Image: Advertisement for the municipal electricity utility in Hamburg (round 1900)

In Germany, there is a strong movement to claim the gas, electricity and heating networks back from private corporations. Initiated by civil organisations, they are pushing the political arena to take action towards a remunicipalisation of the energy system. After setting the theoretical background (in part 1), we will look into two cases: Hamburg and Berlin. These examples provide crucial insights into the interplay between civil initiatives and the political arena and allow to draw important conclusions. 

A municipal utility in Hamburg: good try, no cigar

As we saw in the first part, the referendum in Hamburg pushed the municipality to buy the electricity, gas and heating networks back from Vattenfall. Therefore, things seem to be on the right tracks there. However, a more careful observation shows that the model is missing a crucial part: the democratic governance.

In order to understand where the step was missed, we have to go back in time. During the phase preceding the referendum, several local actors created an energy cooperative, which aim was to apply to the concession for operating the electricity grid. It’s name is Energienetz Hamburg. They made a deal with a Dutch TSO, Alliander, which pulled out at the last moment.

Unfortunately, although Energienetz succeeded to attract a large number of members who commited to a common capital of 50 million euros, the municipality did not include them in the deal for the concession.

This is a missed opportunity, which could have seen a new type of civil-public partnership and the implementation in a state-run company of the cooperative decision-making model: one member (one user) = one vote.

On the brighter side, this energy coop. is now playing an important role in Hamburg, by organizing debates (called Wärmedialogue) to promote and push the municipality to investigate alternative sources of district heating. One solution for instance would be to recuperate the heat from a copper furnace on the South East side of the city instead of using fossil-fuel power plants. As mentioned in this video (to watch absolutely if you have 12 minutes to spare!), district heating is crucial because this represent a large number of homes (>450 000), which generally do not have other choices (e.g., renters who de facto have district heating). Therefore, prices and heating sources become central issues.

In Hamburg, an advisory board was created and adjunct to the Energy Agency of the city. As explained in this article: “Members of this new Board include a broad range of 20 representatives from society, science, business, industry and most importantly all local grid companies, also including Vattenfall and E.ON, which still remain main shareholders of the district heating and gas distribution grid until the purchase options has been exercised.” However, the board exert a mere advisory function and has limited decision-making power. As the article states, this is one of the main challenge that Hamburg faces: “avoid [that] the board becom[es] a toothless tiger”.

Twists and turns in Berlin

In Berlin, the story started in a similar fashion as in Hamburg but developed very differently. A dynamic campaign to remunicipalise the networks was launched in 2013, orchestrated by the civic initiative Berliner Energietisch. The referendum attracted more than 600 000 people but unfortunately, failed short of 20 000 “Ja” votes.

The actors are pretty much the same as in Hamburg:

• private utilities (e.g., Stromnetz Berlin, belonging to Vattenfall) are running the show at the moment,
• a municipal energy provider, Berliner Stadtwerke, daughter of the water utility and a minicipal grid operator Berlin Energie were created as a result of the campaign in order to apply for the concession to operate the grids. Berlin Energie is investigating interesting concepts, like the combined networks (link in German).
• an energy cooperative, Bürgerenergie Berlin, alive and kicking, aims at buying back and operating the grids.

Interestingly, everyone though that the game was over after the failed referendum but this was forgetting the importance of the political game. Indeed, the municipal vote in 2016 saw the formation of a new “Red-Red-Green” (SPD-Die Linke-Die Grüne) coalition in Berlin, which put back the remunicipalisation process on the agenda.

And here are the different options that are being evaluated presently by the municipality. We find applicants like in Hamburg: In white, the fully municipal operators (Berlin Energie) and in grey, the fully privatised actors (NBB Netzgesellschaft and Stromnetz Berlin). But we also find more funky applications: in white-grey hashed, either classical public-private partnership for the gas networks or more a complex civil-public-private partnership for the electricity grid. A new field of possible has been open. We are all very curious what will happen now!

