Renewable energy co-ops: the power to transform

Pascoe Sabido looks at the growing global popularity of community-owned and controlled renewable energy

March 24, 2013 · 12 min read

With more than a third of Indonesia’s population off the electricity grid, micro hydro schemes now benefit more than 50,000 people. Photo: Anne Wheldon/Ashden

Only big energy multinationals and dirty energy like nuclear and coal can keep the lights on. Renewable energy technology is expensive and won’t come on stream fast enough to meet our energy needs and combat climate change. So goes the dominant energy security narrative propagated by politicians, multinational corporations and the mainstream media alike.

But a look at the remarkable growth of renewable energy source cooperatives (resco-ops) over the past few years tells a different story. Every day existing resco-ops go about their business, meeting people’s needs with clean, reliable, affordable energy and growing to take on new members; and every day new resco-ops spring up, bringing new renewable energy resources online and releasing communities from expensive, exploitative corporate-controlled energy. Out there, in the real world, resco-ops are delivering and showing us their exciting potential.

Resco-ops globally

In western Europe, Denmark’s historic leadership in decentralised renewable energy has come from cooperatively-owned and managed wind turbines powering local homes and businesses. Now Germany is rapidly forging ahead with 600 resco-ops appearing in the past three years alone. Resco-ops haven’t taken off so much in central and eastern Europe, partly because of the connotations with their Communist past, but things are changing there too, with pioneers in Estonia relabelling cooperatives – which are helping to reduce reliance on Russian gas – as ‘people’s capitalism’. The UK’s resco-op sector is small but growing, with more than 40 now either trading or soon-to-be launched, following the pioneering footsteps of the Ouse Valley Energy Services Company (Ovesco) in Sussex.

In Asia, countries such as Nepal and Philippines have a long tradition of micro-hydroelectric cooperatives, which enable communities to enjoy lighting for classrooms and clean water for homes and agriculture. Female Indian waste pickers in Mumbai are turning biodegradable materials into biogas for clean cooking and fertiliser, providing them with decent wages at the same time as dealing with the problem of municipal waste. In Rio Grande do Sul, Brazil, cooperative farmers harvesting sugar cane alongside their crops to power local vehicles are just one example of the different resco-op models providing energy access to millions of people across North and South America.

Not all energy cooperatives provide renewable power supplies, as the US experience shows. Energy cooperatives rapidly electrified rural communities across America in the mid-20th century; more than 900 are still in existence. However, unlike Denmark and Germany, which adopted renewable energy as an alternative to nuclear power, 17 US resco-ops actually own or plan to own part of a nuclear power plant. Coal and natural gas also feature heavily among US electricity cooperatives, although a shift towards renewable energy is being fostered through increased cooperation with European resco-ops.

Why do it yourself?

The reasons behind the growing global popularity of resco-ops are varied. In some countries cultural and political traditions make resco-ops more likely – for example, Indonesia’s tradition of cooperation and southern Brazil’s radical, people-centred politics. Some people join or establish resco-ops for ideological reasons, believing in the cooperative ethos and wanting to strengthen their communities; others for environmental reasons, opposing nuclear energy and supporting renewables; others for economic reasons, through a return on investment or lower energy bills. What they all have in common is that resco-ops empower people to meet their energy needs in a way the current failed model of energy market liberalisation cannot.

Dirk Vansintjan, who set up resco-op EcoPower in Eeklo, Belgium, says he never intended to start a cooperative: ‘In the beginning, I just wanted to create more renewable energy and show it was a possible alternative. The first step was bringing people together, then came the cooperative. I didn’t know anything about it, but if you want to do something together, it’s the best legal entity – egalitarian and democratic. If you don’t put money at the centre of your activity but people’s needs, it’s an obvious choice.’

EcoPower began in 1991 with a small refurbished water mill and now supplies one per cent of the Flemish market and has almost 40,000 members. At its core remain the seven International Cooperative Alliance (ICA) principles: voluntary and open membership; democratic member control; member economic participation; autonomy and independence; education, training and information; cooperation among cooperatives; and concern for the community.

