PPPs and Eco-city Infrastructure in Europe

Authors

• Farid Baddache

  Former Managing Director, BSR

Public-private partnerships (PPPs) in Europe on eco cities, and for other smart and clean technologies, have been on the rise. And the recent European Commission Recommendation to mobilize the information, communications, and technology industry to facilitate a transition to a low-carbon economy is sure to provide a further boost.

This Recommendation comes on the heels of a 2007 target set by the European Commission to reduce GHGs across Europe by 20 percent below 1990 levels by 2020. In addition, EU Renewables legislation binds the region to satisfy 20 percent of its energy consumption from renewable energies. This makes Europe a fertile testing ground for larger and longer-term strategic partnerships between companies and governments.

We see these partnerships begin to take root in cases like GE who recently entered into a partnership with the Assembly of European Regions to develop ‘clean energy solutions’ for potentially 270 regions across 33 European countries. Earlier this year, the Danish government and companies including IBM, Siemens, Better Place, and Dong Energy kicked off EDISON, a project to pilot smart grid infrastructure in Denmark. Better Place also intends to build on its ongoing work with the governments in Israel, Hawaii, Canada, and San Francisco to extend to Denmark its automated battery swapping stations.

These efforts mark a good start and provide important insights for the future success of similar PPPs.

First, the development of eco-city infrastructures can succeed only if companies take the long-term view. Siemens, for instance, is looking to receive orders for more than US$6 billion by 2014 for intelligent power networks as it estimates the demand for electricity will double by 2030, due to trends like e-mobility.

Secondly, public authorities can contribute by providing more stability and continuing to foster these new technologies. Governments—in particular, city governments—have a large role to play in enabling a large-scale deployment of these initiatives, such as Paris’ Autolib (an electric car sharing scheme built on the success of the city's bike-sharing program) and the administrative Region of Paris, which provides financial incentives to customers installing equipment that use renewable sources of energy.

Lastly, voters and consumers need to endorse and support such partnerships. We need to see consumers as agents of change ready to move beyond their sometimes tepid acceptance of smart grid technology. A behavioral change is requisite, and technologies like smart meters which target lower energy consumption make sense only if consumers also learn to reign in their energy use.

We think activating consumer participation in energy efficiency is key to transforming PPPs into success. With this, we could move beyond traditional public-private partnerships into a next generation of “P3” structures—public-private-people partnerships.