The Role of Citizens in Producing and Consuming their Own Renewable Energy

Susanne Hirschmann

Staff member of the collective self-consumption project at Som Energia

Climate change has reached the Mediterranean region, which now has to face enormous problems. Since 1950, the air temperature in Catalonia has increased by more than 1.6ºC, rivers have run dry and hitherto unknown insects such as the tiger mosquito are appearing (Generalitat de Catalunya, 2016). To stop this, carbon dioxide emissions must be radically lowered. By using clean energy sources like wind, water, biomass and the sun and reducing our energy demand with energy efficiency measures, carbon dioxide emissions can be avoided and climate change can be decelerated. Therefore, the transition from fossil fuels to renewable energies is unquestionably the solution that must be put into practice as soon as possible. But the remaining question is: who will be the main player in this new power game that will change the energy system, big companies or the people?

Power to, by and from the People

A real change in the energy system means power to the people. A decentralised energy production with, on the one hand, wind parks, solar fields owned by a group of people and efficient use of urban spaces to cover the energy demand in crowded areas and, on the other, smaller installations owned by individuals to cover the demand in the rural sector. This means citizens generating their own energy because who, if not consumers themselves, better understands their energy needs? There are several powerful reasons why people must be involved in taking important decisions about the future of our energy. First, by producing our own energy we will get a feeling for energy. With the decoupling of energy production and energy consumption that took place in the early industrialisation period, we lost the ability to determine the amount of energy needed to sustain our standard of living. How much energy do we need to cover our energy demand, is our energy consumption sustainable or should we lower the amount of energy we are consuming every day? When energy comes only from power plants it is nearly impossible to see the impact of these plants on nature, such as big coal mines destroying thousands of hectares of fertile land. By producing electricity on our own roof our vision of energy surely will change and we can understand what the kilowatt-hours on our electricity bill really mean. Second, lack of acceptance is one of the big problems renewables are facing: renewables, yes, but not in my own backyard. Most people do not want to live next to huge wind parks or giant solar fields but this opinion often goes hand in hand with big installations that are planned without asking or informing anyone living in the affected area. People who have decided that the energy they are consuming should come from renewable power plants as near as possible will have another perspective on renewables. They will see the need for this investment and will also benefit from the power plants as they will be the owners of the installations. Jobs and money will stay local.

But there is more to it than that. The discussion is not only about people’s own backyards, it is about a new society that will blossom into a paradise of participation and a firmly imbedded feeling for democracy. For instance, to provide a platform to work together and achieve more participation, cooperatives can be created. In 2006, Som Energia was the first renewable energy source cooperative (REScoop) to sell renewable energy to its members in Spain. REScoop refers to a business model where citizens jointly own and participate in renewable energy or energy efficiency projects. Now there are already more than ten cooperatives in the Iberian Peninsula pursuing the same goals. The most important aspect of cooperatives is the concept: it is not about money, it is about people. These people take decisions together democratically, invest in renewable energy projects, generate their own energy and thereby ensure that the money stays local. Now there are many more cooperatives pulling in the same direction, decentralising and changing energy systems towards renewables and giving power back to those the energy belongs to: the people. 

Güssing: How Participation and Political Willingness Changed the Austrian Region for the Better

The example of Güssing, a town in Austria with approximately 27,000 inhabitants, is a success story about how locally-generated energy can benefit the whole region and its community and why a favourable legal framework is important to promote renewables. 

In 1988, the region of Güssing was one of the poorest regions in Austria. With high unemployment rates, rural depopulation, young people leaving the town to find work in Vienna and the high cost of covering energy needs for electricity, heating and mobility, the region had to face problems similar to those of the region of Castile and León in Spain, with one of the highest exodus rates in the country. To make the situation worse, there was a lack of infrastructure as no train or highway passed nearby so it was not attractive for business to settle in this region. To solve these problems, Güssing decided to work out the details of a new energy concept, based mainly on biomass with 100% renewables, to become self-sufficient. With this positive change in political opinion a favourable legal framework was developed to clear the way for energy produced regionally for and by the people. Without a stable framework and the political willingness to let participation and innovative projects happen, Güssing would not have had the chance to develop as it has done so far. The first step was the implementation of an energy efficiency programme including new insulation of buildings and optimising heating systems. Due to these measures, the energy needs of the town hall decreased by more than 50%. Later, the town started to invest in a biomass gasification plant, which led to energy self-sufficiency. This plant is powered by wood that surrounds the city and is available in abundance. At present, Güssing produces more energy from renewable sources than is consumed in the town annually. The region can benefit from the electricity sold, the district heating system and the biodiesel, which brings an added value of 13 million euros per year. As the infrastructure was improved, more businesses started to be interested in this region and there are now 50 new enterprises with more than 1,000 direct or indirect jobs in the renewable energy sector (bmvit, 2007). People are involved and money stays local and can be reinvested in local projects (Vansintjan, 2015). Güssing is a good example of a town achieving self-sufficiency, but relying on biomass is not the only way people can produce and consume their own renewable energy.

