{"id":22537,"date":"2015-09-21T00:01:26","date_gmt":"2015-09-20T22:01:26","guid":{"rendered":"http:\/\/www.olino.org\/us\/?p=22537"},"modified":"2015-09-19T18:33:37","modified_gmt":"2015-09-19T16:33:37","slug":"generation-kwh","status":"publish","type":"post","link":"https:\/\/olino.org\/blog\/us\/articles\/2015\/09\/21\/generation-kwh\/","title":{"rendered":"Generation kWh by citizens"},"content":{"rendered":"<p><a href=\"http:\/\/www.olino.org\/us\/wp-content\/uploads\/2015\/09\/LOGO-SOM-ENERGIA-6-BLACK.jpg\" class=\"thickbox no_icon\"><img decoding=\"async\" loading=\"lazy\" class=\"alignright wp-image-22538 size-thumbnail\" src=\"http:\/\/www.olino.org\/us\/wp-content\/uploads\/2015\/09\/LOGO-SOM-ENERGIA-6-BLACK-100x74.jpg\" alt=\" SOM ENERGIA Spain\" width=\"100\" height=\"74\" srcset=\"https:\/\/olino.org\/blog\/us\/wp-content\/uploads\/2015\/09\/LOGO-SOM-ENERGIA-6-BLACK-100x74.jpg 100w, https:\/\/olino.org\/blog\/us\/wp-content\/uploads\/2015\/09\/LOGO-SOM-ENERGIA-6-BLACK-400x296.jpg 400w, https:\/\/olino.org\/blog\/us\/wp-content\/uploads\/2015\/09\/LOGO-SOM-ENERGIA-6-BLACK-1024x758.jpg 1024w\" sizes=\"(max-width: 100px) 100vw, 100px\" \/><\/a>It all started with 157 people, founders of Som Energia, in December 2010 with the aim to jointly produce and consume their own renewable energy.  In January 2011 work started to obtain all necessary permits for selling electricity started and by October \u00a0the service was launched, initially for just a few hundred clients.<\/p>\n<p><!--more--><\/p>\n<h4>How the projects started<\/h4>\n<p>At the same time, new production projects were reviewed. This turned out to be relatively easy. Due to the economic crisis and the legal uncertainties for renewable energy projects in Spain, many project developers were looking to sell some projects, developed on paper, waiting for construction. As hardly any buyers were around, banks were not financing anything, negotiations were relatively easy. Finally a first PV project of 100 kW on an industrial building in Lleida was selected. Building started early 2012 and by April it was fully functional. Consequently 8 other projects were selected and build leading to a portfolio of 732 kWp solar and a 500 kW biogas plant. The total investment amounted to 3.5 million Euro. Around 1100 of our members participated. Collecting the money started in June 2012 and within 10 months we were fully funded. All these investments kept us pretty busy until the beginning of 2014. At that time we were less than 10 people in the office for all the tasks on hand.<\/p>\n<p><a href=\"http:\/\/www.olino.org\/us\/wp-content\/uploads\/2015\/09\/14488623613_0862ab7903_o.jpg\" class=\"thickbox no_icon\"><img decoding=\"async\" loading=\"lazy\" class=\"alignnone size-medium wp-image-22602\" src=\"http:\/\/www.olino.org\/us\/wp-content\/uploads\/2015\/09\/14488623613_0862ab7903_o-400x266.jpg\" alt=\"Power to the people in Spain\" width=\"400\" height=\"266\" srcset=\"https:\/\/olino.org\/blog\/us\/wp-content\/uploads\/2015\/09\/14488623613_0862ab7903_o-400x266.jpg 400w, https:\/\/olino.org\/blog\/us\/wp-content\/uploads\/2015\/09\/14488623613_0862ab7903_o-100x66.jpg 100w, https:\/\/olino.org\/blog\/us\/wp-content\/uploads\/2015\/09\/14488623613_0862ab7903_o.jpg 992w\" sizes=\"(max-width: 400px) 100vw, 400px\" \/><\/a><\/p>\n<h4>The goverment changed the rules during the game<\/h4>\n<p>Then, the government decided that Spain had more than enough renewable projects and could not afford paying any more <strong>F<\/strong>eed <strong>I<\/strong>nn <strong>T<\/strong>ariff<strong>s<\/strong>, so no more projects were going to be accepted, leading to a full stop in new project development, continuing up to today. Also, despite a unanimous parliamentary (taken a few weeks before the 2012 election\u2026.) decision to quickly implement self consumption legislation , nothing is still in place, almost four years later. \u00a0There is a small legal loophole so it is not impossible but reality is that only a few hundred pioneers have put solar panels on their roof. The government tactics have been to delay coming up with anything practical and fair. So we are currently (Summer 2015) looking at legal proposal #3, with no net balance and a \u00b4solidarity tax\u00b4 which makes you pay for all kWh you produce yourself, even the ones your use yourself instantaneously and so never enter the grid! \u00a0So this road to increase self production for our members which has created so much enthusiasm and citizen participation in other countries was firmly closed.