Community renewable energy at a crossroads: A think piece on degrowth, technology, and the democratization of the German energy system

Accepted Manuscript Community renewable energy at a crossroads: A think piece on degrowth, technology, and the democratization of the German energy system Jens Rommel, Jörg Radtke, Gerrit von Jorck, Franziska Mey, Özgür Yildiz PII:

S0959-6526(16)31966-7

DOI:

10.1016/j.jclepro.2016.11.114

Reference:

JCLP 8503

To appear in:

Journal of Cleaner Production

Received Date: 2 February 2016 Revised Date:

31 July 2016

Accepted Date: 18 November 2016

Please cite this article as: Rommel J, Radtke J, von Jorck G, Mey F, Yildiz E, Community renewable energy at a crossroads: A think piece on degrowth, technology, and the democratization of the German energy system, Journal of Cleaner Production (2016), doi: 10.1016/j.jclepro.2016.11.114. This is a PDF file of an unedited manuscript that has been accepted for publication. As a service to our customers we are providing this early version of the manuscript. The manuscript will undergo copyediting, typesetting, and review of the resulting proof before it is published in its final form. Please note that during the production process errors may be discovered which could affect the content, and all legal disclaimers that apply to the journal pertain.

ACCEPTED MANUSCRIPT Community Renewable Energy at a Crossroads: A Think Piece on Degrowth, Technology, and the Democratization of the German Energy System Jens Rommel1, Jörg Radtke2, Gerrit von Jorck3, Franziska Mey4, Özgür

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Yildiz5,6

Special Volume: Technology and Degrowth; Section: 1.2. Democratization

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of technology – Practical approaches (planned as a “think piece” of approximately 4,000 words)

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ABSTRACT: Degrowth activists and scholars have questioned society’s current levels of material throughput and energy use. The energy sector is at the core of any modern economy, and Germany serves as an international showcase for the transition of a large industrialized economy to a low-

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carbon energy system. Diverse actors, organizational models, and technologies have contributed to the initiation of Germany’s energy transition through a wide range of community renewable energy projects.

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The think piece investigates how far these diverse actors embrace the aims

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of the Degrowth movement. It also provides a critical account of on-theground realities through six hypotheses and contrasts them with claims

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Corresponding author; Leibniz Centre for Agricultural Landscape Research (ZALF), Eberswalder Straße 84, 15374 Müncheberg, Germany; Phone: +49 (0) 33432 82 483; [email protected]. 2 Universität Siegen, Department of Social Sciences, Fakultät 1 Politikwissenschaft, AdolfReichwein-Straße 2, 57068 Siegen, Germany. 3 Technische Universität Berlin, Division of Economic Education and Sustainable Consumption, Marchstraße 23, 10587 Berlin, Germany. 4 University of New South Wales, Interdisciplinary Environmental Studies, Sydney 2052, Australia. 5 Technische Universität Berlin, Department of Environmental Economics and Economic Policy, Straße des 17. Juni 135, 10623 Berlin, Germany. 6 inter 3 Institute for Resource Management, Otto-Suhr-Allee 59, 10585 Berlin, Germany.

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ACCEPTED MANUSCRIPT made by the Degrowth movement. It is suggested that community renewable energy projects are at a crossroads. While many projects have familiarized thousands of people with alternative economic models, there is little evidence of a general change in attitudes towards technology,

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consumption, or equity. In conclusion, a major effort is needed to open

initiatives to less affluent actors, oppose recent trends of commodification,

and prevent community renewable energy projects from being engrossed by

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the dominant political and economic system.

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Keywords: Cooperatives; Energy Transition; Conviviality; Sustainable Consumption Highlights:

- Degrowth, technology, and democracy in Community Renewable Energy

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are discussed.

- Six hypotheses on the German energy transition are developed.

Germany.

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- Convivial technology is not used in Community Renewable Energy in

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- Green consumerism might dominate Community Renewable Energy in the future.

