Review of Supportive Framework Conditions and Analysis of Current Challenges for Municipal Energy Transition

While the majority of CO₂ emissions can be assigned to urban areas, municipalities have been the leaders of energy transition in the last decade. Numerous cities and towns have proposed ambitious goals and plans, but they still encounter barriers within the planning and implementation process. In this deliverable (D 2.2) of the FlexSUS project, we explore the barriers as perceived by four selected municipalities in Denmark and Sweden.

As part of Task 2.2 Market and regulatory barriers, D 2.2 contains an analysis of key challenges in the current institutional framework for selected municipalities in Denmark and Sweden and a review of supportive framework conditions and initiatives, primarily concentrating on heat systems. Data was collected through in-depth semi-structured interviews conducted with planners from the partner municipalities and elaborated based on an iterative process with relevant stakeholders.

We identify a number of regulatory, financial, organisational and technological challenges for successful energy transition. Overall, the findings show that regulation and permitting is the barrier occurring in each analysed municipality. Moreover, financing is a main barrier in less wealthy municipalities and those with smaller district heating penetration. Nonetheless, all the interviewed municipalities have ongoing activities (here called good practices), attempting to address some of the challenges and facilitate municipal energy transition.

We also find that regulatory barriers need to be tackled on the national level, while allowing more decision freedom for municipalities. In Denmark, some of the new legislation and measures announced in 2020 may be able to address the identified weaknesses in the regulatory and legal frameworks.

We recommend that, to the extent this is possible, the ongoing municipal initiatives are continued - and new ones are developed, based on lessons learnt from across different municipalities. We provide further recommendations in the Policy Brief, which compiles key “soft practices” that are favourable for the implementation of impactful initiatives in any municipality.