The largest successes with renewable energy are based on enabling frameworks
combined with organisation of promoters, investors, producers, users, and
other stakeholders in ways that have made them able to overcome the barriers
without creating new barriers. This can lead to very different types of
organisation, but in general:
it builds on some existing traditions,
it gives co-operation among different stakeholders,
it give a possibility of affected persons to participate; e.g. neighbours to larger structures have a possibility to participate and see some benefits from the new development.
While the enabling framework has to be established as part of national and local policies, the successful organisation must be created by the involved stakeholders, maybe inspired by examples from other sectors or other countries.
Organisation of promoters
Promoters of renewable energy are usually groups and organisations in favour of sustainable development, as well as states and local authorities that have included increase of renewable energy use as part of the their policy. In addition, business can be promoters, if they see business opportunities in the development. So far renewable energy businesses have been too small to have major influence on the development, but it is possible that this will change in the future.
The role of promoters is to inform users and investors about the opportunities for renewable energy: technology, costs, financing etc. In addition, promoters can play a key role as initiators of new developments that can function demonstrate solutions. The availability of local examples that work well is important for most users and investors to invest in a given solution. For long-term success promoters should be independent from producers, to be able to support a market where more producers compete, and to give unbiased advice to potential investors and users.
Local structure - an example
In Denmark, important local promoters of renewable energy have been energy and environment offices. This is local associations, which provides free, impartial information and guidance on energy conservation and utilisation of renewable energy sources. At the same time the energy offices initiate many energy and environment activities in their local areas. In Denmark, with 5 million inhabitants, there are 18 local offices that were subsidised by the Danish Energy Agency for their educational work on energy and for helping people applying for subsidies on different renewable energy sources from the state. Most of the offices employed one or more energy advisers, who are responsible for the daily work.
An energy and environment office is usually started by a group of people in the local area, who gather and form an association with the common aim to promote environmentally friendly energy solutions. The initiators are mostly enthusiastic people who are already involved in energy and environment activities; but in this way they strengthen their work. The first energy and environment offices were formed in the late 70's, but new ones are still formed.
The membership base of the loca1 energy and environment offices ranges from 20 to 500 members. The members are, in addition to households: wind turbine cooperatives, cooperative building societies, firms, farms, folk high schools, etc. A smaller fraction of these are more closely connected to the office, and participate to some extent in the office activities - mostly on a volunteer basis.
The activities of the local energy and environment offices depend very much on the location. Offices in cities are often involved in urban ecology projects, as well as water saving and traffic planning are natural tasks. In the country a main work field is utilisation of biomass and wind.
Most energy and environment offices have a permanently employed energy adviser. He or she is responsible for the daily management of the office. In addition their work is to give free and unbiased advice - mainly to private people - on supply of renewable energy sources, and energy saving measures, etc. But also institutions can of course approach the office.
The energy advisers have usually acquired their knowledge through active involvement in development and implementation of renewable energy plants. They are experienced in information search and hearing of authorities, and have often a technical, trades or other similar background. In addition, the energy advisers have completed some courses on renewable energy, and they currently follow in- service courses and other technical cooperation organised by "SEK" (see below).
An energy adviser can not be expert in all fields. But the expertise at the individual energy and environment office does not only depend on him or her, but also on the background group. If there are special requirements that can not be met by the energy adviser or the background group, contact can be made to another energy and environment office with expertise in the specific field.
Free educational, information, and consultancy
Everybody can contact the offices, either personally or by phone during opening hours, with questions about everything related to renewable energy and energy savings. The energy adviser is often able to give an answer immediately or has written material that is sent to people who apply.
The opening hours and staff at the individual offices depend on the financial support, though in some offices activities solely are based on subscriptions and voluntary work.
Organise Local Exhibitions & Events
The energy and environment offices often organise exhibitions in the local area. Most energy and environment offices have carried out solar energy campaigns together with local plumbers.
Public lectures, debates, conferences, and meetings, are other methods the energy and environment offices use to disseminate information. They can either take place at the office, or a representative from the office visits a school or a meeting hall, and gives a lecture: for example on solar heating, wind power, or low energy building. These meetings are advertised in the daily newspapers.
The offices make and distribute newsletters, books, magazines, booklets, etc. The energy and environment offices stay in contact with their members through newsletters that are issued four to six times a year. They co-operate with OVE on a national newsletter, and the larger offices have in addition local newsletters, mostly made by volunteers.
