The meaning, relevance and scope of energy democracy

Fiona Dove talks with Daniel Chavez
09 October 2015
Article

What does the concept of energy democracy offer to the struggle against climate change and energy poverty?

Photo credit K.H.Reichert/Flickr
The concept of energy democracy has been incorporated into the language, proposals and demands of many social, political and environmental activists worldwide. There is a growing consensus that in order to stop climate change and secure access to energy to all we must bring about system change, breaking the hegemony of big transnational corporations over the global economy and democratising the public sector. TNI’s Executive Director, Fiona Dove, talks with one of our Fellows, Daniel Chavez, about the significance, reach and scope of energy democracy alternatives in Europe and in the South.

What is ‘energy democracy’?

Over the past five years the concept of energy democracy has been embraced by many activist organisations, mainly in Europe, concerned about the increasing dominance of large corporations over the generation and distribution of energy.

Several definitions have been outlined, but in general they overlap and imply more decentralised and socially controlled energy systems. In some cases, where there are concrete possibilities for reclaiming state-owned enterprises, it also refers to the democratisation of national or local public enterprises, or even putting previously-privatised power utilities back into public hands (renationalisation or remunicipalisation).

In many places, the concept of energy democracy is also strongly associated with the expansion of local initiatives, such as small-scale cooperatives, that generate and distribute electricity based on renewable sources.

Many people tend to think of local and decentralised systems as the only ‘true’ form of energy democracy, but you also refer to public utilities, which are often quite large, centralised and non-democratic.

Yes, you are right, public utilities are not always ideal. But in countries where the population already has extensive and reliable access to electricity services through national, regional or local energy state-owned utilities it would not make sense to shift entirely to off-grid alternatives or dismantle what is already in place.

What we need in those cases is the democratisation of public provision, which means enabling genuine citizens’ participation in the way utilities are run and ensuring that the poor and other marginalised social groups have proper access to energy services. In some cases, that would be a very difficult task.

Some weeks ago I attended a conference on the electricity crisis that South Africa is facing today. I was invited by the metalworkers’ union (NUMSA). One of the main issues discussed at the conference was how to regain control of Eskom, the giant national electricity operator. Many participants believed that the company is already so corporatised (meaning that it is still owned by the state, but behaves like any transnational corporation) that democratising it was utopic and unrealistic, and that perhaps the most sensible alternative would be creating or reinvigorating municipal or provincial utilities.

But I am not convinced that breaking up Eskom would be a solution, as it could open the door to privatisation; and besides, there is no guarantee that the resulting smaller utilities would be more democratic, more efficient or more accountable.

Does the concept of energy democracy apply to other segments of the energy sector beyond electricity?

Yes, it does. Among many activists and researchers active in the hydrocarbons sector, however, the key idea has been energy sovereignty, as they have been struggling for many decades against foreign and private multinationals that have been extracting the oil and gas resources. We have witnessed this kind of struggles in places as diverse as Colombia, Nigeria and Canada.

We all agree that in the context of rapid climate change we urgently need to shut down the fossil fuels industry, but we need a transition plan that would allow oil- or gas-rich countries to use their available resources for a while to finance the shift to more renewable sources.

Activists fighting for energy democracy in Europe are already using this argument, arguing that we cannot let the big transnational corporations privatise our collective renewable resources, as has happened before with the exploitation of the oil and gas reserves in the North Sea.

This discussion is also alive in places that still rely on coal for power generation, such as Greece. The original electoral platform of Syriza (before the recent retreat) had included concrete references to a planned transition to renewable energy, based on a gradual phasing-out of the country’s dependence on lignite to move towards a more ecological energy system over a period of two decades.

What is the meaning of remunicipalisation in the context of the energy sector?

Municipalisation or remunicipalisation is not really a new trend. In the context of our Water Justice project, TNI has been following multiple processes of remunicipalisation, both in the North and in the South and including large cities like Buenos Aires, Paris, Accra and Kuala Lumpur. There are more than 230 cases in which local governments have regained control of water and sanitation services between 2000 and 2015.

In the energy sector, municipal and regional utilities have been in charge of the provision of electricity for already many decades. In the late 19th and early 20th centuries many cities around the world municipalised a wide range of public services, mostly due to the failure of private providers to extend the provision of water or electricity beyond the richest areas.

