Futures Forum: Community energy cooperatives: a confusing picture in UK
The question remains whether the UK can or should emulate the "prosumer and energy co-op movement in Germany" and elsewhere on the Continent:
ENVIRONMENTALRESEARCHWEB BLOG
Grass roots renewable innovation
By Dave Elliott
It is sometimes argued that small-scale community-based experiments with green energy projects can lead to new ideas and practices that can be spread widely – pioneering technological and social innovation. The ‘bottom-up’ grass roots approach has certainly been successful in the past. For example, it’s claimed that wind energy owes much of its current success to the initial small-scale community-based projects that emerged in Denmark, where grass-roots agricultural engineering innovators pioneered new wind turbine designs that were then taken up by community-based wind co-ops. Most of the wind projects in Denmark are still locally owned and local green energy co-op based schemes have spread across Europe, notably in Germany.
In order to explore whether grass roots innovations like this can spread further, a research team from University of East Anglia and the University of Sussex looked at 12 small-scale projects that aim to reduce the impacts of energy consumption in communities across the UK. They included a solar PV project in Brighton, an eco-home development in Bristol, hydro-generation in Cumbria, and a community buy-out on the Isle of Gigha in Scotland. Lead researcher Dr Gill Seyfang, from UEA’s school of Environmental Sciences, said: ‘What we found is that there is a great deal of community enthusiasm for small scale innovative projects like this, but the resources available are not always enough to really help them flourish’.
The theoretical basis for the study is strategic niche management (SNM), an approach to innovation management that has been developed mainly for use in more conventional contexts – to guide corporate-level attempts to respond to potentially system-changing (‘destructive’) technological innovations and linked emerging niche markets. Grass roots energy innovations certainly seem to have similar characteristics, and so the study looks at ‘the conditions under which innovations for sustainability succeed, and guide governance of innovations for sustainability’. However, as the academics note, the context is somewhat different from the more usual commercial one. It involves‘networks of activists and organisations generating novel bottom–up solutions for sustainable development; solutions that respond to the local situation and the interests and values of the communities involved. In contrast to mainstream business greening, grassroots initiatives operate in civil society arenas and involve committed activists experimenting with social innovations as well as using greener technologies.’
The paper says grassroots innovations differ from market-based innovations in that ‘their driving force is social and/or environmental need’, and they ‘display diverse organisational forms’including co-ops and voluntary groups, rather than firms; and they are ‘grounded in local and collective values, based on notions of solidarity, rather than efficiency and profit-seeking; and their niche protection consists of being a space for alternative – i.e. green, sustainability-oriented – values to be expressed’. These initiatives ‘form ‘pockets’ of shared values different to mainstream norms, and communities of interest coalesce around them, in mutually supporting (hence, protective) spaces’.
What the study concludes is that ‘while networking and intermediary organisations can effectively spread some types of learning necessary for diffusion, this is not sufficient: tacit knowledge, trust and confidence are essential to these projects’ success, but are more difficult to abstract and translate to new settings’ i.e. it may be hard to reproduce the specific green and cooperative value-driven ‘niche’ innovations and processes in areas where market values predominate.
All in all then, it’s hard to replicate and transfer widely via conventional top-down corporate SNM! But if these developments are seen as important, e.g. as a source of new ideas and practices, as well as for the direct local benefits they can offer, then more flexible intermediary agencies and support systems are needed, to help them prosper and diffuse the ideas more widely.
Dr Seyfang has spelt out what that means in practice: ‘While technical advice is available through handbooks and toolkits, there are some really critical support needs in particular – from decision making help to financial models and emotional stamina to keep going in challenging times. The [DECC] Community Energy Strategy has adopted many of our recommendations for supporting mentoring and intermediary organisations, but much more still needs to be done. A huge priority is for Government to recognise that many community energy projects are aiming to tackle fuel poverty and develop stronger communities, as well as generating or saving energy. Evaluation and performance monitoring really needs to value these different kinds of results, and not simply focus on the amounts of energy produced. Community energy has a part to play in a sustainable energy future for the UK, but demands joined-up policy support, spanning community development, social inclusion, regeneration, energy and climate change.’
While there is no doubting that local-level projects can have many local benefits, in terms of energy provision, job creation and building local economies, the study implies that, without the right kind of external support, it may be hard for them to break out of their niches and be taken up more widely. In the current context of economic constraint, there is not too much on offer in terms of grant aid, and although the Feed-In Tariff system has helped, in the UK as elsewhere, it’s interesting that another report on community energy, from ResPublica, has focused more on self-raised capital, making use of the ‘crowd-funding’ approach.
Community energy projects are spreading, but it remains to be seen whether they will be happy to adopt a more commercial market-determined approach. For some, the hope is that this may not be necessary, since the alternative approach will come to dominate. Given the success of the ‘prosumer’ and energy co-op movement in Germany, which has led conventional companies to revamp their approach, having lost some of their markets to these bottom-up, grass roots initiatives, that may not be entirely utopian. But as the new UEA/Sussex study shows, in the UK at least there may be some way to go.