<\/p>\n<p>With the two main mechanisms for increasing renewable production basically blocked we started to look around for inspiration at other initiatives in Europe. What other ways would there be to increase renewable production?<\/p>\n<p>One initiative that stood out was the model from <a title=\"Site in Dutch\" href=\"https:\/\/www.windcentrale.nl\">De Windcentrale <\/a>in The Netherlands. We liked their model where people directly invest in a windturbine and get a return in kWh with the financial return depending on the difference between a standard price and their own production price. We met with the founders of De Windcentrale in Amsterdam, exchanged information and got a feel of where we needed to go. This was December 2013.<\/p>\n<h4>So how could we create a model :<\/h4>\n<ul>\n<li style=\"font-weight: 400\">To set up new RES projects (and not re-finance existing projects)<\/li>\n<li style=\"font-weight: 400\">Give a minimum return to our investors<\/li>\n<li style=\"font-weight: 400\">Not promise things we can not deliver<\/li>\n<li style=\"font-weight: 400\">Make it easy for people to participate<\/li>\n<li style=\"font-weight: 400\">Create confidence for people to invest in projects with a life-time of 25 years (this in a Mediterranean country where 5 years is about as long term as things get)<\/li>\n<li style=\"font-weight: 400\">Allows everybody in Spain to participate, not just the people who have their own house and have a suitable roof for solar PV, but also people who rent an apartment with little practical possibilities to set up their own project<\/li>\n<li style=\"font-weight: 400\">Which is legally and fiscal sound<\/li>\n<\/ul>\n<h4>We came up with a Spanisch energy Cooperation<\/h4>\n<p><a href=\"https:\/\/www.somenergia.coop\/\">Generation kWh<\/a> or shared self consumption. These are the main characteristics of the projects we work with:<\/p>\n<ul>\n<li style=\"font-weight: 400\">With a mix of these solar, wind and hydro projects around Spain we try to simulate the typical demand curve of our members as good as possible.<\/li>\n<li style=\"font-weight: 400\">As there are not FITs, all projects have to compete in the \u00b4market\u00b4 and even pay a 7% electricity production tax to the state.<\/li>\n<li style=\"font-weight: 400\">Only the most efficient projects guarantee that the money invested will return, so we\u00b4re looking at solar project in the south of Spain with 1600 full-load hours, in very windy spots with over 2700 full-load hours and re-powering of hydro projects where the civil works are still in a good state and we \u00b4only\u00b4 have to put in a new turbine.<\/li>\n<\/ul>\n<h4>From an administrative, legal and fiscal point of view, it works like this:<\/h4>\n<ul>\n<li style=\"font-weight: 400\">Any of the 21.000 members we currently have can participate by making a special, 25 year, loan to the cooperative at zero interest.<\/li>\n<li style=\"font-weight: 400\">Your investment is in the system and not in one specific technology. We all share the\u00a0advantages and\u00a0disadvantages of each project.<\/li>\n<li style=\"font-weight: 400\">For each 100 Euro participation, participants will get an estimated 170 &#8211; 200 kWh\/year compensated on their electricity bill with Som Energia.<\/li>\n<li style=\"font-weight: 400\">The compensation is at a cost price of roughly 3.5 \u2013 4 c\u20ac\/kWh, compared to a current market price of 4.5 \u2013 5 c\u20ac\/kWh. The financial advantage comes down to 200 kWh X 1 c\u20ac or 2\u20ac\/year per 100\u20ac participation.<\/li>\n<li style=\"font-weight: 400\">Of course if market prices will go up or down, the advantatge will increase or decrease.<\/li>\n<li style=\"font-weight: 400\">Participants keep paying taxes, grid access fees, etc.<\/li>\n<li style=\"font-weight: 400\">The cost price is more stable as the main component is the amortization of the installation and the other components (maintenance, rents, insurance, etc.) are covered by long term contracts.<\/li>\n<li style=\"font-weight: 400\">Each project will be a limited company owned by Som Energia, selling its production via a bi-lateral contract to the cooperative who then redistributes the kWh to each participant.