Joining a local energy community? Why?
Does it promote direct ownership or a financed and subsidized business? YOU pay for these subsidies, your money goes to banks and investors. Local energy communities can change this, when the organize their members to become direct owner of the wind farm.
When large installations are build by local energy communities, it makes a big difference, whether the members:
- own a part of a shared wind farm, and generate their own power directly.
- own a share in a financial business construct, and buy their power for a commercial price, including profits for investors and banks.
In the first situation, members of local energy communities purchase a part of the shared wind farm. And have their power at cost price, the operational cost.
No commercial margin required, no interest for a business loan, no commercial risk, because they consume the power they already own.
They do need however a power balancing contract with a utility. With the right market conditions, this costs only about 0,1 cents per kWh.
In this way, the members of a local energy community have no risk, other than the yearly variation in wind.
So every family can be a proud owner of a wind farm, and have the benefits, cheap power. Even poor families be part of local energy communities, they need a loan, paid with the difference between the cost of commercial power they now already buy, and the cheaper power, they can generate themselves.
Renewable power has preference on the grid, in Europe
This is possible, because wind farms work automatically, and the power has legally preference on the grid.
But detail regulations differ from country to country. And fossil power plants try to block others to offer a real alternative for their commercial fossil power.
However, their fossil power plants can not work automatically. They need to negotiate and purchase fuel, and trade the power they generate, on a daily basis.
Wind farms have preference on the grid, so when citizens own a part of that wind farm, they can directly use the power, generated by their part of the wind farm.
The second situation is more expensive, because power is sold on the market, competing with very large power plants.
Because of this risk, the business of local energy communities often gets subsidized, but the members themselves pay for this subsidy. That is why this is the wrong choice.
The purchase of the commercial wind farm is often financed with a loan from a bank and investors. Their foreign capital needs a profitable margin, paid for by the sale of subsidized power.
The profit that result form this business is far less that the subsidy paid by the members.
Local energy communities should lobby for better regulations
So direct ownership, and having power at operational costs only, is the preferred way for local energy communities.
But regulations work against citizens and to the advantage of businesses.
That is why the most important task for a local energy community is lobbying and political activities, for better regulations. And the have their members to support that, they are voters too.
Off course local energy communities should also demonstrate they can create value for citizens.
Not by copying the marginal business of large fossil power companies, or investors.
But by organizing their members to become principal for the build of their own wind farm. To generate their own power at cost price.
Mandatory CCS2 for all fossil power plants, makes for lower total power cost for consumers
It may seem strange that renewable promoters want to keep fossil power plants open and have them apply CO2 capture and fixation. The fossil free lobby wants to close all fossil power plants. But they want that too early. As owners of a wind farm, we need fossil power plants as backup, they are the “storage” for periods with not enough wind, which happen frequently. That is why all power plants must become climate neutral, to they produce climate neutral power.
Mandatory climate neutral power plants produce power that is more expensive. This is beneficial for consumers, because they pay for the subsidies for the commercial wind farms. With fossil power being more expensive, consumers have less subsidies to pay for.
Fossil power plants will remain necessary for decades to come, better make them climate neutral as soon as possible.
EU administration demands that citizens get the right to generate their own power
The EU has also discovered the benefits for citizens to generate their own power, so the EU want to give every citizen the right to generate their own power.
But, by the nature of the European Community, every member state may do this in its own corrupt way. This is why local energy communities should lobby for direct ownership regulations, and not for commercial ownership.
Selling parts of a wind farm to citizens, for their own use, also makes social acceptance visible. That is the first way a local energy community can create value for politicians.