Why energy cooperatives are an added value to your climate plan

Climate Action Energy 5 min read , June 26, 2019

Read this article in Dutch โ€ข Read this article in Spanish
Energy cooperatives have been growing enormously in recent years ๐Ÿ“ˆ. They generate their own energy, so the money is invested locally (instead of disappearing into the pockets of foreign multinationals). This has advantages for the cooperatives themselves, but also for your climate plan. Would you like to know how? You can read all about it here! ๐Ÿ™Œ

This article is based on our webinar, where Jan de Pauw (RESCOOP) and Ben Caussyn (City of Eeklo) explain everything you need to know to get started.

We start by explaining what a civil cooperation is. An expert already? Feel free to scroll further to point 3 and 4 to discover the benefits of such cooperations and how you can support them in your municipality!

1. What is a civil cooperation? ๐Ÿ™‹

๐Ÿค“ The Flemish ICA defines a civil cooperation as: โ€œ... an autonomous organization of people who unite voluntarily to look after their common economical, social and cultural needs and ambitions through a company that they own together and control democratically.โ€

Such a cooperation is based on seven ICA principles, which are:

  • Voluntarily and open membership
  • Democratic control by the members
  • Economical participation by the members
  • Autonomous and independent
  • Education, training and provision of information
  • Collaboration between cooperations
  • Attention to the community

The most important ones, according to Jan de Pauw, are autonomy and democratic control. This means that there are no reserved positions. Every citizen is allowed to apply to the Board of Directors and determine the coordination of the organization.

The main objective of a civil energy cooperation is generating renewable energy for its own use. This means it's not focussed on making profit, but only providing its own needs in a sustainable manner.

2. How do they work?

Civil cooperations work through a direct participation model. A group decides to provide in their own needs and create a cooperation together. The members choose a Board of Directors themselves. Then they collect funds and the cooperation buys an installation (wind turbines, solar panels, ...).

The generated energy goes entirely to the cooperatives and dividends are paid in exchange for the capital made available.

The added value from the renewable energy, produced by the bought installation, goes to the cooperation as income in the form of green energy certificates. The cooperation also ensures new projects.

A lot of civil cooperations also serve a social purpose and create added value in the area. ๐Ÿ‘ Pajopower (Dutch website) gives the good example.

3. What are the benefits?

There are many benefits for the cooperatives. They have their energy in their own handsโœ”๏ธ, there is 100% profit sharingโœ”๏ธ and their energy bill is fallingโœ”๏ธ. Civil cooperatives and local governments are therefore natural allies in the energy transition - they help prepare your municipality for the future, make your municipality more attractive and help you achieve your climate goals.

Because a cooperative relies on citizen participation, there is also less resistance to projects that provide renewable energy. This is because the citizens themselves benefit! ๐Ÿ˜ This is a very big advantage for wind turbines, where a โ€œNot in my Backyardโ€ effect occurs very often.

Another advantage is that such a cooperative makes your municipality more attractive. It shows that the residents are supporting the projects that are being carried out.

๐Ÿ… Invest in and accelerate the energy transition

An additional advantage for both parties is that sleeping capital is invested in renewable energy. It is estimated that Belgians keep 200 billion euros in their savings accounts, which have a very low interest rate (base rate 0.15%).

Wind turbines are particularly interesting for civil cooperatives, according to Jan de Pauw. Not only because they generate more energy than solar panels, but also because of the green energy certificates.

Wind turbines get 8% of the amount back. This can serve as โ€œinterestโ€ for the payment of the investors.

A realistic solution on a large scale? Suppose that 1000 wind turbines are purchased in Belgium by civil cooperatives (around 3 billion euros). This is only a fraction of the total amount saved, which pays back at 8% โ€œinterestโ€. Impressive and at the same time feasible, right?

๐Ÿ’ฐ Return on investment

The payback period of these investments is also good. Take a look at the example of the city of Eeklo in Belgium:

To allow Eeklo to generate electricity independently, 14 wind turbines would be needed, which cost 42 million euros.

This may seem like a lot, but let's compare this with fossil fuels. Eeklo has 20.000 inhabitants and approximately 2.000 euros per inhabitant is needed to meet the annual energy demand. From a quick calculation, we know that up to 40 million euros leave the country every year to provide Eeklo with energy.

Suddenly, an investment of 42 million euros doesn't too bad, right? There could even be capital for the installations in less than 2 years.

4. How do you make the civil cooperations succeed?

You're probably asking yourself the question: โ€œThis all sounds very nice, but what can a municipality do?โ€ ๐Ÿค”

Well, renewable energy sources are local and natural property. This means that you, the municipality, hold the keys to make citizen cooperatives succeed. Read below how to get successful cooperatives in your municipality ๐Ÿ‘‡

๐Ÿ€ Offer opportunities

Open up locations where civil cooperations can โ€œharvestโ€ this energy. This can be spread out over the whole territory, but also by making public buildings and municipal grounds available.

๐Ÿ” Research the opportunities for your municipality

RESCOOP Flandres is the federation for Flemish civil cooperations for renewable energy and keeps a list (Dutch website) with all its members. If your municipality is elsewhere, make sure to check for similar organizations in your area. You can certainly support an energy cooperation in your municipality.

Important to know is that the success of such a cooperation is depends on the opportunities an area has to offer. It's usually better to team up with surrounding municipalities to increase the opportunities.

๐ŸŽ Create added value for the area

This is something civil cooperations do well on their own, but you can enhance this as municipality. Start up an environmental fund to which local cooperations can contribute. You then invest this in other climate actions and social projects.

๐Ÿ“œ Establish the renewable energy vision

Establish the municipality's vision about renewable energy and communicate openly about it with your residents! This creates more support.

Especially for wind define a set of specifications to create clarity. Establish where wind turbines are allowed to be built and where not. Reserve a percentage of this for civil cooperatives.
๐Ÿ’ก Use this example from Eeklo as an inspiration for your city!

This article was inspired by the Dutch webinars โ€œDe kracht van energiecoรถperatiesโ€ en โ€œCoรถperatieve wind als motor voor lokale energietransitieโ€ with Jan de Pauw (RESCOOP) and Ben Caussyn (city of Eeklo).
Hungry for more webinars? Make sure to take a look here!

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