Community Energy

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Description

Nicky Ison and Ed Langham:

"Community energy projects are those in which a community comes together to develop, deliver and benefit from sustainable energy. They can involve energy supply projects such as renewable energy installations and storage, and energy reduction projects such as energy efficiency and demand management. Community energy can even include community-based approaches to selling or distributing energy.

Community energy projects allow individuals to be involved in clean energy beyond the bounds of their own homes or businesses and in so doing bring a range of benefits and opportunities for their household and for the wider community.

Community energy has and continues to underpin the energy transition in countries like Germany, Denmark, the United Kingdom and even the United States. The first modern wind turbine – Tvindkraft - was literally built by a community in Denmark in 1978." (https://theconversation.com/communities-are-taking-renewable-power-into-their-own-hands-42480)


Typology

Forms and flows of value in community energy systems

DOTSON T.C. & J.E. WILCOX:

"For most of the 20th century, ownership and operation of electricity generation equipment has largely been limited to large organizations with access to financial capital, and later, individual homes living “off the grid.” State policies requiring public utilities to purchase renewable energy produced by small, distributed systems were adopted in the 1980s, in the wake of the energy crises of the 1970s. Since that time, the vast majority of renewable energy installations in the US have been grid-connected to take advantage of net metering policies. As grid connectivity has become the norm, the cost of photovoltaic solar panels –hereafter shortened to “solar photovoltaics,” or simply abbreviated as “solar PV”– has fallen, the solar installation industry has matured, and system resilience has become a policy priority (St. John, 2014), the next frontier of “retail” energy has moved to community-scale energy systems. A range of actors, from grassroots environmental organizations to large “cleantech” firms and many in between, have called for policymakers to provide greater support for community energy.


As mentioned above, the definition of community energy is difficult to pin down, but the three specific models that appear most frequently in energy industry, policymaking, and advocacy accounts are

Collective Solar Purchasing

1) collective solar PV purchasing campaigns;

2) shared renewable energy installations; and

3) microgrids.

The first, often referred to as the “Solarize” model, involves a limited-time campaign, usually run by local officials, advocacy groups, or civil society organizations, during which rooftop solar installations are offered to customers at a discount. Solarize organizers set an installation goal, prepare and issue a request for proposals, and select a solar installation contractor on the basis of criteria such as system price (often treated as the most important), system quality, experience and, if desired, other community benefits, such as offering apprenticeships to local residents or meeting a wage standard. The organizers then carry out their campaign –which is usually run at the neighborhood level, with organizers tabling at local events and holding information sessions at libraries– to create local interest and convert interest to installations. Solarize initiatives are usually structured in such a way that the price for all participants is reduced once a certain participation goal is met. The profile of the Solarize model has risen as local officials in a number of states publishing case studies in coordination with the US Department of Energy’s Sunshot Initiative, which has released a report in support of the model (Myers, Hart, & Hofmeyer, 2012; Irvine, Sawyer, & Grove, 2011). Solarize programs routinely exceed their installation goals, and a typical campaign often results in a locality increasing its total PV installations by over 100 percent. The Solarize model uses grassroots mobilization to promote the diffusion of a well-established sociotechnical configuration--privately owned, onsite PV –with the enthusiastic support of policymakers and the solar industry.


Shared Renewables

The second model, shared renewables, remains less common, despite increasing interest among some policymakers and advocates. Most shared renewable systems in the US are large solar PV arrays, due to greater flexibility in siting and permitting, as well as a decreased likelihood of public opposition when compared to wind development (Coughlin et al., 2012). Shared solar development has not seen the same widespread growth of the Solarize model; this relatively slow growth is generally attributed to the increased complexity it demands. Indeed, because of their larger size and novel ownership structure, shared systems have to navigate the murky waters of incorporation, siting, and permitting in a way that private, Solarize installations do not. Shared systems, however, offer the possibility of energy generation ownership to a much wider public. Participation in Solarize projects is limited to those who own property that receives adequate sunlight and who (most likely) do not anticipate moving or replacing their roof any time soon. Shared systems would be accessible to everyone else: renters, property owners not meeting the criteria above, and anyone who simply does not want to site energy generating equipment on or adjacent to his or her home. Interestingly, shared solar is not often promoted through grassroots mobilization strategies, perhaps because the socio-technical configuration of shared solar is not yet well-aligned with existing energy governance regimes, resulting in barriers to adoption.