<\/li>\n<li style=\"font-weight: 400\">Starting at the end of year 2, each year there will be a linear pay back of the amortization. This return of the loan is guaranteed by Som Energia.<\/li>\n<li style=\"font-weight: 400\">Overall ROI is expected to be between 2-6%, with relatively conservative developments of the market price and costs in line with 1% average inflation over 25 years.<a href=\"http:\/\/www.olino.org\/us\/wp-content\/uploads\/2015\/09\/19477646941_d0ff20aa31_o.jpg\" class=\"thickbox no_icon\"><img decoding=\"async\" loading=\"lazy\" class=\"alignnone wp-image-22592 size-medium\" src=\"http:\/\/www.olino.org\/us\/wp-content\/uploads\/2015\/09\/19477646941_d0ff20aa31_o-400x133.jpg\" alt=\"Spanje\" width=\"400\" height=\"133\" srcset=\"https:\/\/olino.org\/blog\/us\/wp-content\/uploads\/2015\/09\/19477646941_d0ff20aa31_o-400x133.jpg 400w, https:\/\/olino.org\/blog\/us\/wp-content\/uploads\/2015\/09\/19477646941_d0ff20aa31_o-100x33.jpg 100w, https:\/\/olino.org\/blog\/us\/wp-content\/uploads\/2015\/09\/19477646941_d0ff20aa31_o.jpg 980w\" sizes=\"(max-width: 400px) 100vw, 400px\" \/><\/a><\/li>\n<\/ul>\n<p>The project was approved by our members in May 2015 and launched by the end of June 2015. We are now at the end of August and just reached the 1 million Euro with 1100 people participating already. \u00a0Average participation stands at 930 \u20ac. Our aim is to obtain 5 million Euro over the next 18 months. This would allow us to build:<\/p>\n<ul>\n<li style=\"font-weight: 400\">2.16 MWp solar project in Alcolea de Rio (Sevilla), contracts signed and waiting for building permit<\/li>\n<li style=\"font-weight: 400\">50% of a 2.7 MW wind Turbine in Pujalt (Barcelona) waiting for confirmation of grid connection<\/li>\n<li style=\"font-weight: 400\">500 kW recovered hydro central near Lleida or Toledo (ungoing negotiations)<\/li>\n<\/ul>\n<p>The solar project should be operational by the end of this year.<\/p>\n<h4>Why do our members participate and loan us their money for 25 years without a guarantee of a return of investment?<\/h4>\n<p>We think their reasons are diverse and we are about to ask the first participants to send a short video explaining why they participated which we will transform in a collective video which should convince the next wave of participants. For the moment, let me explain why I participated.<\/p>\n<p>The electricity consumption of my family is 2600 kWh\/year. We just switched to an electric Nissan Leaf which will roughly double our consumption to 5200 kWh\/year. The car is charged over night, so our consumption is well distributed during the 24 hours of each day.<\/p>\n<p>Participating in Generation kWh makes sure that our yearly electricity need is covered not with certificates of origin from already existing projects (usually the case with green electricity sold by most companies) but from new renewable projects, owned by the cooperative of which I am an active participant. In order to cover our relatively high yearly consumption an investment of 2600\u20ac is enough. If I would invest the same amount in solar on our roof it would only pay for 1.5 kWp (at 1700\u20ac\/ kWp for a small home solar system) with an estimated yearly production of 2000 kWh (I live in Girona, northern part of Spain, with around 1400 full-load hours) or less than 40% of the production obtained via Generation kWh.<\/p>\n<h4>Additional benefits:<\/h4>\n<p>Making the investment in Generation kWh took me 5 minutes, although I do have to wait for a year to get my first \u00b4delivery\u00b4 of kWh as it takes time to invest the money.<\/p>\n<p>If we ever move house, we can take our Generation kWh production with us (as long as we stay in Spain).<br \/>\nThe money goes to a mix of technologies on different locations it goes a long way in covering our real demand curve, something which would not be feasible for an individual homeowner. It takes a big bite out of the argument that you\u00b4re profiting from the back up services of other technologies.<\/p>\n<h4>Don\u00b4t take me wrong<\/h4>\n<p>As soon as it become legally possible and administratively easy in Spain, we might still put solarpanels on our house but for the moment this is the best there is.