Today, even at the very core of the capitalist system, in the United States, there are more than 2,000 municipal and community-owned utilities that together serve more than 46 million people, according to figures released by the American Public Power Association. These include large cities such as Los Angeles, Seattle and Orlando, as well as small towns across the country. Unfortunately, not all of these local companies are truly public, democratic or environmentally sustainable.

In Europe, the trend towards remunicipalisation of electricity is also very much alive. The new mayor of Barcelona – Ana Colau, a former leader of Spain’s anti-eviction movement who leads a broad coalition of progressive parties and movements – announced some weeks ago that the government will start working on the creation of a new local public utility, in response to the growing pobreza energética (energy poverty) suffered by about 10% of the city households.

Another very interesting European experience is the Berliner Energietisch (Berlin Energy Roundtable). This is an alliance created by more than 50 social and environmental organisations in 2011, aimed at reclaiming power provision in Germany’s capital city. It seeks to establish a new type of municipal utility based on the principles of environmental sustainability, social ownership and democratic management.

The campaign led to a referendum held in November 2013, in which around 600,000 citizens voted in favour of remunicipalisation. Unfortunately, although more than 80 per cent of the voters backed the ‘yes’ option, it was not enough, as the referendum did not reach the legal turnout requirement by only 21,000 votes. Nonetheless, the struggle towards a publicly owned energy company continues, as the Berlin Energy Roundtable remains active and is inspiring similar initiatives across Europe.

Outside Europe we can see an even more ambitious tendency towards ‘republicisation’. I am using a word coined by Massimo Florio, a researcher from the University of Milan who leads a team of scholars that is mapping the reversal of privatisation deals around the world. In Latin America there have been many and extensive processes of renationalisation in several areas of the economy, most clearly in Venezuela and Bolivia. Focusing on the energy sector, the process began in Bolivia in 2006, when the new left government of president Evo Morales announced the nationalisation of the natural gas industry. He followed this up with the state assuming control over the generation of electricity in 2010 and the nationalisation of the power grid operator in 2012. In Venezuela, under the government of Hugo Chávez, the renationalisation of electricity had already been completed in 2007.

Overall, we may consider these outcomes to be positive news, but there is plenty to discuss about the way nationalisation was implemented, the financial benefits gained by private corporations when they transferred their assets to the state, the scope of nationalisation, and the quality of management within the nationalised public enterprises. We must be aware that the state is not always efficient, as the current ailments of the Venezuelan national electricity system demonstrate.

These experiences indicate that we can reverse privatisation, but also that after renationalisation the government then has a responsibility to improve the quality of its services. Fortunately, in Latin America we have other state-owned power utilities, like UTE in Uruguay and ICE in Costa Rica, that show how the state can indeed be very efficient in the energy sector under proper political conditions.

The concept of energy democracy seems to be more common in Europe than in other regions of the world. Is that true?

The concept of energy democracy is already widely used by European activists, but not so much in the South. In Latin America or in Africa we tend to use more the notion of energy sovereignty, usually in relation to other social struggles around food or land issues. But we are not referring to different struggles; the idea of sovereignty implies people’s control over the production, distribution and consumption of basic goods and services, be they food, water or electricity. It means greater social control, taking power away from the corporations and market-oriented institutions that are currently hegemonic in the global economy.

And we see that the struggles are quite similar in the North and in the South. In Greece, for example, the idea of energy democracy is strongly rooted in the ideas of sovereignty and self-determination, with an emphasis on the right to plan and implement a national energy policy without the restrictions imposed by the Troika’s memorandum.

In other countries, such as Uruguay, it means a transition towards non-conventional renewables in order to cut dependence on imported energy and limit vulnerability to the fluctuations of the regional and energy markets.

In Mexico, in the context of energy reform implemented by its current neoliberal government, it means resisting the liberalisation and eventual privatisation of both the oil and electricity sectors, in order to secure the needs of the Mexican people rather than the interests of private and foreign multinationals.

You mentioned Uruguay and Mexico. Could you elaborate on these two experiences?

