Headwind and Tailwind for Community Power...The WWEA “Community Power Strategies” project aims to identify favourable framework conditions for Community Power on a global scale

CommunityPower

February 2016 WWEA Policy Paper Series (PP-01-16)

Headwind and Tailwind for Community Power Community Wind Perspectives from North-Rhine Westphalia and the World

www.WWindEA.org – www.wind.community

Copyright WWEA 2016

Unless otherwise indicated, material in this publication may be used freely, shared or reprinted, as long as WWEA is acknowledged as the source.

About Partners

The World Wind Energy Association (WWEA), an international non-profit organisation headquartered in Bonn, Germany, is working in cooperation with various governments and international agencies to promote wind energy uptake worldwide. With a network of associations and members in more than 100 countries, developed and developing economies alike, it has assisted many governments in developing effective policies for renew-able energy technologies’ promotion. One of WWEAs objectives is to create a stronger focus on community power and distributed energy supply within existing governmental, international, education, research and financial institutions.

The Association for Renewable Energy North-Rhine Westphalia (LEE NRW) is the advocacy organization of all renewable energy technologies in Germany’s most populous state of North Rhine-Westphalia. The association is committed to a sustainable growth of the business location North Rhine-Westphalia. Its goal is to promote power supply that is fully based on renewable energy sources by 2050.

About the authors:

Carlo Schick works at the World Wind Energy Association headquartered in Bonn, Germany, as a Research Analyst and Community Power Officer. He holds a Bachelor degree in Political Science and is a Master of Sci-ence candidate in Environmental Governance. Formerly he worked at Technologies for Economic Development, a Lesotho-based NGO focusing on sustainable development and renewable energy technologies such as biogas and Solar Home Systems.

Stefan Gsänger has led the WWEA since its foundation in 2001 as Secretary General. He is also a member of the International Steering Committee of REN 21, the Executive Committee of the Global100%RE campaign and the Managing Committee of the International Renewable Energy Alliance.

Jan Dobertin, Executive Director LEE NRW

Reviewers:

Paul Gipe, Founder of Wind-Works, USA

Gadi Hareli, Israeli Wind Energy Association

Hugo Lucas, Factor CO2, Spain/Germany

Dr. René Mono, Bündnis Bürgerenergie

Dr. Shane Mulligan, Radicle Works Ltd., Canada

Hon. Peter Rae AO, WWEA President, Australia

Laura Williamson, REN21

Financial Support

The WWEA acknowledges and expresses its thanks for the financial support of the Foundation for Environment and Development of North-Rhine Westphalia and the Foundation for International Dialogue of the Savings Bank in Bonn for the research and publication of the study, as well as the financial support for the international Community Power Symposium held in Bonn on 26 January 2016.

HeadwindandTailwindforCommunityPower

CommunityWindPerspectivesfromNorth-RhineWestphaliaandtheWorld

b

ExecutiveSummary

CommunityWindinNorth-RhineWestphalia(NRW)andGermanyisatcross-roads.Ontheonehand,itholdsvastpotentialfortheenergytransitionfromacarbon-based(and,toalesserdegree,nuclear)en-ergy regime towards a democratic, decentralised,emission-free,andtrulysustainableenergysystem.Moreover, Community Wind bring high levels ofmuch needed acceptance and contributes to localaddedvalue.Ontheotherhand,theupcomingauc-tionsareexpectedtoputastrongcompetitivedis-advantageuponCommunityWindprojects.Asare-sult,theexternalizationofwindpower“acceptancecosts”couldhavedrasticeffectsbothonthefurtherdisseminationofCommunityWindprojectsandtheoutcomeoftheGermanEnergiewende.

The 2015 Paris agreement marked the biggestglobalcommitmenttotheuptakeofrenewableen-ergy technologies (RETs) in history; 195 nationsagreed to reach greenhouse gas neutrality by theyear2050, a goalonly achievable througha rapidphase-out of fossil fuels and transition toward afully renewable energy supply. The chosen termi-nology still leaves opportunity for nuclear power,and fossil fuel energy in combinationwith carboncaptureandstorage.However,historicallylowlev-elisedcostsofenergyandaslowlyreconcilingplay-ingfieldallowforasimpleandbeautifulconclusion:Renewablesarethenewnormal,andanyotherso-lution needs to be justified. Now the questioncomestotheforeofhowtorealizeasocially,envi-ronmentally, and economically just transition to-wards a 100% renewable energy system. Such atransition has tomeet the needs of, and find ac-ceptanceamongthepeoplewhoproduceandcon-sumerenewableenergy.

OnepertinentoptionistheconceptofCommunityPower,which isbasedonthe ideaof localowner-shipofRETs.Thethreemaincriteriathatdifferenti-ateaCommunityPowerprojectfromconventionalRETdeploymentarelocalshareholding(>50%),lo-cal control and decision-making power related totheproject,andthelocaldistributionofthesocialandeconomicbenefitsgeneratedthroughthepro-ject.(ThesecriteriaweredeterminedbytheWWEACommunity Working Group, comprising expertsfrom all continents). Community Wind is one oftechnology-specificsubtypesofCommunityPower.

