Urban energy systems: Municipal utilities and the case of Switzerland

Urban energy systems are multi-layered complex constructs that connect energy suppliers and consumers in urban areas with the help of diverse (grid) infrastructures and with the participation of selected institutions. In light of considerable differences in the degree of urbanization as well as other factors, their design can vary greatly from one another. Taking into account political commitments such as the Paris Climate Agreement, four central trends dominate the transformation of urban energy systems that are currently underway: decentralization, decarbonization, digitalization, and convergence or sector coupling. The latter are consequences of an increasing decentralization of local power generation, as well as increased efforts to decarbonize the urban energy system and will only become feasible through an increased use of digital technologies. In Switzerland, urban energy systems are largely operated by locally based municipal utilities. These are cross-utility companies under municipal ownership that offer other forms of energy and several infrastructure services in addition to electricity in the urban area and thus operate on monopoly and competitive markets at the same time. Despite various conflicting goals, municipal utilities are predestined to act as a motor for the energy transition in urban areas with a strategy tailored to local conditions and oriented to overarching energy and climate policy objectives, due to their ability to coordinate centrally and develop the urban energy system in a holistic manner. Therefore, the Swiss "municipal utility model" could serve as a model for other countries to decarbonize their own urban energy systems against the backdrop of intensified efforts by the international community to achieve greater climate protection.