Given the dual challenges of inequality and climate change, we propose “energy democracy” as a framework for ownership of energy infrastructure. Energy democracy promises to share the benefits of renewable energy, advancing equity and sustainability simultaneously. Throughout the Habitat-III process, SustainUS will be advocating for community-owned renewable energy as a key urban solution.
What is energy democracy?
Energy democracy is the concept that a community should have control over where and how their energy is produced. Under this framework, the power to control, own, and benefit from the energy system shifts from private companies to community members. Local residents are empowered to produce their own clean and affordable energy.
Why energy democracy?
As we make the necessary transition away from fossil fuel dependency, we have the opportunity to rethink how we generate our energy. Our fossil fuel-based energy system has generated wealth for a sliver of society. The economic elite and wealthy investors have profited by extracting and combusting coal, oil, and natural gas. An energy utility that runs as a monopoly is not incentivized to accelerate the shift to renewable energy by making rates competitive. When the shift does happen, our future renewable energy system could easily generate wealth for the same corporations and economic elites.
Power purchase agreements provide an example of how the savings provided by renewable energy generation can be withheld from the communities where the energy is being produced. For example, an energy service company (ESCO) might install a solar array on a residential roof. The ESCO would finance and own the array. The resident would have the option to buy their energy from the ESCO at a monthly rate competitive with what they were previously paying to the electric utility. In most cases, the ESCO receives the majority of the savings from going solar. People who can own an ESCO must have access to large amounts of capital, and in all likelihood would be members of the same economic elite that profited off of the fossil fuel-based economy.
This moment of transition provides an opportunity to rethink who should profit off of energy generation. A climate justice approach to transitioning away from fossil fuels must consider those communities that have been systematically disadvantaged by our current socio-economic system. It is possible to build an energy system that grants every individual a right to access and generate clean energy. Rather than exacerbating racial and economic inequalities, the transition to a renewable energy system could be a force for equity.
Decentralized electrical power generation has the potential to create decentralized political power, but does not guarantee it. Public utilities have the potential to provide communities with a cleaner, more affordable choice, but do not guarantee it. Because of these ambiguities inherent in the transition to renewable power, a principled framework for decision-making is critical. Energy democracy provides just that framework, operating in the climate and economic justice lens discussed above.
Examples of Energy Democracy
Energy democracy is already in motion in communities across the United States and around the world. Two ways to organize energy democracy are through cooperative ownership and municipal ownership. Cooperative ownership allows community members to assemble voluntarily and collectively invest in and own renewable energy infrastructure. Municipal ownership involves the existence of a public utility. An example of each is provided below.
Cooperative Ownership: Solar Gardens in the Twin Cities
Cooperative Energy Futures is promoting Community Solar Gardens
in Minneapolis, Minnesota. Participants are invited to buy a subscription to a community solar garden, a large array of photovoltaic panels. A subscription represents partial ownership of the solar panels, and the local utility is required to credit the subscriber’s energy bill in accordance with their stake in the array. Over the course of the subscription, the participant receives savings of up to 40% on their monthly electric bill because of the Community Solar Garden credits. Community solar gardens allow people to go solar who do not have suitable roofs for generating solar power. Additionally, subscribers cooperatively own the panels and therefore share the cost of maintenance.
Municipal Ownership: Boulder Community Energy Utility
Boulder, Colorado is in the process of creating a publicly-owned utility, the Boulder Community Energy Utility
. By transferring ownership of the energy infrastructure to the municipal government, Boulder is allowing for more innovation and for the pursuit of the public welfare in deciding from where to source the city’s energy. Municipal utilities are in the position to prioritize locally-generated renewable energy.
Aside from the question of ownership, local governments and community groups have been pursuing policies and mechanisms that allow residents to opt to source their energy from renewable sources. Below are some examples of infrastructure that provides consumers with the choice to buy or even produce renewable energy.
Community Choice Aggregation
Community Choice Aggregation (CCA) is a program that allows citizens to vote to decide from where their energy is sourced. A municipality can aggregate their residents’ power demands by establishing a public utility which negotiates to get the most competitive rates. The goal of a CCA program is to lower greenhouse gas emissions for the community at the lowest price. Currently, about 1300 municipalities serving 5% of all Americans have CCA programs. For example, Sonoma Clean Power and Marin Clean Energy in California have both been able to provide cleaner energy at lower rates than the state utility monopoly Pacific Gas & Electric.
Collective Purchasing Power
In the absence of CCA, another way that consumers can access renewable energy is by leveraging their collective purchasing power on an individual basis. Through solarize campaigns, for example, households join together to install solar on their roofs. By going solar together, participants are able to get discounted pricing from manufacturers and installers.
A feed-in tariff is a policy mechanism under which the government agrees to pay producers for producing renewable energy, allowing for the power from renewable energy to be competitive with conventional sources. Most feed-in tariffs will also guarantee grid access for renewable energy projects and include long-term contracts for at least 15 years. Feed-in tariffs have encouraged the deployment of more than 15,000 MW of solar and 55,000 MW of wind energy in the European Union from 2000-2009. In Germany, under the German Renewable Energy Act, the purchase prices were based off of the cost of producing the power from each particular source.
Virtual Net Metering
Net Metering is related to feed-in tariffs in that it involves the utility buying back renewable power generated locally. Particularly suited to solar, net metering rolls back the electric meter for the amount of electricity that the household photovoltaic array contributes to the grid. Virtual net metering is a variance on this that allows for cooperative ownership, such as the Solar Gardens mentioned above. With virtual net metering, residents can share the gains from a single large collectively-owned renewable energy source.
Check out the resources below to learn more about Energy Democracy!
SustainUS is a youth-led advocacy organization that works towards a sustainable world free from systemic injustice. Learn more about our work at http://sustainus.org