Local energy initiatives cannot make a difference, unless ….

Across Europe and abroad, local energy initiatives multiply in numbers and attention. They are widely received with sympathy and encouraged in national and European programs. There appears to be a shared belief that local, community-based energy initiatives are important, if only because they express a public sentiment that global environmental concerns deserve more serious political attention. Not surprisingly, social scientists embrace local energy initiatives as a relevant topic for global environmental change research agendas. Why do people organize to produce their own energy in a renewable manner? Which barriers do they face in the context of a fossil-based energy regime that is unlikely to give up its hegemonic position? How can they cope with these barriers and increase their effectiveness? Who are their allies and adversaries? What about the role of government in supporting local initiatives? And, the overriding question, can local energy initiatives make a difference for the energy transition? To put it bluntly, can ordinary citizens, creating new institutions for cooperation at local level, make a significant contribution to addressing the global environmental issues of our era, where the most powerful actors and institutions including (inter)national governments, the international scientific community, business and the environmental lobby have been unable to deliver?

The obvious answer to the ultimate question is: No, and in the very best case: No, unless... Below, I will explore under which conditions local initiatives can make a difference indeed, unfolding the world of difference that stands between the No and the Unless. Below, I will first clarify the topic of investigation.

What is local in local energy initiatives?

Local energy initiatives show a large variety in size, scope, and organization. They are usually associated with the level of small-scale, such as a village, neighborhood, or town. The famous example is the Danish island Samsø, which has managed to produce beyond 100% of its residential energy demand in a sustainable manner. However, what about regional and national associations, such as Ecopower in Belgium or The Windbird in the Netherlands, mobilizing end users to jointly invest in wind turbines? These investors do not necessarily live next to their wind farms. Or, people in the city's center investing in solar PV on farmers´ barns or in a bio-energy plant in a rural area? Strictly speaking, such initiatives are not really local however decentralized in character. And yet, replacing the word local by decentralized is not satisfactory either. What to think about a major energy company investing in a wind turbine together with a small town's municipality? For sure, this is decentralized production of electricity, but is this a local initiative? Geographical scale is insufficient for comprehending the type of initiatives at stake. Critical is the notion of local involvement, especially some form of community ownership (Walker 2008; Musall and Kuik 2011). Here, we may refer to all kinds of end-users, including households, businesses, universities, government agencies, etc.

An important factor to be taken into account is the role of government in local energy initiatives. The Netherlands provides a typical example of a less supportive policy context. Analysts agree about the inconsistent policy framework that, at best, provides short-term incentives. Yet, many municipalities have action plans for becoming “climate neutral” at some point in the future and facilitate local initiatives. I am personally most familiar with the Dutch situation and it is this context that counts significantly as the background of my view on local initiatives. Germany provides the typical example of a supportive policy context at both national and local level (Mylonas 2011). At national level, the feed-in tariffs have created a climate in which local initiatives flourish. However, even in Germany financial support tends to decline.

What motivates local energy initiatives?

Academic interest in local energy initiatives has emphasized the relevance of green values in shaping peoples' actions. Social scientists have stressed the distinction between green values and values associated with mainstream consumerism (Seyfang 2009). Green values relate to a (radical) change in lifestyles, less consumption, less luxury and a sense of community, which is simultaneously their driving force and outcome. It is hard not to recognize this ideological framework in e.g. the Transition Towns or the Eco Villages movements. In fact, many local initiatives that have germinated outside the realm of these movements are based on similar values and concerns.

Yet, local energy initiatives show diversity. An important driver, apart from environmental concerns, appears to be lack of trust in energy companies and a desire for autonomy and self-control in a globalizing world. Through energy cooperatives at local scale consumers become producers of their energy, closing the gap between consumers, producers and shareholders (Stokman 2010). They provide, as Gates (1998) has put it, the ownership solution for disconnected capitalism thereby referring to the paradoxical situation of a hegemonic worldwide capitalism with less and less entrepreneurial capitalists. Concerns with respect to the direction of society and transparency of governance are probably felt among large groups of citizens. This would suggest that there is a potentially large support for an environmental movement to shape the direction and speed of the energy transition. However, the obstacles are numerous.

Cognitive impairments

There are institutional barriers of many kinds, such as laws and regulations, tax regimes, infrastructures, the behavior of the “green” financial sector and more, which put local energy initiatives in a position of disadvantage. Institutions are usually defined as the formal and informal rules of the game that shape actors' behavior. Institutions are enabling, because they facilitate interactions between all kinds of actors, providing each of them with a specific role and expectations as regards the behavior of others. Institutions are at the same time constraining in that they discourage “out of the box thinking”. To use the term introduced by Lindblom (1997), they (re)produce “cognitive impairments” that prevent a fresh approach. It is widely acknowledged that the unequal balance of power in the energy sector, dominated by a few large oligopolies, forms an obstacle for the energy transition. What is much less taken into account is that this unbalance is not only reflected in institutions such as the market or politics but also where the production, dissemination and utilization of knowledge is concerned. Knowledge institutions, e.g. (semi) government agencies, established research and consultancy networks as well as environmental NGOs with a focus on big players rather than small firms, shape the way actors, including energy consumers, frame the issues implied by the energy transition in a delusive way, obstructing a clear sight on possible shortcuts toward sustainability (Hisschemoller and Bode 2011).

