Energy Democracy

Large-scale photovoltaic plants in the hands of citizens*

What's the problem?

Currently far too few renewable energy generation plants are being added in Germany and worldwide. The expansion is too slow. In order to achieve the German government's goal of increasing the share of renewable energies in electricity generation in Germany to 65% in 2030, at least 8 GW of photovoltaic capacity would have to be added each year (1). At present, about 4 GW are being added per year (2). In order to achieve the 1.5 degree target, 15 GW of photovoltaics would even have to be added per year (3).

What is the measure?

It is inevitable that large and many photovoltaic projects will have to be implemented. A core group must be found and existing networks must be used to work as quickly and efficiently as possible. The plants should belong to the citizens as far as possible. The financing model for the plants, in which as many private individuals as possible but also investors and banks can participate, should include a redistribution component. The large investors are to take over a "sponsorship" for the small investors. Large investors can secure large project shares, but receive less percentage returns than small investors, which leads to a kind of redistribution. The smaller the investment, the higher the percentage return; therefore, the large investor receives a higher return in absolute terms, but a smaller one in percentage terms. The large investor thus abstains from percentages so that the small investor can get a higher return.  In tender offers for medium-sized projects of less than 10 MW, the award value was mostly between 4.5 and 5.5 euro cents per kilowatt hour. The electricity generation costs are of course lower, because the plant owner wants to earn something. Only a few days ago, the energy giant EnBW cleared the way for the largest solar park in Germany to date with a capacity of 180 MW (4). As this plant is larger than 10 MW, it will not be subsidised. EnBW will sell the electricity on the electricity exchange. The think tank "Agora Energiewende" expects an average stock electricity price of 5 Euro cents per kilowatt hour for 2020 (5). However, since this price fluctuates daily on the stock exchange and is currently often less than 3 cents per kilowatt hour (6), one can guess how cheap photovoltaic electricity has now become in Germany too.

How can the implementation look like?

An important point is how to reach a broad citizenship and motivate them to participate in such projects. Simple ways are crowd-funding platforms, but a gradually broader citizen participation would be desirable. In due time, appropriate PR and marketing measures will have to be defined. For the first pilot projects, interested small investors can be sought via crowd-funding platforms and in the surroundings of environmental movements. Through pilot projects, trust can be built up for a wider audience for follow-up projects.  Through physical assistance in project development, land acquisition, construction, etc., committed individuals can acquire project shares (x € equivalents/hour of work). Other citizens participate financially. The willingness to participate in PV projects in a certain way is certainly different from person to person. Accordingly, there must be several models - from cooperatives to classic investment projects (with a redistribution component).

How does this work against climate change?

The more and larger the projects, the greater the CO2 savings. The aim is to replace fossil power plants. We have to think in GW and mobilise a large mass of people to do so. The CO2 savings per kWh of PV electricity compared to the German electricity mix is 550g (1000g compared to lignite). At roughly 1000kWh/kW/year this is 550kg CO2 savings per kW per year. So 550,000 tons per GW per year (7). Every additional GW of photovoltaic increases the pressure on fossil fuels and takes away their legitimacy. PV projects can also be implemented relatively quickly compared to other power plants (less resistance than e.g. wind, relatively little planning effort). Efficient and hard-working 10-person companies can implement 50 MW/year.  Germany has a large backpack of CO2 emissions and is therefore committed to global equity with regard to emissions. First and foremost, emissions in Germany must be reduced as quickly as possible (by displacing fossil fuels with renewables and reducing consumption). At the same time, Germany's CO2-backpack also imposes a moral obligation to bring renewable energies to the local population in countries with low CO2 consumption. The acquired know-how with citizen energy plants in Germany should be used to support the energy turnaround in other regions.  Probably the most difficult part is the project development in the necessary dimension.   

Continuative literature and sources