1. Introduction

Numerous scholars, policy-makers, and activists question the dominant capitalist model, calling for alternative lifestyles and a fundamental transformation of the economic system (Jackson, 2011; Seyfang, 2009; Trainer, 2012). In the tradition of Georgescu-Roegen (1971) and Ecological Economics (e.g., Healy et al., 2013; Spash, 2011), components of the 2

ACCEPTED MANUSCRIPT Degrowth movement7 have emphasized biophysical limits to economic growth and the impact of economic activity on entropy and material throughput (cf. Kerschner, 2010). Distinct concepts and methods such as Energy Return on Investment and Life Cycle Assessment bear witness to

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this perspective (cf. Amate and de Molina, 2013; Sorman and Giampietro, 2013). Consequently, a sustainable economic system would be based on a transformative agenda for both the macroeconomy (e.g., Jackson, 2011;

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Victor and Rosenbluth, 2007) and individual consumption behavior (e.g.,

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Seyfang, 2009).

The energy sector has received much attention in the Degrowth debate because it is at the core of economic activity in any modern economy and a natural starting point for limiting growth in energy use. While the green growth paradigm focuses on technological change, the Degrowth paradigm

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calls for a more fundamental transformation of the energy system (Bloemmen et al., 2015; Domènech et al., 2013; Johanisova et al., 2013; Kunze and Becker, 2015). Discourse in this field links economic questions

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to environmental issues, political and social participation, legitimacy and

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equity, all accompanied by a skeptical view of technology (Kerschner and Ehlers, 2016). Some authors also try to connect the Degrowth discourse to discussions about social enterprises (e.g., Johanisova et al., 2013). According to Illich (1974), there exists a technological threshold that would lead to negative environmental and social impacts without satisfying demand. Technology must be embedded in a Degrowth strategy because 7

Note that due to a lack of coherence, some Degrowth scholars and activists would question the existence of a wider “social movement.” Thus, the term is used here in a more general sense.

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ACCEPTED MANUSCRIPT technology cannot overcome resource limits on its own and may cause negative externalities (Kerschner and Ehlers, 2016). In a similar vein, Homer-Dixon (2006) calls attention to the downsides that could emerge from the concentration of power and a high degree of connectivity in the

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socioeconomic system. A large-scale technical fix that addresses declining energy returns on investments and environmental degradation might not exist, and problems might be further aggravated by population growth.

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One branch of the Degrowth debate therefore conceives of the economy as

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being based on local, small-scale, self-sufficient production (Trainer, 2012), and case study research notes that some self-sufficient communities achieve low energy throughput and local self-sufficiency without explicit reference to the Degrowth movement (cf. Cattaneo and Gavaldà, 2012; Kunze and Becker, 2015; Trainer, 2012). However, these are exceptional cases that

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exist in a small niche; the extent to which widespread and diverse actors involved in the generation of electricity from renewable energies follow practices that are compatible with Degrowth claims remains an open

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question (Seyfang and Longhurst, 2016).

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Against this background, a closer look at the German case might help to clarify how far diverse actors in the context of the sustainable transition of energy sectors embrace the aims of the Degrowth movement. The so-called Energiewende (energy transition) aims at a long-term structural change of

the energy system. Roughly half of the installed capacity of renewable energy in Germany is owned by citizens (Trend:research Institut & Leuphana Universität, 2013). In this context, a variety of business and participation models exist that include individualized, profit-oriented, and 4

ACCEPTED MANUSCRIPT market-centered forms of investment in addition to new forms of citizen participation under the term Bürgerenergie (citizen energy) (Radtke, 2016; Yildiz, 2014). Bürgerenergie is defined as a joint investment by citizens in renewable

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energy in which citizens (1) hold the majority of the shares and (2) investors come from the same region (Trend:research Institut & Leuphana

Universität, 2013). It is based on democratically governed projects that

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explicitly emphasize collaboration between citizens, civil society, and local

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authorities (Hoppe et al., 2015). Thus, Bürgerenergie can be seen as a way towards embedding technology into society (Illich, 1973). While a more balanced “biotechnic society” (Mumford, 1937) is certainly possible, it does not automatically follow that this would be realized in a small-is-beautiful framing (Schumacher, 1973).

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Bürgerenergie is also covered under the broader term ‘community renewable energy’ (CRE) (cf. Strachan et al., 2015). This term will be used

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throughout this think piece8 because some national cooperatives or even transnational power companies that interact with local communities are

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relevant to the hypotheses developed here. It is the objective of this think piece to confront and contrast the realities of the German energy transition and the associated citizen initiatives with the (normative) claims of the Degrowth movement. The think piece is organized around six hypotheses derived from the Degrowth literature that capture

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According to the Merriam-Webster dictionary, a think piece can be defined as “a piece of writing meant to be thought-provoking and speculative that consists chiefly of background material and personal opinion and analysis.”