This is interesting as it points out the joint role of the civil society and of the political arena in creating new spaces. It starts by a strong civic movement and is enabled by a favorable political landscape.

To finish, here a second little video that we did with TNI at the occasion of the conference “Against the NAM”. I had to answer the question “Why should we treat energy as a commons?”.

The post Remunicipalisation of energy systems – Part 2 appeared first on P2P Foundation.

Image: Advertisement for the municipal electricity utility in Hamburg (round 1900)

In Germany, there is a strong movement to claim the gas, electricity and heating networks back from private corporations. Initiated by civil organisations, they are pushing the political arena to take action towards a remunicipalisation of the energy system. This is a very interesting process, which allows to explore key concepts such as the right to energy and democratic governance as well as the interplay between politics and the civil society.

I presented this story during a conference on about the potential remunicipalisation of the Groningen gas field at the beginning of January (see previous article). You will find here all the slides from the presentation, which you can download and reuse (but please, cite me!). All sources are indicated at the end of the post.

Energy is a commons

Firstly, I will quickly lay some theoretical foundations to the relationships between energy and the commons. The following slide is an illustration of the differences between energy used as a commodity or a common good.

• Energy is a commodity: it is produced to make profit (even green): we are clients/consumers and our decision power is to chose between different companies. The incentive in this case is to produce as much energy as possible (or raise the prices) to increase the profits. The prices are set either by the producer (the owner of the power plant) or by the market.
• Energy is a commons: it is produced to respond to a need and we are producers and consumers at the same time, this is called “prosumers”. We can decide together with our neighbours on the system we want to have. The incentive is to produce what is needed and save it. Being a commons does not mean that energy becomes free of charge but that the prices can be adapted to our needs (we control it and use it to foster social and climatic justice). Think of water, which is also a common good: it still has a cost for the consumer. But you don’t make profit out of it because it is considered as a human right. We should look at energy in that way.

Cooperatives and municipal utilities to foster energy democracy

When we think energy democracy, one thing that comes to mind are cooperatives. There are many throughout Europe, which can have very different financial structures and sizes. But they have one thing in common, which makes them very particular: their ownership and governance modes.

The infrastructure is owned by the members, who each have a vote. Decisions are taken on the model “one member, one vote”.

The other form of organisation that holds great potential for energy democracy are municipal utilities. They are known in Europe for the water utilities and used to play a large role for energy as well. But the wave of privatisations in the 1990s put them in the hands of private corporations. Since a few years, some cities are taking a reverse path and buy their networks and utilities back. This is very interesting because municipal utilities, which inherently belong to all, have potentially one crucial advantage over cooperatives: as all inhabitants/users can be considered as members, they might prove more inclusive structures. However, this is only true if the governance mode is copied on the coop one: “one member one vote”. We will see that it is not necessarily the case.

Hamburg in the driver seat

First, here are a few basics on the structure of the energy system in Germany:

• On the one hand, there are the grid operators (TSO): they own and operate the local electricity, gas and heating networks. They get concessions of 20 years, given by the federal states: these are quasi-monopolies. They compete to get the concession but once the get it, they have no competitors.

• On the other hand, there are the energy providers, who operate the power plants and commercialise energy (they are the users of the grid). Here it can be anyone producing energy, from the very big to the very small.

In Hamburg, the concession for the networks was hold by Vattenfall and ran out in 2013. People then decided to regain control on the grid. So the city of Hamburg grounded a municipal utility (called “Hamburg Energie”), as a daughter of the water utility. It is now an energy provider, which focuses on producing and selling local green energy (mostly electricity but also some gas).

Next to that, a collective of citizens founded the initiative “Unser Hamburg Unser Netz”. They ran a campaign and had a referendum, during which people voted in favour of a full remunicipalisation of the networks. Therefore, the electricity network was bought back in 2014 and the gas and heating networks should get back in the public hand by 2018/2019.

