Theoretical Understanding of Energy Transition in Germany Part 4 (Final) - Critical Reviews on Germany's Energiewende

Over the last couple of months, this blog has placed a primary focus on what roles community plays in renewable energy development, taking Germany as an example. As discussed earlier, community power is highly associated with the emergence of RE projects whereas its development is considered to be accelerated through the state's involvement. This is attributed to the fact that a small-scale business cannot compete with big utility companies which both benefit from economies of scale and the possession of key infrastructure such as grid systems. What I have realized through examining their development is that there are two distinct meanings of community power. First is 'multiple individuals pooling resources (such as space, money, and skills) in order to mutually benefit from a shared renewable energy project', which is generally accepted as a definition of community power (Sustainable Enterprises Media, 2016). Whether the power produced by renewables is sent to the grid in long distance or used on site to offset electricity usage, community power generation is locally owned and collectively operated. The second is more of political power which can influence the energy policy of the entire nation. In this post, I would like to share my reviews on this topic with the findings above.

Photo.1 (Reference: Friends of the Earth Europe, 2013).

As I have already discussed in earlier posts, community renewable energy initiatives began to emerge in many parts of Germany when anti-nuclear movements become dominant in 70s - 80s (National Geographic, 2015). One of the most famous examples is the abandonment of the construction of a nuclear power plant in Wyhl near Freiberg (Details described in my old post here). Their collective value against nuclear power turned the locals to become publicly active enough to keep demonstrating against the plan (National Geographic, 2015). The movement spread across nationwide, which gradually formed a political party, known as 'Green Party' in 80s. This certainly reflects the second definition of community power I have mentioned at the beginning. Essentially, Germany's long history of green politics including relatively earlier FIT introduction and extensive financial support for RE is consolidated by the power of community.

Todays, their political power is strong enough to further accelerate the country's green movement, including the recent decision to phase out nuclear power plants following the Fukushima disaster despite the ruling parties were primarily pro-nuclear (Major Economies and Climate Change, 2014). With the climate change negotiation going for a couple of decades, there is also a huge pressure to decarbonize the nation by diverting the investment on conventional energy system such as domestic lignite and other imported fossil fuels, which are dominantly managed by big utility comapnies. This has come with the further growth of community RE since 2000 when Renewable Act, which is known as a new FIT system, was implemented. For instance, half of wind energy is produced by individuals / communities or wind cooperation.

Nevertheless, large utility companies would not just let community energy initiatives keep going. For example, Vattenfall, is the Swedish state-owned company that recently started investing on a large-scale offshore wind projects (Vattenfall, 2015). They used to be a primary exploiter of lignite (and still are), yet, the public interest in clean energy has encouraged them to embark on the completely new strategy, the energy mix (National Geographic, 2015). In April 2015, 80 offshore wind turbines in the North Sea were inaugmented, called 'Dantysk Project (Dantysk Offshore Wind, 2015). It is expected to produce enough renewable electricity that supports the households, subway and tram lines in Munich by 2025 (National Geographic, 2015). Similarly, E.ON, the other utility company now divide their business area into the one devoted to contemporary energy such as coal, gas and nuclear and the other to renewables (Reuters, 2014). Despite half of the current wind energy is owned by individual households or community cooperation, it is expected that the share of these large companies will rise in the future (Oteman et al, 2014).

Photo.2 Offshore wind turbines in Germany's North Sea (Reference: NHST Media Group, 2015).

This seems, at least to me, a positive outlook to Germany's RE development because large companies have greater funds to develop RE more quickly than community power. However, some critics argue that it could price out community energy companies of the market. Considering the temporality of FIT systems, the future climate seems rather dim to small-scale projects because they do not have economies of scale like big companies. The consequence is either relinquishing of business or mergence with the Big Four. I suppose the former is less likely because energy is a type of staple product that needs to be constantly produced and distributed to consumers. By contrast, the latter case is more viable and acceptable if the quality of services and the electricity prices remain at reasonable levels. This raises a question that whether community 'ownership' is a prerequisite for community energy project management.

As I insisted in the earlier post, I believe that community ownership is essential at the beginning of community initiatives, yet, this may not be the case in the long term. It reflects the argument made by Harvey and Reed (2007) that the participation of community in the development of local initiatives is necessary but the community management is not. In other words, community should have the right to decide how projects will be managed even including the decision to let non-community-owned companies to operate the facility (Newton, 2013). I assume that It is because ownership is rather symbolic than something functional. This means that the difference between community-owned and non-community-owned projects is a stronger psychological effect of the project on the locals to become proud of themselves achieving their own initiative. The only reason why I insist that ownership is essential at the onset of project is that Germany has a strong sense of community and the grassroots movement is very typical (National Geographic, 2015), therefore, the incentives for energy projects need to be derived from their own. This bottom-up view is presented in the interview to some German that 'there's a certain rebelliousness that's a result of the Second World War' that 'you don't blindly accept authority' (National Geographic, 2015). This is not to say that government is not trustworthy or reliable but that people are inherently skeptical of and challenge the government. As I said earlier, this is reflected in the politics of community power.

To conclude, community's involvement is a key aspect of Germany's energiewende and so will be in the future. With large utility companies entering the RE market, it is likely that community-level RE cooperation/company is gradually taken over by the former. However, whether the ownership remains in the community or is handed over to outside company is not something we must worry about. Rather, community participation to discuss the future management of their RE facility is more important, so that they feel being continuously engaged. Also, community's political power is inevitable in developing Germany's energiewende over the course of transition in the way that shapes the energy politics of the entire nation. Although it is anticipated that the growth of community RE will slow down for the above reason, their political influence on Germany's energy sector will not be dismissed. If you have any thoughts please don't hesitate to share them with me here!