Microgrids

The third model of community energy, microgrids, are exactly as they sound: energy systems designed to provide heat and power for a localized area and operate in conjunction with or isolated from larger energy infrastructures as conditions dictate (Bourgeois et al., 2015). From the perspective of the larger electricity grid, microgrids act as a single unit, either importing or exporting electricity.


Microgrids operate at a higher order of complexity than shared solar systems because they

1) can involve both heating and electricity, often produced through district heating and cogeneration; and

2) involve aligning generation capacity and system load.


As would be expected given this level of complexity, microgrids are the least common model of community energy: At the time of this writing, no community owned microgrids are in operation in the US.

Each of these models of community energy holds the potential to generate multiple forms of value beyond the standard paradigm of dollars flowing to individual, private consumers. Community energy systems could help to generate multiple forms of value, ranging from economic, environmental, and resiliency values, to more novel forms, such as the establishment of thick community, local expertise, and capacities for community governance, experimentation, and the enactment of social and environmental values." (http://revistas.ucm.es/index.php/TEKN/article/view/52840/50002)


Applicable to Australia:

"* Donation/community organisation models – these models of community energy involve a community raising funds through donations (either using a crowdfunding platform or more traditional fundraising) to install renewable energy or undertake energy efficiency measures. Typically, the host site and beneficiary of this model is a community organisation such as a school, surf-lifesaving club, fire station etc. Examples of groups who are using community energy donation/community organisation models include CORENA, The People’s Solar and Clean Energy for Eternity


  • Community investment models – these models are where an organisation develops a sustainable energy project and raise funds through opening up the project to community investors, on the expectation that these investors will receive a certain return on their investment. Examples of a community solar investment model is the Repower Shoalhaven model.


  • Commercial-community partnership models – those where a community group partners with a commercial energy developer (or similar organisation) to deliver a community energy project. This can result in duel ownership between the community and the developer or other structures such as those developed by Clearsky Solar Investments.


  • Multi-household models of community energy – are about aggregating households to deliver sustainable energy solutions. Examples of such models include solar bulk-buys which were popular around 2009 and the Moreland Energy Foundation has developed a rates-backed solar model for low income households with the City of Darebin."

(http://www.embark.com.au/pages/releaseview.action?pageId=9797728)

Status

2015

  • "The DECC (UK Department of Energy and Climate Change) Community Energy Strategy in 2014 did a systematic assessment and found at least 5,000 community energy groups active in the UK since 2008." [1]

From an interview of Chris Rowland by Rob Hopskins:

"* Ed Davey had a vision of a ‘small 50,000’ energy companies, rather than a big six. Was this hype or is it achievable?

There has already been a large increase in the number of energy cooperatives and also the number of share offers they are managing to make. Cooperatives UK say that the greatest single type of co-operative amongst their members is the energy co-op. So in some ways, the vision is already on its way to being achieved.

Saying this, we have to have the right government policy that continues to support the growth. The 28% cut in feed-in tariff is going to hurt and it will be interesting to see what effect this has on the sector.

As of 11 April 2012, the energy regulator Ofgem had identified 403 community energy projects receiving FIT support, that number will have grown significantly since then. The existing energy generation coops at that time were already generating 20.8MW of renewable energy and had part ownership in a further 1.2GW of larger commercial schemes! The Feed-In Tariff made all that possible.

We know from our own share offers that there’s a huge interest in community energy from the public and from investors. Since our 2011 issue, we’ve spent a lot of time mentoring other groups setting up – or already set up – as energy cooperatives to get them off the ground. Some of these have been successful in their own launches. This kind of peer-to-peer support is invaluable to new enterprises, as much as the financial support is in many ways.