Presentation of plants and demonstration houses
Many energy and environment offices arrange open house days once or several times a year, where it is possible to visit wind turbine cooperatives, biogas plants, a family with a solar collector on the roof, plants for collection of rainwater, etc.
Resource audit of the house
Members of the association can have a visit from an energy adviser, who examines the house. Based on the audit, the energy adviser will recommend electricity, heat, and water saving measures, e.g. installation of renewable energy plants, recycling, etc.
The energy and environment offices also spend some time on teaching in primary schools, adult education centres, day classes, etc. The education can be either on a specific topic, or in general on renewable energy and various environmental conditions.
Demonstration plants, plus research and development projects
The energy and environment offices act as initiators and consultants in larger projects. But the extent of these activities is very dependent on which skills the active members of the individual association have.
Some energy and environment offices undertake paid consultancy, by virtue of specially qualified staff, either employees or in the background group. They take part in realising different types of renewable energy projects - e.g. large wind turbine projects, biogas plants, or building renovation. But in the majority of cases, the role of the energy and environment offices is to promote and bring the ideas into effect. The practical implementation is thereafter done by local tradesmen or for larger projects by a consulting engineer.
The Danish local offices are organised in the national "SEK" (Association of Energy Offices) and work in close cooperation with OVE (Organisation for Renewable Energy)
The offices are organised with a board of members. The board has formal tasks as a governing body, but most important is probably to give inspiration to, and initiate, local work. The energy advisers, who are easily buried in the extensive day-to-day work, need visionary partners.
Many offices have a background group or activists who support the daily work. They may give technical assistance to solve different problems, be responsible for the newsletter from the energy and environment office, etc. If this high degree of local involvement did not exist, it would be difficult to keep the energy and environment offices alive.
Part of Local Networks
The energy and environment offices cooperate with other environmental groups in the neighbourhood. Likewise cooperation with local firms and tradesmen (e.g. plumbers who install solar heaters) is a natural part of the offices' work. Another important task is the cooperation with local politicians and authorities; and of course political work at local level to promote environmentally friendly energy solutions. - It is unfortunately not always the case that local politicians agree with us.
Organisation of Users & Investors
It is crucial that those deciding to use renewable energy, or just to invest in it, are satisfied with it, and will recommend that others do the same. It is likewise crucial that they do not create unhappy neighbours, e.g. by lack of involvement of neighbours in larger projects. In several large-scale successes with renewable energy, organisation of users and investors have been important, - and the same will be true for the future.
In Denmark many windpower investments have been organised as co-operatives of consumers, allowing ordinary household consumers to buy a small share of a large windturbine. In this way ownership has been distributed to many people that would not or could not invest in a large windturbine. This allowed large investments without large individual or institutional investors. It also allowed neighbours to be involved; and thus to have a say in the development of the projects.
The large involvement of the population has given large support for windpower.
The use of specialised co-operatives was based on a long tradition for such user or consumer co-operatives. Many Danish shops & utilities are organised as consumer co-operatives while several food industries are organised as producer (farmer) co-operatives.
On national level Danish windturbine owners are organised in an association of owners that supports its members with technical and legal advice. It also maintains a statistic of most Danish windturbines, where the owners can see month by month how well their windturbine performs compared with the other windturbines. Especially in the first years, this statistics was also important to show the reliability of general performance of the technology.
Groups of Self-builders
In Austria users of solar heating were organised in groups of self-builders that joined local courses in building solar heating for houses. During such a course, each participant produced solar collectors that could provide the house with more than 50% of the heating for hot water, and in some cases also give a contribution to space heating. These groups and courses of self-builders were the basis for the large success with solar heating in Austria.
Both the Danish windpower co-operatives and the Austrian solar self-builders were most important in the first phase of large-scale success, where it was crucial to find some kind of organisation that could go beyond the circles of original investors and developers of the technologies, and that were not stopped by the barriers that hindered the involvement of traditional investors and commercial companies. The user-owned structures are not stopped by the apparent lack of market that keeps makes larger companies and investors reluctant to invest. Even if such companies had decided to invest, they might not have been able to succeed in building the necessary local support for the new solutions. In today's development commercial companies and banks play a larger role.
In addition to organisations of users and investors, the Danish windpower development have benefited from national exchange of experience in gatherings of all stakeholders every half year, where new developments are presented and there is in general a free flow of information. Such gatherings with low participation fee are important to keep the smaller stakeholders involved, including the many small enterprises that are important in success with renewable energy.
