RENEWABLE ENERGY COOPERATIVES
A Review of Impacts, Limitations and
Barriers
Mümtaz Derya Tarhan
University of Toronto – PhD Candidate
People, Power, Planet Partnership – Project Co-ordinator
Community Innovation and Social Enterprise Conference
Cape Breton University - July 9, 2015
Energy Sector: Context (1/2)
Issue 1:
Long history of energy generation from polluting and
harmful sources (ie. coal, nuclear, natural gas)
Outcomes:
 Almost irreversible concentration of carbon
dioxide in the atmosphere (Foster et al 2009)
 Increased healthcare issues and costs (DSS
Management 2005)

Displacement/poisoning of communities
worldwide (Shiva 2002)
Energy Sector: Context (2/2)
Issue 2:
Long history of centralized (state and corporate)
ownership, planning and generation of energy
generation
Outcomes:
 Efficiency losses during transmission
 Supply and price volatility (Lovins et al, 2002)
 Communities excluded from decision-making and
benefits
 Perceptual disconnect from energy (Pasqualetti 2009)
Energy Sector: Renewables
Increased uptake of renewable energy (RE) since 1990s,
however:
 Ownership mostly corporate (Huybrechts and Mertens, 2014)
 80% of electricity generation still from fossil fuels as of
late 2013 (REN21, 2014)

Transition towards a sustainable energy system
requires not only a switch to renewables, but also
decentralization, democratization, and community
participation!
What is Community Energy? (1/2)



Broad
definition:
Direct
community
participation in, and ownership of, renewable
energy (RE) projects
Lack of unequivocal definition due to fluid
meaning and self-defined nature of a
‘community’
Communities can be brought together by
geography, interest, etc. (van der Horst
2008)
What is Community Energy? (2/2)


CE Ownership Models:
•
Co-operatives
•
Community Trusts (i.e. CEDIF model in
Nova Scotia)
•
Non-profit entities
•
Municipal ownership
•
LLCs
•
…and more
How to tell a genuinely “community” owned RE
project from one that is not?
Setting “Community” Energy Apart
Source: Walker and Devine-Wright 2008: 498
Renewable Energy Co-operatives

A co-operative with the primary business of
generation heat and/or electricity from
renewable sources
 Other
co-ops in the RE sector: distribution,
consumer, purchasing, service, etc.
RE Generation Co-ops Around the
World


As of early 2014, around 3,000 RE co-ops
across Europe (80% in Denmark and
Germany) – (REScoop.eu 2014)
Germany
 As
of Spring 2012, 800m Euros invested for
290,000 MWh of power (DGRV 2013)

Denmark
 3/4
of country’s windmills co-op owned
RE Co-ops in Canada

31 active RE co-ops in Ontario
 212
projects awarded Feed-in-Tariff contracts
 Majority in development – 68%
 Total of 75 MW capacity
 $27 million raised

Very limited activity outside of Ontario
Economic Impact on Members
1. Sharing costs of capital-intensive RE projects


Increased access to RE projects
Unsuitable properties
2. Income from electricity/heat sales

Feed-in Tariffs
3. Consumption of generated energy

Avoiding supply and price volatility (DGRV 2013; Platform 2014)
4. Generation of additional economic opportunities

Farmer-led RE co-operatives (Schreuer 2010)
Local Economic Impacts
1. Job Creation
1.1 to 1.3 times more construction jobs
 1.1 to 2.8 times more operations & maintenance jobs

(Lantz 2009)
2. Local Economic Activity

5x more resources stay in the local economy (Galluzzo

Partnerships with other local institutions
(municipalities, schools, hospitals, co-ops, etc.)
2005)
3. Surplus re-investment in the Community
Limitations to Economic Impacts
Not all projects succeed!
1.
Communities-of-location vs Communities-ofinterest (Tarhan 2015)
1.
Exclusion of ‘community’ members lacking
financial means
2.
RE is capital-intensive
3.

Low-income communities? (Tarhan 2015)
Social Impacts
1. Social Cohesion



‘stronger sense of community’ (Willis and Willis 2012: 12)
‘better spirit among people’ (Rogers et al 2008: 4223)
‘in the old days the tone was one of heated
debate and dispute – these days, decisions are
reached far more quickly’ (DGRV 2013: 12)
2. Community Empowerment


‘empowering impact of raising money funds from
within the community versus some big company
somewhere else’ (Willis and Willis 2012: 26)
Increased confidence, interest and capacity
Limitations to Social Impacts
Increased social friction
 Existing low levels of trust (Walker et al 2010)

Undemocratic processes and/or private
outcomes
 Moel

Maelogan (Ibid)
Political and ideological divisions (Huybrechts and
Mertens 2014)
Ecological/Perceptual Impacts
1. Clean Energy Generation
2. Increased acceptance of RE projects
 Overcoming NIMBYism?
 Zchadraß
vs Nossen, Germany (Musall and Kuik 2011)
3. Promoting a culture of conservation?
 Prosumers are prone to conservation
behaviours (Stern et al 1999; Devine-Wright 2007)
Barriers to RE Co-ops’ Emergence (1/2)
Perceptual Barriers

Long history of centralized energy policy,
planning and generation
 Lack

of community confidence (Rogers et al 2008)
Lack of awareness among general public,
politicians, financial sector, the cooperative sector (Huybrechts and Mertens 2014)
Barriers to RE Co-ops’ Emergence (2/2)
Barriers to Market Entry

Access to capital (esp. start-up phase)
(Huybrechts and Mertens 2014)
 Key
volunteer skills is crucial
 Volunteer burnout an issue


Lack of policy and project development
support (Walker 2008; Seyfang et al 2012)
Access to the grid (Lipp et al 2012)
Conclusions (1/2)

Successful RE co-ops generate positive
community development outcomes
 while
accelerating the social and perceptual
dimensions of the global energy transition

Co-op ownership does not guarantee
successful outcomes of RE projects
 Processes
and outcomes matter (Tarhan, 2015)
 Policy – and social demand for policy matter
Conclusions (2/2)

Further research required for:
 Insight
into failed projects
 Strategies to enable participation of low-income
communities and individuals
 Relationship between co-op membership and
conservation behaviours (Tarhan, 2015)
Questions & Comments

Thank you!
M. Derya Tarhan
University of Toronto
People Power Planet Partnership (PPPP)
md.tarhan@mail.utoronto.ca
References (1/2)
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