As Robin Murray outlined in ‘A different way of doing things’, the cooperative movement can provide a much-needed alternative economic model. Energy and where it comes from, how affordable it is and who controls it has an enormous bearing on people’s lives, and the energy system is a key component of our economy that needs to be transformed to become more equitable and sustainable. As experiences around the world are already demonstrating, resco-ops can support the switch to clean renewable energy at the same time as helping to strengthen local communities and transform our current relationship with large energy corporations.

Transforming our energy system

Around 75 per cent of all greenhouse gases come from the burning of fossil fuels, while their production and transportation have devastating impacts on local communities and the air, water and ecosystems we rely on. Tackling climate change requires a huge transformation of the global energy system, starting with the rapid roll-out of clean, reliable, affordable renewable energy. Resco-ops must be at the heart of this process because of the way they transform our relationship with energy and where it comes from.

For most people, energy arrives through a wire, pipe or pump, with no link to its source. Being involved in a resco-op gives you a direct connection to and understanding of how energy is produced, managed and used. Local ownership and control of renewable energy increases social acceptance of renewable technologies and overcomes nimbyism. Even in Thuys, Denmark, with its long history of wind energy, the installation of large, corporately-owned wind turbines led to their rejection as local residents felt they were bearing all the costs and receiving none of the benefits. According to wind energy pioneer Jane Kruse, only with the revival of community-owned and controlled schemes have people begun to accept wind turbines again.

The fifth cooperative principle of ‘education, training and information’ also leads to greater awareness. EcoPower might attract people for its low prices and simple tariffs, but its mission is also to educate people about energy conservation. With the support of the cooperative and each other, members’ energy use has been reduced by 40 per cent over five years. And education doesn’t stop with energy savings. EcoPower takes members on a ‘cooperative journey’, increasing their involvement and commitment to cooperative principles, and leading to better understanding of why we need an alternative economy.

Strengthening communities

The benefits from resco-ops don’t stop with the transition to clean energy. Local resco-ops bring communities together in shared decision-making, empowering individuals and invigorating local democratic participation. And rather than searching for profit, most resco-ops prioritise addressing community needs. The seventh ICA principle is that cooperatives work for the sustainable development of their communities through policies approved by their members. In an example of how this can work in practice, in the Indonesian village of Cinta Mekar income from the micro-hydro plant was spent first on connecting those villagers who couldn’t initially afford it, and then on providing community facilities such as running water, lighting for schools, maternal health care and loans to micro-enterprises.

Resco-ops can also strengthen local economies by recycling money rather than seeing it syphoned out of the community for fossil fuel imports. The small Greek island of Sifnos, for example, imports 99 per cent of its energy at a cost of €5 million per year, leading Apostolos Dimopoulos to found Sifnos resco-op. It is also a big motivation for Vansintjan in Flanders, where €2,400 per inhabitant leaves Flanders every year, going directly to big energy companies that don’t reinvest in the local area. According to Tri Mumpuni, co-founder of the Indonesian NGO IBEKA, which helped set up Cinta Mekar’s micro-hydro plant, ‘Poverty is not a problem, it is a symptom of local communities being disconnected from the resources around them that can contribute to their human wellbeing.’

Challenging Dirty Energy inc

Resco-ops challenge not only the source of energy (sustainable or not), but the corporately-owned and controlled, centralised model of providing it. They offer a decentralised model driven by need rather than profit. In providing an alternative, they redefine the relationships we have with large, faceless, multinational energy corporations, reducing our reliance on them and highlighting the inadequacy of what they offer. Acting collectively also combats our isolation as powerless individual consumers. Not all resco-ops are set up with such explicit political agendas, but they are an inherent feature of the model as a result of choosing to pursue social goals rather than profit.

