January 29, 2024

Smart Districts

Table of Contents

Smart Districts

Smart districts are the energy component of smart cities. They are areas within which assets of multiple energy forms are managed collectively, and energy flows are optimized across multiple buildings and sectors. A smart district combines clean energy technologies with digital infrastructure, to minimize the districts on external energy sources without impacting residents’ comfort.

Smart districts involve :

  • Collective management of distributed energy resources (DERs)
  • Optimization of energy use across sectors
  • Connected devices and implemented technologies that gather data for analysis to identify additional optimization potential within the district, and maximize future viability, resource efficiency and adaptability.


The main goal of smart districts is to improve the quality of living of its residents while promoting resource efficiency and sustainable living. Some of the key characteristics of smart districts include: 

  • Sustainable energy: Smart districts concentrate on energy generation through renewable resources like solar or wind to promote the usage of carbon-neutral energy.
  • Resource efficiency: By connecting DERs and assets through digital technologies, consumers can optimize energy usage based on real-time data. 
  • Digital infrastructure: When utilizing a wide range of assets and DERs it is crucial to have a highly functional and stable digital infrastructure. This includes a high-speed internet connection, smart-technologies as well as central control units to ensure seamless communication. 
  • Data-based decisions: The collected data gives insight for improvements, curtailment and efficiency. These insights need to be translated into actions by an energy management system – on a household as well as a district level.


In smart districts clusters are groupings of assets, buildings, companies and/or neighborhoods that are organized by their function and characteristics within the area's infrastructure. Elements within a cluster will usually have similar challenges, which can be better understood and resolved when grouped.

Clustering enhances the opportunity in a smart district to improve sustainability through the efficient use of resources. 

Clusters in smart districts can be categorized into the following:

  • Curtailment clusters focus on the reduction of output in order to balance a district’s electricity demand and supply.
  • Energy clusters describe systems with no direct energy connection between prosumers and consumers. As a consequence the energy must be exchanged virtually.
  • Ownership clusters are groups of assets from different owners that are optimized by the same energy management system. 
  • Communication clusters happen when not all assets can be connected to a single wide area network. Instead, these clusters are connected and synchronized via the cloud.

Multi-energy optimization (sector coupling) 

The main forms of energy found in a smart district are electricity, heating, mobility and hydrogen. In multi-energy optimization, these are controlled by a single energy management system – essentially sector coupling within a single district. It ensures optimal efficiency, cost effectiveness and enviromental sustainability by utilizing and distributing a wide range of energy sources. Through the use and combination of different energy types such as electricity, heat or hydrogen the flexibility of a system and therefore its optimization-potential and overall sustainability through a more integrated, efficient and sustainable energy grid can be greatly increased.

Cascaded energy management (hierarchy)

In cascading energy management systems, multiple, and sometimes opposing, optimization goals are taken into account. An example could be that assets within a household are controlled based on the household’s goal, such as maximization of self-sufficiency, while at the same time, boundary conditions of the overarching district EMS are also taken into account. This could mean that solar power within a household is used to charge an electric vehicle to its desired state of charge, while remaining surplus photovoltaic (PV) power is fed into the grid to power other assets within the district.  This requires the harmonization of local and district-wide energy optimization, which can only be done with cutting-edge digital solutions.

In practice


SmartQuart is an initiative between 11 partners to build three interconnected smart districts that showcase the possibilities and value of smart, sustainable living. 

Three different districts in diverse landscapes across Germany are being established:

Bedburg: The rural district of the three is focused on optimizing the use of renewable energy resources within the suburb near Cologne. With an implemented wind turbine, its own PV plants within the neighborhood and central as well as decentral heat pumps - clean energy supply is always guaranteed. 

Essen: This quarter was designed to be a digital urban district. Several existing properties are digitally connected to simulate various solutions for sustainable power and heat supply. This district showcases how energy can be used efficiently even in highly dense urban areas.

Kaisersesch: This industrial neighborhood demonstrates how renewable energy for heat, power and industry can be linked with the mobility-sector using hydrogen technology. Electricity from renewable sources is first converted via electrolysis into hydrogen in a power-to-gas plant. The smart district supplies local public transportation or uses the hydrogen to generate heat and electricity in a CO2 neutral manner. 

The Smart Hub, a systemic bond, links the three districts together. It is a central platform that enables the virtual energy exchange between the three smart districts. In this way, electrical power produced in Bedburg can, for example, be used to operate the electrolyzer in Kaisersesch to produce affordable green hydrogen for long-term storage.

Smarter Together

Smarter Together is a collaborative project that aims to co-create and replicate integrated solutions for smart cities to improve the quality of life of urban residents. For this project there are five focus areas: 

  • Civic engagement.
  • Renewable energy and heat management in urban neighborhoods
  • Holistic renovation concepts
  • Smart data
  • Electric mobility

Within the project large-scale smart city solutions will be implemented in six urban neighborhoods. In addition, new business models for economically replicable smart city solutions will be introduced that promote user-centered innovation, conduct trials on low-energy neighborhoods and transform existing data networks into citizen-centric open data platforms.  The results of this project are set to deepen the understanding and open the possibilities of applied smart city solutions for other cities. 

Currently there are six cities that collaborate in this project:

  • Vienna, Munich and Lyon are the lighthouse cities. That means the smart city solutions will be implemented there first to showcase how these solutions can benefit urban areas and to collect data to further improve and optimize the solutions.
  • Santiago de Compostela, Sofia and Venice function as successor cities. Based on the collected data and insights by the lighthouse cities, the solutions will be implemented in different urban areas and further optimized. 
  • Kiev and Yokohama are the observer cities. These cities are intended to extend the range of the project and take specific perspectives of Eastern European and Eastern Asian cities into the holistic observation model.