‘A grassroots sustainable energy niche? Reflections on community energy in the UK’, was funded by the Energy and Physical Sciences Research Council and EDF Energy and is in the journal Environmental Innovation and Societal Transitions:http://grassrootsinnovations.org/2014/05/12/journal-article-a-grassroots-sustainable-energy-niche/
environmentalresearchweb blog - environmentalresearchweb
The revolutionary rise of the energy prosumer
BY Sam Friggens
A recent academic paper published in the journal Energy Policy argues that the impacts of solar power could be as significant as the transformation from TV to the internet. It will mean the emergence of energy ‘prosumers’, fundamentally altering our relationship with energy whilst driving innovation and demanding new business models. Government and business will need to move fast and flexibly to manage a transition over which they have limited control.
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German power prices negative over weekend
Germany set a new record on Sunday, May 11, by getting nearly three quarters of its electricity from renewable sources during a midday peak. Nonetheless, Craig Morris says the resulting negative prices are both good news and bad news.
On May 11th, power prices were negative for several hours in Germany. (Source: EPEX)
German power prices negative over weekend – German Energy Transition
Energy by the people
Germans can switch power providers. In fact, they are not only free as power consumers, but also free to become “prosumers” – simultaneously producers and consumers. They can even sell the power they make at a profit. Germany’s Renewable Energy Act stipulates that the little guy’s power has priority over corporations. German feed-in tariffs have helped produce all of this community ownership, thereby simultaneously reducing NIMBYism (not in my backyard).
In most countries, the energy sector has long been in the hands of large corporations because electricity came from large central stations. Renewables offer an opportunity, however, to switch to a large number of smaller generators, and this distributed approach offers an opportunity for citizens and communities to get involved – an opportunity that is not being taken advantage of everywhere in the switch to renewables.
Some countries are switching to renewables by requiring utilities to produce more green power with policies called “quota systems.” These policies set targets for utilities to reach, and penalties can be imposed if the targets are not met. The focus here is generally on cost, with the assumption being that utilities will choose the least expensive source of renewable power. For instance, the British Wind Energy Association lists wind projects as submitted, approved, refused, and built, categories that do not exist in countries with German feed-in tariffs.” Rejections are thus a natural part of requests for proposals, which are also common in the US.
In contrast, no single organization in Germany has the task of reviewing wind farm proposals for approval or rejection; instead, local governments decide where wind farms can be built and how they will be designed (space, number of turbines, etc.). Utilities face no penalties because, in fact, it is not their responsibility to ramp up renewables. Utilities are also eligible for feed-in tariffs, but these firms nonetheless rarely make such investments. Overall, the difference between the two approaches – feed-in tariffs versus quotas – is striking. Under quotas, only the least expensive systems go up after time-consuming reviews, and they remain in the hands of corporations; under feed-in tariffs, everything worthwhile goes up quickly, and ownership of power supply rapidly transfers to citizenry. In other words, Germany is democratizing its energy sector.
This focus on cost is justified in quota systems (like Renewable Energy Standards in the US) because excess profits would go into the hands of a small group of corporations. Proponents of such quota systems correctly charge that the cost impact of feed-in tariffs is generally greater than the cost of quota systems, but they overlook two aspects: first, countries with feed-in tariffs generally install a lot more renewable generating capacity; and second, if properly designed, profits from feed-in tariffs go back to small investors, not multinational players, thereby breaking the stranglehold that large corporations have on the energy sector. In other words, many of the people who face slightly higher retail rates also receive revenue from those increases.
Social transition
The energy transition is not just a technical challenge; it will also challenge us to change our behavior. If the goals of Germany’s energy transition are to be met, Germans will have to pursue “sufficiency strategies” focusing on a cultural transformation – a process that cannot be completed overnight, but will take time and require a lot of awareness-raising. Germany is a society in which people love their creature comforts, so as all of these devices become more efficient, we must ensure that people do not simply decide, say, that a car with twice as good gas mileage means they can drive twice as much for the same price. Aside from the increase in energy prices already taking place, this discussion about policies to change behavior is just getting started in Germany. Already, it is clear that new ownership and financing models (such as energy cooperatives) will not only allow people to get involved in new ways, but also increase acceptance of local change and awareness of energy consumption.
Increasingly, new modes of flexibility will need to be tried out. For instance, the first German cities now have apartment swapping platforms so that parents whose children have left home can move into accessible apartments of the right size. Housing associations are working on flexible housing concepts to allow rooms to be easily separated in order to put an end to the unbroken growth in per capita living area over the past few decades. Elsewhere, residential complexes now have ultra-efficient washing machines for common use in the basement, and car sharing provides people with efficient mobility to suit their needs. But people should not be forced to adopt such ideas. Rather, they will come up with such solutions themselves as they become more aware of the problems posed by rising energy prices and the impact of carbon emissions.
See also:
Futures Forum: “Energiewende” – energy transformation... reducing dependence on fossil fuels and changing the role of the large traditional utilities.
Futures Forum: Sweden, Denmark and Norway have been voted the happiest countries in the world...
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