<\/p>\n<p>We realize this model is not easily replicated. Also, if your market has easy and favorable conditions for self consumption and\/or FITs, we suggest you focus on those first and build your cooperative business model around it. There are many ways to do this successfully. You might want to look at this <a href=\"www.rescoop.eu\">REScoop<\/a> website for inspiring examples around Europe.<\/p>\n<p><a href=\"http:\/\/www.olino.org\/us\/wp-content\/uploads\/2015\/09\/19555660018_c9441aefbe_o.png\" class=\"thickbox no_icon\"><img decoding=\"async\" loading=\"lazy\" class=\"alignnone wp-image-22601 size-medium\" src=\"http:\/\/www.olino.org\/us\/wp-content\/uploads\/2015\/09\/19555660018_c9441aefbe_o-309x400.png\" alt=\"Sustainable power by citizens\" width=\"309\" height=\"400\" srcset=\"https:\/\/olino.org\/blog\/us\/wp-content\/uploads\/2015\/09\/19555660018_c9441aefbe_o-309x400.png 309w, https:\/\/olino.org\/blog\/us\/wp-content\/uploads\/2015\/09\/19555660018_c9441aefbe_o-77x100.png 77w, https:\/\/olino.org\/blog\/us\/wp-content\/uploads\/2015\/09\/19555660018_c9441aefbe_o.png 680w\" sizes=\"(max-width: 309px) 100vw, 309px\" \/><\/a><\/p>\n<h4>Realize<\/h4>\n<p>But\u2026 do realize that what has happened over the last years in Spain can and probably will happen to other countries. Already it is clear that FITs will disappear (see\u00a0<a href=\"http:\/\/www.olino.org\/us\/wp-content\/uploads\/2015\/09\/Agora_Auctions-Paper_056_web.pdf\">See this publication<\/a> if you want to know more) in all EU countries and will be replaced with \u00b4competitive tenders\u00b4 (more on this in this <a href=\"http:\/\/www.olino.org\/us\/wp-content\/uploads\/2015\/09\/2014_design_features_of_support_schemes.pdf\">clear report<\/a>)which, if not designed specifically for the benefit of small, local cooperatives and citizen groups, will usually favor big players. Also the wide application of self consumption in various countries has already lead to discussions over its \u00b4sustainability\u00b4, referring to its impact on profits of the current oligopolistic market players. Already several restrictions on its use are on the horizon.<\/p>\n<h4>Change<\/h4>\n<p>What is clear is that in order to facilitate the transition from our current fossil fuel based centralized production system in the hands of a few big corporations towards a renewable energy, decentralized, citizen owned \u00a0system, lots of things will have to change. Many companies and activities have to disappear. They won\u00b4t go voluntarily. They still make big money on digging up, distributing and burning fossils and have enormous social, political cloud. Alternatives have to be created and more and more people should become involved and vote with their investments and their consumption and at some point, this will also transfer towards political power.<\/p>\n<p>We hope our journey inspires yours. Please do contact us in case you have any questions.<\/p>\n<hr\/>\n<p>Girona, September 2015<br \/>\nGijsbert Huijink<\/p>\n<p><a href=\"http:\/\/www.somenergia.coop\">www.somenergia.coop<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>It all started with 157 people, founders of Som Energia, in December 2010 with the aim to jointly produce and consume their own renewable energy. In January 2011 work started to obtain all necessary permits for selling electricity started and by October \u00a0the service was launched, initially for just a few hundred clients.<\/p>\n","protected":false},"author":38,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[26],"tags":[63,59,60,62],"_links":{"self":[{"href":"https:\/\/olino.org\/blog\/us\/wp-json\/wp\/v2\/posts\/22537"}],"collection":[{"href":"https:\/\/olino.org\/blog\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olino.org\/blog\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olino.org\/blog\/us\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/olino.org\/blog\/us\/wp-json\/wp\/v2\/comments?post=22537"}],"version-history":[{"count":30,"href":"https:\/\/olino.org\/blog\/us\/wp-json\/wp\/v2\/posts\/22537\/revisions"}],"predecessor-version":[{"id":22648,"href":"https:\/\/olino.org\/blog\/us\/wp-json\/wp\/v2\/posts\/22537\/revisions\/22648"}],"wp:attachment":[{"href":"https:\/\/olino.org\/blog\/us\/wp-json\/wp\/v2\/media?parent=22537"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olino.org\/blog\/us\/wp-json\/wp\/v2\/categories?post=22537"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olino.org\/blog\/us\/wp-json\/wp\/v2\/tags?post=22537"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}