Energy democracy refers to the freedom to choose who provides your power, and to produce your own. Many Germans take advantage of this freedom to take part in the Energiewende: one in every sixty Germans is now an energy producer.
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 renewable power has priority over dirty power. German feed-in tariffs have helped produce all of this community ownership, thereby increasing acceptance levels for renewables.
In most countries, the energy sector has long been in the hands of large corporations because electricity came from large central power 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. Germany has an unusually high level of citizen involvement in the Energiewende.
Meanwhile, in Freiburg, Germany, a town of some 220,000 people in the southwestern corner of the country, citizens funded roughly a third of the investment costs for four turbines put up on a nearby hill, with the other two thirds coming from bank loans. The project manager says interest rates from the bank were around 4.5 percent, whereas the project paid a dividend of up to six percent to citizen investors. The citizen investments counted as equity; in other words, the banks provided relatively low interest rates because so much equity was available. On the other hand, a lot more paperwork is involved when you have hundreds of small investors instead of a few big loans from banks. But the Freiburg project, like so many others in Germany focused on greater community acceptance – so that locals can negotiate with locals, not with an out-of-town corporation that makes everyone feel like it could get its way.
The latest projects attempt to make communities not just net exporters – selling excess power to the grid and only purchasing power from it when not enough renewable energy is available – but entirely self-sufficient. For instance, the Island of Pellworm has combined solar, wind, biomass, and geothermal in a hybrid power plant connected to a smart grid with energy storage to reduce the dependency of its 1,200 inhabitants on energy imports by 90 percent.
There are also community-owned biomass projects. In 2004, a local farmer in the village of Jühnde formed a cooperative with nine other farmers who wanted to grow energy crops. More than 70 percent of village residents agreed to switch their heating systems over to a district heating network connected to a new village biogas unit. The biomass unit runs largely on local corn crops. For several years now, the villagers have been paying local farmers and businesses for their heat instead of paying for foreign oil and natural gas.
When Jühnde switched over to its renewable heat supply, it drew a lot of attention across the country and served as an example for scores of other communities – and continues to do so. Indeed, there was a bit of a boom in corn as an energy crop, which drew some criticism. People feared monocultures and were concerned about the impact on biodiversity and landscapes, but anyone who has seen the Corn Belt in the United States, soy plantations in Brazil, or palm oil plantations in Malaysia would find Germany’s largest cornfields quite small in comparison.
New projects will continue to depend on local support. If the citizens affected do not want to be surrounded by even more cornfields, the project will not go forward.
It is often said that only the wealthy can make such investments; for instance, critics charge that you need to own your own home to have a solar roof. But more than 90 percent of Germany’s energy cooperatives have already set up solar arrays, and a single share in such cooperatives costs less than 500 euros in two thirds of the cooperatives – with the minimum amount less than 100 euros in some cases. As the head of Germany’s Solar Industry Association (BSW-Solar) puts it, “Energy cooperatives democratize energy supply in Germany and allow everyone to benefit from the energy transition even if they do not own their own home.”
Furthermore, some energy cooperatives are moving beyond power production to include grid ownership. In the 1990s, the movement began with the Schönau Power Rebels, residents of a village in the Black Forest that forced their local utility to let them purchase the local grid. Now, the movement continues to spread across the country. In 2014, Germany’s second largest city – Hamburg – voted to buy back its grid. A similar campaign in the capital city Berlin failed, however. Citizens are even to be allowed to purchase stakes in transmission lines expanded for offshore wind, albeit to a very limited extent.