TheWWEA“CommunityPowerStrategies”projectaims to identify favourable framework conditionsfor Community Power on a global scale. In thisbroaderframe,aregionalcasestudyonCommunityWind inNRWwasconducted.Basedonexpert in-terviews with CEOs of Community Wind projects

andCommunityWindfacilitators,andanonlinesur-veyaddressedtoabroaderCommunityWindstake-holder base, the following conclusions have beendrawn:

Todate,CommunityWindremainsanelusivecon-ceptthatisneitherlegallynorpoliticallydefinedinNRW(orinGermany).However,CommunityWindis regardedasa formofwindenergydeploymentwhichentailsmanybeneficialsocialandeconomiceffects,mostimportantlyasameansofenhancinglocalacceptanceandlocaladdedvalue.

The single most important driver of CommunityWindcanbeattributed to theguaranteed feed-intariffintroducedonthefederallevelbytheRenew-ableEnergySourcesAct (EEG).Otherdriverscom-prisethecurrentwind-energy-friendlystategovern-ment of NRW, regional/municipal renewable en-ergy initiatives,voluntaryCommunityWindstand-ards,aswellasregulatoryguidelinesaimingonthesimplification of planning/permission procedures.On the other hand, rising complexity, high landleasesofferedbycommercialwinddevelopers,op-positionfromwildlifeandnatureconservationasso-ciationsandaperceiveddeclineofsocietalinterestinRETsaresaidtoimpedethedeploymentofCom-munityWind.Inaddition,theupcomingauctionsforonshore wind are expected to entail tremendousimpediments for CommunityWind deployment inNRW and Germany. The cornerstones of the up-comingauctiondesignare said toputCommunityWindprojectsatastrongcompetitivedisadvantage,meaning independent bottom-up development ofCommunity Wind projects would not be possibleanymore.Therecentlyproposed–February2016–simplified qualification requirements for Commu-nityWindprojectscanbeconsideredasafirststepintotherightdirection.However,thoseprojectpro-ponentsstillhavetocompeteagainstmoreexperi-encedmarketplayerswithahighercompetitivead-vantage.

Acatalogueofattractivefuturebusinessandaddi-tionalmarket activities for CommunityWind pro-jects includes repowering activities, regional elec-tricity tariffs, storage, e-mobility and energy effi-ciency. However, the changing regulatory frame-workconditionsdonotallowforabroadbaseddif-fusionofthosebusinesslines,exceptforsometrail-blazerprojectsofexperiencedCommunityWindim-plementers. Community Wind networks, infor-mation platforms and associations are consideredtobecrucialmediumsforthediffusionoftheCom-munity Wind concepts and their innovative busi-nesslines.

TableofContents

ExecutiveSummary.........................................................................................................................b

SectionA:CaseStudyCommunityWindNRW.................................................................................11.StudyContextandBackground.......................................................................................................1

1.1.Introduction.............................................................................................................................11.2.Definitionofkeyconcepts:CommunityPower,CommunityWind,CommunityWindstakeholders...................................................................................................................................31.3.StatusofCommunityWindinGermany..................................................................................41.3.UpcomingAuctionsforOnshoreWind....................................................................................81.4.IntroductiontotheCaseStudyRegionNorth-RhineWestphalia............................................9

2.StudyDesignandMethodology....................................................................................................123.FindingsandDiscussion................................................................................................................13

3.1.Compositionofrespondents.................................................................................................133.2.ReflectionontheconceptofCommunityWind....................................................................143.2.BeneficialEffectsofCommunityWind..................................................................................153.3.BarriersandDriversofCommunityWindinNRW.................................................................173.4.CommunityWindandCompetitiveAuctioning–OpinionsandExpectations.......................213.5.TheFutureofCommunityWind............................................................................................27

4.Conclusion.....................................................................................................................................305.Policyrecommendations...............................................................................................................32

6.1.Policyrecommendationsmunicipal-level..............................................................................326.2.Policyrecommendationsstate-level.....................................................................................326.3.Policyrecommendationsfederal-level..................................................................................326.4.Recommendationsforfurtherresearch................................................................................32

SectionB:SummaryWWEACommunityWindSymposium2016...................................................331.PanelDiscussion:TenderingCommunityWind–ExpectationsonStateandFederalPolicy........342.Key-NoteSession:CommunityPowerinEurope...........................................................................353.Key-NoteSession:CommunityWindWorld-Trip:StatusQuo,ProblemsandSolutions................354.SynthesisDiscussion:WhataretheGuardrailsofGlobalCommunityPower?.............................37

SectionC:TenElementsofaGlobalCommunityPowerStrategy...................................................38

Annex............................................................................................................................................39Overviewonshorewindauctionkeypointsandone-tierreferencerevenuemodel.........................39

Bibliography..................................................................................................................................41

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COMMUNITYWINDPERSPECTIVESFROMNRWANDTHEWORLD

SectionA:CaseStudyCommunityWindNRW

1.StudyContextandBackground

The global average surface temperature in 2015 is likely to be the warmest on record and to reach the symbolic and significant milestone of 1° Celsius above the pre-industrial era.

