A democratic alternative to the Spanish energy oligopoly

Som Energia, Catalonia (Spain)
28 November 2017
Article

The liberalisation of markets ordered by the EU left the oligopolistic Spanish energy market basically unscathed. Endesa and Iberdrola alone have an 80% market share. Green energy suppliers are still scarce, and community-owned solar parks are not widespread. The cooperative Som Energia, founded by staff and students of University in Catalonia seven years ago, promises to change this. Its goals are – much like similar projects in other countries – to promote climate protection and the energy transition, in combination with an economically viable business model.

Board members and members of the technical team.

To this end, the organisation founded a green energy supplier by the same name in 2011. Seven years later the cooperative counts more than 35.000 members from all over Spain and 55.000 contracts. Every member can share its membership with 5 people so they can have a contract and get energy from the cooperative, without have to pay the entrance fee of 100€. This helps to provide access to green electricity from Som Energia for people with lower income. This fact emphasizes Som Energia’s fundamentally political and democratic approach. Som Energia contracts individuals, industrial clients and municipalities. The number of employees is also growing constantly, 40 people are currently employed and hundreds of volunteers are collaborating in the local groups.

In 2016, for the first time since its creation, the cooperative reported profits instead of losses. Investments are means of reaching a shared goal and creating a large green energy supplier. The cooperative’s rapid growth is surprising, even though it was founded only seven years ago. Growth has been supported by studying the examples of similar cooperatives in Belgium, France and Germany as well as the umbrella organization of European energy cooperatives, REScoop.

Som Energias growth

In January 2017 Som Energia faced their fastest growth thus far because of a very strong winter which was the root cause for rising energy bills. In only six months Som Energia saw over 5.000 new members. According to the cooperative’s president, Marc Rosello, some signed up with the political aim of doing something to create a post-fossil fuel economic order and experiment with new forms of grassroots democracy. Some were simply not happy with their electricity supplier, but many members were already involved in other cooperatives or in other political initiatives and now became interested in the question of energy.

Som Energia general assembly 2017 in Girona

Invest in green energy production

Som Energia’s first pillar is to supply renewable energy to its members. The cooperative’s second pillar is its investment into green power plants. So far, the cooperative has financed six solar parks, a biogas plant and a hydroelectric power station with a capacity of close to 4,5MW. Spain’s first citizens’ wind turbine is still in the process of construction. The aim is to be able to supply renewable energy produced by their own power plants to all their members. Because of the fast growth and the difficulties of finding adequate projects, the cooperative can currently only cover a 3% of the electricity needs of their members by their own power plants. To overcome this the cooperative provides the following innovative ideas for financing their power plants.

Share capital

On the one side members can invest in share capital. The first time investment in shared capital was offered, members already lend 800.000€ to Som Energia to finance projects of energy generation. In October 2017 the period for investment in share capital opened again and within 7 days about 1.500 members invested 5 Million Euros. With this money more PV-Installations will be financed by the beginning of 2018. The lowest contribution is 100€, the highest contribution during the first week is 5.000€ and after the first week 100.000€. With the limit during the first week Som Energia is making sure that also small investments can be done. The interest rate is 1,75%. This investment allows the cooperative to be independent from bank loans. Instead, they invest their members’ money directly in new generation projects.

Generation kWh

On the other hand, money can be invested in the project “Generation kWh”, a success story for collective self-consumption. The aim is to produce electricity and invest in renewables as a collective. Som Energia started the project Generation kWh in 2015, after the Rajoy administration cut the Feed in Tariffs [1], which shows that self-consumption is still possible even without these governmental funding schemes.

Generation kWh works in the following way: Energy shares, which are 100€ each, can be purchased by each member to (partially) offset their specific annual consumption. To provide an example: A typical household with an average annual electricity consumption of 2400 kilowatt hours needs to invest 900€ to cover 70% of its energy demand for 25 years. Every 100€ contribution is equivalent to 170-200 kwh per year which is going to be discounted from the energy bill with Som Energia. After 25 years the initial investment is to be returned. In the meantime, the investor had savings on his energy bill for 25 years. The project bore fruit in May 2016, as the first collectively owned solar field started to provide energy to about 1.300 households. More than 2.700 people participated in this fundraising action and together they collected more than 2.5 Million Euros which will be invested in even more community owned power plants [2].

How does Som Eneria operate?

The cooperative consists of sections and local groups. Each local group is independent to act, attract new members and organise information campaigns. The local groups are listed in this map. Because the local groups constitute the cooperative from below, they can create their own statutes and procedures and are not obliged to implement centrally decided rules. The organisational structure therefore runs from bottom to top and not the other way around. While in Barcelona the emphasis lay on member training, other groups have focused on expanding energy supply capacities or creating links to other cooperatives outside of the energy sector.

Grupo Motor drives participation

In autumn 2016 the so called “Grupo Motor” started and guided a long-term strategy to develop and deepen a participatory process for Som Energia. The results were presented in the local groups meeting in Spring 2017. The “Grupo Motor”, formed by board members, members of local groups and members of the technical team, met various times around Spain. They came up with 7 strategic lines for the cooperative and the idea to form GTTs (temporary working groups) in which members can voluntarily work together to find solutions for specific problems like self-consumption.

Som Energia as a platform for other movements

Som Energia is embedded within a broader movement in which many Spaniards seek and support practical alternatives to the capitalist logic of exploitation. Som Energia promotes non-discriminating language with generally feminised subjects, which is far from what is usual in Spain. Furthermore, wherever possible, Som Energia seeks out ethical and ecological banks as partners.

