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Energy co-ops produce own power, beat geopolitics/inflation

The quest for cleaner, cheaper, decentralized energy production has accelerated due to a development in geopolitics and climate that the so-called “pragmatists” didn’t see coming: inflation and the Ukrainian war, albeit a warmer than usual winter in some parts of Europe.

When the European Union reached 100GW of solar energy installed in 2018, a significant (yet still marginal) overall percentage of potential energy generated in the region, the block celebrated the milestone. In 2022, it reached 200GW, and the current projection sets the cumulative solar photovoltaic market close to 600GW installed.

The war in Ukraine and the geopolitical blockade of Russian gas coming into Western Europe via sources such as Nordstream have fueled the previous acceleration to new highs, according to data on imports of PV panels from China, which suggests an exponential deployment surge across the continent.

Solar rush propelled by the war

A graphic from EU statistics board Eurostat shows the perfect correlation between the start of the war in Ukraine and the vertical growth of PV imports, from less than 1 billion euros at the beginning of 2022 to over 2.6 billion by September. Predictions show how such imports would have quadrupled in the year.

Chinese imports are still the primary source of PV solar panels in the EU, though several countries are increasing their production capacity, led by Italy, France, and Slovenia.

As for energy production with installer PV farms, China was the world leader in 2021, with over 30GW of photovoltaic capacity, followed by the United States (9.5GW), Japan (7.4GW), Germany (5.8GW), India (4.9GW), Italy (2.2GW), Australia (1.9GW), South Korea (1.8GW), Vietnam (1.6GW), and Spain (1.5GW). The top 10 countries represent three-quarters of the global photovoltaic market.

The solar race and the storage challenge

The picture varies in solar energy penetration (or the percentage of a country’s total energy consumption that comes from solar as an average), led —according to IEA data from 2021— by Australia (with 15.5% of its total energy consumption in the year from PV solar), Spain (14.2%), Greece (13.6%), Honduras (12.9%), Netherlands (11.8%), Chile (10.9%), Germany (10.9%), Japan (9.4%), Italy (9.3%), and Israel (8.9%).

Small hydropower plants have allowed remote valleys in the Alps to guarantee their own power supply, thanks to Renewable Energy Cooperatives such as the ones powering South Tirol

Economies of scale have turned solar power —including the cost of storage— into the cheapest form of energy if fossil fuels keep their current prices. However, solar power storage is rapidly facing cost trends in batteries that already represent a setback, with the price of lithium climbing around 500% since the beginning of the coronavirus pandemic. Industry analysts believe the added pressure on lithium prices will vanish in the coming years once new mining plants being opened across South America go full production (lithium production has doubled since 2015).

Despite potential bottlenecks in energy storage, solar photovoltaics is the fastest-growing electricity source, reaching 760GW of capacity in 2020 and producing almost 3% of the world’s electricity. Wind power worldwide has also increased rapidly, and it amounted to 733GW of installed capacity in 2020, with four countries from the top 10 by added capacity reaching over 20% of the share of total consumption in a given year: Germany (6.3GW of installed capacity in 2021, and 23.1% share of total consumption in 2021); United Kingdom (2.7GW installed in 2021, 21% share); Spain (2.7GW installed capacity and 20% share); and Sweden (1.2GW installed capacity and 20.3% share).

Longing for commercially viable nuclear fusion

Recent news publicized the first nuclear fusion ignition, an important scientific milestone that proves the feasibility of building energy plants in the future in which the combination of atomic nuclei (to form a heavier core) could release large amounts of energy with no CO2 impact.

Unlike the current nuclear plants based on the nuclear fission reaction (an atom is bombarded with a neutron, which splits into two or more smaller nuclei, releasing energy in the process), nuclear fusion would release much more energy, fueled by lighter elements (hydrogen, helium, deuterium, or lithium) that don’t produce radioactive waste.

Although the achievement in the Northern California lab is scientifically important, the technology isn’t ready to cover the world’s needs by recreating the physics that powers the sun (essentially, nuclear fusion). But the promise of abundant commercial nuclear fusion is still years —if not decades— away.

Nuclear fusion or similar silver bullet solutions won’t come to the world’s help short term, hence the need for innovative strategies to reduce the current dependability on fossil fuels —and no scientific paper or a rational explanation has helped public opinion more than a surge in energy prices.

The villages producing their own power

The Russian invasion of Ukraine quickly highlighted the European fossil fuel dependence on Russian-controlled oil and gas imports, but it has only materialized as the cold months prompt companies, offices, and households to ramp up their energy consumption, from electricity bills to gas-dependent heating systems. Consequently, installing solar panels and heat pumps as efficient HVAC systems isn’t meeting demand, thanks to falling installation costs and strong incentives.

Though the energy mix in the most industrialized nations (their main energy sources as a percentage of a country’s total consumption) cannot change dramatically in the coming months or even years, something important has shifted overnight: a sense of urgency among the public opinion to reduce energy cost, dependability, and pollution.

Micro-hydro installation on a creek

Currently, developed countries depend on inflation-hit and pollutant fossil fuels (coal, natural gas, and oil) as primary sources for large-scale energy production, with a few exceptions such as France (where, despite the difficulties and criticism the sector is experiencing, nuclear energy is still the main energy source), or the Scandinavian block: Norway, Sweden, and Iceland have a small and concentrated population, mainly served by hydropower; whereas Denmark’s multiyear expansion of wind farms along its coast allows the country to have renewables as the main source.