The Mexican energy sector has often been reported in the international business media as an example of a failed system that could only be saved by a radical neoliberal reform. The Economist magazine even wrote about the need for “a new Mexican Revolution”. In the past two years, the country has changed its constitution and has passed new laws to end the eight-decade monopoly of Pemex – the state-owned conglomerate – on oil and gas production. The power sector has also being liberalised, threatening the survival of the Federal Electricity Commission, CFE, the other large state-owned company.

The assumption is that the reform will result in a more efficient exploitation of the country’s untapped energy potential – which includes extensive shale reserves that might exceed those of its northern neighbour and main trade partner, the United States – as well as provide cheaper electricity.

In reality, transferring the control of the Mexican fossil fuel resources to private corporations will be bad news for the planet, but also for its people, since a huge portion of the national economy and public budget revenues depend on the energy sector. The empirical evidence from many countries of the South shows that opening the door to private and foreign companies in the extractive and services sectors too often results in fast and substantial gains for the new investors and permanent and heavy losses for the citizens.

The case of Uruguay is rather the opposite. The current transition towards non-conventional renewables in my country of origin has also been characterised by the international media as an energy ‘revolution’. Unlike many other countries of the South, access was not a problem in Uruguay, because already decades ago the coverage of the national electricity grid had achieved a practically universal level, above 99%. The issue was rather where Uruguay’s power was sourced.

The Uruguayan experience is highly relevant internationally, because we are not talking about a small island or a tiny nation with a very basic economy, but rather about a country twice the size of the Benelux and with a GDP per capita higher than Poland, Hungary, Croatia and many other European countries. It is also interesting that a single national utility – UTE, a very efficient public enterprise – has been leading the transition to a sustainable energy model, mostly based on rapid and huge investments in wind power.

The goal of the current government (the leftist Broad Front coalition has been in power since 2005) is to generate as much as 38 per cent of its power from wind by the end of 2017, up from around 13 per cent today. That would position Uruguay in the same league as Denmark, the global wind energy leader, which gets around 43 per cent of its energy from wind farms.

During rainy years, Uruguay can rely on three dams to generate around 75 per cent of its electricity, but during droughts the country is forced to spend a lot of money burning fuel. The rising supply of wind energy will make Uruguay self-sufficient in terms of electricity consumption, and will also generate surplus power that could be exported to neighbouring Argentina and Brazil.

By the way, I am also very proud that TNI has contributed to the campaign against the Trade in Services Agreement, TISA, supporting the work of environmental and labour organisations in Uruguay. We recently celebrated the news that Uruguay became the first country in the world to walk away from TISA. This and similar trade and investment treaties, like TPP in the Pacific Rim or TTIP in Europe, are major threats to the survival of public enterprises responsible for the delivery of electricity, water, telecommunications and other essential services.

How is the state envisioned in current debates on energy democracy?

This is a very important question, because I have referred many times to state-owned enterprises, national governments and municipalities, without explaining the significance of state institutions in current debates and real-world struggles towards energy democracy.

I am aware that many of our friends and allies in Europe and Latin America have a very critical view of the state, pointing at many historical and current examples of top-down and hyper-centralised forms of provision of energy services that have been neither democratic nor efficient. Some critics also refer to the extensive neo-liberalisation of the state, including the expansion of state-owned companies in the energy sector (both in the electricity and in the oil and gas segments) that behave like any private transnational corporation.

I do share most of these criticisms, but I do not always agree with the underlying political proposition: I do not think that community-owned initiatives or sustainable energy cooperatives could be the only viable alternative or that we should give up on the state. Paraphrasing the title of a great book published by another TNI Fellow, my dear friend Hilary Wainwright, I think we should ‘reclaim the state’. Those of us coming from a Marxist tradition are familiar with the theorisation of the state as an instrument of domination by the ruling class, but recent developments in Latin America and other regions of the world have taught us that the state is not an autonomous and internally homogenous institution, and also that it can be changed in response to the pressure of counterhegemonic social and political struggles.

I think it is time for progressives to overcome the old dichotomy within the left that opposes those who focus on the development of autonomous self-organised sources of power to those others who still believe on the need to seize (and manage) state power. We cannot ignore the impressive list of recent and very diverse political experiments that have proven the viability of innovative connections between autonomous and socially-rooted power and processes of transformation of the state pushed forward by left political parties around the world. I am referring to the rich and growing collection of initiatives of the kind that Erik Olin Wright refers to as ‘real utopias’.

