Marc Théry is the Energy Manager in Le Mené, a municipality in Brittany, France who can be named substitutional for a movement which is rapidly gaining momentum globally: The Community Energy Movement. As renewable energies unfold their impact locally, it is in fact mostly cities and communities investing in renewable sources to ensure that revenues stay in the region. “We want to produce the energy we use and not export energy and buy it back from EDF (French Utility) which is completely crazy as an economic model.” says Marc Théry. With this opinion, he is not alone.
Across the world, community initiatives change our existing energy sector by producing, selling, and distributing renewable energy or delivering energy services. The REN21 Global Status Report 2016 which is launched today, actually features this trend for the first time, proving that this is not a niche sector anymore. In Europe, more than 2,800 energy cooperatives were in operation as of 2015. Australia has 45 community energy projects and 70 are in planning phase. In India, community energy projects (largely micro-hydro) have existed since the 1950s and in Nepal, roughly 15% of electricity is produced by community-owned micro-hydro installations. Costa Rica, with its ambitious goal of becoming carbon-neutral in 2021, is home to four energy co-operatives with over 180,000 members, controlling almost 15% of the energy market. In East Africa, where community energy projects have driven energy access efforts in areas that lack a centralized electricity grid.
All this shows that the energy transformation starts in the fundamental way our system is structured. And with it comes a battle, as power and profits shift hands from the few to the many.While there is no agreed definition of community renewable energy, the concept revolves around the idea of community ownership, participation, and shared interest in the context of renewables initiatives.
In the understanding of the Scottish government for example, community energy refers to projects led by constituted non-profit distributing community groups established and operating across a geographically defined community. The Australian Community Power Agency states that “community-owned renewable energy projects are those that help decarbonise, decentralise and democratise electricity systems and demonstrate that renewable energy technologies work. They develop local renewable energy resources for electricity, heat and fuel in ways that reflect the motivations and aspirations of the local community, maximise local ownership and decision making, share the financial benefits widely and match energy production to local usage.” Community energy may describe a geographic community or a community of interest.
Common characteristics are also described as the following:
- Ordinary people or citizens are involved in running the project through communities such as co-operatives or development trusts;
- there is a co-operative, democratic or specifically non-corporate structure;
- there are tangible local benefits to people living or working close to projects;
- the profits go back to the community or are re-invested in other community energy schemes
The Rocky Mountain Institute refers to community-scale solar as “mid-size (i.e., 0.5–5 MW), distribution-grid-connected solar PV”. Here, community-scale solar includes both shared solar, i.e. subscribers to solar gardens as well as small utility-scale systems with utility off-takers.
Community Energy – what is it?
Examples from across the world show that there are different forms of community energy. In the German municipality Wolfhagen, citizens own 25% of the local utility, which enables them to benefit from the profit made from the operation of RE plants, have direct influence on decision-making processes as well as provides the necessary capital for the utility to realize projects.
In South America, the Brazilian cooperative CRELUZ was set up in 1966 to improve the supply of electricity. Initially, the co-operative managed the local grid and purchased electricity from a national supplier, but eventually invested in local generation using mini-hydro technology and connected previously neglected households to the grid. CRELUZ now operates 4,500 kilometres of power lines reaching 36 municipal areas. 20,000 families are members of the co-operative with an estimated 80,000 people benefitting in total.
San Diego in California/US just recently set a 100% renewable electricity target by 2035 and it intends to drive this transition by introducing a Community Choice Aggregation (CCA) programme. In the past, the local utility SDG&E purchased electricity directly from the various producers (gas, wind, solar, etc.) and then sold it to consumers. This did not allow the City of San Diego nor its citizens to actively decide where their energy comes from. On the contrary, it gave the utility total control of the city’s energy supply. Now through the CCA programme the City will be able to purchase the electricity directly from the various producers and sell it to residents and businesses. The power will still be delivered to the consumers by the utility, which is still managing the power infrastructure, regulating the grid, providing customer service, etc. As opposed to the private utility model, this service is not for profit, it is run by local governments and it is completely optional for the consumer. Additionally through this scheme, part of the revenue from energy sales that would normally flow into the private utility shares would now remain within the community budget. This available income can be used to fund local energy efficiency and renewable energy projects.
Political Support for Community Energy
This shows that community renewable energy initiatives may range from individual households to various forms of social enterprises, as well as public ownership by municipalities. The choice of form often relates to the interest or goal of the particular community as well as to the regulatory frameworkwhich determines who and how community renewable energy can be structured. European analyses have shown the importance of sufficient flexibility for individuals and communities to organise in an appropriate way that allows them to pursue their purpose or goal.
Generally speaking, an enabling environment for community energy requirescommitment and political support from governments at local, regional, national, and even supranational (EU) levels. It is evidenced by recent trends especially in in North America and Europe that community renewable energy requires stable and long term policy measures. Regions with supporting policies have seen a proliferation of community energy initiatives.
This blog was produced based on material that the author compiled as an input for the Community Energy Feature in the Global Status Report 2016. The article was originally published on our Climate & Energy Blog “Power to the People”.