Following my own observations, cognitive impairments largely explain for the current slack in the energy transition. If local initiatives would be able to link up their willingness to take positive action to a fresh approach, avoiding the cognitive impairments I will discuss below, they might indeed be able to make a difference. I thereby make two critical claims. First, energy end users (local initiatives) are relevant, because they have, more than other actors, a genuine, personal interest in the shift to a community-based renewable system. This claim is supported by the assumption that the local transition can be brought about against affordable cost. Admitted, this is not a common sense assumption. To clarify, I do not mean that an affordable shift will be possible throughout the entire residential sector today; actually, it is fair to expect that this is not (yet) the case. Therefore, because they are genuinely interested, local initiatives may want to find out about this, keeping an open mind. Secondly, I claim that, at this stage, as to start making a real difference for the energy transition, already a few successful examples will do. To be sure, there are already inspiring forerunners (e.g. Samsø and several smaller towns and villages in Germany), but what lacks are exemplary cases that have managed to address the physical constraints in (sub)urban areas that represent the bulk of energy demand in the residential sector but also witness physical (spatial) barriers inherent to the urban environment.

The constraints of the dominant energy discourse

Many, if not most community projects start with some idea as to jointly produce renewable electricity through the purchase of solar PV panels or investment in a wind turbine. These initiatives are an important signal in favor of sustainability. Especially in large urban areas, though, they can only cover part of the households' electricity needs. Interestingly, whereas the focus in most projects is still on renewable electricity, for the residential sector in north-western Europe the demand for heat counts for about 60% or more in the residential sector. So it follows that investments in renewable electricity alone will usually not make much of a difference for the total of local CO₂ emissions. For heating, insulation of buildings and behavioral change are among the options preferred. However, energy savings will certainly not end fossil fuel dependency.

Yet, it is quite understandable why local initiatives behave this way. Solar PV and wind are the renewable energy options best known by the largest number of people, and they are probably most cherished as really renewable in contrast to biomass options that are often considered controversial. Furthermore, in line with many government and EU policies and programs local initiatives follow a step-by-step approach, primarily focusing on the “low hanging fruit”. This incremental approach concentrates on different aspects of sustainability separately and in a hierarchical order, such as Take all measures for energy savings first! Next, apply renewables! Then, for the remaining demand, apply the most efficient fossil options! Concepts like these are known as “trias energetica” (the Netherlands) or “energy hierarchy” (UK). In practice, they have proven extremely powerful in shaping peoples' mind sets. However, they overemphasize insulation of buildings (energy savings), which is for many old buildings only to some extent possible. It is even forbidden in cultural heritage areas in London, Athens, Antwerp, Amsterdam, and many more places and may negatively affect in-house air quality. Unfortunately, according to my observation, the most prestigious EU and nationally funded projects take place within this dominant frame, often leading to non-replicable examples because of the very high subsidies involved. Monitoring heavily insulated office buildings has shown a sharp increase of energy consumption during night time in winter, which is explained by the need for ventilation before the employees enter their work place. This may explain for pay-back periods beyond imagination: a new office building (Province Noord-Holland, Haarlem, the Netherlands), constructed according to “trias energetica” guidelines, shows a payback period beyond 70 years. Still, the dominant discourse, reflected in subsidy schemes and demonstration projects, encourages local initiatives to believe that action according to the principles outlined above is ´natural´ in the pursuit of sustainability.

My main criticism at this point is that the dominant discourse on greening the residential sector narrows down the range of options. Notwithstanding national differences, there is reason to assert that the way we (are trained to) think about renewables leads to undervaluation of integrated options such as small-scale combined heat and power (CHP) using waste, biomass (Proka 2012) or even natural gas (Dunham and Orchard 2012). A variety of options exists for the production and distribution of low value heat (25–30°C instead of 60–90°C), such as capillary tube systems for walls, floors, ceilings and even windows, or advanced heat exchangers (Gout 2011). These systems are still expensive when applied at the level of private houses or apartment buildings. However, they may prove well affordable at community level using renewable heat from the sun and underground heat and cold storage (Thuring Petrea 2012). In that case local initiatives could step forward as launching customers helping these innovations to pass the so-called Valley of Death, where innovations need to transform from R&D to commercially viable products.

Joint social procurement

Hence, addressing cognitive impairments must aim at widening the range of renewable options for serious consideration. Local initiatives cannot afford to ignore to focus on both costs and benefits as they will be held accountable by their friends and acquaintances. All this implies to start thinking differently about how to move forward, thus (i) integration instead of compartmentalization, (ii) big steps instead of incrementalism, and (iii) heat, cold, and electricity instead of just electricity. To carry the latter a little bit further; what I propose is a shift away from thinking in terms of means, characteristic for the dominant discourse on renewable energy (heat-pump, solar PV panel, insulation, which again is reflected in many grant and subsidy arrangements), to goals, i.e. (1) renewable heat (and cold) (2) and renewable electricity.

