On Tuesday (August 4), I met with Simon Funcke, a Ph.D. student at Albert-Ludwigs University in Freiburg who studies the local effects of energy transition. Mr. Funcke co-published a guide for municipalities or small regions looking to start local energy cooperatives; has participated in multiple “added value” studies for renewable energies (such as this assessment for PV in Freiburg); and has recently been studying the actors and political discourses associated with renewable energy deployment. During our conversation, I learned quite a bit about the interaction between Germany’s national and local renewable energy movements.
Germany’s Renewable Energy Act (EEG) in 2000 kickstarted the national energy transition by making it profitable for small renewable energy producers (such as homeowners with solar panels on their roofs) to sell electricity to the grid. As a result, it became financially beneficial for German municipalities to enter the renewable energy market. Added value studies such as Mr. Funcke’s, which track the life-cycle effects of renewable energy technologies in a particular region, can help communities identify how much their economy might gain from advancing the renewable energy agenda, as well as how benefits are distributed. In fact, one of Mr. Funcke’s studies came out just before a national election in which Germany’s federal government was pushing a nuclear energy agenda, and the study created a lot of media attention around the fact that non-nuclear renewable energy sources could be good for local economies.
As a result of these policies, many communities came together to create their own energy systems. For instance, villages such as Jühnde (in Lower Saxony) now run entirely on bioenergy.* Many districts and regions have set their own renewable energy targets, and added up, these targets are more ambitious than the national renewable energy target. Politicians in space-constrained cities have started to build “co-supply” ties with nearby rural communities that have more space to build renewable energy capacity. For instance, the city of Munich invests in off-shore wind to reach its renewable energy goals. According to Mr. Funcke, the local approach can be advantageous because stakeholders are more easily able to converse with each other. It’s easier to strike compromises in a local setting, and stakeholders are less likely to oppose a (renewable energy) system of which they have partial ownership. Furthermore, cities can more easily work on local issues such as mobility, public transportation, and building standards than the national government can.
Alongside this bottom-up push for a renewables, a top-down push has re-emerged. Some of this top-down push has been out of necessity, as large projects (such as offshore wind turbines) are too expensive and logistically taxing for municipalities alone. In addition, the government has had to control the location of different types of renewable energy. Currently, most of Germany’s wind power is in the north and its solar power is in the south, which means a cross-country “energy highway” would have to be built to balance power across the country. By using a tender system, in which the government puts forth large renewable energy projects in specific locations which companies then bid to implement, the government can prevent this location skew. However, tender systems have created some tension with municipalities, as some suspect these large projects are the government’s way of pandering to large energy companies and pushing citizens out. Tender projects are also no cheaper than simply paying renewable energy producers through EEG, as tender-winning companies often go bankrupt or cannot complete projects. (Apparently, the tender system flopped in England for this very reason.)
So what does this local/national dynamic mean for Smart Grids’ entry into the market? We’ll find out. According to Mr. Funcke, local initiatives are currently more focused on building renewable energy capacity than on taking “the next steps” to fundamentally transform their system (in part because current regulations make it hard to take these steps). For instance, villages like Freiamt produce more renewable energy annually than they use, but since production fluctuates — sometimes the city produces less than it needs at a particular moment, and sometimes it produces more — for a constant supply of electricity, Freiamt still depends on the transmission grid and conventional sources of energy. In northern Germany, grid operators sometimes (as a last resort) have to turn wind turbines off when the grid can’t handle the amount of power being fed in.** The “Smart Grid” tactics to address these problems are often comprehensive, necessitating a change in the entire energy system as opposed to a change in just the electric grid. However, as suggested in the energy cooperative guide, current policies render only “directly grid-related measures… financially sound. Until changes on the state or national level occur and set the necessary incentives, single projects as well as individual or entrepreneurial initiatives are the only options to implement … beacon [distribution network] projects” .
* A note on bioenergy: According to the energy cooperative guide, “[b]ioenergy plants have the potential to compensate for the fluctuating production from wind and solar energy, as well as the change in demand” . However, as Mr. Funcke pointed out, whether bioenergy makes sense is extremely dependent on the particular region in question. If a region has leftover sawdust from a local sawmill, then it makes plenty of sense to use it for bioenergy. However, other locales may have better uses for their biomass, such as replacing petroleum-based cement with wood during construction projects. It’s also debatable whether or not it makes sense to ship biomass to locales without it. (Note: the English and Dutch ship wood pellets from North America to fulfill EU global warming legislation, which has increased wood pellet production in North America.) In addition, Mr. Funcke pointed out that the types of renewable energy used can lead to different approaches towards transforming the electricity system. Simply substituting coal with wood pellets allows you to keep the traditional centralized energy system, whereas using decentralized solar and wind energy necessitates Smart Grid technologies and deeper system-wide changes. [back]
** The operator then reimburses the wind farm operator for lost profits. [back]
 Ruppert-Winkel, C.; Hauber, J.; Aretz, A.; Funcke, S; Kress, M.; Noz, S.; Salecki, S.; Schlager, P. & Stablo, J. (2013): Cooperative Local Energy Transitions. A Guide for Socially Just and Ecologically Sound Renewable Energy Self-Sufficiency – with an Emphasis on Bioenergy. ZEE Working Paper 06 – 2013. [back]
(Note: The interviewee reviewed the above writeup before its publication.)