These framework conditions depends on political decisions. In the current industrialised societies where traditional energy supply is based on mature technologies, with a century of technological developments, a strong supporting lobby, as well as widespread subsidies and other benefits, renewable energy has little chance without political support. A successful development does not require whole whole-hearted support from the political establishment, but it does require some kind of political will to support a growth of renewable energy, and to remove barriers if the development is halted.
Often policies that support renewable energy are part of a larger strategy for sustainable development, security of energy supply, etc. This helps to explain for politicians the role of renewable energy. The main risk is that sometimes strategies are not followed up by regulation and support that is specific or strong enough to initiate a large-scale development of renewable energy. Some policies include targets for development of renewable energy or reduction of CO2 emissions as key elements. Such targets can be important drivers for development of renewable energy, and they allow an easy follow-up, where politicians and the public easily can see if policies give the expected development. On the other hand low targets can be a barrier for development, and if support mechanisms are very closely linked to targets, the development cannot go beyond a given target.
For investments to take place, the investors must be able to afford the investments, either with own resources or with loans. The required pay-back periods vary greatly with the investors situation and the perceived additional benefits of the investment. Some investors are willing to accept long pay-back periods for investments that benefit the environment or reduce input of fossil fuels. If environmental requirements or fossil fuel prices go up, it can turn out to be very good investments, even if they look less profitable at the time of investment. Required simple pay-back periods vary from 5 years or less for commercial investors that see risks in the investment to up to 20 years, for private investors that e.g. invest in their own house and that do no need loans for the investment.
Different regulation supports different types of investors; and usually it is important that there are several investors involved. Markets with just one or a few investors involved, such as large utilities, have not lead to large-scale use of renewable energy, except for large hydropower. This is surprising to many politicians that have experience from other forms of energy, where large single investors are legio.
Policies affect the investment in a number of ways:
investment subsidies that some countries give for a period to start a market. The subsidy is usually limited to 30-40% of the investment or less.
regulation of grid connection and grid reinforcement fees are important for technologies that sell electricity to the grid: windturbines, cogeneration of heat and electricity based on biogas/biomass etc. In most countries with large-scale success with windpower, the investors' costs of grid connection have been limited, e.g. to the cost of the physical connection, leaving the costs of grid-reinforcement to the utilities.
taxation, e.g. VAT. In some countries VAT is lower for energy purchases than for purchase of renewable energy equipment
The income /savings from a renewable energy investment depends to a
large extend on political regulation. This include:
regulation of prices for electricity sold to the grid. The most successful has been fixed prices for electricity from eligible renewable energy, usually for a period limited to e.g. 10 years.. Another way of regulating prices have been tender-procedures, where investors via a tender can achieve a fixed price for sold electricity for a number of years.
a similar type of regulation is "portfolio standards", where a utility is required to have a certain percentage of renewable energy in its supply. The utility can decide to invest in own capacity or to buy electricity from others.
energy/CO2 taxes make other energy sources more expensive, and benefit renewable energy if it is exempted from the taxes (fully or partly).
General taxations and tax breaks also influence the economy of renewable
energy investments, e.g.:
depreciation rules for investments
taxation of income from renewable energy
While renewable energy technologies are generally available, not all technologies are available in all countries. Further, a large-scale development requires more than one supplier of a given technology.
National / local production is important to increase the benefits of a development of renewable energy, such as local income and employment. While the initial development is faster and cheaper with use of technology imported from leading markets, a larger development will benefit from local production.
The use of research and development funds for renewable energy is a
valuable assistance to developments. It is, however important that research
and development funds are not monopolized by large institutes and companies.
Historically such large entities have not been very successful in transforming
their research and development into useful renewable energy solutions alone.
The involvement of small and medium sized enterprises (SME's), NGOs and
other smaller stakeholders are of crucial importance.
In addition to research and development, national test and knowledge centers are important, to test equipment and to make information about it available.
Renewable energy users need technical support for maintenance. This is in general the responsibility of the suppliers, but in some new markets, suppliers do not have sufficient maintenance structures in place, in particular for smaller installations. A network of maintainers can be valuable in early phases of the development.
Information for potentials users about the possibilities for renewable energy is crucial. Allocation of funds from national budgets or small levies on energy consumption can give the basis for an independent consumer information system. See the chapter on organizing for details on how such a system can be organized.