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ACCEPTED MANUSCRIPT central claims of the movement, namely, the need for (1) localization of production, (2) changes in business models, (3) equity and fairness, (4) strong sustainable consumption, (5) the convivial use of technology, and (6) a sense of community (cf. Trainer, 2012). These claims represent

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particularly important issues in the field of CRE. The think piece draws on the authors’ multi-disciplinary experiences with CRE research focused on the German case. Although real life examples are used to illustrate its

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arguments, this piece is not empirical in nature. Rather, the goal of this work

Degrowth movement.

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is to start a discussion with CRE activists, scholars, and participants in the

2. Six Hypotheses on CRE and Degrowth in Germany

Degrowth is part of a broader debate on social-ecological transformation (Asara et al., 2015) that uses a common framing of social problems but

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encompasses diverse positions (e.g., Jackson, 2011; Latouche, 2009; Trainer, 2012) about the correct response to the multiple crises caused by

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the dominant methods of production and consumption (Schneider et al., 2010). Despite this diversity, Degrowth authors share a common view that

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technical and market solutions to the multiple crises are not sufficient and that social innovations are necessary for a social-ecological transformation (Kallis, 2011; Wells, this issue). Some of the social innovations debated within the Degrowth discourse can also be found within CRE, e.g., relocalization of production (Latouche, 2009; Trainer, 2012), change and democratization of business models (Johanisova et al., 2013), democratization of society and the economy (Johanisova and Wolf, 2012; Latouche, 2009), sufficiency and strong sustainable consumption (Lorek 6

ACCEPTED MANUSCRIPT and Fuchs, 2013), convivial technologies (Bergmann, 2004; Illich, 1973; Schor, 2011), and the rediscovering of the commons and strengthening of the community (Helfrich et al., 2015).

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2.1 CRE (re-)localizes production and cuts off intermediaries The globalization of the economy promises gains in efficiency and the

diffusion of green technologies (Organisation for Economic Co-operation

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and Development, 2011). However, for the economy as a whole, new social and ecological costs are emerging, and postcolonial structures are being

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reinforced (Escobar, 2015; Johanisova et al., 2013), as witnessed by international megaprojects such as DESERTEC. The re-localization of production reduces transportation, strengthens local economic cycles, and strengthens social control over the means of production. Moreover, relocalization with an emphasis on utilizing renewable energies makes local

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economies more resilient to market cycles and peak oil (Hopkins, 2008; Kerschner et al., 2013) and enables sustainable production-consumption

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systems (Lorek and Spangenberg, 2014). An argument in favor of CRE is the decentralized organization of

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production; this may also increase local consumption, allow the bypassing of intermediaries, and increase the level of acceptance for CRE projects, especially in the case of wind turbines (Bauwens et al., 2016). To date, in Germany, the predominant technology used in CRE has been photovoltaic, especially in energy cooperatives, whereas wind energy has been used predominately by corporations such as limited partnerships with a limited liability company as the general partner (GmbH & Co. KG). In terms of

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ACCEPTED MANUSCRIPT installed capacity, CRE projects have been relatively small (Yildiz et al., 2015). The current policy regime foresees possibilities for direct marketing and feed-in tariffs that are much lower than the cost of purchasing electricity

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from the grid. Thus, financial incentives should usually work in favor of prosumers or the direct marketing of produced electricity. However,

administrative burdens make it difficult for smaller actors to benefit from

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direct marketing. For instance, electricity produced from renewables must

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be registered in a system (Herkunftsnachweisregister) run by the federal environmental agency (Umweltbundesamt). There is an ongoing discussion about introducing a similar – albeit voluntary – system for locally produced renewable energy (Bundesministerium für Wirtschaft und Energie, 2016). Technical developments have led to larger turbines and large-scale projects

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in the case of wind energy (Bauwens et al., 2016). This makes planning costlier, and larger investments are needed. Because “wind turbines exhibit

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economies of scale in terms of declining investment per kW with increasing turbine capacity” (Blanco, 2009, p. 1375) and because such scale economies

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might also exist in operations and maintenance, larger turbines and projects are usually more competitive (Blanco, 2009). Taken together, these developments work in favor of growth-oriented supra-regional business models. In addition, feed-in tariffs have been substantially lowered, and a new auctioning model has been introduced in Germany. To sum up, in the past, the Energiewende offered strong opportunities to re-localize production or to cut off transnational energy transfers, but the noted changes in the legal environment threaten this route. 8

