Revolutionizing Clean Energy Sharing: A German Town's Vision

In Siegburg, a citizen energy cooperative is leading the way in promoting sustainable practices by introducing a groundbreaking approach to sharing clean energy. However, the conventional public electricity grid poses a significant challenge when it comes to distributing green electricity.

Bürgerenergie Rhein-Sieg, a renewable energy cooperative based in Siegburg, North Rhine-Westphalia, Germany, is planning to develop a new solar park on recently leased land at a former landfill site.

Since 2011, over 350 individuals in this area have come together to financially support the advancement of eco-friendly electricity.

Germany is home to approximately 900 similar citizen energy communities, with around 9,000 of them spread across the European Union, primarily in northern Europe.

Participation in these communities is open to everyone through the purchase of one or more cooperative shares. At Rhein-Sieg co-op, for instance, a single share is priced at €250 ($275). In return, members receive both interest on their investment and dividends from the electricity they contribute to the public grid.

Thomas Schmitz, the voluntary director of the cooperative, aims to distribute and collectively sell the region’s locally generated electricity using an approach known as “energy sharing.”

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EU backs citizen energy cooperatives

The European Union supports the establishment of citizen energy cooperatives, as it believes that sharing energy will help decentralize the electricity market in Europe. The EU requires all member states to facilitate the formation of clean energy communities and guarantee their ability to use, store, and sell the energy they generate. These requirements must be incorporated into the national legislation of all EU countries.

However, according to Schmitz, the current situation does not even allow individuals to freely share their self-generated electricity with their neighbors.

What’s hampering clean energy sharing in Germany?

Germany’s Ministry for Economic Affairs and Climate Protection has stated in response to the Diplomat news inquiry that EU law does not allow for preferential treatment of collectively generated power. Instead, it emphasizes the need for equal treatment of renewable energy collectives.

The main obstacle to clean energy sharing in Germany lies in the use of the public electricity grid. Currently, electricity generated by a civic energy collective cannot be transmitted through the public grid for use by its members. However, for energy sharing to be successful, this capability is crucial. Valerie Lange from the Alliance for Citizens’ Energy (BBEn) highlights that this is still not possible in Germany.

Additionally, even if it were possible, the existing regulations in Germany make it unprofitable to sell citizen-generated electricity through the public grid. Felix Schäfer, co-founder and co-chair of Bürgerwerke, explains that this limits the potential for selling electricity to neighbors or regional businesses.

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Levies result in high costs for Clean energy sharing

According to Schäfer, in Germany, individuals who sell electricity through the grid are automatically classified as electricity traders and are obligated to pay taxes, such as electricity tax, and transmission fees to the grid operators. Consequently, energy-sharing cooperatives would need to transfer these costs to their customers. This would place a significant burden on small energy cooperatives, which are typically managed by volunteers.

Ultimately, Schäfer states that for customers, obtaining green community electricity from their own region would be just as expensive as purchasing power from Norwegian hydropower plants. Currently, Norway’s hydroelectric stations supply electricity to approximately 3.6 million German households.

Cooperatives advocate for a decrease in charges

Due to the fact that German electricity charges do not apply to “private solar power generated from one’s own home,” homeowners can benefit from electricity produced by their often state-subsidized solar systems at a very low cost, as explained by Schäfer. Alternatively, “Tenants opting for green electricity from a nearby communal solar park may find it significantly pricier.”

This is the reason why Schäfer’s organization is urging for a significant reduction in charges such as the electricity tax and transmission fees for community-based citizen energy.

The BBEn also believes that the federal government must establish tangible financial incentives for energy sharing. By 2030, Germany aims to generate 80% of its electricity from renewable sources. Currently, it is only about half of that.

“To accomplish this objective, we require a multitude of wind turbines and solar plants. These plants will stand out more than centralized fossil fuel power plants. We will all have them in close proximity to our homes,” states Valerie Lange from BBEn, highlighting a potential source of opposition to renewable energy.

Citizen energy has to pay off

Lange stresses the need to incentivize citizens, ensuring their support for the energy transition and overcoming any objections. In order to achieve this, she believes that individuals should have the opportunity to actively participate in energy production and reap its benefits. To make this feasible, it is crucial for their energy plants to be financially viable.

The BBEn, on the other hand, advocates for the involvement of all interested parties within a 50-kilometer radius in citizen energy plants. Additionally, they propose the implementation of a state electricity premium, which would enable utility-scale clean-energy parks to sell their energy at attractive prices. This approach would effectively encourage the utilization of renewable energy sources.

Smart meters are still the exception

To enhance widespread adoption of smart meters, all stakeholders need accurate information on electricity flow. Smart meters, measuring real-time consumption, provide this crucial data from regional plants and other sources.

In Germany, only about 3% of energy consumers currently have smart meters installed, prompting BBEn to recommend focusing initially on installing them in buildings and households interested in energy sharing initiatives to address this low adoption rate.

Self-sufficiency is a strong motive

Thomas Schmitz, a representative from the Rhein-Sieg cooperative, emphasizes the increasing interest in large wind or solar plants within local communities. The motivation behind this interest stems from the realization that dependence on energy imports from countries that are no longer desirable as energy suppliers is a significant concern.

Consequently, the desire for self-sufficiency has become paramount. If generating clean energy locally is not feasible, individuals at the very least aspire to obtain electricity from their own region. To facilitate this transition, Germany must establish the necessary conditions that prioritize energy sharing as a fundamental aspect of its clean-energy transformation.