The Spanish Sun and the Spanish Problem with Self-Consumption

In Spain it is interesting to widen the horizon to how solar energy can be used for self-consumption in the future. The latest publication about self-consumption from the European Commission clearly points out that self-consumption of PV (photovoltaic) energy is going to be one of the new cores of EU energy policy and therefore this should include Spain. To achieve the goal of greater self-consumption by European citizens the legal situation in some countries must be changed because some governments are building barriers to avoid this development towards a democratic energy system (European Commission, 2015). “Self-consumption of PV energy” is defined by the European Photovoltaic Industry as “the possibility for any kind of electricity consumer to connect a photovoltaic system, with a capacity corresponding to his consumption, to his own system or to the grid, for his own or for on-site consumption” (Roesch, 2013). Self-consumption seems to be easy to achieve and, together with other additional drivers for change in current energy systems, something which should be supported. Some countries, such as Denmark or Germany, are already in the fast lane to achieving the glorious objective of “power to the people”, but is this also a reality in Spain or just a utopia? Crossing Germany by car means passing through lovely villages, in which even church rooftops are covered by solar panels, and driving by huge solar fields and wind parks along the road. In Spain it seems that only tourists getting burnt on the beach are benefiting from the high solar irradiation, but it is rare to see solar panels in public. It is a big opportunity that Spain is missing. Nearly one and a half times the size of Germany, with just half of its population and global irradiation rates much higher than in northern European countries, Spain could easily be one of the role models for the energy transition but it is squandering this golden opportunity. Even though solar energy is very attractive because of the economic benefit of the installation, it is not very popular in Spain. The cost of solar power is decreasing and becoming more affordable. In 2010 the price was €2/Wp (Fraunhofer ISE, 2015) and today the average price of Multi-Si Modules has dropped down to €0.36/Wp. At the same time, energy bills are rising in many countries and the future price development seems to be following this trend. Between 2005 and 2015 the price of electricity in Europe rose by about 10 cents and in Spain and Germany prices even doubled, which should make renewables even more attractive. But it seems that the Spanish government does not share the same ideology and prefers to block this movement. In the last few years, instead of moving forward, the legal situation for cooperatives, small-scale consumers and producers of renewable energy has become increasingly precarious. The fixed charges on electricity bills rose, meaning saving energy no longer reduces the bill and small consumers pay higher prices than big consumers who do have variable charges. But energy efficiency is still the best way to save energy because the best kWh is the one that is not consumed. Installing solar panels on a roof legally involves so much paperwork and time that people get frustrated and do not even try to become prosumers. Last but not least, laws such as Royal Decree 900/2015, which is the basis of the so-called “sun tax”, reinforces stigmas and fears that self-consumption is illegal and it is better to avoid this technology. The Spanish government should change direction as there are so many good self-consumption projects just waiting for their opportunity to develop and spread across the country. Some will be explained here. There are two main ways to achieve self-consumption: as an individual or a group.

A Glimpse into the Future: Prosumers Connected Through Virtual Power Plants Will Rule the Energy Market

For a glimpse into the future of a decentralised energy system, consisting of solar panels and intelligent connected batteries, we need only look at the intelligent battery provider Sonnenbatterie and the sonnenCommunity. Members of this community can generate their own power, store it with an intelligent storage system and share surpluses online with friends or other members. This community is able to partly replace the traditional power companies as it consists of decentralised energy production and not merely providing energy from central power stations. The benefits are obvious. Members are independent of established electricity providers, have significantly lower energy costs and receive the surplus energy from other members for free. Even the problem of costly grid expansion is partly solved by direct marketing in the region and even between neighbours or small residential systems. Three technologies are combined in this visionary idea: decentralised power generation, advanced battery storage technology and digital networking. Therefore, a virtual energy cloud can be created and controlled by self-learning software that connects the members with the community. This software can make predictions about how much energy will be produced and how this energy has to be distributed to cover the whole demand of the sonnenCommunity (Sonnenbatterie GmbH 11/25/2015). Systems like these are part of so-called virtual power plants. Virtual power plants are relatively new energy management systems. They distribute and coordinate in real time the energy production of different energy sources and the actual energy demand. So wind turbines, hydroelectricity, small scale PV and batteries provide a stable energy supply. For instance, when one consumer who is producing PV electricity has run out of energy he will get access to other sources of energy, such as electricity produced by his neighbour’s wind turbine. The energy can be provided at lower costs, it is more flexible and there is less energy loss because of the shorter transportation. The idea of an energy community is not unique but the example of sonnenCommunity clearly shows what the future will bring and how important the role of citizens in the new energy system will be. There is still a long way to go to turn this idea into reality in Spain. Because of the high bureaucracy barriers imposed by the government, few people even think about installing their own solar system. Furthermore, shared energy consumption is still a difficult topic in Spanish legislation. 

