The Democratisation of Energy

There is a pervasive misconception that cutting emissions whilst growing an economy is an oxymoron. There is also a widely held belief that renewable energy is simply inadequate when it comes to the energy-demands of an ever-growing world.

Renewable energy is not seen as a viable alternative to coal – not because of peer-reviewed, robust scientific evidence; but because its viability depends upon two things happening that the coal industry is desperate to prevent. The first is obviously the removal of coal as the cheapest source of energy. This can be achieved in a number of ways, including reflecting the actual environmental cost of coal within its purchase price via an emissions pricing scheme. The second is a rejection of the current power monopoly and shift towards the democratisation of energy ownership.

In places like Australia and America this sort of f*ck you to the coal industry is unprecedented. Scientists in America in particular, are the victims of a deliberate and coordinated attack to silence, discredit or misrepresent scientific findings which go against their corporate interests. Historically, we have seen this in the corporate led campaigns to silence the science that demonstrated the harmful health effects of smoking and asbestos. We saw it in 2011 when Big Oil flexed its muscles and misrepresented the amount of oil that remained in the Gulf of Mexico so that business could continue as usual. We don’t see it, but it happens daily, when corporations withdraw funding from scientific projects that make findings that they find unfavourable or threaten to sue the scientists involved.

The easiest way to cripple the cash cow is to cut off its life support. Germany is on its way to doing just that with 51% of its renewable energy individually owned; taking the profit incentive out of the hands of those who could exploit it.

At COP18, Doha, Dr Haas elaborates on the critical role that the democratisation of energy has played to Germany achieving, indeed exceeding, its emission reduction targets.

“Germany has important goals – emission reduction commitments within the national context of 80 – 95% by 2050 which will require the full decarbonisation of the power sector. It will require a nearly 100% renewable based power system” he said.

Sounds ambitious. Is it possible whilst maintaining economic growth? According to Dr Haas, it is. “Decoupling emissions growth and economic growth is possible if you apply dedicated policies”. He stresses that since 1970 hard coal, lignite and nuclear have all received more subsidies than renewable energy.

Germany has the world’s first feed-in energy laws which allow individuals and community groups to own and manage their own renewable energy production.

“More than 800 energy cooperative have been created in Germany so that people pool their bit of money together to create a wind farm or buy a PV system. For example in Bad Neustadt Municipality each individually put in only 2000 euro for a cooperative solar PV system and the result was 235,000 kWh and then you get more than 5.5% return” explained Dr Haas.

You can see why industry heavy-weights may not be the biggest fans of the initiative with money remaining in the hands of the people, not in the corporate coffers.

However, the impacts for everyone else are huge. Not only do the individuals who invest in owning and distributing their own renewable energy make a return every year; but as the world’s largest PV market, Germany’s collectivisation initiatives are driving the cost of PV down for everyone. Ironically, Germany is not even particularly sunny so for places like Australia and south west USA solar energy should be even cheaper.

There is a more radical benefit to private ownership of energy, however, and that is the equitable distribution of power.

Strong parallels can be drawn between microfinancing and the democratisation of energy. Just as microfinancing has operated in the Global South to give back power to individuals and small business owners; individual and community ownership over energy production gives the consumers control over an essential service.

Jeremy Rifkin explains that the democratisation of energy can be used to surpass the lack of infrastructure and consolidated start up funds that is impeding the development of many poorer countries. By abandoning the old infrastructure and embracing a new, collectivised model “risk can be more widely diffused, with localities and regions pooling resources to establish local grid networks, and then connecting with other nodes across regions”. Developing countries do not have to make the same mistakes of the developed world and begin the arduous process of building coal plants and extracting gas; instead they can “leapfrog” directly to a new and accessible model of energy distribution.

The coal industry is the a ball and chain slowing down progress and risking climate instability for the entire world. Germany is a hopeful example (alongside others such as Denmark) of a transition towards collectivised ownership and distribution of energy. The democratistaion of energy could not only save the developing world from repeating the errors of the past; but is an economically viable way for developed countries to fulfil their international obligations to reduce their carbon emissions and transition towards a low carbon future.

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