In her latest book Naomi Klein reminds us that the only way to stop climate change is overcoming capitalism, and that climate change can be seen as an opportunity to solve many other social problems. This does not imply that the only way to get rid of capitalism is storming the winter palace like the Bolsheviks in 1917. In fact, I am convinced that sudden or violent revolutions are no longer viable. Instead we should move forward with ‘non-reformist reforms’ that significantly erode injustice or oppression, including the development of counter-hegemonic alternatives for state provision of public goods. But that implies building non-capitalist institutions able to offset the expansion of capitalism. In that sense, both a local renewable energy cooperative and a democratic and well-managed public utility could be considered ‘real utopias’.

My focus of research during the past three years has been public enterprises, but I do not idealise the state. I am very much aware that public utilities should not be understood as inherently ‘progressive’ institutions, or that they should be always defended just because they are not privately owned. I have studied the case of EPM, a municipally-owned company from Medellin, Colombia, that used to be a very social, efficient and accountable enterprise delivering electricity, water and telecom services at the local level, but in recent years it has embarked on an international process of expansion, eating up privatised utilities in other places in Colombia and other Latin America countries, while behaving in its home city like any private company, installing pre-paid meters and cutting services to households unable to pay the tariff.

EPM is a clear example of what we define as corporatisation: a company that is formally ‘public’ but which operates in line with neoliberal business practices. But my own research on state-owned enterprises also reveals that it is certainly possible to democratise and improve the public sector and that public ownership still matters.

Why do you think it is important for TNI to be working on these issues?

At our name suggests, TNI works on transnational issues, and clearly energy belongs to this category. Some days ago the United Nations Assembly formally agreed a new set of targets known as the ‘Sustainable Development Goals’, or SDGs, one of which explicitly refers to sustainable energy: SDG 7. This is part of an ongoing process that included the declaration of 2012 as the International Year of Sustainable Energy for all, and Ban Ki Moon’s SE4ALL initiative.

At TNI we are quite sceptical about the prospects and impacts of these global initiatives, characterised by plenty of grandiose but sterile discourses and the subordination of social needs to the interests of transnational corporations (the SDGs have already been rebranded as the ‘Global Goals’, which sound more alluring for corporate-led publicity campaigns).

But we do welcome the fact that the so-called ‘international community’ has identified energy as a vital issue. At least at the discursive level, there seems to be an agreement on the need to shift towards a sustainable energy matrix by the year 2030, ensuring universal access, substantially increasing the share of renewable energy, and doubling the global rate of energy efficiency improvement.

The drivers, contents and specific characteristics of such transition are very much at the core of current social, political and environmental struggles. The ideas defended by those of us who prioritise the concept of energy democracy are radically different to the ideas presented in glossy publications by the big transnational corporations that lobby the UN in New York or the EU in Brussels. Therefore, at TNI we feel that we must engage in international processes, adding pressure for a more sustainable and democratic transition, in partnership with many organisations around the world that share our concerns and ideas.

Finally, you have referred several times to the water movement. Would it be possible to develop similar movements in the energy sector?

TNI has been working with movements opposing privatisation and supporting public control of water services for more than a decade – and there is lots to learn from their struggles. At a recent meeting organised by the Rosa Luxemburg Foundation in Brussels some participants referred to the ‘water warriors’ as a model that needs to be studied more closely if we want to build an international movement in the energy sector.

At this moment we can see many organisations in different parts of the world active in energy-focused struggles, but nothing similar to the water movement in terms of coordination of actions or a common platform. We also need to build stronger links with other actors, like the Trade Unions for Energy Democracy initiative.

Susan Spronk, a professor at the University of Ottawa, has written a brief but very insightful paper on the potentials of experience-sharing, with the catchy title ‘Oil and Water do Mix: Citizen Struggles in Energy and Water’. In her paper Susan explains how social movement, across South and North, have achieved significant victories in the struggle against water privatisation, and argues that trade unions, researchers and other social organisations can surely learn from these struggles to develop regional and international coalitions for energy democracy.

We are aware that the political economies of the energy and water sectors are different in many aspects, but we can draw useful lessons from the water activists on how to frame our demands, the importance of working together with allies who might not entirely share our political views, and how to strengthen internal democracy within our own organisations.