* What is the potential for community energy?

It comes down to government policy. For example, there are changes in what Co-ops can receive in terms of investment tax relief. That tax relief gives co-ops an advantage currently, but the range of eligible co-ops has been squeezed and the relief is now only available if you are a community benefit society. This is an example of the stopping and starting that causes uncertainty in this industry.

The drop in FITs will give community projects an advantage because these groups can still access a social tax relief if set up right, whilst commercial companies will not be able to. Other government policy is more difficult, especially around wind farms of course." (https://www.transitionnetwork.org/blogs/rob-hopkins/2015-07/transition-network-conference-2015-community-energy-revolution)


Examples

Nicky Ison and Ed Langham:

  • "In Germany, 47% of the installed capacity is owned by citizens and communities while in Scotland there are now 249 community energy projects."

(https://theconversation.com/communities-are-taking-renewable-power-into-their-own-hands-42480)


Australia

Nicky Ison and Ed Langham:

"Here in Australia, while the community energy sector is still new, a recent baseline assessment found that there are now 19 operating community energy projects, which have as of the end of 2014 generated 50,000 megawatt-hours of clean energy – enough to power more than 9,000 homes. The community energy sector has already contributed more than A$23 million in funding for sustainable energy infrastructure.


Some prominent examples of community energy in Australia include:

  • the international award-winning Hepburn Wind in Victoria – Australia’s first community wind farm;
  • Denmark Community Wind in Western Australia – Australia’s second community wind farm;
  • Repower Shoalhaven – a community-owned 100-kilowatt solar array on the Shoalhaven Heads bowling club on the New South Wales south coast;
  • Darebin Solar Savers in Melbourne – a project that saw the Moreland Energy Foundation put solar on the roofs of 300 pensioners, who use the savings to pay back the cost of the system through their council rates;
  • several donation-funded community solar projects on community buildings across Victoria, NSW and South Australia.

There are more than 60 groups across every state and territory in Australia developing community energy projects. The most popular are community solar projects.


...


The Coalition for Community Energy has recently released a guide to “behind the meter” models of community solar.

However, while many communities are starting with solar, many have more lofty ambitions, including the Zero Net Energy Town project in Uralla, NSW, the 100% Renewable Yackandandah initiative in Victoria, community bioenergy projects in Cowra and northern NSW, and many more.

This ambition and the potential of community energy in Australia led the Australian Renewable Energy Agency (ARENA) to fund the development of a National Community Energy Strategy, led by the Institute of Sustainable Futures at University of Technology, Sydney. This outlines a range of initiatives that are needed to grow the community energy sector in Australia and maximise the potential benefit of the energy transition to all communities.

Community energy projects are disruptive business models with financial and social value. The motivations for community energy are many and varied including wanting to act on climate change, wanting to reduce the amount of money that goes out of a community in power bills, and increasing social capital and community resilience.

We are starting to see the rise of community entrepreneurs innovating and developing new models, and in doing so reshaping the future of energy in their communities. With the support mechanisms outlined in the National Strategy, there is no reason that Australia can’t follow in the footsteps of other countries, to allow all communities across Australia to benefit socially and financially from the energy transition." (https://theconversation.com/communities-are-taking-renewable-power-into-their-own-hands-42480)


More Information

  1. Community Energy Investment Web Sites
  2. Community Energy Strategy‎‎


Bibliography

  • SMITH, A., HARGREAVES, T., HIELSCHER, S., MARTISKAINEN, M., & SEYFANG, G. (2015). Making

the most of community energies: Three perspectives on grassroots innovation. Environment & Planning A, 48(2), 407-432. doi: 10.1177/0308518X15597908.

  • TONGSOPIT, S.J., & B.M. HADDAD. (2007). Decentralised and centralised energy: A property rights

analysis. International Journal of Global Energy Issues 27(3), 323-338.

  • WISEMAN, H.J., & S.C. BRONIN. (2013). Community-scale renewable energy. San Diego Journal

of Climate and Law, 14(1), 1-29.