World Meteorological Organisation

1.1.Introduction

2015markedthe“beginningoftheend”ofthefossilfuelera.ThelongawaitedUNclimatechangeagree-mentorParisagreementwillprobablyonedaybeinterpretedastheformalturningpointinthelonganddifficultprocessofcombatinganthropologicallyinducedglobalwarming.Itstillneedstoberatifiedby195governmentsanditisnotduetotakeeffectuntil2020;however,theimmediateandsalientso-lutiontoachievegreenhouse-gasneutralityby2050istherapiddeploymentofrenewableenergytech-nologies.Ontheglobalscale,thisparadigmshifthasdriventhedivestmentof$2.6trillionoutofcarbonbased energy sources (Arabella Advisors 2015).Thus vast streams of investment will be directedintorenewableenergytechnologies(RETs)inboth,developedanddevelopingcountries.In2015globalinvestments in RETs summed up to $329 billionUSD, surpassing its previous record set in 2011(Bloomberg2016).

BesidestheParisagreementitself,theactivitiesandcommitmentsoftheglobal100%renewableenergycommunityreachedatremendouslevelinthelastfewyears.Allaroundtheworld,countries,regions,municipalities, or cities are voluntarily aiming to

switchtoa100%renewableenergysystem1.Thesebottom-upandtop-downpressuresontheincum-bent energy regime add to the general decline of

1Avaluableinformationsourceofthestatusof100%re-newableenergyisthewebsiteoftheGlobal100%REcampaign:www.go100re.net

thelevelisedcostofenergyforRETs(IRENA2015).Allthosefactorsmakerenewablesthenewnormal.

Nowthequestionariseshowasocially justtransi-tiontowardsarenewableenergysystemcanbeim-plementedontheground,taking intoaccountthespecificpotentialsandchallengesofwind,solar,wa-ter,biomassandgeothermalenergy technologies,aswell as catering for needs and concerns of thepeoplewhoproduce and consume renewable en-ergy. The answer to this question is inherentlylinkedwiththeevolutionofwindpowertechnologyingeneral.GermanyandDenmarkcanbeseennotonlyasthepioneercountriesofwindpoweringen-eral,butalsothetwocountrieswhichgavebirthtotheCommunityWindmodel(Valentine2015;Toke2009).

Uptothe late1990swindenergywasstillanichetechnologyinGermany.Earlywindpowerprojectsmainlyattractedinvestmentsfromfarmersandlo-calentrepreneursinthewind-abundantcoastalre-gions,whousedtheirlandtoharnessfreeandabun-dant wind resources. At that time, the model ofshared and local ownership, the nucleus of theCommunity Power concept, was deployed to dis-tribute financial risks that went along with costlyupfrontinvestments.In2000,theGermanRenewa-bleEnergyAct(EEG)replacedtheformerElectricityFeedingAct(StrEG)andsettheregulatoryfounda-tionfortheboomphaseofwindenergydeploymentinGermany.Thecombinationofa20-year,technol-ogy-specific,guaranteedpaymentforindependentpowerproducersprovedtobesuccessmodelforin-troducingRETsintomarketsdominatedbycarbon-intensiveandnucleartechnologies,whichweredi-rectly and/or indirectly subsidised heavily. At-tractedbythefinancialsafeguardsoftheEEG,thenumberofCommunityWindprojectsthrived,along

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withaddedvaluefortheregionsofdeploymentandhighlevelsofacceptance.Itcanbeconcludedthattherewasastrongco-evolutionofbothCommunityWindandtheguaranteedfeed-intariff.

Today, variations of the German feed-in-tariffmodelhavebeenenacted in108 jurisdictionsatanational or provincial level (REN21 2015) wheretheyhaveestablishedfavourablemarketconditionsandspurredtheuptakeofRETs.TheWWEAstatisticinGraph1showsthatbytheendof2015theglobalinstalled on- and offshore wind capacity reachednearly435GW,producing4%of theworld’selec-tricitydemand.Thosenumbersindicatethatthein-fantyearsofwindpoweraredefinitelyover.

