In 2011, German Chancellor Angela Merkel drew the world’s attention to Germany’s energy transition ― or Energiewende ― when she ordered the shutdown of eight nuclear reactors in the aftermath of Fukushima. But, in all of that new attention one thing about the Energiewende was sorely overlooked: its history as a grassroots movement.
By 2011 Germany already had a world-class renewable energy law, which triggered massive investments in biogas, wind and solar power. Yet most of that investment did not come from the big utilities, as one might commonly think. As late as 2012, Germany’s four largest utilities made up only 5.5 percent of investments in renewables. Citizens and community groups accounted for nearly half, with the remainder being largely newcomers to the energy sector.
This is in stark contrast to the situation in the United States, where Americans are fighting in a number of states to protect their right to put solar on their roof. Here, when big utilities do support solar, it’s mostly the huge arrays they build themselves. But the Energiewende’s start as a grassroots movement appeals to many commonly held American values. U.S. communities can learn from Germany’s example about the benefits that clean energy can generate.
Since 1991, the Germans have enjoyed the individual freedom to put solar on their roofs, and they have also come together to build community wind farms and biogas power plants. So one reason to care about community energy is therefore liberty: you have the right to make your own energy.
Another reason is the urgency of climate change, and utilities are simply not investing fast enough.
Where they are investing, it’s primarily outside their home territories. Utilities have no interest in more renewables on their home turf, because they want to run their existing nuclear, coal and gas power plants. Each new solar panel and each new wind turbine added to the grid will lower the demand of electricity from conventional power plants. A subsidiary of Florida Power & Light, for instance, claims to be the “world’s largest generator of renewable energy from wind and the sun” – practically all of which is outside Florida. At home in the Sunshine State, FP&L fights residential solar.
“Like the Germans, American communities would benefit more from their citizens investing in local renewables instead of giving their money to big utilities largely owned by Wall Street investors.”
Big European utilities are no better. Last year, French nuclear giant EDF built more than 1,000 MW of new renewables ― mostly in Canada and the United States. Likewise, only a fifth of German giant RWE’s new renewables are in Germany. Investments at home hurt these firms’ current assets. New market players are needed to accelerate the transition.
Citizens can easily fill the gap left behind by reluctant utility giants. A recent study by the Climate Policy Initiative found that individual German households and citizen groups have enough available capital to cover half of the total investments needed for the transition this decade. Because Germans are not richer than Americans, the situation will not be much different in the United States.
Like the Germans, American communities would benefit more from their citizens investing in local renewables instead of giving their money to big utilities largely owned by Wall Street investors. Renewables create local jobs and generate local tax revenue, thereby strengthening struggling rural communities in particular.
In contrast, the stock market gives money to the largest corporations, which have the legal expertise to exploit tax loopholes. The big boys take money out of your community but pay little back.
Clearly, the energy sector must be viewed within society. Despite all the talk about “free markets,” America remains controlled by corporations. All German households have been able to choose from hundreds of power providers for more than a decade, whereas nine out of ten Americans still have no choice.
In the end, the energy transition is a one-time window of opportunity to democratize the energy sector. Incumbent utilities partly go green so they can tell communities and citizens, thanks, but your renewable energy is not needed. Later, in coordination with losing industries, these utilities might give up on the transition altogether. 20th-century-tech makers would prefer to turn the clock back anyway. Only society will insist on completion all the way up to mid-century.
Obviously, there’s a lot more at stake than just carbon emissions. Yet, the climate debate sometimes sounds as though all of our problems will be solved once we reach zero emissions. In reality, the “co-benefits” of climate protection (like innovation, greater energy democracy, stronger communities and a cleaner environment) are the real benefits.
Focus on carbon reduction alone, and you may wake up in a world with little consumer choice, high market entry barriers, impoverished rural communities and energy corporations that were more successful at protecting their current assets than at building renewables. Focus on community renewables, and you get lower emissions – along with a better world.
Craig Morris is an energy journalist and Arne Jungjohann is an energy analyst and political scientist. They are co-authors of Energy Democracy, the first history of Germany’s energy transition, the Energiewende.