Wednesday, 29 October 2014


Yesterday the National Grid warned that its capacity to supply electricity this winter would be at a seven-year low due to generator closures and breakdowns. The National Grid revealed that spare electricity capacity, which ran at about 5% over the winter months last year, would be nearer 4% this year, three years ago the margin was 17%. The loss of generating capacity is a symptom of a bigger systematic sector wide problem as a result of the model for energy production, distribution and ownership being fundamentally flawed.

Our energy production and distribution model has been restructured to primarily benefit the big 6 energy cartel members, their interests and their (City) profits. From the perspective of energy consumers and smaller scale energy producers, or anyone who wants things to change the problem is that all the Westminster based political parties have quietly bought into this cartel dominated model of energy production and ownership (or perhaps were quietly bought).

The reality is that the UK’s cartel dominated model for energy production and distribution is not necessarily the norm everywhere in Europe or around the world. Alternatives exist and prosper, a particularly good example of a balanced and healthy energy mix can be found in Germany. Here small may very well be beautiful, even within a geographically sizeable state, particularly in relation to energy, back in 2012 some 22% of the countries energy came from small scale green entrepreneurs. 

In Germany community based co-operatives (both urban and rural), farmers and homeowners are part of the 1.3 million renewable energy producers and part of the energy mix. Incidentally in Germany, citizens’, cooperatives, and communities own more than half of German renewable capacity. Small-scale electricity generation is having a knock on effect encouraging change throughout the energy system.

In Berlin, a cooperative (Burger Energie Berlin – literally Berlin Citizens Energy) is campaigning to take control of the capital's electricity grid with some 35,000km of underground cables. The cooperative is a free, cross-party coalition of citizens who are committed to a sustainable, sustainable and democratic energy policy in Berlin. Members have one vote regardless of the amount their deposit and anyone who wants the power network to be in civil hand, is welcome.

Ordinary Berliners have invested their cash in the venture with the intention of producing a reliable 100 percent renewable energy supply. The aim is to promote the integration of renewable energy into the grid and to invest a portion of the profits from this directly into the transition to renewable energy. At present the Berlin electricity grid is run by Vattenfall (whose concession runs out this year) regularly generates millions in profits, members of the co-operative believe that the profits from the grid operation should flow to Berlin’s citizens.  

This is grass roots energy generation that has potentially the power to change the nature of the energy supply system (in Germany and elsewhere). They aim to build an energy grid that is better handle the rise of green power and allows local use of locally produced energy. This may well be a case of small being both beautiful and perhaps more disturbing from the perspective of Westminster being that it is both community beneficial and community owned.

In Germany, there is a deliberate promoted policy of energy transition (or ‘Energiewende’) – this is a very different approach to what is practised in these islands (at least south of the Scottish border). For a start the ‘Energiewende’ is driven by a desire to reduce and eliminate any dependency on nuclear energy. 

The introduction of the Feed-in-tariff (EEG) in 2008 was an important part of this process, along with (post Fukushima) the almost unanimous across the board political commitment to a wide range of targets (in 2011) which included a commitment to reduce energy demand (with a 50% reduction in primary energy use by 2050) and the achievement of an 80% renewable electricity share of total consumption (by 2050). This has resulted in a significant uptake of renewables in Germany.

It is worth noting that:
  • In early 2012, around 25% of Germany’s power was generated from renewable sources;
  • Costs for wind generated power have fallen by around 50% since 1990;
  • Costs for solar systems has fallen by around 80-90% since 1990;
  • In 2011, over 380,000 people were employed in the renewable energy sources industry
  • Only 13% of Germany’s 60 GW of renewable energy is owned by utilities, with the rest being owned by households, communities, and farmers among others;
  • In less than 7 years, an energy market with 4 main suppliers has turned into one with more than a million suppliers;
  • Solar supply has already met peak lunchtime demand on several occasions.
Another of the benefits of the Energiewende is more local ownership of the means of energy production, more jobs, more security of supply and real meaningful action to tackle climate-changing emissions from energy.

The real striking difference is that the operation of the grid in Germany means that generated renewable electricity is used first and that distribution network operators (DNOs) are also seeking to reduce demand. This is so radically different from the way the energy is generated, distributed and used here in Wales.

Another significant difference, aside from the scale and pattern of investment (in Germany), is that small businesses, co-operatives, individual households and local authorities benefit from investment distributed by a network of local banks (something we pretty much entirely lack in Wales). The whole thing is supported by the KfW (state investment bank) to the tune of 23.3 billion euro in the area of environment and climate protection (2012 figures).

These developments are a million miles away from the so-called ‘Free market’ for energy that exists in the UK, which is pretty dominated by the ‘Big 6’ energy cartel members. The fact that some former politicians have found rewarding post political career employment within the energy sector may be co-incidental but suggests that there is little desire for improvement within Westminster.

The way the current set up works, it is difficult to imagine ‘Government’ at most levels (at least south of the Scottish border) in the UK grasping the concept, the practicalities and real possibilities of genuine community owned beneficial energy generation projects.

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