When comparing country specific investment intoRET,developingcountriesarenowonparwithde-velopedcountries(REN212015).Buttowhatextentdoesthisfast-paceduptakeofRETsentailuseoftheCommunityPowermodel?Especiallyindevelopingcountries,CommunityPowerprojectssuchasCom-munityWind,whetherutilityscaleorsmalloff-gridwind,holdvastpotential,notonlyforleap-froggingcarbonintensivetechnologies,butalsoasasustain-able and inclusive model of poverty alleviation.However, to date, the share of CommunityWindprojectsaroundtheglobe isstillnegligible,andtoourknowledgehasnotevenbeenmeasured.Sofar,wind power uptake in developing countries has

2Tenderingschemesusuallyincludemorethanonese-lectioncriteria,whileauctioningschemesselectsuccess-fulbiddersonlybasedontheprice.However,thetwotermsareoftenusedinterchangeably.

beenandisdrivenbylarge,globallyoperatingutili-ties and project developers (Baker 2015; WWEACommunityWindSymposium2016).

Against this backdrop, aworld-wide trend towardcompetitiveauctioningmechanismsisgainingmo-mentum.While in2005only5 countrieshadauc-

tionsortenders2forRETsinplace,by2015some60countrieshadimplementedauctioningschemes.Intheory, properly designed auctioning schemescouldpotentiallycontributetoincreasingtheshareofCommunityWindaswell. Inreality, thepicturelooksdifferent,asmostoftheexistingauctionsde-signs introduce additional impediments for smallmarket players and favour experienced, capital-strongprojectdevelopersandinternationalcorpo-rations.

Theoverallobjectiveof thecurrentWWEA“Com-munityPowerStrategies”projectistoidentifycon-duciveframeworkconditionsforCommunityWind,particularlywithregardtoregulatorysystemsgov-erning auctions. Throughout the project phase,which also includes an international CommunityWind symposium (see Section B of the Report), amultiple level approach is applied. It follows the“think globally, act locally” principle: understandglobalproblemsandtrends,andexaminelocalre-sponsesinordertogivesoundpolicyrecommenda-tions.Inthisbroaderframe,theregionalcasestudy

Graph1

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on Community Wind in North-Rhine Westphalia(NRW)investigateshowtheCommunityWindcon-ceptisdeployedlocally.Whilethespecificfindingswouldnotimmediatelybegeneralizableonaglobalscale,theresultsareexpectedtoprovidevaluableinsightsto informandprovokefurtherdiscussionsontheuptakeoftheCommunityWindconcept.

ThisstudywillinvestigatethecurrentstatusofCom-munityWindinGermany’smostpopulousandmostenergyintensive(withregardtoenergysupplyanddemand)stateofNRW.Itisbasedonexpertinter-viewswithCEOsofCommunityWindprojects,andasurveytargetingmembersofwindpowercooper-atives and shareholders of CommunityWind pro-jects. The following sectionswill provide an over-view of the concept of CommunityWind, and itscurrentdeploymentinGermanyandNRWinpartic-ular.FollowingtheintroductoryChapter,thestudydesignandmethodologyareoutlinedinChapter2.Themainfindingsoftheinterviewsandthesurveyarepresentedanddiscussed inChapter3.Ashortconclusion(Chapter4)isfollowedbyconcretepol-icyrecommendationsbasedontheneedsofCom-munityWindstakeholders(Chapter5).TheSectionBprovidessummariesofdiscussionsfromthepan-elsheldattheCommunityWindsymposiuminBonninJanuary2016andSectionCintroducesWWEA’stenelementsofaGlobalCommunityPowerStrat-egy. Finally, AnnexA provides an overviewof theupcoming competitive auctioning scheme for on-shorewindenergy.

1.2.Definitionofkeyconcepts:CommunityPower,CommunityWind,CommunityWindstakeholders

The concept of Community Power reflects a longtraditiondatingbacktothepre-industrialera,whenlocallyownedmillsharnessedtheabundantpowerofwindandwater(Hvelplund2014).Inadditiontothose early forms of Community Power, a majorshareofthefirstdistributionnetworksforelectric-ityacrossEuropewasinthehandoflocalcoopera-tives.However,withthecentralisationofelectricitysystems,manysharedlocalownershipmodelslosttheir purpose. After a stalemate period in the1970s,theimpactsofthefirstglobaloilcrises,alongwiththefirsttechnologicalinnovationsofRETs,ledtoarevivaloftheCommunityPowerconcept.Itwas

due to the activities of Community Power stake-holdersthatRETsinthefieldsofwind,solarhydroandbiogaswereabletodevelopfromanichetech-nology to a mature alternative of the incumbentfossilandnuclearenergyregime(Hvelplund2014).

ThecontemporarydefinitionofCommunityPoweris based on the cornerstones of shared and localownership, democratic decision-making and a de-centralisedstructureofenergysupply.Asdescribedin detail below, according to WWEA’s definition,CommunityPowerprojectsincludebusinessmodelswherecitizenscontributeatleast50%oftheequityofthecompany,theinvestorscomefromtheregionwheretheplantislocated,andthemajorityoftheprojects’benefitsaredistributedlocally(Graph2).Thesetupofthebusinessmodelcanrangefromen-ergy cooperatives, joint investments (by a smallgroupoflocalinvestors),localinvestments(jointin-vestmentsofcitizensandmunicipalities)orclosed-end funds (Yildiz 2014). Community Power stake-holders also include individual owners of facilitieslike agricultural sole proprietorships, partnershipsandsmallercorporations.