ACCEPTED MANUSCRIPT 2.2 CRE changes business models Another strand within the Degrowth literature discusses the change of business models (Johanisova et al., 2013; Liesen et al., 2015; Reichel, 2013; Wells, this issue). Business in a Degrowth society is a new type that focuses

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on collaborative production and becomes independent of the growth

paradigm (Liesen et al., 2015). It is seen as being crucial that new concepts of governance and changes in the work environment in favor of reciprocal

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relationships, collective working, egalitarianism, and autonomy are

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understood and adopted to induce changes to contemporary economic activity (e.g., Borghi and van Berkel, 2007; Kokkinidis, 2015; Nørgård, 2013).

A Degrowth company actively supports social-ecological transformation (Gebauer and Mewes, 2015). For example, the German electricity

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cooperative Elektrizitätswerke Schönau calls itself a Degrowth company (Gebauer et al., 2015). It supports competitors by helping them develop

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their businesses and calls their consumers to develop a model of sufficient consumption. Moreover, a Degrowth company can make a call for worker

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participation to realize the normative ideal of the immediate articulation of opinion and direct involvement in a company’s decision-making processes as elements towards a participative society (von Jorck and Gebauer, 2015; Yildiz and Radtke, 2014; Yildiz et al., 2015). CRE can have a significant impact on the organization of (unpaid) labor, the representation of voluntary contributions, and democratic decision-making within businesses. Energy cooperatives are a particular focus here because they are based on and explicitly promote the voluntary contributions of their 9

ACCEPTED MANUSCRIPT members. These contributions include participation and democratic codetermination through the general assembly, the board of directors, and other governing bodies of energy cooperatives. The one-member-one-vote principle ensures the codetermination rights of member-owners, who also

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constitute a pool of unpaid labor, irrespective of the capital invested (e.g., Huybrechts and Mertens, 2014). Similar phenomena can be observed in

other CRE business models. Codetermination rights might be more limited

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outside of energy cooperatives with respect to management and strategic decision-making, but (unpaid) labor and the voluntary contributions of

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involved citizens in the planning and realization of renewable energy projects are promoted regardless, as the high involvement of local stakeholders is a defining characteristic of CRE. Consequently, CRE often provides a vehicle to increase voluntary work efforts and ensure democratic

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decision-making within companies.

Most CRE business models are not inherently growth-oriented but focus on the business’s contribution to the energy transition. A growth orientation

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instead results from the institutional and technological environment

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(Bauwens et al., 2016). Finally, supporting each other in a collaborative way and being supported by local consumers, CRE business models could potentially challenge and change the culture of the energy business. 2.3 CRE ensures the broad participation of diverse actors and contributes to equity Several authors discuss Degrowth on the institutional and macroeconomic levels (Jackson, 2011; Seidl and Zahrnt, 2012; Victor and Rosenbluth 2007). However, there is also agreement that a Degrowth economy must be formed 10

ACCEPTED MANUSCRIPT from the bottom up (Grabs et al., 2015). Bottom-up initiatives must be based on low-energy technologies that require lower levels of bureaucratic control than green or brown high-energy technologies (Illich, 1974). Being skeptical about expert knowledge, the Degrowth research community instead adopts

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the post-normal science approach, considering the interests and expertise of diverse stakeholders (Cattaneo et al., 2012). Deliberative processes will bring legitimacy for the Great Transformation, which is tested in small

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participatory communities by pioneers of change (Schellnhuber et al.,

2011). Grassroots initiatives create projects to realize sustainable lifestyles

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and different modes of production (Grabs et al., 2015). CRE projects are grassroots initiatives that bring together numerous actors on the basis of small financial contributions.

