While there is lots of news these days about renewable energy getting a boost from the Inflation Reduction Act in the US and the need to find alternatives to cheap unnatural gas from Russia, there is a quiet revolution taking place that could significantly disrupt the utility industry. Communities in Europe are making plans to create their own electricity from renewable sources.
Some call it “energy citizenship” because it involves people managing their own supply of electricity rather than relying on a utility to do it all. As you might imagine, not all utility companies are delighted at the prospect of communities generating their own electricity. It goes against the grain of the traditional model which involves distributing electricity from a few large generating plants — whether thermal or solar or wind powered — and sending it to individuals through a grid composed of substations, utility poles and wires.
In the US model, utility companies generate much of their income from investing in new generating stations. By law, they receive a guaranteed rate of return on those investments. That model is one reason why the larger utilities invest in boondoggles like new nuclear power plants. To make more money, they need to make more investments. Even if those investments are unwise, the companies make money because their customers are required by law to pay their utility bills or do without electricity. Communities have little power over the decisions made by the companies. “Energy citizenship” disrupts that model.
The Guardian reports that from solar panels in the Netherlands to biomass burners in Spain, communities across Europe are increasingly making, consuming, and selling their own energy. According to the latest data, 2 million Europeans are now involved in 7,000 local energy communities across the continent, with more happening every day.
They will be key to Europe’s green transition because, as heat pumps replace gas boilers and electric vehicles supplant internal combustion engines, highly centralized electricity production and distribution systems — power stations and grids — will simply not be able to adequately handle the increase in demand for electricity.
GRETA & CleanWatts Lead The Way
“At least, not on their own,” said Gonçalo Mendes, a senior researcher and energy systems modeler at LUT University in Finland and a member of GRETA — the Green Energy Transitions Action program — created and funded by the European Commission to promote “energy citizenship,” defined as educating all citizens on how to use energy in a sustainable way and participate in the energy transition.
The only way forward, Mendes said, is “to decentralize more and more, produce and consume more energy locally from sources like solar and wind and boost storage and smart solutions for efficient energy management.” He says Europe is “nowhere near” meeting its target of cutting greenhouse gas emissions by 55% in the next eight years unless “we work urgently on the role everyday citizens will have to play. And to get there, we need to explicitly recognize the social side of the energy transition.”
Lurian Klein is an expert on energy communities at CleanWatts, which has built a modular, interoperable, and localized cloud-based operating system designed to address the needs of renewable energy communities. “Our platform seamlessly connects the dots between behind the meter optimization for community members and front of the meter grid resiliency and transaction management for local energy markets. It’s time to re-frame our relationship with energy and for each of us to become an active contributor to the global energy transition,” it says.
Klein says those democratized energy communities “thrive on social interconnectedness among end users rather than being based on competing economic self-interests. They reinforce positive social values, really strengthen empowerment and social engagement.”
Michael Pinto of CleanWatts says, “You have electricity needs that are going to double and grids that won’t cope. But you also have [renewables] that are competitive now, and smart technology to measure, manage, and balance production, storage and consumption efficiently.” Europe has two options, he says — “blackouts and massive volatility and completely rebuilding national grids, or changing the way electricity is produced, delivered, and consumed. More agile, more resourceful. That’s local energy communities.”
“There are tens of thousands of municipalities in the EU,” said Pinto. “There are 8,000 in Italy alone — about 5,000 of them with fewer than 5,000 inhabitants. The potential here is just enormous. But the challenge is enormous, too.”
Renewable Energy Communities In Europe
Grunneger Power, in the Netherlands, has 2,500 members. It was created a decade ago by local people frustrated by the slow pace of the transition to renewable energy. The cooperative owns two solar parks with a total of 10,000 solar panels as well as smaller sites on homes and buildings across the city. The electricity generated is provided to the members of the cooperative with any excess sold to a sustainable energy provider. Any profits are invested back into the cooperative.
Bologna, Italy, has a green energy community project comprised of Bologna University, the city, several residents associations, the regional energy agency, and other stakeholders. Part of the community is residential and part is industrial.
Carlo Alberto Nucci, a professor of electrical power systems at Bologna University and technical leader for the project, said it is a pilot — “like a living lab” — and that recent government incentives for local energy communities in Italy will make a significant difference. “What’s fundamental is that we start to produce energy where it’s consumed and we can do that now because of renewables.” He said about 20% of energy produced in cities should come from energy communities.
Smart meters, connected appliances, and end user apps will be critical to the system’s success, Nucci said. “A smart app can automatically switch on your home devices, choosing the best moment for you — and for the efficiency of the whole community — to use your washing machine, for example. Much of this is really about the concept that energy is of value, that information about it is really important, and that virtuous energy behaviors absolutely can make a difference — to both individuals and the community. This is all quite new.”
Renewable Energy & Agency
Until now, people who use electricity have had very little say in how that electricity is generated or distributed. The utility companies made all the decisions and consumers either quietly and dutifully paid their utility bills or they were shut off. In an odd sort of way, people were powerless to control their access to electrical power.
The very idea that they should be able to make decisions for themselves is a byproduct of the fact that solar panels have increased in efficiency and declined in price by a factor of 10 over the past 20 years. Prior to that, the idea of people generating their own electricity was unthinkable.
Ultimately, Gonçalo Mendes tells The Guardian that more than 80% of EU households could play an active part in the energy transition. “Energy citizenship, we call it. Obviously, awareness and engagement levels will differ. But it’s all about agency.” Agency is another way of saying self-empowerment and it could be an earthquake for the utility industry. Many people think that would be a good thing.
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