So things seem to be on a right track in Hamburg, and it was indeed experienced as a tremendous victory for the supporters of energy democracy. But… something is missing in the Hamburg model: the citizen participation, based on the cooperative model. Indeed, both the municipal energy utility and municipal TSO are run as companies and users are not taking an active part in decision-making (they are merely consulted).

That’s it for now. Next time, we’ll have a look at energy cooperatives in Hamburg and at the story in Berlin. Stay tuned!

In the meantime, you can watch the whole presentation, that was recorded by TNI (whom I thank very much!).

Photo by Pacific Northwest National Laboratory – PNNL

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How relocating energy in the commons helps scaling-up renewables & saving energy

Is energy a mere commodity, or is it a common good? Why is this relevant in the first place? Here we look at why energy is part of our commons, from the sources to the product itself. In a second time, we will see that relocating energy in the commons has very important implications: it helps solve the energy efficiency dilemma (i.e., we need to reduce our energy consumption but who’s going to pay for that?) and scale-up renewables.

What is a commons?

Once upon a time… there was an alpine pasture, where cattle from the village came to graze. The air was fresh and brisk, there was enough grass for the animals. But it was also a delicate, sensitive environment: put too much pressure on it (too much cattle) and it would be ruined in no-time… In other words, the pasture was a finite resource, which could support a finite number of cattle.

A (finite) natural resource, that is necessary to all: that’s a natural commons.

There are three way of dealing with natural commons:

1. The commons (e.g., the pasture) is claimed by someone, who controls its access and monetize it: it becomes a commodity and the usage profits mainly to a few.
2. There is no communication in the community and no rules are set to use the commons. Individuals tend to exploit the commons as much as possible in order to maximise their own profit and compete for accessing to it. Eventually, the commons is destroyed. This is how Garrett Hardin described modern humans’ behaviour in the “Tragedy of the Commons” in 1968, which led him to argue that only privatization (as in 1.) or state regulation are successful mode of governance for the commons.
3. People actually talk to each other and are conscious of the problem of over-using their commons. Therefore, communities organise themselves and set some rules, compensation mechanisms and sanctions against free-riders. Benefits are shared and sustained. This is what Elinor Ostrom (and her colleagues) reported upon throughout her career: communities are able to (and do) manage their common goods by themselves.

Next to the finite or physical resources defining the classical commons framework, we can think of other non-finite and more abstract resources that can be treated as commons and referred to as social commons: digital commons, knowledge commons, health commons, urban commons… Shifting the paradigm from commodity to commons helps to reduce the (artificial) scarcity of these resources (created and sustained by privatisation and monetisation) by having a common-ownership or no-ownership. This is best illustrated by the creative common licences, which allow (for some of them) companies to sell a product but not to claim its ownership (which means that other companies can sell the same product, modify it, etc…).

And finally, there’s the act of commoning: doing together, sharing, benefiting from each other. As we saw in the previous episode, this is one of the recurrent arguments given by members of energy cooperatives as a ground and as a co-benefit from their project.

Renewable energy is a common good

SCAD Museum of Arts, Work by Nari Ward (“We the people”) Photo by JR P CC-BY-NC2.0

Here we will focus on renewable energy (RE) but this discussion also applies to fossil fuels. According to the definitions above, RE is a commons and we demonstrate this using three different viewpoints:

• the source (wind, sun…),
• the product (energy and more specifically electricity), and
• the energy transition process (i.e., the switch towards clean renewables).

The source. The renewable sources of energy (especially wind, sun, water and in a lesser extend biomass) are clearly part of our natural commons: no-one can claim their ownership and they belong to all. Furthermore, and this is particularly important, they are finite resources. It is therefore crucial to make sure that the access to these resources is equally shared throughout the society.