If local initiatives would reason as suggested, they might want to investigate into the following question: how can we realize a local energy system, which brings the highest environmental benefits against lowest cost? The goals would ideally relate to 100% renewable heat (including space heating and cooling, tap water and cooking) and 100% renewable electricity. The procedure for answering this question I provisionally call Joint Social Procurement (JSP). JSP has so far inspired several neighborhood based initiatives in Amsterdam and one in my own energy inefficient neighborhood in Haarlem (the Netherlands), as well as the South London Hyde Farm initiative (Dunham and Orchard 2012). It can be applied everywhere where people are seriously interested in opportunities for an affordable, sustainable local energy system.

The end users of energy are the central actors, working together to get the best value for (their) money. However, in achieving their goals they need to work together with (local) governments, water boards, waste companies, nature conservation agencies, farmers, technology suppliers, in short: all who may benefit in one way or another from the local transition. This makes the procurement a social process rather than a tendering procedure. The procedure proposed is based on the principle of backcasting, which in contrast to forecasting, starts with specifying a strategic future goal and, from there, works back to the present as to identify opportunities, barriers, and the actors who may come to play a role (e.g. Vergragt and Quist 2011). This procedure basically includes the following steps:

1.	Assessing local energy demand: this specifies the goal of the local initiative, the total amount of energy that needs to be produced in a renewable manner or saved.
2.	Assessing local investment power: one of the main obstacles for local initiatives is to find the money to cover an investment. People normally do not realize that they have investment power, but they already pay for their current energy use. To clarify (in an oversimplified form), if a local initiative finds a way to replace its total fossil-based energy use, its members can invest their current energy budget in the new system by transferring their payments to the bank account of their own energy cooperative. After calculating the joint yearly expenses, the local initiative must decide on an acceptable payback period, say 10 years. My own neighborhood, about 1000 households, would then be able to invest up to 25 million Euros including capital costs. On top of this, municipal funds already allocated for adapting to climate changes can be invested in the system because integrated solutions for energy and (waste) water become available.
3.	Seeking social support in the local (neighborhood) community: the awareness of local investment power is a powerful incentive for mobilizing local support. Since statistical evidence shows a continuous increase of energy prices over the past ten years and prices are expected to go up in the near future, the shift to a renewable system at neighborhood level can produce significant selective benefits for the participating households (Hisschemöller and Sioziou Forthcoming 2012). Obviously, this social process will be driven (or undermined) by the results of technical and financial feasibility studies, demonstration of innovative technologies, political support and the building up of a team of respected and trusted community members.
4.	Developing a business case: this process starts with networking and talking to energy experts offering their advice. The local initiative will probably select a team to develop competing scenarios and, from there, calculate the different options. At this point, the assessment focuses on that I referred to as means, the share of the energy demand that can be covered by solar PV, wind, waste or biomass, depending on physical conditions at local level. Challenges are manifold at this stage. How to enhance the formation of a consortium that will provide the initiative with an integrated plan? How would we know that facts and figures presented are correct? How do we know that the (innovative) systems and technologies offered will be reliable and safe? In the best case, national governments would join the local coalition, as they are capable of providing them with the necessary guarantees. In the worst case, local coalitions will have to share these risks, learning from each others´ experience and involving private equity.
5.	If all former steps have been successfully completed, there may be sufficient social support to take a joint investment decision and start implementation.

Conclusion

There are many reasons to be skeptical with respect to Joint Social Procurement and the procedure I propose for increasing the relevance of local initiatives. Obviously, the outcome is not given in advance and physical and social uncertainties will be there during the entire process. This is in my view not the real issue though. What probably makes Joint Social Procurement really difficult is that local energy initiatives are encouraged to ask questions that they, given the dominant institutional framework, are not supposed to ask. They are encouraged to look for options that they, given the incumbent energy interests, are not supposed to look for. The real challenge is as to whether a coalition can be formed between those on the demand side who seriously strive for an energy transition at local level and those on the supply side, who are possibly able to deliver but who are in many occasions forced into the margins of the (national) energy knowledge institutions.

On the other side, we witness an increasing number of people who are genuinely concerned with respect to the directions societal development takes. These persons have good reasons to be interested in establishing their local renewable energy system. The questions and steps proposed as Joint Social Procurement match with these concerns and interests.

At this stage, only few successful examples may be needed in order to get the transnational energy transition process accelerated. What we need is interaction between projects, mutual learning and cooperation, preferably at European level and beyond. Environmental scientists, in their capacities as academics, practitioners and foremost global citizens, can deliver a noteworthy contribution to addressing the many critical questions, practical barriers and obfuscations on the way forward.