Greg Pahl, you are one cool dude. I love this. I love CSAs, and the idea of CSEs is just about oo cool for words.
August 9, 2006
Rejection of a wind project in East Haven and a preliminary negative finding about a 20-turbine wind farm in Sheffield have put the brakes on most large-scale wind proposals in the state. So this might be a good time for the renewable energy community — the wind power sector in particular — to step back and consider another option.
This other option falls between the large-scale commercial wind farm and the small-scale backyard wind turbine, and it has been described as “the third way.” This middle strategy, also referred to as community-supported wind, relies on somewhat smaller-scale projects that are developed, sited, and owned by members of the local community rather than out-of-state corporate entities.
Community-supported wind could fill a huge gap in Vermont’s present wind power sector. And this approach is not limited to wind power, but can be applied to virtually any type of local renewable energy project, such as solar panels, biogas digesters, a variety of biofuels, and small-scale hydro.
When applied to a wide variety of renewable energy technologies, this strategy is known as community-supported energy (CSE). CSE projects are somewhat similar to community-supported agriculture. The main difference, however, is that instead of investing in potatoes, carrots, or cucumbers, local residents invest in projects that provide greater energy security and a wide variety of other benefits.
A cooperative or community-owned energy project offers many advantages. It stimulates the local economy by creating new jobs and new business opportunities for the community while simultaneously expanding the tax base and generating new income for local residents. A locally owned energy project also generates support from the community by getting people directly involved.
Another advantage of community energy projects is that they can be owned cooperatively or collectively through a variety of legal mechanisms. Ownership strategies can include limited liability corporations (LLCs), cooperatives, school districts, municipal utilities, or combinations of these models. Sometimes a partnership with an existing utility can be mutually beneficial. The appropriate model varies from project to project and from state to state, depending on a wide range of variables. What these strategies all have in common, however, is some form of community ownership and group benefit.
The main point is to identify the project as belonging to the community, which may avoid (or at least minimize) the usual conflicts between local residents and developers, whose large-scale, commercial proposals are often viewed as primarily benefiting absentee owners. Local ownership is the key ingredient that transforms what would otherwise be just another corporate energy project into an engine for local economic development and greater energy security.
Community-supported energy projects offer yet another advantage; they retain a greater amount of income in the local area and increase the economic benefits substantially over projects owned by out-of-area developers, according to a study conducted by the National Renewable Energy Laboratory. NREL compared the effect of a large corporate wind farm owned out of area with a similar project owned locally. The study found local ownership yields an average of $4 million in local income annually, over three times more than the $1.3 million produced with out-of-area control, while job creation was more than twice as large in the local model.
A European model
With benefits like these, why aren’t there more CSE projects? For one thing it’s a relatively new concept in this country, although it’s a well-established strategy in many European nations. In Denmark and Germany — world leaders in wind energy development — many commercial-scale wind turbines are installed as single units or in small clusters distributed across the countryside, or sometimes in or near urban areas. And many of these turbines are either owned by the farmers on whose land the turbine stands, or by groups of local residents. This idea has spread to many other EU nations as well and is beginning to catch on in North America, especially in states like Minnesota and Iowa, where dozens of community owned wind farms are sprouting up like mushrooms after a rain.
The main barrier to wide-scale implementation of community-supported energy in Vermont is a regulatory environment and process that does virtually nothing to encourage these types of projects. For the most part, CSE isn’t even on the radar screen of most regulators, and the typical high cost of the approval process (often $100,000 to $500,000 or more) halts most community-based initiatives before they even get started. This situation needs to change, and it needs to change soon, because all viable forms of renewable energy, regardless of their size, need to be supported and encouraged if we are going to meet the substantial energy challenges of the next few decades.
One of the best regulatory models in North America at the present time is the new standard offer contracts in Ontario. Announced earlier this year, the new standard offer contracts (advanced renewable tariffs) are a historic step towards a sustainable energy future. Standard offer contracts allow homeowners, landowners, farmers, co-operatives, schools, municipalities and others to install renewable energy projects up to 10 megawatts in size and to sell the power to the grid for a fixed price for 20 years. The Ontario standard offer contracts provide a powerful model that other provinces and states (especially Vermont) should consider when developing their own renewable energy laws and regulations.
CSE in Vermont
Vermonters currently spend over $1 billion to heat and light their homes and businesses. If just 5 percent more of the state’s energy needs could be met at the community level, it would keep $50 million circulating in the local economy, rather than flowing mainly out of state as it presently does.
In Addison County, a new community based-group, the Addison County Relocalization Network (ACoRN), is actively engaged in developing or supporting a number of CSE projects. Several other community groups in other parts of the state are considering similar projects as well. But in order for these initiatives to succeed, the regulatory environment needs to be streamlined for smaller projects, group net metering needs to be expanded further, and some changes to the state’s cooperative laws also need to be made by the Legislature. In addition, a comprehensive set of financial, contracting and permitting incentives directed towards community projects need to be developed and implemented by the state.
Community-supported energy is an idea whose time has arrived, and I am convinced that if this strategy were to be adopted across the state that it could fundamentally alter the entire debate about most renewable energy proposals. Almost every city and town in Vermont has the potential for one or more community-supported energy projects. Perhaps you can get one started in your community.
Greg Pahl is a Weybridge writer and a founding member of the Addison County Relocalization Network (www.acornvt.org). His book “The Energy Survival Plan: Personal and Community Solutions for a Post-Oil World,” will be published in January.