According to an estimate by Müller et al. (2015), energy cooperatives in

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Germany have invested 1.45 billion Euros in production facilities and generate 0.58 percent of electricity from renewable sources. Despite this low amount, 157,000 people are members of renewable energy

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cooperatives. Similarly, small absolute and small per capita investments can

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be found in other forms of Bürgerenergie, especially in bio energy and wind parks (Trend:research Institut & Leuphana Universität, 2013). Several studies have investigated member characteristics and motivations in CRE projects in Germany (see Poppen, 2015; Rauschmayer et al., 2015; Yildiz et al., 2015, for energy cooperatives; Holstenkamp and Kahla, 2016; Radtke, 2015, for CRE in general). Despite substantial differences in methods and sampling, the data mostly show that CRE projects are fairly homogeneous in terms of their members’ demographic characteristics. 11

ACCEPTED MANUSCRIPT Although one cannot fully rule out selection biases remaining in the responses, members are predominately male, well educated, and have above average incomes. Their main motivations include normative aspects such as concern for the environment and the desire for a citizen-driven energy

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transition. However, the same surveys reveal that various economic

motives, such as regional economic development, positive effects of selfconsumption on the reduction of energy costs, and returns on investment,

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play important roles.

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With respect to participation, the large trading cooperative Greenpeace Energy, with approximately 20,000 members dispersed across the entire country, can help to illustrate a negative trend. Members of Greenpeace Energy and other large trading cooperatives participate much less actively in the company’s decision-making (Radtke, 2015). Although the broad

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participation can generally be viewed as a success, researchers must explore in further detail what membership actually incorporates, and different degrees of participation must be more clearly distinguished. For instance,

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Radtke (2015), Bauwens (2016), Hatzl et al. (2016), Fleiß et al. (2016), and

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Holstenkamp and Kahla (2016) – among others – distinguish between financial and environmental motivations for joining CRE initiatives in Germany, Flanders (Belgium), and Austria. Whereas Hatzl et al. (2016) make this distinction at the organizational level, other studies investigate motivations at the membership level. Radtke (2015) and Bauwens (2016) also show that different levels of engagement exist at this level. Furthermore, the homogeneity of participants in CRE could be problematic. While there are advantages from homogeneity in terms of organizing 12

ACCEPTED MANUSCRIPT collective action (Hansmann, 1999), research in development shows that the negative effects of group heterogeneity might be mediated by well-adapted institutions (Bharamappanavara et al., 2016; Poteete and Ostrom, 2004). A fundamental transformation of the energy sector requires the participation of

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all social groups, and heterogeneity might be desirable for a CRE.

The question of how to initiate broader social change is still unresolved (Grabs et al., 2015) and highlights that, apart from strategic niche

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management and niche policy advocacy, an analysis of critical niches with

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respect to social equity is needed if CRE projects are to be sustained (cf. Seyfang, 2009; Smith et al., 2016). In addition, organizational innovations must be developed that allow for the integration of marginalized social groups. Questions of justice must also play a role in these changes. From a general perspective, the just or fair character of a situation depends on the

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reference point. Hence, if CRE is compared with a market structure in which facilities are owned and managed by a small number of profitoriented companies that are disconnected from local communities – which is

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still the typical case in today’s energy systems – CRE projects can be

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considered as enhancing justice (or fairness). With respect to distributive justice in the German energy sector, a more nuanced picture emerges. In this context, it was largely the middle class that benefited, but without necessarily making the poorest worse off. Hence, this result could be considered to be an injustice (Yildiz et al., 2015). However, the poorest also benefited from environmental profits, which could lead to the conclusion that according to the Rawlsian approach to justice (Rawls, 1971), an increase in inequality may be justified. In addition, in other 13

ACCEPTED MANUSCRIPT contexts, distributive justice was enhanced through CRE (Gross, 2007 on Australia). While there are no substantial improvements in “recognitional justice” (Walker, 2012) for CRE in Germany, procedural fairness has been

altogether, CRE has not led to a decrease in justice. 2.4 CRE facilitates sustainable consumption

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enhanced through CRE (Gross, 2007; Hall et al., 2013). Considered

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There is an ongoing debate in the Degrowth community as to how far

individual behavioral change and single projects can facilitate broader social

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change and to what extent Degrowth can be achieved within a capitalist economy more generally (cf. Jackson, 2011; Trainer, 2012). Seyfang (2009) argues that grassroots organizations may facilitate social change by developing organizational models that reduce the ecological footprint and enhance sustainable lifestyles. Distinguishing between weak and strong

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sustainable consumption, Degrowth focuses on the social structure of consumption (Lorek and Fuchs, 2013).

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Because of the rebound effect (Santarius, 2015), green consumerism cannot be a solution to unsustainable consumption (Lorek and Spangenberg, 2014).

