Public-public partnerships and deep energy retrofits: The case of Porto Region
By João Encarnação, Porto Region
The metropolitan area of Porto consists of 17 municipalities in northern Portugal which are home to 1.7 million people. Its Sustainable Energy Action Plan (SEAP) from 2012, drawn up as part of its membership of the Covenant of Mayors initiative, defines its goals as follows: compared to the 2005 baseline, CO2 emissions will be reduced by 25% in 2020, while energy efficiency is expected to increase by 20%. Additionally, renewable energy sources are anticipated to grow by 30%.[i] Like many other local SEAPs, these targets go way beyond the targets set by the European Commission. In order to reach them, the 17 municipalities work together with local agencies to initiate an energy transition steered by public institutions.
Partnerships between municipalities and agencies
Vila Nova de Gaia municipality is one of the 17 municipalities that form the Porto Metropolitan area. The local government of Vila Nova de Gaia joined the Covenant of Mayors as early as 2008 and is also member of the Energy Cities Alliance. The municipality among 6 others, works with Energaia, the Energy Agency for the South of the Porto Metropolitan Area, which was established in 1999 to manage projects and develop policies that foster local competitiveness and promote sustainable development, through close collaboration with associated municipalities and other local, national and international entities. The agency operates in an area with almost 600,000 inhabitants, offering services to citizens, companies, local authorities and initiatives that benefit the public, such as educational facilities and elderly care centres.[ii]
Best practices: Sustainable buildings and biogas recovery
Over the last 10 years, Energaia has encouraged sustainable construction of buildings by offering tax reductions, which has led to savings of 224 tonnes of CO2 equivalent per year. Additionally, the municipality produces electricity by recovering landfill biogas and heat from the motor generator exhausts at a waste management plant. Vila Nova de Gaia, another municipality, Santa Maria de Feira, and a waste recovery company co-own the enterprise that operates the plant, which generates 4% of the total electricity consumption of Vila Nova de Gaia.[iii]
One recently completed project is PIEE IPSS, a programme tailored to offer energy services to Private Social Solidarity Institutions. The project educated employees of these institutions on energy efficiency; the trained employees then formed a network of Internal Energy Coordinators.[iv] Energaia also provides comprehensive and accessible data on energy efficiency and consumption for each municipality on their website.[v]
Energy retrofits and more living quality
The Vila D’Este social housing refurbishment project was the largest of its kind in Europe. It improved indoor comfort levels while reducing energy costs for a target group of less affluent residents, through the implementation of energy efficiency measures such as thermal insulation, better glazing and the introduction of shading, allowing for a potential annual saving of 3,800 tonnes of CO2 equivalent.
Vila D’Este is a densely populated neighbourhood with approximately 17,000 inhabitants in Vila Nova de Gaia. The dwellings belong to private owners (some of them rented) and banks, as well as the municipality. The project involved a total investment of €15 million, co-financed by European and national funds, implemented in two phases, which has led to energy savings with a payback time under 10 years.
Energy-efficient street lighting
In 2015, Energaia supported the council of Vila Nova de Gaia with the project ge.IP (Energy Management of Public Lighting) to upgrade the municipality’s street lighting systems, which account for around 60% of the electricity use managed by the City Council. Electricity consumption was reduced by 1,144,058 kWh, reducing CO2 emissions by about 538 tonnes per year.
However, there are challenges for municipalities wanting to make changes to their street lighting. Under Portuguese law, the distribution of low voltage electricity is the responsibility of municipalities, who can manage it directly or under concession. All municipalities except one currently subcontract it, which means transferring all the relevant powers necessary to the contractor for the term of the contract.
The distribution company EDP Distribuição manages 99.5% of these contracts – just one of the municipalities working with Energaia has a cooperative, Loureiro Electric Cooperative (CEL) managing the low voltage distribution network in their area. The legislation that made the creation of energy cooperatives possible has since been revoked so it is not possible to create new cooperatives for this purpose.
Contracts with EDP have shown several flaws, including a lack of data regarding asset management and difficulties in developing energy efficiency projects. Financial aspects of the contracts are also part of the problem. Local customer service has been subcontracted and is of very low quality. Citizens’ complaints about faulty streetlights are often made to the municipality, which struggles to receive adequate responses from the service centres. This compromises public safety. These are some of the reasons why municipalities want to take more control of the management of public lighting.
With the possible creation of a renewable energy community, the main focus is greater control, development, and maintenance of the public lighting network, allowing quicker investments in more efficient equipment and easier management. By investing in modernization and telemanagement, municipalities can reduce energy consumption and adapt lighting to specific needs, thus providing a better service to the community.
We were inspired by the Halle Pajopower case that we got to know about during the mPower programme. The city of Halle wanted to replace the street light bulbs with more efficient ones. As it hadn’t budgeted for this, it had to look for funding elsewhere. External funding was needed, which became an opportunity for Halle to engage its citizens. Since the situation was very similar to that of Vila Nova de Gaia, we might attempt to copy the project.
Next steps towards energy-efficiency and sustainability in the metropolitan region
In the years to come, the municipalities and agency in Porto region are committed to initiating more projects, including increasing solar power production on municipal buildings across the entire metropolitan area and a renewed effort to upgrade public lighting systems. For this project, the form of partnership most suitable is still under discussion, while funding may be provided by several entities including the European Regional Development Fund.[vi]
The expertise we have acquired on issues such as combining energy refurbishments with improving people’s quality of life, as well as experience in energy-efficient street lighting and biogas recovery from waste, are a healthy foundation for future projects. The energy transition policies in the metropolitan area of Porto are characterised by a high level of collaboration between public entities such as municipalities and agencies as well as private actors. As proven in the past, the creative and innovative potential of these networks can be an important factor to nurture further developments.
About the author:
João Dinis Madureira da Encarnação, graduated in Electrotechnical Engineering, and works with Energaia. He is responsible for managing European projects such as the BELIEF Project (Building in Europe Local Intelligent Energy Forums) and Mi Ciudad AC2 (Innovative Global Urban Planning Methods, funded by the Territorial Cooperation program of the Southwest Area). He currently manages the Southern Sustainability Observatory in the Porto Metropolitan Area, an energy management tool for municipal equipment and infrastructure. He also manages the Covenant of Mayors initiative in Vila Nova de Gaia.
This blog article was co-created by Lukas Toedte and is part of the mPOWER blog series in which cities and towns share how they are building better energy futures.