Graph2:ThreemainelementsofCommunityPower

Community Wind, as one subtype of CommunityPower,comprisesallkindsofwindenergyprojectsthatcomplywiththeabovementionedcharacteris-tics.Todatetherearenointernationalornationalstandards or legally agreed binding definitions inplace,whichcouldhelptoclearlydifferentiatebe-tween“commercial”windprojectsandCommunityWind.ThismakesglobalstocktakingofCommunityWindprojectsadifficultendeavour.Since2011,theWWEA uses the following definition, developedthrough intensive discussion among themembers

Localstakeholdersownamajorityshare

Votingcontrolrestswitha

community-basedorganisation

Majority ofsocialandeconomicbenefitsare

distributedlocally

4


of its Community Power working group (from allcontinents):

CommunityWind is any combination of at leasttwoofthefollowingthreeelements:

1. Localstakeholdersownthemajorityorallofawindproject

Alocalindividualoragroupoflocalstakeholders,whethertheyarefarmers,cooperatives,independ-entpowerproducers,financialinstitutions,munici-palities,schools,etc.,own,immediatelyoreventu-ally,themajorityorallofaproject.

2. Votingcontrolrestswithacommunity-basedorganization:

Acommunity-basedorganizationmadeupoflocalstakeholdershasthemajorityofthevotingrightsconcerningthedecisionstakenontheproject.

3. Themajorityofsocialandeconomicben-efitsaredistributedlocally:

Themajorpartorallofthesocialandeconomicbenefitsarereturnedtothelocalcommunity.

Thisdefinition isprimarilyused forWWEAsactivi-ties in the field of Community Wind, especiallywhen referring to Community Wind on a globalscale.Inthestudyathand,secondarydataonCom-munityWindcamefromdifferentsources,henceitis based on different conceptions of Community

Wind3. Throughout the study, constant attentionhad been set on seeking a basic congruency be-tween the different conceptions of CommunityWind.Forreasonsofsimplicity,theWWEACommu-nityWindisdefinedbythethreeelementsdetailedabove.

WhenzoominginonCommunityWind,itisalsoim-portanttobeabletodifferentiatebetweenspecificstakeholder groups that are usually involved inCommunityWind. The following non-mutually ex-clusiveCommunityWindstakeholdergroupscanbedistinguished:

1.Project implementers are themaindriversandentrepreneursbehindaCommunityWindproject.Theyusuallycomeupwiththevisionorbasicidea

3ForathoroughconceptualizationofCommunityWindseeTrend:Research2013(inGerman)

behindaparticularproject.Theirmotivesforrealiz-ingaprojectcanrangefrommakingapoliticalstate-mentforasustainableenergysystemtoplainfinan-cialconsiderations.

2.CommunityWindshareholdersarelandowners,membersof energy cooperatives, partnersof lim-itedassociations,or investors inCommunityWindprojects.Theyhaveageneral interest intheEner-giewende towards a decentralized energy systemandarewillingtoinvestinRETsaslongastheycanexpectareliablereturnoninvestment.

3.CommunityWindfacilitatorsareinvolvedinset-ting-up of conducive framework conditions forCommunityWind.Thiscategorycomprisesassocia-tions, networks, and NGOs, but also individuals,whowork independentlyor cooperatewith thoseinstitutions.

4.ProsumersareveryactivestakeholdersofRETsingeneral.Thisincludessolarroofsystems,energyef-ficiency,homestorage, localheatingandE-Mobil-ity.TheyoftensupportCommunityWindprojects,assist in local transformation processes and func-tionasrolemodels.

1.3.StatusofCommunityWindinGermany

In2012CommunityWindasdefinedbytheWWEAaccountedfor24.6%oftheinstalled30’854MWon-shorewindcapacityinGermany(seeGraph3).Add-ingtheshareofprojectswithminorityshareholdingbylocalsandsupra-regionaldebtandmezzanine-fi-nanceschemesforindividualinvestors,atotalshareof50.4%wasreached.Institutionalandstrategicin-vestorsaccountedforashareof39.4%,whileonly10.2%wasownedbylargeutilities(Trend:Research2013).Astudyfocusingontheownershipstructuresofnewlyaddedonshorewindcapacityintheperiodbetween 2012-2014 concludes that roughly 15-16of that capacitywas realisedbyCommunityWindimplementersand16-20%ofthiscapacitywasthenoperated as Community Wind (BWE 2015). Theslight difference between the two stages (realisa-tionandoperation)wasexplainedbythefactthatsomeprojectsmight have been realized by largerwinddevelopersthathavebeencommissionedto

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selltheprojecttoCommunityWindstakeholdersaf-terwards.However,theresultsofthisstudycannoteasilybeinterpretedagainstthefindingsofthepre-vious ‘stocktaking’studybecauseofa lackofcon-sistency between the deployed Community Winddefinitionsused.