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Reducing the overall level of consumption and reorganizing economic activity would also be necessary to stay within safe operating spaces as proposes, for instance, by the planetary boundary concept (Rockström et al., 2009). CRE can be seen as a sustainable production-consumption system that not only supplies renewable energy but also influences demand. CRE should not only exchange “energy slaves” (Illich, 1974) by shifting from brown to green energy; rather, demand for and dependence on energy must be reduced. 14

ACCEPTED MANUSCRIPT Although survey research shows that concern for the environment is an important driver for joining CRE projects in Germany (Radtke, 2015; Rauschmayer et al., 2015), it is questionable and methodically difficult to identify the extent to which participation in CRE drives a behavioral change

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towards sustainable consumption. Furthermore, positive behavioral change

in one domain might easily generate spillovers to other domains (Dolan and Galizzi, 2015). Involvement in CRE could either lead to positive effects in

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other domains (e.g., sustainable food) or be used as an excuse to consume

more elsewhere (e.g., increased air or car travel). Currently, researchers still

of sustainable consumption.

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find it difficult to disentangle the complex causal relationships and drivers

Apart from the many small cooperatives, some very large cooperatives such as Greenpeace Energy and Elektrizitätswerke Schönau sell electricity from

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renewable energy to tens of thousands of non-member customers. These enterprises use their democratic decision-making practices for marketing purposes. To some extent, they might thereby also be commodifying

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organizational attributes and promoting green consumerism (cf. Rommel et

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al., 2016; Sagebiel et al., 2014) instead of sustainable consumption, which includes a more fundamental change in lifestyle and practice (cf. Lorek and Fuchs, 2013; Seyfang, 2009). At the same time, the Elektrizitätswerke Schönau wants their customers to consume less energy and to direct energy use towards sustainability and democracy. Some large corporate energy suppliers extend their business activities by (mis)using positively coined terms such as cooperative, democratic control, codetermination, etc. For instance, the “RWE Bürgerenergie eG” is a spin15

ACCEPTED MANUSCRIPT off of one of Germany’s largest corporate utilities. Although formally a cooperative, the governance structure of the firm is established such that members primarily contribute capital, while operations are conducted by a limited liability company to rule out codetermination. Similar changes in

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governance structures have been observed in the dairy industry, where some very large cooperatives operate their businesses using a professional

management team that is detached from the control of the member-owners

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(cf. Höfer and Rommel, 2015). Initially, the aim of energy cooperatives and other CRE projects was to promote self-sufficiency and prosumption.

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Ultimately, the example illustrates that the degree of sustainable consumption and the modes of participation are closely related. 2.5 CRE facilitates a different use of technology

Skepticism and ambiguity about experts and technology prevail in the

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Degrowth debate (Kerschner and Ehlers, 2016). Eco-efficient technologies might have rebound effects through negative environmental, social, and

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economic net impacts (Kerschner and Ehlers, 2016). Decentralization, conviviality, and the relocation of economic activity are frequently

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highlighted as prerequisites for a Degrowth economy (e.g., Garcia, 2012). Large-scale centralized technologies in the energy sector (DESERTEC, coal mines etc.) can have negative impacts on the environment and on people’s autonomy (Illich, 1973), whereas convivial technologies such as open source hardware (e.g., the global village construction set) could support a modern subsistence lifestyle (Bergmann, 2004; Schor, 2011). These forms of decentralized and open technology enable people to fulfill their needs through their own creativity independent from the market. Even if there are 16

ACCEPTED MANUSCRIPT only a few examples of renewable energy within this narrow understanding of conviviality in Germany, CRE offers decentralized and democratic access to energy, which strengthens (energy) autonomy and shifts production towards local needs. Ultimately, the positive effects will critically depend

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on the social embeddedness of the technology (Illich, 1973).

Thus, the question arises: to what extent does CRE promote these aspects and is there is a relation between the characteristics of the underlying

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technology, the institutions, and the chosen organizational form that has

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been overlooked in the academic debate (cf. Künneke et al., 2015)? For instance, it can be observed that small energy generation cooperatives have low requirements for equity capital and use solar PV technology overproportionally, whereas wind energy projects are more likely to request high amounts of equity capital and be more profit oriented (Bauwens et al., 2016;

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Becker and Kunze, 2015).