Generation kWh: The Solution for Collective Self-Consumption

But what about all the others who do not own a house, a roof or land for solar installations? Is there a way for renters to take control of their destiny and produce and own their own energy? Helen Keller once said “alone we can do so little, together we can do so much” and she is absolutely right. One example of how we can do so much together is provided by Som Energia. The project “Generation kWh” plays on the two meanings of the word generation: a new generation of people standing up for their rights to own their own energy plants and the idea of producing green electricity. Feed-in-tariffs fulfilled the function of making renewables more attractive and ensuring their profitability in the long term and creating a stable environment to invest in them. As the rapidly changing legal situation in Spain made investments in renewables very risky, this stable environment could not be created and there was stagnation in the renewable energy sector. Therefore, Som Energia started the project Generation kWh, which asserts that self-consumption is still possible even without government funding. Every member can purchase energy shares, each worth €100, related with their specific annual consumption. For example, a standard household with an average annual electricity consumption of 2,400 kilowatt hours needs to invest €900 to cover 70% of its energy demand for 25 years. Every €100 contribution corresponds to 170-200 kWh per year, which will be compensated from the energy bill with Som Energia. The cost of generation is roughly 3.5-4 cents per kilowatt hour, whereas the current market price is about 4.5-5 cents per kilowatt hour. Thus, the participants can save 1 cent per kilowatt hour while other costs such as taxes, grid access fees and so on stay the same (Roselló, 2015). After 25 years the sum originally invested will be returned to the investor and, during this period, the investor enjoys energy bill savings. Implemented in 2015, the project bore fruit in May 2016 as the first collectively-owned solar field providing energy to about 1,300 households started to work. In total, more than 2,700 people have already participated and together they have invested more than €2,548,400, which will be invested in even more community-owned power plants (Palmada, 2016). The great support for the Generation kWh project is a perfect example of what citizens want: to participate and be part of the change. 

Collective Self-Consumption in Cities

This is not the only example of how citizens can take power into their own hands. Generation kWh works on bigger installations but how can solar energy be generated and consumed in cities? For instance, Barcelona has a surface area of more than 100km2. Nobody would expect 100km2 to be completely covered by solar panels but there are so many rooftops or building façades that can be used for producing energy. The potential resources of installing PV in this city are 7-14 MW of PV technology installed on public and private rooftops. Installing PV panels on buildings means that the energy is produced where it is needed: in crowded areas where somebody is always using the oven, charging an electric car or washing clothes (Camaño-Martín, 2008). 

The Mieterstrom Model for Self-Consumption in Cities

To put this into effect, the German Mieterstrom neighbour solar supply model can be used. It shows how residents can get access to power generated on their building rooftops. The functioning of the Mieterstrom model is quite simple: neighbour solar supply is based on locally-generated electricity and this electricity is used directly by the tenants in multi-family houses or neighbourhoods. An energy provider offers to supply PV electricity to the residents of a building directly from the roof and to supply energy via the grid if there is no energy being generated at a given moment. One important detail of this model is that not all the tenants have to participate. About 50-75% of the total electricity production can be used, and participating households usually cover 35% of their own electricity requirements via the PV (Zuber, 2017). The advantage is that the consumer does not have to pay high investment costs for a solar installation on a building where they might only stay for a few years but they receive electricity produced as locally as possible. Furthermore, they will pay a cheaper price because the supplier does not have to pay grid access fees as the energy is supposed to be consumed instantaneously (Roesch, 2013; Dunlop, 2016). In the near future, Spanish people will have a glimmer of hope of getting access to shared self-consumption in buildings. The Constitutional Court of Spain took a step in the right direction and eliminated obstacles to shared self-consumption on 2 June 2017, which had been illegal according to Royal Decree 900/2015 (Tribunal Constitucional de España, 2 June 2017).

Azimut: Tenants of a Whole Building are Joining Forces to Produce their Own Energy

The PV installation does not necessarily have to be owned by the supplier. The tenants themselves (with the permission of the owner) can pay for the installation and be consumer and producer of their own energy at the same time. In spring 2017 the Azimut 360 cooperative located in Barcelona presented its pilot project Agrupación de Consumos (joint consumption). Their main objective in this project is to carry out a PV installation on a rooftop of a multi-family building and link all the electricity meters to one single meter. The electricity will be distributed to the different parties living in the building and with an internal electricity meter they can manage billing themselves. This change will lower the building’s peak load and provide savings on the energy bill. Moreover, the electricity generated by the solar panels can cover a significant amount of the daily energy demand. As there are more households with different habits the energy demand will be more balanced. The tenants must work together, cooperate and make decisions about how to carry out the installations and how energy should be distributed. Projects like these help to build community and make people feel responsible for their habits according to their electricity consumption because it is not your own electricity but belongs to the whole community (azimut360, 2017). 

Citizens Will Bring About Renewables: Self-Consumption is Necessary

With these inspiring examples and role models with so many people involved one thing is clear: self-consumption of renewables should not be illegal, it is necessary and must be driven by the people. But how can we bring this about? With less bureaucracy, lower prices and more publicity in favour of renewables and energy efficiency we could move towards a better future. What is needed is a change in the Spanish energy policy because it does not represent the will of the people, which should be the basis of the government’s authority. And the will of the people is democracy, including in the energy sector.