ThehighshareofCommunityWindinGermanycanbeexplainedby several conditions/factors. Firstly,decentralizedonshorewinddeploymentischarac-terizedbyrelativelyhightransactioncostsandlowrates of return on investment, which may detercommercialdevelopersandinvestors(Yildiz2014).Incontrast,individualinvestorsaremoreattractedbylongtermschemeswithmoderateyieldexpecta-tionsof4-6%,especiallyintimesofpersistentlylowinterestratesonthecapitalmarket(BrühlandWalz2015).Inadditiontothis,therelativelyhighincomelevelinGermanyandsafetyofinvestmentthroughaguaranteedfeed-intariff(seeChapter1.4)allowsinvestment volumes to be jointly raised by localpopulation.Besideseconomicmotives,localowner-shipandparticipationcanbeseenasavaluableen-richment, rather thana transaction cost. Commu-nityWindstakeholderscanplayanactivepartin

4ForashortoverviewondebtandmezzaninecapitalschemesseeYildiz2014(English)orEnergieAgen-tur.NRW2014(German)

changinglocalenergypolicyandplanningandcon-tribute individually to the transitionof theenergysystem.

Lastly,avery importantbut sometimesunderesti-mated factor is thatCommunityWindcontributessignificantly to local acceptance of wind turbines(Valentine2015;MusallandKuik2011).Inthepast,acceptanceofwindturbineswasoftenframedasapositiveside-effect.Today,againstthebackdropofrisingwind turbinepenetration, larger turbinesaswell as declining acceptance rates of commercialprojects,CommunityWindcanbeadecisivecondi-tionfortherealisationofawindpowerproject.

InGermany,mostCommunityWindprojectsareor-ganised as limited partnerships, energy coopera-tives,oracombinationofboth.Table1givesashortoverviewoftheregulationsthoselegalentitieshavetocomplywith.InadditiontothosebasicformsofequitybasedCommunityWindprojects, debt andmezzanine-financeschemesexist.Theyallow indi-vidual investors to participate with less entrepre-neurialrisks,butexcludethemfromtakinganactive

partinconceptualdecision-makingprocesses.4

Institutionalinvestors 39,4%

Largeutilities10,2% Individual owners 4,2%

CommunityWind(WWEAdefinition)20,4%

Minorityshareparticipation

andsupra-regionalparticipation

25,8%

CommunityWind(broaddefintion)

50,4%

InstalledonshorewindcapacityinGermanybyownershipstructurein2012(30,854MW)

Graph3

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Table1:GermanWindEnergyAssociation(2012)

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1.3.1.ENERGYCOOPERATIVES

InGermanythecooperativebusinessmodelhasalong standing tradition, with the first cooperativestarting its operation in 1863 (DRGV 2015). Sincethencooperatives,asjointlyownedanddemocrati-callycontrolledbusinesses,havesuccessfullyestab-lishedthemselvesinavarietyofsectors.Coopera-tivesusuallybasetheiroperationonthefollowingsevencoreprinciples:voluntaryandopenmember-ship;democraticmembercontrol;economicpartic-ipationbymembers;autonomyandindependence;education, training and information; cooperationamong cooperatives; and concern for community(Viardot2013).

ThoseprerequisitesmakethecooperativebusinessmodelaperfectvehicleforCommunityPowerandCommunityWindprojects,ascoperativemembershave the chance to participate financially and totakeanactivepartinthedecision-makingprocess.Everycooperativememberhasonevote,nomatterhow many shares of the cooperative each holds.The democratic idea of cooperatives is also re-flected in the average minimum share of 738 €,which allows for participation of less capital-en-dowedindividuals.Onefourthofthecurrentenergycooperativesevenworkwithaminimumsharebe-low 100 €. In 2014, the average financial involve-mentofenergycooperativememberswas3’298€(DRGV2014).

Graph4:ownillustrationbasedonDRGV(2014)

The973existingGermanenergy cooperatives canbeclassifiedeitheronaresourcebasis(solar,windorbioenergy)oronanactivitybasis (energypro-duction,energyconsumptionorservices).75%ofallenergycooperativesareengagedwithsolarpower,butthesolarenergycooperativeboomhasdeclineddrasticallywiththeamendmentof theRenewableEnergyActin2012(seeGraph4),whichintroduced

strong remunerationcutbacksof solarprojects. Inaddition, the obligatory auctioning for large-scalesolarintroducedin2014isalsobelievedtohavede-terredmanypotentialsolarcooperatives.

Whilethelast3yearsalreadyhavebeenrelativelybleakforsolarcooperatives,electricityproductionthroughwindpowercontinuestobeviableoptionforenergycooperatives.CommunityWindcooper-ativesprimarilyproduceenergyfromwindturbines,buttheirportfoliomayincludeotheractivitiesorre-sources.In2014,68oftheGermanenergycooper-ativeswereattributedtoonshorewindenergy,withasmallnumberofadditionalwindcooperativesex-pectedbytheendof2015.Againstthebackdropoftheupcomingauctionsforonshorewindfrom2017,however, Community Wind cooperatives are ex-pectedtofaceanopaquetrajectorysimilartotheoneofsolarcooperatives.