In this context, it is important to note that there is considerable regional

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heterogeneity in natural potential for renewable energy from solar, wind, biomass, or hydropower in Germany. For instance, the natural potential for

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wind power is large in the North, whereas the South has greater potential for photovoltaics. Such heterogeneity in natural potential could also impact legal forms and member motivations in CRE projects (cf. Holstenkamp and Kahla, 2016; Radtke 2016). Furthermore, as North and Weber (2013) stress “[h]aving been united from a loose confederation of states only in 1870, Germany also has a strong regional and local tradition that lasts to this day” (p. 45). Another dimension might be legal differences across federal states or differences between the 17

ACCEPTED MANUSCRIPT former German Democratic Republic and the old Federal Republic of Germany. In other words, heterogeneity in culture or civic engagement might interact in complex ways with geographical conditions and technologies within a particular region. As shown by North and Weber

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(2013) in the case of a regional currency in Bavaria, success and failure are often shaped by the local culture of collaboration among businesses, e.g.,

the willingness of local banks to support citizen-led initiatives. Arguably,

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considerable heterogeneity along these dimensions exists across German

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regions.

An analysis of the field of application of business models on the basis of the German case reveals that the selection of a specific business model correlates with the underlying technology and the scale of the project. Accordingly, energy cooperatives often build on solar energy. Thus, the

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underlying value-added of these cooperatives is based on a rather simple, standardized technology with easily accessed technical support, which

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makes it suitable for those with low technical knowhow (Yildiz, 2013). In contrast, wind energy builds on more difficult technological processes,

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including the regular monitoring of wind flows. Wind turbines further entail a greater risk of technical failure, which requires addressing provider liabilities. Renewable energy projects using wind energy are often realized through closed-end funds because this format allows project developers to raise money from citizens while simultaneously retaining authority over entrepreneurial decision-making (Bauwens et al., 2016). Members of cooperatives, who are partly liable and thus have private wealth at stake, might not be willing to accept such risks. However, it is an open question as 18

ACCEPTED MANUSCRIPT to how far these differences in technology are actually the cause of different business models. In principle, differences in the planning process, in the experience of the supporting umbrella organizations, or in the motivations of investors could drive organizational choice. A combination of innovative

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research designs will be necessary to further elucidate these questions (Höfer and Rommel, 2015).

CRE changes the dominant type of technology in the energy system. While

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PV supports a modern subsistence lifestyle, wind energy is more dependent

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on centralized production and finance. In conclusion, it remains to be seen whether new phenomena such as small wind turbines based on open source ecology technical designs can gain momentum in CRE initiatives. 2.6 CRE creates community

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Based on the assumption that further growth and the monetization and commodification of relationships among humans erodes sociability, community, and the environment, theorists underline the added value of

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conviviality and community relations for the creation of social ties (Illich, 1974; Kallis et al., 2015). In a Degrowth economy, “reciprocity work”

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increases social ties by promoting a scale reduction, conviviality, and voluntary activities. In addition, Degrowth theorists highlight the relationship between scale and democracy by promoting the idea that smaller social and economic systems contribute to increased social interaction and participation as well as to re-democratization (Andreoni and Galmarini, 2013; Funtowicz and Ravetz, 1993).

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ACCEPTED MANUSCRIPT Similar social benefits and a general motive of social change are also attributed to the CRE concept. CRE is distinguished into a process and an outcome dimension (Walker and Devine-Wright, 2008); it focuses on social interactions, as well as on the spatial and social distribution of benefits

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driven by the aim to de-carbonize and decentralize the electricity system (Hicks and Ison, 2011). In particular, CRE projects can contribute to

(further) capacity building among and the empowerment of participating

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community members.

This benefit has been demonstrated, for example, by several qualitative

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studies establishing that social capital9 formation appears as a prerequisite but also as an outcome of CRE initiatives (Parkhill et al., 2015; Seyfang and Longhurst, 2013; von Bock und Polach et al., 2015). Middlemiss and Parrish (2010) propose that cultural, personal, infrastructural and

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organizational capacities form the social capital of CRE initiatives, which allows these initiatives to take responsibility for and influence social change. For example, community groups used and further developed their

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cultural capacity by framing project narratives according to their self-valued

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traditions of community ownership and respect for the natural environment. Several CRE projects have also been guided by a strong normative impetus initiated by volunteers seeking to engage in locally meaningful activities (Seyfang et al., 2013; Smith et al., 2016).

