Germany's Little Energy Co-ops Make a Big Splash

December 17, 2012 | 00:00

Germany's Little Energy Co-ops Make a Big Splash

When Germany's environment minister Peter Altmaier addressed the first-ever congress of energy cooperatives in Berlin on November 19, he knew he was looking out over one of the Energiewende's core constituencies. "If all Germans were as engaged as you," he said, "my job would be a lot easier. But we're not that far yet," he joked. Locally based co-ops have become hugely popular in recent years, their numbers tripling in size since 2010 to over 600. Every second day a new clean energy co-op is formed in Germany. Moreover, this tradition-imbued model is now entering a new phase, becoming professionalised as they grow in size, enter into onshore wind power production, and find adherents in big cities, including Berlin. From Germany's capital, Paul Hockenos reports.

(c) buerger-energie-berlin.de
The astounding success of Germany's energy co-ops, environment minister Peter Altmaier said to more than 400 co-op representatives in Berlin, is why he wants to extend the model beyond renewable energy to sectors such as transportation, heating, energy efficiency, and transmission grids. The co-operative model (Genossenschaft) in general and the modern-day clean energy co-ops specifically, Altmaier said, inspired his idea of involving citizens directly in the financing and planning of the country's grid expansion and modernization, a central and controversial element of the Energiewende. "If people on the ground are involved like they are in the co-ops, they are more likely to accept it," he said, referring to local opposition to the planned high-tension cable system.

Energy co-operatives are a means for German citizens to engage directly in the Energiewende. The Genossenschaft model – dating from the 19th century – is unique in that it provides a vehicle for locally organized people who don't own property or have large capital to invest. The co-op enables them to bundle their assets together with other like-minded people and invest in a commercial business operation that in some way serves the public good. Initial investment in an energy co-op requires as little as 50 euros. Another unique characteristic: the minimum investment gives a member one vote in the decision-making process; this vote carries the same weight as that of someone who has invested much more. The co-op's members are involved in decision-making, planning, organization, and sometimes even the day-to-day operation of the enterprise.

"What's so important about the co-ops and their recent boom," says Patrick Graichen of the Berlin-based NGO Agora Energiewende, "is less the quantity of energy they generate, which up to now is just one percent of the total of renewables, than the involvement of so many people. They're taking matters into their own hands rather than waiting for politicians to act. It's an empowerment from below, something novel in the energy industry."

Potpourri

Germany's 600 clean energy coops with 80,000 active members are a potpourri of self-organized enterprises, with anywhere from five to more than 4000 members investing in PV, hydro, bioenergy, local heating (Nahwärme), onshore wind, or power-heat cogeneration. A study conducted earlier this year by the German Cooperative and Raiffeisen Confederation, or DGRV, an umbrella organization for Germany's cooperatives, found that in 2011 co-ops invested a total of 260 million euros in energy-related projects. (At least 800 million euros since 2009.) The average energy co-op has 160 members; two-thirds of the energy co-ops have between 50 and 200 members. More than 90% of the members are private persons (and 3.5% farmers, 4% private sector players, 1.5% municipal actors.) The average initial investment is 714 euros, while the average total investment for a member is €3,172.

The financial crisis, says Graichen, has contributed to the recent proliferation of co-ops. "A co-op is a good option for someone to invest a small amount of savings rather than putting it in a bank where interest rates are negligible. The whole financial system itself looks so unstable at the moment. With a co-op you can get a return of 4 or 5% and be involved in something hands-on and close to your own home."

Currently, the lion's share of the investments of energy co-ops goes into PV installations, the least expensive and technologically basic of the clean energy possibilities.

"It's an empowerment from below, something novel in the energy industry"
The average total investment for an enterprise is €1.2 million and the average generation capacity is 440 kWp. "Photovoltaic co-ops enable people with limited financial contributions to participate in the generation of renewable energy in their locality," explains the DGRV report. "The enterprises are often initiated together with municipal actors, public facilities, and regional banks. This way roof space can be used – for example of municipal buildings like kindergartens and schools – that private individuals would otherwise not have access to."

Suits and ties

A look around the participants of the energy co-op congress ("Energiewende – dezentral und genossenschaftlich"), and their name badges gives some indication of how disparate and heterogeneous the DIY projects are. Some of the 400 participants wore suits and ties, while others sported thick beards and blue jeans. The mixed bag came largely from villages, towns, and small cities across the republic: from the Jagst Valley in the Swabian Alb, Franconia in eastern-most Bavaria, the Mecklenburg lake region, the Frisian islands off the North Sea coast, to the Holstein border with Denmark, just to name a few.

Moreover, co-op members span the political spectrum. The Berlin congress, for example, was sponsored by the office of a Christian democratic MP from Bavaria, Josef Göppel. "Co-operatives support the notion of personal responsibility," explains Göppel. "They strengthen the middle classes and keep economic power in the regions. These are all core themes of Christian democratic politics."