Overall, the installation of renewables is growing exponentially and has accelerated across the world, with China installing as many GW of electricity capacity than the rest of the world, whereas the global consumption and production of coal to generate electricity is stalling, according to the International Energy Agency.

Time for energy renewable energy sovereignty

Energy self-reliance has also gained interest, and off-grid experiments inspire DIY enthusiasts worldwide, especially during a harsh winter with high inflation and skyrocketing energy prices across the board.

Despite the critical importance of the macro scale to attest to the main trends of energy production by source in every country, region, and the world as a whole, a lot of innovation is taking place at the margins, with companies, small communities, and individuals funding medium and small-scale electricity plants powered by different (and sometimes several at once) renewable energy sources, often backed up by battery or fuel-reliant generators.

Small and medium-sized solar, wind, biomass, and even small hydropower plants on streams grow thanks to independent renewable energy cooperatives and subsidies. Several companies are also trying to build small modular reactors (SMRs), smaller, more economical, and efficient fission nuclear reactors that could be built such as heavy modular machinery, allowing for economies of scale: a factory could manufacture the pieces that then would be shipped and assembled on-site, instead of the current, more costly and individualized approach.

SMRs would double down on passive safety, beginning with a more efficient fuel containment and a lower radioactive waste per reactor, though their legacy design (unlike nuclear fusion, capable of operating with lighter elements such as hydrogen and helium) depends on the same heavy, radioactive elements.

Micro-hydro installation

SMRs, or the proposed small nuclear parts that could be safer, more economical, and capable of reducing the waste duration to a fraction of the traditional nuclear waste from conventional fission reactors, are not the only controversial energy source proposed to reduce fossil fuel dependability. Environmental groups and local populations have expressed formal concerns over the years about the impact on the landscape and wildlife of solar and wind farms, as well as small hydro and biomass energy production facilities.

South Tirol’s small hydropower energy cooperatives

With abundant rivers and creeks overcoming quick altitude drops, sometimes via waterfalls, Alpine valleys in South Tirol have overcome their remoteness with a network of small hydropower plants. Traditionally, small hydropower guaranteed the area’s self-reliance on local energy production with a decentralized energy network of thousands of medium-sized, small, and even individual small-hydro plants. Sophie Hardach explains BBC:

“some powering entire valleys, others, a single farm, or even, a single milking machine. New ones have also been built, based on the assumption that their environmental impact is relatively low.”

Now, with soaring inflation and energy prices across Europe during the coldest part of the year, South Tirol’s small hydro energy cooperatives vindicate their self-reliance. But Franz Schwitzer, managing director of the Pflersch energy cooperative in the Pflersch Valley, explains that the area’s self-organized energy sources “were a result of necessity and extreme marginalization.”

Though the decentralized network of small hydrologic plants from South Tirol isn’t free from local and regional criticism due to the mounting evidence of their impact, arguably disrupting streams, damaging habitat, and harming migratory fish. Cooperative managing directors argue that the tension between the network’s impact and its social and economic benefit should be addressed case-by-case: their alternative could handle a much higher cost and impact, augmenting the valleys’ dependability from costly and potentially pollutant external energy sources.

In Denmark and Germany, small wind and solar farms, respectively, have flourished thanks to more amiable financial and regulatory structure, as well as reduced paperwork, boosting the creation of hundreds of renewable energy cooperatives. There are, however, similar examples in France, Belgium, United Kingdom, Italy, and Spain (Som Energia in Girona, Catalonia, the first of its kind in Spain, was founded in December 2010, reaching 54.300 members and generating 12 GWh of electricity in 2019). Hundreds of thousands of households in Germany alone have joined cooperatives since 2006.

American energy co-ops: more renewables potential

In the United States, a 2020 breakdown of the cooperative retail electricity shows how renewables (22%) are growing their share in the energy mix, and nuclear energy represents a substantial 16% of the total. Fossil fuels cover almost two-thirds of the sources: natural gas (32%), coal (28%), and gas (2%).

South Tirol, Italy

Biomass powers half of the energy co-ops incorporated in the United States, “a resource including plants and wood, methane from animal waste, landfill gas, or municipal waste. Biomass can either be burned to produce heat or converted into biofuel. The 339 cooperatives in 32 states that use biomass have a total capacity of 480.5MW.

The future looks bright for solar and wind power energy cooperatives, while medium and small hydropower has its future if experts integrate approaches that reduce their damage to wildlife, such as migratory fish, as well as their visual impact, already very limited due to the remoteness of small hydropower, as attested by the mentioned by the cooperatives of the Alpine South Tirol, an autonomous region from Italy of German-speaking heritage.

Friendly regulations and access to low-interest credit could help kickstart new renewable energy cooperatives capable of reducing dependence on fossil fuels and centralized energy networks, as well as increasing self-reliance in an era in which geopolitics, inflation, and economic volatility affect energy prices dramatically.

In the medium term, other renewable energy sources and more efficient solar PV panels can accelerate the transition towards more resilient and clean power networks.