Som Energia also wishes to act as a platform for various ecological movements, such as those against fracking and nuclear energy. This is achieved mainly by supporting existing organisations, such as creating new spaces for discussion. The organisation’s website is commendable for its transparency of documents and the involvement of workgroups. In Spring 2017 Som Energia, together with the ethical bank Coop57, organized a contest called “Germinador Social”. The objective of the contest was to provide a platform for new and innovative projects which will push forward the energy transition in Spain and which are closely intertwined with the social economy [2].

Car sharing – A cooperation with Som Mobilitat and Ecotxe

Two contest participants were the car sharing cooperative Ecotxe with its scope of action in Mallorca and Som Mobilitat which was funded in summer 2016 in Mataró, close to Barcelona. The objective of Som Mobilitat is to decrease the number of vehicles in the cities providing a sustainable solution for transportation. Som Mobilitat concentrates on designing, producing and financing new services and technological products and to collaborate with a network of cooperatives [3]. For instance, they invest in electrical cars and collaborate with Som Energia and other cooperatives.

Both car sharing cooperatives are widely supported by members of Som Energia. Som Energia collaborates which these car sharing projects, as mobility -together with electricity and heating- has a significant impact on the environment. 40% of the primary energy in Spain is used for transportation and 80% of these 40% are used for transportation on streets and highways [4].

The digital general assembly

The high number of decentralized, autonomous local groups – some of which are even outside of the Iberian Peninsula – complicates voting and elections. Therefore Som Energia makes seminal use of online participation. Local groups participate in the annual general assembly via a live stream. In the general assembly of 2017 they could even vote through an online voting system on multiple issues, such as the election of the board, contracting new staff members and the collaboration with another company. 11% of the members of Som Energia used the online voting system and gave their opinion in 2017. Groups meet and jointly follow the live stream of the assembly. In 2017, only 79 people actually physically took part in the Asamblea General, but in total 323 members participated remotely through their local groups in 20 different cities.

Initially, the option of local groups sending delegates was discussed, because the groups who were located further away in particular feared that they would be disadvantaged. But rapid growth meant a sports stadium would have been required to accommodate all members in a traditional general assembly. Finally, the idea of delegates was dropped and instead a form of direct democracy through online participation and voting was maintained.

Using the internet solved two problems: the problem of distance and the problem of numbers. Test runs before the actual assembly ensured that the elderly and less internet-savvy members also knew how to take part.

Som Energia general assembly 2017 in Alt Penedès

Cooperation with municipalities

By now Som Energia collaborates with over 300 municipalities. 160 of them contracted Som Energya directly as their electricity supplier and others used calls for tender to get contracted by Som Energia. The last tender Som Energia won was for the public water company of the city Valladolid Aguas de Valladolid EPEL. The call for tender had a value of 6 Million Euros per year. But because Som Energia’s internal limit of tenders is 2 Million Euros, it applied for the partial tender and won. The tender will last for 18 months and it can be extended for one more year. Unfortunately, these tenders only consider the monetary value and not the social aspects.

Som Energia also collaborates with micro villages. Villages with less than 500 inhabitants can contract Som Energia without paying the 100€ entrance fee [5].

For Som Energia, low income is not a reason to exclude a potential member. Together with some municipalities they stand up against energy poverty [6]. Members of Som Energia which are in precarious situations will not get charged for their electricity consumption for one year. Beyond fulfilling their legal responsibilities of not letting vulnerable households go dark – which many other energy suppliers do not take care of – the cooperative wants to be proactive and fight energy poverty together with municipalities. Four municipalities already signaled they want to become members of Som Energia and pay the electricity bill for vulnerable households in their area [7]. Som Energia´s collaboration with municipalities in terms of energy poverty is key to promote climate protection and a transition towards renewable energies that includes all parts of society, especially those who are most vulnerable.

Challenging the “sun tax”

Since November 2013, Som Energia has been struggling (together with other groups) to bring down a new government law subjecting all operators of PV installations to pay a kind of “sun tax”. With this law, Spanish energy policy has switched from ignorance of to open hostility towards small-scale energy producers, who are typically the ones to invest in PV installations. Nevertheless, Som Energia is currently looking for pilot projects such as small scale PV installations with battery storage for self-consumption. These pilot projects should show that small-scale energy production and consumption is still possible, even without governmental funding.

References:

[1] Feed-In Tariffs are payments to ordinary energy users for the renewable electricity they generate. See:http://www.fitariffs.co.uk/FITs/

[2] https://www.generationkwh.org

[3] https://www.germinadorsocial.com/

[4] https://www.sommobilitat.coop/

[5] http://blogs.publico.es/econonuestra/2014/11/17/consumo-y-derroche-de-energia-en-el-planeta-podemos-resistir/

[6] https://blog.somenergia.coop/comunicados-prensa/2017/07/ndp-la-asociacion-de-micropueblos-y-som-energia-colaboran-para-hacer-llegar-energia-verde-a-135-municipios-catalanes/

[7] Energy poverty is a systemic situation in which people are not able to adequately heat an/or electrify their homes at an affordable cost. See: http://www.eapn.eu/

[8] https://blog.somenergia.coop/som-energia/2016/03/som-energia-ante-la-pobreza-energetica/

The article contains parts of “Som Energia: an energy cooperative to link local groups in Spain”, from the report Energy Democracy in Europe: A survey and outlook by the Rosa Luxemburg Stiftung.