In Brazil, the Movimento dos Trabalhadores Sem Terra (Landless Workers Movement, MST) runs wind turbine workshops for communities without electricity with an explicit focus on challenging the dominant system of corporate-controlled energy. According to Eliana, an MST activist involved in the workshop interviewed in Katherine Haywood’s short film available on the Red Pepper website: ‘There is a source of energy that is probably exhaustible, which is petrol. Its production is monopolised by big business and the dominant classes. For the movement it is important we have this type of initiative and we learn this type of knowledge [how to build and install wind turbines] so that small communities have sovereignty over their energy production.’

Who benefits?

While resco-ops clearly have the potential to bring significant benefits to local communities, there is no guarantee that those benefits will be equitably shared. Avoiding capture by wealthier interests depends on whether those establishing a resco-op follow the agreed ICA principles of openness and participation and are committed to delivering wider social benefits. Some European resco-ops are not socially inclusive, instead acting as secure investment vehicles during volatile economic times. In the UK, resco-ops are seen by some as the preserve of the middle classes, for those with money to invest. The principle of member economic participation is intended to give everyone a stake in the co-op, but it can also lead to exclusion. Here in the UK the minimum connection fee is £250.

To ensure resco-ops remain inclusive and progressive, creative solutions are needed. In Eekle, the €250 fee to become a member of EcoPower can be paid off via the savings made in members’ bills over a few years, allowing poorer members to avoid upfront costs but still benefit. Villagers of Mavanga in Tanzania were able to contribute their labour in constructing the micro-hydro dam and the mini-grid that distributes electricity.

Participation also depends on how a resco-op determines its local community. Loose definitions of ‘community energy’ allow a community of investors – no matter where they are located – to call themselves a community energy cooperative. This loses the connection to the geographical community and undermines local participation and democratic governance. Instead, resco-ops should focus as locally as possible and find creative ways to include all stakeholders who live nearby. MOZES, a community energy scheme on a poor housing estate in Nottingham, UK, achieves this by default: anyone living within the defined local area is automatically a member and has a say in how it is run.

Beyond self-help: what role for government?

Resco-ops still account for a tiny fraction of the global energy market, held back by regulatory, financial, technical, and cultural institutional barriers. However, these barriers are not insurmountable, and vary greatly from country to country. Some governments actively support resco-ops. F D Roosevelt’s US government provided interest-free loans to rural electricity cooperatives, while Bangladeshi state subsidies have fostered a long history of locally-owned co-ops powering villages and irrigation pumping stations. In Tanzania, the government sees resco-ops as key to rural electrification, particularly in areas the grid is not likely to reach for a long time.

Denmark and Germany supported resco-ops by creating the right regulatory environment via renewable energy feed-in tariffs (REFiTs), guaranteed payments for the generation of renewable energy, which are now spreading around the world. Tri Mumpuni was instrumental in campaigning for Indonesia’s REFiT, passed in 1999: ‘I told [the government], as long as you do not agree, I will always come and knock at your door and beg you, “Please issue this policy!’’’ Campaigning organisations have been instrumental, and many across Europe are now turning their minds to actively campaigning for community-owned renewable energy.

Co-operating cooperatives

In line with the sixth ICA principle of cooperation among cooperatives, resco-ops are organising among themselves to collectively identify and overcome barriers. EcoPower, for example, recently set up the Resco-op coalition with members from across Europe to promote the spread of resco-ops.

The UK’s Cooperative bank has earmarked £100 million just for UK resco-ops, while the German resco-op explosion has been underwritten by local mutuals and credit unions. The National Rural Electric Cooperative Association (NRECA) in North America also has an international branch, which is helping rural electricity cooperatives and federations from Bangladesh to Yemen, including helping establish what has become the world’s largest, Bolivia’s Cooperativa Rural de Electrificación (Rural Electrification Cooperative, CRE).

It’s too early to say whether resco-ops and the wider movement can overturn the power of the fossil fuel industry and deliver change at the speed and scale necessary. But major progress has already begun. 2012 was the International Year of the Cooperative: why stop there?

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