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This lecture focuses on the conceptualization of smart urban energy systems, exploring the drivers towards their development, such as the evolution of urban infrastructures' technologies, climate change, and resource efficiency. The session also delves into the three dynamics of system's evolution, transitioning from centralized to decentralized generation and from planned to intermittent generation, along with the shift towards price signals. Additionally, it discusses the main layers of transition in urban electricity and socio-technical systems, emphasizing the infrastructure, data/digital, and services layers.