Proposal: A Cooperative Strategy for Distributed Renewable Energy (1)

Excerpted from Kevin Carson and Keith Taylor:

“”A public policy geared toward the public good whether it comes from the government, business or local level communities, would seek to mitigate neoliberal development models which act more like leaches than community symbiots. Public policy should not be used to privilege the existent destructive corporate order, but instead provide for the space necessary for alternative polycentric solutions. The demand for and growth in alternative energy, particularly wind energy, provides a substantial opportunity for community entrepreneurs. Groups in Oregon, Minnesota, and Maine are working together to pool their resources and own wind capital outright. Yet these models are in their infancy, and current national policy continues to privilege the corporate firm above all others. The proposed solutions for freeing the market for alternative energy innovation must not only be critical of the impediments to innovation, but also must stress the potential benefits from such development.

Sustainable energy generation, transmission and distribution are socio-ecological in nature. Engineering expertise must be combined with evidence of social outcomes as well to optimize solutions and combat neoliberal economic tendencies of ecological destruction. What is needed is a diverse partnership of major institutions to free market actors to participate in this next generation of clean energy development. There may be no better institution equipped to participate in this initiative than the electric power cooperative.


A common critique of the cooperative movement is that if the business model it truly ideal, then why is it not the predominant business model? First, there is the obvious: When public policy privileges capitalist business models, the system perpetuates itself (albeit in an unsustainable, downward spiral). Second, the cooperative business model is really only just beginning to flourish in the U.S. The American cooperative sector has a relatively solid foundation arising from the New Deal era that only recently is being recognized as a potential force for true change.

The electric cooperative industry in the United States has the human, political, social, built and financial capital to not only compete with transnational energy conglomerate, but to pool its vast array of social and material resources to innovative the energy sector and democratize it. The United States has over 930 electric cooperatives, 864 of them providing distribution of power to regional and local communities. The remaining cooperatives (generation and transmission coops or G & T) generate energy, mostly through coal, and sold as a commodity to public and private market actors. These cooperatives are represented by the National Rural Electric Cooperative Association, providing invaluable information and resource pooling, which is critical for small-scale firms, like cooperatives, to survive (Ostrom, 2005).

Taken together, the cooperative sector has enormous potential to not only proliferate growth in renewable energy, but to also foster deep, meaningful community development. This is especially true given the technological developments of recent years, which amount to an enormous force multiplier for the resources available to the alternative economy and go a long way toward nullifying the conventional capitalist economy’s advantage in resources.

Historically, capitalist ownership and wage labor were associated with the high cost of production machinery. The shift from production primarily involving individually affordable workman’s tools, to production with costly machinery in factories, meant that the expensive machinery required for factory production could only be purchased by very rich people who in turn hired wage labor to work the machinery.

According to John Curl, successful worker co-ops, like the Owenite unions’ cooperatives in Britain and the National Trades’ Union in the U.S., were mostly created before the mid-19th century, and were undertaken mainly by striking workers in craft employments where the tools of the trade were fairly inexpensive and “factories” were just large agglomerations of craft workers all using their hand tools in the same place. In this period cooperative shops were frequently organized by artisan laborers on strike, and were sometimes organized as an alternative to wage labor altogether.(3) The balance between human capital and physical capital was such that workers could often walk out and take “the factory” with them, leaving behind a “company” consisting of nothing but a name and four walls.

Such possibilities largely came to an end with the advent of factory production using expensive machinery. The main reason the labor movement failed to build a counter-economy based on worker cooperatives after the mid-19th century (e.g. the failure of the Knights of Labor’s network of worker co-ops) was the size of the capital outlays required.(4)

We are now experiencing a reversal of the previous shift: a transition back from expensive machinery to affordable, general-purpose artisans’ tools, accessible through cheap communications technology (the internet) and the open source movement that is essentially the worlds biggest coordinated DIY effort.

Technological innovation is in the process of making capital constraints irrelevant, and thereby nullifying the capitalists’ former privileged access to enormous amounts of investment funds (indeed, websites like allows for small-scale projects to crowd-source financing and subvert the banking cartels). Thanks to the desktop revolution, as Tom Coates put it, “the gap between what can be accomplished at home and what can be accomplished in a work environment has narrowed dramatically over the last ten to fifteen years.”(5) Douglas Rushkoff commented on the superfluity of investment capital resulting from this:

The fact is, most Internet businesses don’t require venture capital. The beauty of these technologies is that they decentralize value creation. Anyone with a PC and bandwidth can program the next Twitter or Facebook plug-in, the next iPhone app, or even the next social network. While a few thousand dollars might be nice, the hundreds of millions that venture capitalists want to–need to–invest, simply aren’t required. …

The banking crisis began with the industry, because here was a business sector that did not require massive investments of capital in order to grow. (I spent an entire night on the phone with one young entrepreneur who secured $20 million of capital from a venture firm, trying to figure out how to possibly spend it. We could only come up with $2 million of possible expenditures.) What’s a bank to do when its money is no longer needed?(6)

The same thing is happening in physical production. Over the past twenty years or so, the minimum cost of machinery required for producing goods of “factory” quality has fallen by two orders of magnitude. Using assorted homebrew versions of CNC 3-axis cutting tables, milling machines, lathes and 3-D printers developed by hardware hackers, it’s possible for a garage shop with $10,000 worth of machinery capable of manufacturing goods that once required a factory costing hundreds of thousands of dollars.(7)

So the basis of the capitalist’s authority—the high cost of production machinery, and his ability to control labor’s access to it—has disappeared. And the balance between human capital and physical capital has shifted back to that prevailing in the days of artisan labor. An increasing share of production is carried out by independent job shops using small-scale, general-purpose machinery, producing on contract for corporate clients. Corporate control of production depends almost entirely on their ownership of “intellectual property” and their control of branding and marketing. The affordability of the actual machinery of production, and the growing importance of human capital as the primary source of value-added, mean that the corporate headquarters is becoming a redundant node increasingly vulnerable to being bypassed.

Under the cooperative model, there is no cooperative headquarters, but instead a central federation in which each individual cooperative chooses whether or not to join. The beauty of the cooperative federation scheme is that the model pushes the federation to innovate, lest the cooperatives split off and form a competing federation.

The current federation, NRECA, is a DC metro-area based association that provides valuable market research information, forecasting, and resource pooling amongst the membership. NRECA could go a step further to use its relatively positive social and political capital to leverage new partnerships amongst its cooperative base, university researchers, and engineering “hobbyists” to build a new open source model of energy generation. In this sense, development could be decentralized, though adhering to core principles, objectives, and ends. What the implosion of physical capital outlay costs has done for material production, networked, stigmergic organization has done for the transaction costs of coordinating effort that could be strung together through cooperative federations like NRECA.”

2 Comments Proposal: A Cooperative Strategy for Distributed Renewable Energy (1)

Leave A Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.