Community Power Empowers

Rising oil, gas, coal and uranium prices, increasing awareness of the threats of climate change, irresolvable difficulties surrounding nuclear energy, as well as increasing energy demand from emerging and developing countries, are only some of the myriad reasons the world is looking into alternative energy solutions. Renewable energies are shifting toward the center of such deliberations, but in order for them to meet rising demand, they will need to be harvested in a decentralized manner. Moving away from a centralized model will benefit everyone from small communities to sovereign nations. Countries such as Denmark and Germany are already reaping rewards, and it's not too far-fetched to think that the United States could share in the success as well.

Before I explain what decentralized energy is, let's talk about centralized energy: Today in most industrialized countries, the electricity is generated in huge central power plants of 1,000 megawatts or more, fueled by coal, gas or uranium. One power station provides hundreds of thousands of paying customers with electricity. It follows that only the utility makes a profit. The highly centralized system depends greatly on the availability and price of oil, coal, gas or uranium. These resources are offered by nature only at a few spots on our planet, and to which only a few corporate groups have access.

Decentralized energy allows smaller organizations or groups scattered across a region or country to generate energy and sell it for a profit. Since renewable energy resources, including sun and wind, are available almost everywhere, anyone, theoretically can get into the game. And there are several advantages for doing so. The more people that become involved, the more democratic the energy supply system becomes. Energy sellers make a profit, landowners receive leasing fees, communities get improved infrastructure, local folks get jobs, municipalities receive taxes, and consumers receive electricity at competitive prices.

This shift has already happened in other countries with great success. Let us have a look at Denmark, which has today a wind-electricity share of 20 percent in the national grid, providing power to millions of people.

Denmark's story began in the 1980s, with families becoming shareholders in cooperative wind farms. Hundreds of families came together and decided to pool money, create a cooperative, and buy, install and operate a wind turbine. The Danish government made sure that these wind turbines could be connected to the national power grid and that they received a cost-covering payment from the utilities for the generated electricity. As a result, around 200,000 Danish families became shareholders in wind turbines and several former land machinery companies started manufacturing wind turbines. Today many Danish wind companies are world market leaders, with their specific know-how and with an overall turnover of €4.7 billion in 2007 (US$7 billion).

Germany, today the worldwide leader with 23,000 MW installed capacity, took a similar path as Denmark. Hundreds of thousands of Germans have invested in citizens' wind farms across the country, and thousands of small- and medium-sized enterprises are running successful businesses in a new sector that today employs 90,000 people and generates 8 percent of the country's electricity. The political instrument is quite simple: The German Renewable Energy Act, EEG guarantees priority grid access for wind turbines and a fixed remuneration over a period of 20 years.

A similar system could work very well also in the United States. The country has a long tradition of democracy and citizens' rights, enhanced by self-confident citizens who are used to taking charge and changing their lives. Why shouldn't farmers in rural areas be able to build wind turbines, produce electricity and generate income like any other crop? Combined forces within the local neighborhood would lead to the community power approach that has been so successful in Denmark or Germany.

The current legislation in the United States, however, only enables certain corporate groups to benefit from a so-called production tax credit, which allows them to reduce their tax debt for each kilowatt generated from wind power. Newer, smaller companies that want to get in on the action are not allowed. Although wind power jobs are increasing in the United States, community power cannot work because such groups of people are discriminated against by law and cannot invest.

To change this, there are several promising initiatives on the way, similar to the successful Danish or the German system. For example in Michigan, state Rep. Kathleen Law has forwarded a renewable energy bill that will lead to an investment boom in Michigan and probably thousands of new jobs in an emerging industry. Californian Gov. Schwarzenegger has started very ambitious programs for enhancing investment in renewable energy, and several other encouraging activities can be found in other states. Even on the federal level, Congressman Jay Inslee has introduced a very exciting legislative proposal that would create an explosion in renewable energy and community power investment.

Community wind power will provide clean and affordable energy, and will distribute the related benefits to many. Decentralized, distributed and interconnected generation in the hands of diverse shareholders will also make our energy supply more secure and less vulnerable against technical blackouts or against sabotage, simply because there are more pillars keeping the system stable. President Jimmy Carter's administration proposed such a fundamental system change already in 1980. In the remarkable report "Dispersed, Decentralized and Renewable Energy Sources: Alternatives to National Vulnerability and War", it concluded, "The development of alternative energy systems such as cogeneration, wind, biomass, solar, small hydro and the like can reduce the United States' dependence on imported fuels and strategic materials and thus vulnerability to disruption in those supplies. Renewable and dispersed energy systems for fuel and electricity offer the best potential for survival and recovery if implemented at the local level."

Today, around 100,000 MW of wind capacity have been installed worldwide, contributing nearly 1.5 percent to the global electricity consumption -- and the development has only begun. The world's transition toward a new energy era will have to be based on renewable energy by necessity. Based on the past, analysts estimate that wind power will grow, on average, 20 to 30 percent per year. In the longer term, wind will provide at least 20 to 30 percent of the world's electricity needs.

We will only succeed with the momentum that global social movements, powered by local communities, will bring to such a shift. Decentralized community power will be a key tool in realizing a sustainable energy future for the United States and finally for the world.

Stefan Gsänger is secretary-general of the World Wind Energy Association located in Bonn, Germany.