**1. Introduction**

At the end of 2019, the newly elected President of the European Commission published the European Green Deal [1], a roadmap for transforming the EU's economy towards sustainability. The goal is for the EU to be climate neutral in 2050 by boosting the efficiency and use of resources, moving to a clean and circular economy and restoring biodiversity and cutting pollution. The de-carbonization of the energy sector, as well as ensuring that buildings become more energy efficient, is amongs<sup>t</sup> the key actions in this long-term strategy. The subsequent proposal for the first European Climate Law [2] aims to ensure that all EU policies contribute to the European Green Deal and that all sectors of the economy and society will play their part. With over 40% of the global energy consumption being attributed to the construction and use of buildings [3,4] and the European building sector being responsible for an estimated 39% of final energy consumption [5] it is evident, that any future oriented governmen<sup>t</sup> must include buildings and their associated infrastructure at the core of its roadmaps.

Currently EU legislation related to energy use in buildings is based on the Energy Efficiency Directive [6], the Renewable Energy Directive [7], and Energy Performance of Buildings Directive (EPBD) [8], with each directive providing the framework conditions for the national regulations and standards. The EPBD, which came into force for the first time in 2002 has since then be twice revised in 2010 and 2018 [9], with each new version imposing ye<sup>t</sup> stricter regulations on energy efficiency in buildings. In the last amendment the EPBD included for the first time the development and application of a so-called smart readiness indicator (SRI), which should describe how well the building can interact with the grid, manage and optimize itself, and relate information to and from its occupants. Since the SRI has not been fully elaborated in the regulative document, a study has subsequently been commissioned by the EC in order to provide guidance and a coherent framework for the member states [10,11]. The study provides a calculation framework for the assessment of the SRI that is based on qualitative indicators in a matrix approach that covers a series of impact criteria, domains and domain services. The framework focuses mostly on a qualitative assessment that is dependent on certified assessors, thus adding the danger of subjectivity to the process. Since its publication the consortium has carried out several tests to validate the process. An independent study also concluded that the approach shows limitations, particularly when applied to colder climates [12]. Another recently published analysis highlights the inherent subjectivity of the proposed solution as it documents how two independent research groups carrying out the assessment on the same buildings came to highly diverging results [13]. It is expected that more appraisals will follow to assess whether the initial proposal poses a viable way forward. The member states of the European Union will finally have to jointly or individually decide on the specific process to be implemented in their countries.

In a position paper of the "Annex 67: Energy Flexible Buildings" of the International Energy Agency (IEA) the authors argue, that there is a need for a quantitative analysis of buildings' energy flexibility [14]. Whilst a market model is proposed as an assessment, this is not considered entirely future proof, as costs and markets are subject to change [15]. One of the key objectives of the SRI is the assessment of the load shifting potentials of buildings, however this aspect is not explicitly quantified within the above-discussed study [10,11]. Also, the district is not considered, even though the clustering of larger entities becomes more important as load shifting capabilities increase. In a previous publication [16], the authors of this article have already proposed a methodology to integrate a quantitative assessment of the load shifting potential of buildings in order to support an objective judgment and subsequent implementation of the SRI. Based on the definition of the SRI in that paper, conclusions can be drawn on the load shifting potential of buildings. Following the publication, the authors have consulted with relevant stakeholders to gather feedback on the proposed methodology and to identify relevant research gaps.

This article consequently builds on the previously published methodology with the aim to provide a coherent assessment to support the optimization of infrastructure decisions on a larger scale based on the hypothesis that a perspective beyond the building level is necessary to leverage potential load shifting capacities of the built environment. The underlying hypothesis is, that the methodology for the SRI can also be expanded to larger entities, such as districts or cities and that it can provide an adequate approximation for the potential CO2 savings. The subsequent research questions follow this hypothesis and can be summarized as follows: (1) How can the definition of the SRI be extended in terms of an efficiency limit? (2) Can the assessments for buildings be meaningfully extended to groups of buildings and larger districts? (3) Can the equivalent CO2 savings potential be derived from the methodology?

As a result, the objective of this study is the adaptation and enlargement of the methodology to also include larger entities as well as infrastructure and CO2 assessments on a district scale. The aim is to provide a numerical model-based approach on the assessment of whole districts based on their overall energy storage capacity, load shifting potential and their ability to actively interact with the

energy grids. In addition to the district SRI and the district load shifting potential it also provides an estimation of the equivalent CO2 savings compared to a system that does not include the building's load shifting potential. Comparably to the first publication, the approach is applied to theoretical use cases for validation. It shows that a comprehensive quantitative approach can provide meaningful result also on a district level, thus delivering important answers to the question of how much buildings can contribute to actively store and dispatch energy within a district or larger urban quarter.

The following Section 2 highlights the current state of the art and subsequent research gap this publication is addressing in the context of the assessments of smart districts. The regulative framework conditions are briefly outlined, followed by an account of state-of-the-art research related to the load shifting potential in buildings in combination with the increased use of renewable energy systems (RES). The particular focus on smart districts is seen as the logical intermediate step between smart buildings and smart cities. Section 3 describes the overall methodology, respective equations and derivations for the assessment. In Section 4 the approach is tested on a theoretical use case on a small representative district in the City of Vienna. The discussion in Section 5 finally provides a review of this extended methodology, its limitations, as well as potential for a wider application with the goal that the member states include an objective and quantitative assessment within their new regulations related to the Smart Readiness Indicator.
