Wolfgang Hoeschele: The energy infrastructure that we inherited from the 20th century is one dominated by fossil fuels and uranium, mined in relatively few localities in the world. The distribution and refining of these fuels is tightly held by a few large corporations. Electricity generation typically occurs in plants that hold local or regional monopolies, with vast profit potential. While gasoline is burned in millions of vehicles, the distribution system remains within the control of a few corporations, which often have regional or national oligopoly or monopoly control. The environmental impacts of the energy industry are staggering. It is high time for change.

On the positive side, the need for change to a 21st century energy system based on renewable sources of energy is widely recognized, the necessary technologies exist (and are often cheaper than conventional forms of energy provision), and considerable progress has been made. We can build locally-based renewable energy infrastructures. Renewable energy from the sun, wind, water, organic waste, and geothermal heat can be found everywhere on the planet. Hence, every city and town can make use of available renewable energy sources that offer economic opportunity and enhance resilience in the face of global economic crises and environmental change. On a regional level, localities can exchange energy in order to even out seasonal or daily imbalances in supply and demand.

A locally based vision of renewable energy generation could eliminate global- or national-level domination of the energy infrastructure by a few large players, and thus the concentration of profits in the hands of a very few. It could also reduce our greenhouse gas emissions to very low levels, comparable to the emissions before the industrial revolution. But the local orientation alone would not ensure that the benefits would be shared among all sectors of the local population, and therefore it would not guarantee widespread and active support. This is where sharing solutions come in. Shared energy infrastructure means that people together own and operate both the distributed energy generation facilities and the infrastructure to deliver that energy from where it is generated to where it is used.

In a sharing vision of a local renewable energy system, many households will generate their own renewable energy (as in solar photovoltaic or solar thermal systems on their rooftops), but many more, for whom this is not an option, will share in the ownership and operation of off-site renewable energy generation infrastructure such as wind turbines. The distribution systems by which energy is delivered to households will belong to cooperatives, municipalities, or trusts that are accountable to their customers and therefore do not take advantage of the potential of supply monopolies to generate economic rents (unearned income, extraordinary profits). The energy infrastructure is built by companies controlled by their employees, ensuring equitable sharing of the economic benefits. The construction and maintenance of this entire infrastructure is financed in such a way that it benefits the producers and consumers (and often prosumers — people who both produce and consume what they produce), rather than simply providing growth opportunities for the finance “industry.” Consumers use their buying power to ensure that they obtain renewable energy that is produced under fair conditions.

All the elements of this locally-based, sharing vision of a renewable energy infrastructure already exist. Some have even been brought to considerable scale, as for example in Denmark, where a large proportion of the wind energy generation is accomplished by local wind cooperatives. The challenge is to bring all these elements together into mutually supportive networks, and to establish such networks essentially everywhere.

In many countries, much of the grid is owned by municipal authorities, which is an excellent solution as long as democratic accountability of these authorities is ensured. Unfortunately, there has been a trend in recent years to privatize electric distribution grids, on the basis of the argument that private control is automatically more “efficient.” However, this argument is only valid if there is true market competition, which is not the case in most energy distribution systems.

In this context, the best way to ensure that a business serves its customers is for the customers to take over the business. There are different models to do this: in rural areas — as in much of the U.S. — rural electric cooperatives have long played a large role in running the local grids. In large urban areas, however, this model has not been as successful. At the urban scale, municipal ownership or trusts are more prevalent.

Finally, it is important that the workers installing all this equipment get a good deal — and this works best if they themselves own their own companies and make the important decisions. The challenge now is to bring all these elements together and help them to grow, in order to build an energy infrastructure that allows all of us to live well, while ensuring good living conditions for all the other species on this planet.

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Wolfgang Hoeschele: The establishment of a carbon-neutral energy system requires massive investments in infrastructure such as wind turbines. Because distributed energy systems do not fit the business models of the old energy utilities, they continue to invest far too little in this sector. Meanwhile, many individual electric power consumers are interested in investing in renewable power infrastructure, but these investments are too large and require a level of expertise too advanced for individual households to be able to support them. How can consumers take matters into their own hands?

Wind cooperatives allow multiple households to pool their funds to collectively build one or more wind turbines. As co-owners, they make investment decisions and negotiate the terms with operators of larger electric networks. An urban example of this is the Middelgrunden Wind Turbine Cooperative, formed in 1997, which partnered with the Copenhagen municipal utility to build 20 wind turbines of 2MW capacity each, off the shore of Copenhagen. Københavns Energi, the municipal partner, has since then merged with several other companies to form the private energy company DONG Energy. The cooperative owns 10 of the turbines, while the other 10 are owned by DONG Energy. Over 8,500 people who mostly live in or around Copenhagen own the 40,500 shares of the co-op. The cooperative is organized as a partnership, and each partner has one vote, regardless of the number of shares. One wind turbine is a “children’s wind turbine” — shareholders have had their children vote on their behalf and thereby participate in the decision-making process, learning how to organize a sustainable future as cooperation between people.

The cooperative benefits from the support of the Danish association of owners of wind turbines (founded in 1978 as Danske Vindkraftvaerker, later renamed Danmarks Vindmølleforening). This association has successfully lobbied the national government to create favorable conditions for the expansion of wind energy. In part due to its activities, cooperatives accounted for around 50 percent of Danish installed wind energy capacity in the 1980s to early 1990s, and 20 percent of installed capacity today.

Results:

• The wind turbines were completed by 2001, and the output of the cooperative’s turbines has been varying from 40-45,000 MWh in the last several years.

• This is one of many examples in Denmark of wind power being produced as a result of the collective efforts of individuals interested in wind power.

• There is high public support for wind power in Denmark, due in no small part to the fact that ordinary people, not just some distant shareholders, are direct beneficiaries.

Additional Resources:

FEASTA report on Denmark’s wind cooperatives

Middelgrunden cooperative bylaws

English translation of Danish Promotion of Renewable Energy Act of 2008

This piece is an excerpt from Shareable’s upcoming book, “Sharing Cities: Activating the Urban Commons.” Keep an eye out for the public release of the book this summer. 

Photo by Stephen Braund

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