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Berliners await landmark decision on sale of city’s power grid

Residents and activists in Berlin want to add to the growing number of cooperatives investing and running power generation in Germany

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The vigorous growth of the energy cooperatives is challenging energy companies in Germany (Image by Southern Weekend)

“Why don’t we just buy the entire Berlin power grid?” asked Luise Neumann-Cosell, a resident of the city and a staunch advocate of renewable energy. She is organising to join forces with other Germans and win back control of Berlin’s power distribution network from energy giant Vattenfall. The grid would then be run as a long-term concession by the group she is a member of, BürgerEnergie Berlin eG.

The two leaders of the group seem too young for such an undertaking. Neumann-Cosell, the only full-time employee, is wiry, wears a nose ring, and is 28. Arwen Colell is only 27. The pair used to work as anti-nuclear campaigners. To enact their new plan to buy the Berlin power grid, they need to raise 20% of the value of the acquisition from the public – 200 million euros. On June 16, the group announced that, after multiple rounds of bidding against energy companies, it had made it through to the final three.

Decision soon

Neumann-Cosell says she is optimistic: “We have high hopes – one of the other three candidates is a firm linked to the Berlin government, which is aligned with us. So in fact it’s us against Vattenfall,” she says in a meeting room near Alexanderplatz. The city government makes its final decision at the end of the year.

The aim of the cooperative and its supporters is for the grid to buy more renewable energy.

In 2011 Germany launched its Energiewende, or energy transition strategy, outlining closure of nuclear power plants and setting a target for 35% of energy to come from renewables by 2020. But Berlin gets just 1.4% of its power from renewables today, according to news weekly Der Spiegel.

Neumann-Cosell believes Vattenfall is protecting vested interests by sticking to coal power. “But if the grid was controlled by Berlin’s own citizens, they’d have no excuse not to buy renewable energy.”

The concession to run the power grid is auctioned off once every 15 to 20 years, and anyone is entitled to bid. The end of Vattenfall’s contract in late 2014 gives ordinary people a chance to get involved.

The energy cooperatives system is an important part of Germany’s planned transition, and it is this system which allows ordinary citizens to participate in the contest to buy the power grid.

Successfull smaller role models

Tao Guangyuan, director of the Sino-German Renewable Energy Cooperation Center, explained that cooperatives “are part of Germany’s basic economic structure, with over a hundred years of history.”

Germany’s cooperatives are founded in accordance with the country’s Cooperatives Law, have the status of a legal person, are formed by three or more members, manage their own affairs, and assume responsibility for profits or losses. They are structured much like joint-stock companies, with power divided between directors, supervisors, and members. However cooperatives are not run for profit and each member has a single vote, regardless of the size of their investment. This ensures that ordinary citizens are able to participate.

Unlike the Berlin collective, which has raised tens of millions of euros to bid for the capital’s power grid, the vast majority of energy cooperatives are small or medium-sized new energy generators in towns or villages.

In Ettenheim, 600 kilometres from Berlin, Jorg Blod runs a 140-member cooperative. Founded in 2011, the Ettenheim Energy Cooperative has the town’s mayor and a banking industry representative on the supervisory board. Initially the group raised 200,000 euros.

Over the last three years, Blod has raised a further 330,000 euros to build six rooftop solar-power plants. The electricity generated is sold to the local grid and profits distributed to members in line with the size of their investment. The town now takes 10% of its electricity from renewable sources, but the target is to raise this to 40%.

Ettenheim lies in the state of Baden-Württemberg, the first to set up energy cooperatives. Twenty years ago the locals were already experimenting with new-energy cooperatives – solar, wind and small-scale biopower generation.

Germany has a population of only 80 million people, and 10 million have invested in new-energy generation. If their household members are included, one third of the country can be regarded as participating in the energy transition.

Barbel Hohn, chair of the German Green Party’s Environmental Committee, said that energy cooperatives make it possible for each citizen to become a new energy generator, and that Germany’s energy transition is a change not just in technology, but also in ownership – in the future the country’s energy will be in public ownership.

“The three forces in Germany’s energy transitions are private rooftops, energy companies and energy cooperatives. The cooperatives are already too important to be ignored,” said Tao Guangyuan.

Challenges

The vigorous growth of the energy cooperatives has challenged energy companies. “It’s taking away their business,” said Barbel Hohn. Competition between the two is becoming more apparent, and battle lines are being drawn.

Subsidies for renewable energy are partly responsible for higher energy prices. This has resulted in opposition to renewable energy, led by the large industrial groups. They blame overuse of renewables for spiralling electricity prices and call for slower renewables expansion.

Some have commented that the subsidies for renewables (paid by the tax-payers) end up in the hands of large energy companies and the owners of the land the new energy generating plants are situated on.

But the cooperatives don’t just steal business from the rich – they pay dividends to their investors, the public. Money collected as taxes flows back to the taxpayer. This is an advantage for the cooperatives, but contrary to the interests of the energy companies.

It is not easy for the cooperatives to challenge the energy giants. And the Berlin energy cooperative faces practical challenges.

First, Vattenfall has more experience and technical skills than the cooperative.

Second, the Berlin grid employs 1,400 people. The cooperative employs one – Luise Neumann-Cosell. She needs to organise professionals and volunteers to cover legal issues, financing, marketing and other matters.

Third and most important is funding. After the last bidding round, Neumann-Cosell had raised 10 million euros, but this is far from what will be needed to succeed. “If things go well we’ll attract more members. Currently we can’t afford to advertise.” She thinks the 100-million euro profit the grid makes means the cooperative is a good investment opportunity for the locals. 

Editor’s note: On invitation from Germany’s Ministry of Foreign Affairs, six winners of the chinadialogue and The Guardian’s 2014 Environmental Press Awards spent one week in Germany in late June to learn about Germany’s energy transition. After that visit Xie Dan, winner of the best in-depth report award, wrote this piece for Southern Weekend.

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