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In the mainstream economics and sociology literature, the social capital concept dominates the discussion of social relationships. Although the term was originally developed as an analytical concept to understand processes of social distinction (Bourdieu, 1979), some scholars define and use social capital as an instrumental resource at the individual level (Coleman, 1988). Empirical work also operationalizes social capital as civic engagement (Putnam et al., 1993) or as a property of community and networks (Paldam, 2000). Although in the Degrowth context, one would like to see more scholarly work on social ties, several empirical studies on CRE heavily rely on the social capital concept.

20

ACCEPTED MANUSCRIPT However, Putnam (2000) argues that civic engagement can also have negative consequences because homogenous groups might primarily advance bonding capital focused on group members’ interests and needs. The high degree of homogeneity in CRE (Bell et al., 2005, 2013; Johnson

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and Hall, 2015) negatively affects distributional and procedural justice in

the respective local communities (Adams and Bell, 2015; Johnson and Hall, 2015; Sovacool and Dworkin, 2015). Different authors have also noted the

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weakness of CRE in terms of the actual participation of citizens in such

projects. CRE project members are often less engaged and struggling to

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meet the expectations of the projects’ governing bodies in terms of collaboration (Radtke, 2015; Yildiz et al., 2015). However, there are several positive examples of voluntary initiatives in the Local Agenda 21 process, providing the impetus for developing CRE projects and hence contributing

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to the generation of social ties among a number of local stakeholders, such as councils, local businesses, or farmers (Hoffman and High-Pippert, 2005, 2010). In both respects, CRE can create group identity and a strong

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affiliation to both the organization and the local community (Radtke, 2015;

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Ruddat and Sonnenberger, 2015). Thus, CRE shows some parallels with the Degrowth movement by emphasizing social relations and community welfare as a path to contributing to social change. In summary, CRE projects are often torn between aspiration and reality, and broader outcomes in the Degrowth sense remain to be seen. 3. Conclusion

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ACCEPTED MANUSCRIPT This think piece investigates the extent to which CRE projects are compatible with some of the normative claims posited by the Degrowth movement. Germany’s CRE initiatives are diverse in their motivations and homogenous in their sociodemographic composition. The structural level

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and dominating policies such as the Renewable Energy Act shape realities on the ground. Recent reforms work in favor of large investors and are

further stimulating green consumerism. Low levels of actual involvement in

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had begun as a promising movement.

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decision-making raise doubts about the survival and future direction of what

Overall, an ambivalent impression prevails. A few CRE projects can be considered to be supporting sustainable communities in the Degrowth sense of grassroots movements and “low-carbon labs”. Even some larger companies such as the Elektrizitätswerke Schönau explicitly refer to

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convivial lifestyles. However, achieving independence from structural and local factors (e.g., feed-in tariffs or availability of volunteer work) continues to be a challenging task that threatens the existence of many initiatives –

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most of which still critically depend on a market-based capitalist economy.

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The dramatic decline in the formation of energy cooperatives as a consequence of shifts in policy regimes bears witness to this fact. Questions of broader social change are inevitably linked to mutual exchange and to shifting alternative economic practices into the transformation of the entire economic system. Currently, CRE initiatives are dominated by the middle class, and it is questionable whether the long-term success of grassroots initiatives can lead to a positive shift in the entire economic system. While there is a growing sense of community in many CRE 22

ACCEPTED MANUSCRIPT projects, marginalized groups are often excluded from participation. Few members in CRE projects are critical of technology, and as such, few members explicitly criticize excessive consumption and energy use. In fact, CRE is dominated by technophile eco-modernists.

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Currently, CRE is at a crossroads. CRE initiatives could follow a path of green growth by focusing on green technology and substituting for

hazardous fossil and nuclear energy sources. High investments in energy

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infrastructure and low prices for renewable energy could certainly lead to

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some environmental benefits.

However, CRE could also follow a Degrowth path. CRE initiatives would then have to take a more critical stance on technology and its rebound effects. The Degrowth path offers opportunities for localized business models, lower energy consumption through sufficiency strategies, and an

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understanding of CRE projects as providers of services. In the long-term, by considering open source ecology and the stronger integration of consumers

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and producers, CRE could play a key role between market and non-market energy supply.

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Acknowledgements

We thank Melf-Hinrich Ehlers, Christian Kerschner, Rodrigo Lozano, Linda Nierling, Petra Wächter, and four anonymous referees for their helpful comments on this think piece. Franziska Mey would like to thank the Cooperative Research Centre on Low Carbon Living for financial support. References

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