Many of the more successful co-ops are in the process of expanding their operations, a move with far-reaching implications for the co-op model as well potentially for the Energiewende. "A lot of those working in the co-ops do it in their free time," explains Benjamin Dannemann of the Renewable Energy Agency, an institute in Berlin promoting clean energy. "But as they get bigger and expand their offerings their structures are changing. They're becoming more professional and more hierarchical."

Stromrebellen

One co-op that went through this process years ago is the Elektrizitätswerke Schönau. Perhaps the most famous clean energy co-op in Germany, it is located on the southern rim of the Black Forest near the Swiss border. The Schönau Stromrebellen,

Some of the 400 participants wore suits and ties, while others sported thick beards and blue jeans
as Germany has come to know them, bought the local grid from the incumbent utility in the 1990s. It began offering non-nuclear renewable energy – mostly hydropower -- to 1,700 local customers. By 2001 it owned hydro, wind, and heat and power co-generation plants and had 15,000 customers nationwide. Today EW Schönau has 130,000 electricity customers as well as a gas works that serves 7000 people in Baden Württemburg, Bavaria, and Bremen. It's the third largest green electricity supplier in Germany.

"Of course we're not the little co-op that we once were," explains Ursula Sladek, EW Schönau's managing director, noting that the business now has nearly 100 full-time employees. "As a professional enterprise we've expanded what we offer and have production facilities in different parts of the country. This minimizes the risk," she says, something the small pv co-ops don't have to worry about. But, underscores Sladek, the one-person, one-vote principle of the Genossenschaft and the co-op's decentralized structures haven't changed.

The addition of wind turbines to an energy co-op's portfolio is the next logical step, explains Andreas Wieg of the DGRV. Within the last year, co-ops in Oldenwald (Hesse), Starkenburg (Hesse), Ingersheim (Baden Württemburg), and Tauberfranken (Franconia) have installed wind power. One of the strongest motives for expanding, explains Wieg, referring to the DGRV study, is the desire to contribute value to the region (regionale Wertschöpfung). In the study, adding regional value ranked equal with the promotion of renewable energy and environmental concerns as the prime motivation of energy co-op founders.

"Wind power is a lot more complicated and expensive," says Wieg, adding that many of the PV co-ops find it challenging to make the jump. "There's an investment of tens of thousands of euros before one even knows whether the project will be approved by the locality," he says.

Berlin's transmission grid

Minister Altmaier's idea to bring co-op-like structures and engagement to Germany's expansion of Germany's transmission grid is not entirely new. The first move EW Schönau made was to buy the local grid. Other localities have bought their grids or simply constructed their own, like in the village of Feldheim in rural Brandenburg, another best practice co-op.

Currently, a co-op by the name of BürgerEnergie Berlin has much bigger plans, namely to win the concession to operate Berlin's transmission grid as of 2015. In contrast to Schönau's population of 2,400, Berlin supplies over 3.5 million people with electricity. The grid itself, which the current operator Vattenfall owns, encompasses 37,000 kilometers of cable and 80 transformer stations. In order to buy a 51 percent share, the co-op requires at least 200 million euros. Its 500 members have so far raised just 3 million euros.

But the initiative has momentum: All of the major political parties in Berlin's city-state legislature are now working together with BürgerEnergie Berlin. The co-op is also getting expert coaching from the founders of EW Schönau. A single share costs 100 euros, although the co-op strongly encourages interested individuals to buy at least five shares. The co-op founders say their aim is to put the grid back in the hands of Berliners, provide cheaper and more 'intelligent' grid services, and with the revenue invest in projects that further the cause of the Energiewende.

Engaged burghers

Wieg warns though that not every collective effort qualifies as a co-op. Genossenschaften are companies with engaged citizen participation, not capital funds. "There's more to a co-op than just investing money and collecting interest," he says, referring to some proposals to invest in grids or energy efficiency measures. "There has to be a palpable local interest and engagement."

Likewise Wieg is cautious about Altmaier's proposal to use the co-op model to win acceptance for the country's new transmission cables. This could work, he says, only if it pertained to local elements of the grid that had a direct impact on the people living there. The construction of a smart grid that links energy use and energy production, for example, "would be an excellent fit" for a co-op, he says, while big transmission corridors probably wouldn't qualify. But Wieg notes that the environment ministry has yet to make a concrete proposal on the matter.

Moreover, as inspiring as the picture of engaged burghers participating in their own energy production may be, there are obvious limits to what co-ops can accomplish. Big offshore wind parks, for example, says Graichen, are out of co-ops' reach. "And these are an essential part of the Energiewende, too," he says.

Nevertheless, Germany's co-ops haven't stopped reaching – and no one knows how far they will be able to reach in the end, and what their impact will be on the established market. One of the four big German suppliers, EnBW, has already made a defensive move by involving co-ops in the ownership of some of its new solar parks in southwest Germany. It's a model that the others may be forced to follow.

 

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