The product. Electricity and energy in a broader sense are part of the social commons. Indeed, accessing to energy being necessary in modern societies, it becomes a common good. And due to finite sources, the amount of energy available is also finite.
It is crucial to avoid the appropriation of this common good by individuals or single actors (i.e., free-riders) in order to prevent the creation of an artificial scarcity and efficiently fight energy poverty. If this does not sound too serious in the western word, it is a huge issue in poorer countries and has been placed in the United Nation agenda for 2030 as the sustainable development goal number 7.

Energy transition. By looking at the process of switching from fossil fuels to renewable sources, we enter into the field of “climate change mitigation”. Decarbonising the energy sector falls into the global commons: every gramme of CO2 released in the atmosphere will have an effect on all of us. The Intergovernmental Panel on Climate Change (IPCC) stresses the threat posed by free-riders to our mitigation efforts (summary for policy makers, AR5): “Effective mitigation will not be achieved if individual agents advance their own interests independently.”
As one can read on the website of the Mercator research Institute on Global Commons (MCC), energy is also part of the social commons: “These are public goods providing access to health services, education, clean water, sanitation, energy, or transport and communication infrastructure. They are essential for human well-being as the level of provision of these goods has significant effects on both growth and inequality.” The MCC describes the dilemma of the energy transition as an overuse of the global commons and an under-provision of the social commons.

The energy transition is a huge task for our generation and it creates both challenges and opportunities. On the winners’ side, a new market is being created, which is already profitable enough to attract institutional investors. Large investment in renewables from private sources is potentially a good news, as it speeds up the energy transition. However, there are serious drawbacks in the commodification of energy. First, the returns on investment will remain in private hands, which is a loss of revenue for society and increases the concentration of capital into the hands of a few. Second, as these investments are profit-driven, the primary goal is to install the technology providing the highest income, regardless of people’s needs and desires (so not necessarily the appropriate technology).
To summarize, here is how the EU Horizon 2020 research project REScoop presents the social relevance of framing RE sources in the commons (policy recommendation):
“Wind, solar, hydro, biomass and geothermal energy are natural resources. They in fact belong to no one and are in principle available to all. They are common goods. From the perspective of social justice, more attention therefore must be paid to the way in which decentralised renewable energy sources are managed. In a world where energy is scarce, these sources of energy will mean income for the operators. Citizens and users therefore have every interest in keeping this local energy production in their own hands as much as possible. Governments too have every interest in anchoring decentralised renewable energy with the users as much as possible so that the added value of the production also benefits society. This is especially true for wind energy, an energy source that extends over a larger area, but ultimately is exploited on a small site. The benefit of this exploitation should extend to the widest possible group of people. Thus, the exploitation of wind energy should not simply be privatised, but also allocated on the basis of socio-economic criteria.”

Reducing energy consumption

The people’s windmill – outside European Parliament, Brussels More than a 150 people formed the shape of a giant wind turbine in front of the European Parliament in Brussels to call for more support for community renewable energy projects. Photo by Friends of the Earth CC-BY-NC 2.0

One aspect of commodifying energy that is often overlooked, is that in order to increase the profits, utilities have an inherent incentive to produce and sell as much energy as possible. This is totally counteracting all efforts made to increase energy efficiency and conservation.
As recognized by several experts, reducing our greenhouse gas emissions (by increasing our efficient use of energy) is a key pillar of the energy transition. However, efficiency measures are often presented as a burden, which is costly and does not generate enough profits.
As stated by John Byrne and his team at University of Delaware, effectively “relocating energy in the commons” (I stole this expression from this remarkable and very accessible paper) has the double advantage to stimulate the installation of renewable power plants and save energy simultaneously, whereas energy as a commodity leads to a state of “energy obesity”. This “commonification” of energy is presented through the Sustainable Energy Utilities (SEU), which are community-based institutions aiming at designing and financing local energy projects. The idea is to consider the energy consumption of a community globally, with the primary aim being to save it: when energy is needed, SEU should implement an appropriate renewable technology, and incorporate heat and transport systems in the design.

