Positive Energy Districts Pave the Way for Europe’s Climate-Neutral Cities

In a bold move toward urban sustainability, Positive Energy District (PED) initiatives have been rapidly becoming a cornerstone of EU's strategy to achieve climate neutrality in its cities and to equally reach a higher degree of resilience at national and EU level. The launch in 2021 of the European Mission on Climate-Neutral and Smart Cities and its subsequent work with the 112 mission cities that aim for climate neutrality by 2030 has further thrust PEDs into the spotlight as tools to deliver on urban climate action.

Across Europe, the interest and demand for PEDs is increasing. This was apparent at the CINEA-organised meeting of 16 EU-funded PED Projects (such as ASCEND, BIPED EU, TIPS4PED, SPARCS EU, exPEDite and NEUTRALPATH) that we attended on 23-24 September 2024 in Brussels. Our interactions there with researchers, innovators and stakeholders – many of them from mission cities – revealed their conviction that PEDs have a tremendous potential to transform urban landscapes into hubs of renewable energy, energy efficiency and integrated smart solutions. However, our interlocutors were also quick to point out that implementation challenges persist, ranging from technological and regulatory challenges (related to energy system integration, urban planning and administrative obstacles) to political, stakeholder engagement and financial challenges. 

Since then, as part of our work for the Mission Board for Climate-Neutral and Smart Cities and in other professional capacities, we engaged in numerous exchanges on the energy transition component of the Cities Mission, including the role of PEDs, with city and national representatives, researchers, utility providers, civil society organisations and other stakeholders. Below are three takeaways from these exchanges, combined with insights from our Mission Board advisory work on the review assessment of the Climate City Contracts of 92 mission cities that have received the EU Mission Label so far (10 in October 2023 and 23 in March 2024, 20 in October 2024 and 39 in May 2025). 

A vision for integrated urban transformation 

There is wide consensus that, at its core, the PED strategy is about redefining the urban energy ecosystem. While fulfilling their main function of turning neighbourhoods and districts into energy-efficient and self-sustaining areas, PEDs also serve as real-life laboratories where innovative technologies such as digital twins and interoperable cloud platforms are tested and scaled. For instance, digital twins—virtual models that simulate among other systems the energy behaviour of urban districts—enable city planners to optimize energy use, forecast future demands and make data-driven decisions. Such digital solutions help not only with forecasting and simulating energy use, but also with integrating various energy systems from heating and cooling to electricity and mobility to create a holistic urban energy network. In this sense, PEDs align with the holistic and cross-sectoral vision put forward in the action plans under the Climate City Contracts.

Equally important, the PED strategy hinges on a multi-level collaborative approach. Local governments, utilities, technology providers and even residents are required to work together to bridge the gaps between policy, technology and on-the-ground implementation. This cross-sector collaboration is key to breaking down the traditional silos within city administrations, enabling a more agile and responsive energy planning process. Here again, PED initiatives are strongly aligned with the Climate City Contract approach that aims to build consensus, secure commitments and spur action from political and professional stakeholders as well as from civil society and citizens. 

Contributions that drive the energy transition 

The contributions of the PED initiative extend far beyond digital innovation. PED projects have become crucial demonstrators for integrated urban energy solutions. Several pilot projects across Europe—from Porto to Turku—are already proving the feasibility of deploying renewable energy systems, advanced storage solutions and smart management technologies at scale. These projects not only validate the technical aspects of PEDs, but also provide tangible evidence of their economic and social benefits.

One of the major breakthroughs is associated to the development of interoperable digital twin platforms. These platforms are crucial to integrate data from disparate sources—ranging from building management systems and local sensors to renewable energy installations—to create a unified picture of energy consumption and generation. This unified approach facilitates real-time energy management and paves the way for participation in emerging energy markets. As a result, cities would be able to optimize energy use, reduce greenhouse gas emissions, and even provide lower energy bills for residents.

PED transformations also foster strong stakeholder engagement. With a diverse array of partners—from research institutions and technology firms to city officials and investor networks—PED projects are building a foundation for replicability and scalability. Moreover, the vibrant ecosystem created under PED initiatives reverberates across sectors and strengthens the entire spectrum of innovation linked to sustainable urban transitions.

Outcomes and the road ahead 

The main outcomes from the PED efforts are promising and multifaceted.

First, the development and deployment of scalable, interoperable digital twin systems are setting new standards for urban energy management. These systems will allow different stakeholders in cities to monitor, analyse and optimize energy flows in real time, ensuring that renewable energy sources and energy storage solutions are effectively integrated into the urban fabric.

Second, the demonstrator projects have yielded a growing portfolio of successful case studies. These projects provide concrete models that other cities can replicate, thereby accelerating the broader adoption of PED solutions across Europe. From enhanced energy efficiency and improved integration of local renewables to demonstrable reductions in greenhouse gas emissions, the tangible benefits of PEDs are beginning to reshape the narrative around urban energy transitions.

Finally, PED initiatives are driving policy support and strategic collaborations. By fostering the alignment of local actions with EU-level targets and leveraging platforms like the Cities Mission Platform (implemented by the NetZeroCities consortium), the Intelligent Cities Challenge, or the Smart Cities Marketplace, PEDs are helping cities transition toward climate neutrality and are acting as catalysts for wider policy reforms. The development of standardized protocols and common data models is fostering interoperability across multiple energy sectors—a critical step in ensuring that urban energy systems are resilient, adaptive and future-proof. In turn, this is helping to drive better urban planning, paves the way for public-private partnerships, and helps scale new and innovative approaches.

Looking forward, PED initiatives are set to evolve further. Plans for an updated framework definition, enhanced stakeholder engagement, and continuous scaling through annual calls and database updates are already in motion. The next phase should focus on transitioning from isolated pilot projects to demonstrator cities that embody a systemic, replicable model of urban energy innovation. 

To conclude, the PED initiative represents a remarkable convergence of technology, innovation, policy, and multi-(level) actor and community engagement. It is a testament to the power of collaborative innovation in addressing some of the most pressing challenges of our time—paving the way for smarter, more sustainable cities across Europe. 

As the initiative gathers momentum, it promises to transform the urban energy landscape, making climate-neutral cities not just an aspiration, but a tangible reality. We are convinced that the implementation of Climate City Contracts under the Cities Mission will not only benefit from, but also significantly add to the PED momentum.

Op-ed article by the Cities Mission Board on PEDs