1.3.2.CLOSED-ENDFUNDS/LIMITEDPARTNERSHIPS

Anorganisationalset-upforCommunityWindpro-jectsthatismorecommonlyusedthanenergyco-operatives is the closed-end fund. Like coopera-tives, these constituteabusiness vehiclewith theprimaryaimtoraiseequitycapitalthroughalargenumberofinvestors.MostoftheGermanCommu-nityWind,aswellascommercialwindfarms,arere-alizedthroughthelegalformofaGmbH&Co.KG.,a limited partnership with a limited liability com-panyasgeneralpartnerinchargeofbusinessman-agement.

In case of CommunityWind farms, project imple-menters manage the limited liability company,whilelocalresidentsorotherindividualinvestorsfi-nanciallyparticipateaslimitedpartners.IncontrasttoCommunityWindcooperatives,closed-endfundsarelesssuitedforCommunityWindprojectswhichexplicitly aim to include all shareholders in entre-preneurial decision-making processes and exercis-ing control on management. On the other hand,closed-end funds allow for various organisationalset-ups.Forinstance,aGmbH&Co.KG.canrealizelargewindfarmsandtransferashareofitsportfoliotoaCommunityWindcooperative,orallowindivid-uallocalinvestorstofinanciallyparticipatethroughdebtandmezzaninecapitalschemes.Inordertobeable to offer financial participation to investors,

923

58

132

160

194183

104

29

0

50

100

150

200

250

2006 2007 2008 2009 2010 2011 2012 2013 2014

Newlyfounded energycooperativesperyear

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closed-endfundsgenerallyhavetofulfilstrictpro-spectusrequirements.

Unfortunately, no statistical data on the amountand composition of Community Wind organisedthrough close-end funds is available. TheGermanassociationforclosed-endfunds(VGF)offersempir-icalstudiesonclosed-endfundswithintheenergysector in general. However, as those statistics in-clude non-renewable energy projects and do notdifferentiatebetweencommercialwindfarmsandCommunityWind,theirusefulnessislimited(Yildiz2014).

1.3.UpcomingAuctionsforOnshoreWind

Theintroductionofaguaranteedfeed-intariff(FIT)throughtheRenewableEnergySourcesAct(EEG)in2000wasacrucialframeworkconditionfortheriseof Community Power (Toke 2009; Li et al. 2013;Yildiz et al. 2015). Since then, all operators of re-newableenergyplantswerestatutorilyentitledtoreceive technology-specific and progressively re-ducedpaymentsforelectricityexportedtothegrid.In2012,anamendmentoftheEEGintroducedthemarket premium and the flexibility premium forplant operators who directly sell their electricity

fromrenewablesources5.

From the perspective of Community Wind, suffi-cientremunerationperkWhforaperiodof20yearscontributed significantly to the calculability of re-turns of investment, eventually reducing financialrisksthatgoalongwithhighupfrontinvestments.Inaddition, theunderlying reference revenuemodelenabledthedevelopmentofCommunityWindpro-jectsatsiteswithmediumwindpotential,thuscon-tributing to a level playing field for wind deploy-mentacrossGermany.TheGermanFITprovedtobeasuccessmodelforthemarketintroductionofRETandwasreplicatedover108timesaroundtheglobe(REN212015).

AgainstthebackdropofrisingmarketsharesofRETand related questions of their sound integrationintotheenergysystem,theEuropeanCommissionenacteditsnewEnergyandEnvironmentStateAid

5ForamoredetailedhistoricaloverviewontheRene-wableEnergyAct,seeValentine20156ForaGermananalysisandevaluationofCommunityPower/CommunityWindstakeholderstatementsinthe

Guidelinesin2014.Thoseguidelinesrequirethat,asof2017,supportforrenewableenergyprojectsgen-erallybeawardedincompetitivebiddingprocesses.Suchasystemdoeslittletosupporttheintegrationofsmallerplayersintothepowermarket.Themainmotivationmaylieinanefforttocontroltheexten-sion quantity and to push back smaller investorssuch as Community Power projects, resulting inplannablemarketconditionsfavourableforthetra-ditional utilities, which currently face economictroublesduetotheirpreviousinertiainrenewableenergyinvestments(WWEACommunityWindSym-posium2016).Inanycase,theGermangovernmentdecidedtodropthesuccessfulFITmodelandtore-placeitwithauctionsforonshoreandoffshorewindandlarge-scalephotovoltaicsinstallations(>1MW)basedonthefollowingthreeobjectives:

Three official guiding principles of the upcomingauctionsforRET(BMWi2015)

