How a German town wants to reinvent clean energy sharing

Bürgerenergie Rhein-Sieg, a citizen energy renewables cooperative located in Siegburg in the state of North Rhine-Westphalia in western Germany, wants to construct a new solar park on newly leased land at a former landfill site.

Since 2011, more than 350 people in this region have joined forces to finance the next generation of environmentally friendly electricity .

Germany boasts nearly 900 such "civic energy communities." In total, there are about 9,000 of them across the European Union, most of which are in northern Europe.

Anyone can join one of these communities by purchasing one or more "cooperative shares." At the Rhein-Sieg co-op, for example, one share costs €250 ($275). In return, members receive interest on their investment and dividends from the electricity they feed into the public electricity grid.

Thomas Schmitz, the co-op's volunteer director, wants to distribute and sell collectively produced electricity in the region using a model known as "energy sharing."

EU backs citizen energy cooperatives

The EU sees energy sharing as conducive to decentralizing Europe's electricity market. Brussels stipulates that all EU member states must enable clean energy communities and ensure that they can consume, store and sell the energy they produce. All of this, the EU specifies, must be inscribed into national law across the bloc.

But, Schmitz told DW, this still isn't on the table: "At the moment, you're not even allowed to give away self-generated electricity to your next-door neighbor."

What's hampering energy sharing in Germany?

In response to an inquiry from DW, Germany's Ministry for Economic Affairs and Climate Protection said that EU law does not provide for the privileged treatment of collectively generated power, but rather for the non-discriminatory treatment of renewable energy collectives.

At the heart of the problem is the use of the public electricity grid: Electricity generated by a civic energy collective for use by members of the collective cannot be channeled through the public grid. But if energy sharing is to succeed, that is exactly what is needed. "This is basically not yet possible Germany," says Valerie Lange of the Alliance for Citizens' Energy (BBEn), an umbrella organization for citizen energy projects.

What's more, the rules in Germany mean that even if it were possible, selling citizen-generated electricity via the public grid — for example to your next-door neighbor or a regional commercial enterprise — would barely be profitable, explains Felix Schäfer, co-founder and co-chair of Bürgerwerke, a cooperative and electricity trader that markets electricity generated by German renewable energy communities.

Levies make energy sharing expensive

"In Germany, anyone who sells electricity via the grid is automatically considered an electricity trader and has to pay taxes, such as electricity tax, and transmission fees to the grid operators," explains Schäfer. Energy-sharing co-ops, he says, would have to pass costs on to their customers. All of this would require an enormous effort from the likes of small energy cooperatives, which are usually run by volunteers.

The bottom line is that for customers, green community electricity from their own region would end up costing at least as much as power from Norwegian  hydropower  plants, says Schäfer. At present, Norway's hydroelectric stations provide approx. 3.6 million German households with electricity.

Cooperatives call for reduction in levies

Because German electricity levies do not apply to "private solar power from the roof of one's own home," homeowners can use electricity from their often state-subsidized solar system very cheaply, Schäfer explains. "For tenants who would like to use green electricity from a communal solar park next door, on the other hand, the electricity would be significantly more expensive."

This is why Schäfer's organization is calling for a significant reduction in levies such as the electricity tax and transmission fees for communal citizen energy.

The BBEn also feels that the federal government has to create real financial incentives for energy sharing. Germany has pledged that 80% of its electricity will be renewable by 2030. Right now, it's about half that.

"To achieve this goal, we need many, many more wind turbines and solar plants. These plants will be much more visible than the central fossil power plants. We will all have them near our homes," says BBEn's Valerie Lange, pointing to a potential source of opposition to renewables.

Citizen energy has to pay off

Lange says that to get people behind the energy transition and to counter objections, "they must be able to participate in production, and benefit from it." For this to happen, she says, their plants have to make financial sense.

The BBEn contends that all interested parties within a radius of 50 kilometers should be able to participate in a citizen energy plant. Also, a state electricity premium should ensure that utility-scale clean-energy parks can sell their energy at attractive prices. This would create an incentive to use renewable energy.

Smart meters are still the exception

For this to happen, all the parties involved have to know how much electricity flows from regional plants and how much from other sources — and when. This data can be provided by "smart meters," digital electricity meters that measure consumption in real-time.

In Germany, however, only around 3% of energy consumers have these meters. BBEn proposes that meters first be installed in buildings and households interested in participating in energy sharing.

Self-sufficiency is a strong motive

Thomas Schmitz from the Rhein-Sieg cooperative says that interest in large wind or solar plants in one's own neighborhood grows when people can profit from them.

"People have understood that they are very dependent on energy imports from countries from which they no longer want to buy energy. The desire to become self-sufficient is great," says Schmitz. "If they can't generate clean energy locally, they at the very least want to get electricity from their region."

For this to happen, Germany needs to create the conditions that will make energy sharing a central part of Germany's clean-energy transition.

Edited by: Paul Hockenos, Rüdiger Rossig and Aingeal Flanagan

This article is part of a six-part series on energy communities in the European Union conducted with the support of Journalismfund Europe.