Originally posted on energycommonsblog

Lead image: Energy cooperative from the US, Touchstone Energy.  Photo by David Ingram CC-BY-NC2.0

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Community energy refers to any kind of power plant using a renewable source of energy, that has been planned, financed and which is owned by a community of people (from the village to the house). And why would these energy communities matter? It is nice enough but sounds pretty irrelevant when we think about fighting climate change or fostering democracy… However, several recent studies highlight the crucial role of energy democracy in meeting these societal challenges.

Hereafter, I will distinguish energy communities (as defined earlier) from external projects, which involve private or institutional investors and a project developer who do not belong to the community where the power-plant is installed. If informed and sometimes a minor share-holder, the community generally does not take part in the design and the decision-making.

Some benefits of community energy can (and sometimes have been) quantified:

• Reinvestment in local economy. A much larger part of the initial investment and profits derived from energy communities flows back to the local economy as compared to external projects (up to eight times larger, see article & original study -in German).
• Lower electricity prices are to be expected as energy communities expect lower return-rates than external projects. This is crucial to help fighting energy poverty.

Out of a visit I made in the energy self-sufficient village Feldheim (I’ll relate that in a future episode!), I also got these two indications (which to my knowledge have not been quantified yet):

• Stable real-estate value. Due to the positive image of energy communities compared to villages where a renewable power-plant was installed by external actors, the value of the real-estate is largely sustained or improved.
• There is creation of local and resilient jobs and reinvigoration of rural regions. Feldheim is a typical example of how such a project helps to fight structural unemployment and to attract new inhabitants (e.g., the school has reopen its doors after being closed for decades).

Other benefits are more difficult to quantify but are nonetheless tangible. A series of interviews from local stake-holders involved in community energy projects reported the following (see article & study in German):

• It increases the connectivity between the community members (“making friends”, “doing together”).
• Involvement. The possibility to participate in the decision-making at all levels provides a strong incentive to be involved in the community and thereby fosters democracy.
• Interestingly, it raises the level of self-worth for local actors, who are able to acquire new skills, and/or achieve challenges (for instance get involved and better understand local politics).

Finally, there is a range of strategical benefits:

• Power generation in public hands. Power plants being by nature highly strategic infrastructure, it seems rather reassuring that they remain in the public hands rather than under private control.
• Stabilize grid and fight black-outs. It might seem counter-intuitive, but a research project from the German Fraunhofer Institute shows that the decentralized production of energy might help to stabilize the grid. As shown by this video (in German), small decentralized production units are actually a better solution against black-outs than big centralised power-plants.
• Favouring the installation of the “appropriate technology*” coupled to the implementation of energy-saving or energy-efficient measures. The interest of an energy community lies more into finding an adequate, robust and resilient solution to produce clean energy rather than maximising profits.
• Fuel the energy transition. Community energy projects raise the awareness and acceptance towards the energy transition, and therefore help to fight climate change and environmental damages.

Glossary
*Renewable energy: energy produced from sources that will be renewed/replenished in a short amount of time. Typically, even if you use the wind, the sun-rays, the tides, the waves, the flow of a river, and in some cases biomass to make energy (warmth or electricity) today, that has no impact on their amount tomorrow. That does not mean that they are infinite (there is a finite amount of wind), but it means that their quantity won’t be depleted permanently if you use them. It is therefore clear that oil, coal and uranium (to make nuclear power) are finite and not renewable (or at least not on short time-scales): if you use them today, there will be less tomorrow.
*Appropriate technology: it describes the technology best adapted to the local conditions and needs of the community members. It is used in opposition to the race for “high technology” (or high-tech), which, although being technologically sound, is not always the best suited solution. High-tech also does not necessarily feeds the interests of the community, of the “common good” but rather that of external investors.

Originally published on Energy Commons

Lead image: Hepburn Wind, Flickr

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