan calling for halving greenhouse gas emissions by 2035 — a target that was recently updated to achieve net-zero emissions. As part of San Diego's effort, the city approved a project with Shell Energy to build, own and operate eight renewable microgrids at police, fire and public parks facilities. These independent power networks powered by solar energy will provide grid backup or off-grid power to meet local electricity needs, and will include battery storage and EV charging stations. In total, the microgrids will consist of 930 kilowatt-hours of solar and 2 megawatt-hours of battery storage.
Because they are powered by solar, San Diego's microgrids are expected to reduce greenhouse gas emissions by 1,270 tons over the next 25 years. At an initial price of 18 cents per kilowatt-hour, the electricity provided by the microgrids is expected to save the city $4 million. Importantly, though, the microgrids will continue to operate even if the power grid goes down, providing resilience and essential services to an area increasingly threatened by wildfires.
To Heather Werner, the deputy director of sustainability and mobility for San Diego, the resiliency, financial and sustainability benefits of deploying the microgrids are extremely important. But another critical aspect is that the microgrids send a message to residents and businesses in San Diego about what is possible in the city's decarbonization journey. "The renewable microgrids are a great first example of how the city can walk the walk and show we are not just setting policies and expectations of others," she said. "But we're also doing the work and learning the lessons we need to know in a larger sense."
