Citizen’s bid to buy back the grid: lessons from Germany

14^th August 2013

ResPublica's Caroline Julian reports from Berlin, as part of her Winston Churchill Memorial Trust travel fellowship to Germany

The city of Berlin has just become adorned with posters and billboards communicating the various campaigns of the major political parties. With the next General Election on the horizon (22nd September), much is on the agenda and much is at stake, not least the future of Germany’s Energiewende – literally ‘energy turnaround’ or ‘energy transition’ – that will see the continued phase-out of nuclear power stations and growth of renewables in the next decades.

But even more is at stake for Berlin’s inhabitants: the potential ownership of their local grid. Federal law stipulates that municipal authorities can invite bids from new companies, including communities, who wish to run their local grid network once the contract term ends (usually 20 years). One civil society-led group is campaigning to take on the local grid in Hamburg, and two have stepped forward in Berlin. Both grids are currently operated by the Swedish state-owned company, Vattenfall. The campaigns of both cities have achieved enough signatures to take the issue to a city-wide referendum, which will take place this autumn.

Berlin has been fairly successful in recent years in calling to account various contracts forged between the local state government and private companies, and plans for the privatisation of public services. In 2011, citizens demanded the publication of a contract previously unavailable to the public outlining the terms of sale of the municipal water company to Veolia and RWE. When put to a vote, the referendum was passed with almost 99% in favour. Another initiative has also sought to counter the privatisation of the S-Bahn, the regional train company.

Such protests have transpired to something much more radical for the local energy market. If neither the state nor the private sector can be trusted with public services, community ownership and governance must be the answer. So runs the logic for citizens in Berlin.

The supply of Berlin’s power and operation of the city’s electricity distribution grid used to be run by the municipal state company – the Stadtwerke – Berliner Staedtische Elektrizitaetswerke (BEWAG) up until 2002. Since this time, the company has been contracted out to Vattenfall, which now runs both the local utility and distribution networks in the state of Berlin. As Vattenfall own nuclear plants and coal-fired power stations, many inhabitants were unhappy with this move and felt that under their own governance the utility company and grid network could do much more to channel and supply (local) renewables in the city. As a multinational company, Vattenfall’s profits were also likely to have leaked out of Berlin. Under democratic control, civil society groups would have greater powers to keep the economic value local.

The referendum is supported, not only by renewables activists, but by wider civil society groups too. Berlin’s tenant’s society (representing 150,000 members), several church groups and even the orchestra of the Berlin state opera, the ‘Staatskapelle’, are among the signatories. Distrust in both the state and the private sector to run and manage public services is widespread, and community or city-wide ownership seems to citizens to be the only way – and most are pleased to have the opportunity.

We shall see at the forthcoming election, on September 22nd for Hamburg, and later in November for Berlin, as to whether the referenda are successful, and which external organisations and citizen initiatives are in the running to win the bid.

Whilst taking ownership of a utility company or local grid networks akin to the social movements in Berlin and Hamburg might not yet be a possibility in the UK, we should not disregard this case as if we have nothing to learn. Numerous opportunities have been opened up through the Localism Act 2011, which gives communities the right to develop their own neighbourhood plans and buy public assets, and local authorities now have increased powers to produce renewable energy and retain business rates and revenues from such projects. The recent report on ‘Local Energy’ published by the Energy and Climate Change Select Committee demonstrates that there is a growing appetite amongst communities and local authorities to localise production and supply. Cornwall Council, for example, is working with local community energy projects and independent generators, as well as consumers, to identify new opportunities to facilitate a local energy market as it develops its smart grid in partnership with the District Network Operator.

In many respects, we are witnessing the beginnings of re-localisation and the decentralisation of our energy market, and can only expect to see communities become increasingly part of this local economy as this shift continues to take place.