1. Quantitycontrolof renewableenergydeploy-ment

2. TokeeptoaminimumoverallcostarisingfromtheRenewableEnergySourcesAct

3. Touseauctions to createa levelplaying fieldforalloftheplayersinvolved

Thefeedback fromCommunityWindstakeholderswith regard to the upcoming restructuring was

mainly negative6 as auctions are expected to putsmall project developers at a competitive disad-vantage. Compared to large professionalized pro-ject developers, which can benefit from variousscaleeffects(e.g.lowerpurchasepricesforcompo-nents, higher credit ratings) and bigger projectsportfolios, “small bidders” lack the know-how forstrategicbiddingandcouldbedeterredbytheriskofnotbeingabletocompensateforasingleunsuc-cessfulbid.Hence,theobjectiveofmaintainingthecurrentlyhighlevelofthediversityofplayers(e.g.smallandmedium-sizedfirms,energycooperatives,localprojectdevelopers,etc.)isseenasconflictingwiththeideaofauctions.Theresultsofthefirsttwolarge-scale photovoltaic auctioning rounds added

officialBMWiconsultationprocessseeBündnisBürgerenergiee.V.(2015)

9


uptothenegativefeedback,asnotasingleCommu-nityPowerprojectwonaconcession.ItwasonlyinthethirdauctionroundthatfiveCommunityPowerprojects, out of a total of 43 accepted bids,wereabletobesuccessfulintheauction.

One possible solution tomaintain the diversity ofplayersistogivesmallactorsand/ortheirprojectsaspecialtreatmentwithintheauctionortoexcludethemfromtheauction.ThisoptionisembeddedintheguidelinesoftheEuropeanCommission,whichallowsmallinstallationstobeexemptedfrompar-ticipating in competitive bidding processes. Smallinstallations are defined as those producing lessthan6MWofwindpower(or6generationunits).InJanuary2016theEUCompetitionCommissionerMargretheVestagerspecifiedanaveragegeneratorsizetobe2.5to3megawatts,meaningthatthelarg-estwindfarmthatcouldbebuiltwithouttakingpartinauctionswouldbenolargerthan18megawatts(Vestager2016).

Basedonthissocalledde-minimisrule,researchin-stitutes as well as CommunityWind practitionersandfacilitatorsdraftedexemptioncriteriaandfedthem into the official consultation process on theGermanauctioningdesign.Fornow,however, theFederal Ministry for Economic Affairs and Energy(BMWi)decidednottoincludeexemptions–seem-inglyindicatingthatonemotivationbehindthenewlegislationisindeedtoexcludesmallinvestorsfromthemarket.

“Other than that {onshorewind <1MW}, the Re-newable-Energy-Sources-Act does not provide forany further exemptions designed tomaintain cur-rentlevelsofdiversityofplayers.Theexemptionforwindfarmscomposedofnomorethansixinstalla-tionsthatexistsundertheguidelinesonstateaidforenvironmentalprotectionandenergy,forinstance,hasnotbeenincludedonthegroundsthatitwouldresultinamoresegmentedmarketforinstallations,reduce the level of competition, and lead to solu-tions that are economically inefficient.” (BMWi2015)

Nonetheless,inFebruary2016(afterthefinalizationoftheempirical researchandtheWWEACommu-

7Anoverviewonthekeypointsfortheupcomingon-shorewindauctionsandadetailedexplanationofthe

nityPowerSymposium),theBMWipublishedanup-datedversionofthekeypointsonthedesignoftheupcoming onshore wind auctions which includedspecific simplified qualification requirements for“worth protecting” Community Wind projects.Those include participation in the auctioning pro-cess without a prior approval under the FederalEmissionControlAct(BImSchGapproval)andabidbondofonly15€perkWduebybidsubmissionandanother15€perkWafterbidapproval.TheBMWigrants those simplified qualification requirementsforprojectsthatcomplywiththefollowingcriteria:

• Aminimumoftenshareholdersofthebidding

projectcorporationhavetobenaturalentities

• Eachmember’sshareofvotingrightsmustnot

behigherthan10%andallnaturalentitieshave

tohaveatleast51%ofallvotingrights

• Aminimumof51%ofthevotingshareshasto

beheldbyshareholderswholiveinthedistrict

(Landkreis) in which the wind farm will be

erected

• Theproject size is limited toamaximumof6

turbinesandamaximumof18MW

• The project company and all of its members

must not have been participating in onshore

windauctionswithinthepast12month(BMWi

2016).

The latest versionof key points for theupcomingauctionsforonshorewindwaspublishedinFebru-

ary 20167, and the legislative process on theamendmentof theRenewableEnergySourcesAct(EEG)isexpectedtobecompletedbySummer2016.

1.4.IntroductiontotheCaseStudyRegionNorth-RhineWestphalia NRWisGermany’smostpopulousstatewithapop-ulationof17.5million,aswellasthefourthlargestbyarea(34’083km2).Thelargestpartofthestateis covered by agricultural areas (almost 52%) andforests(25%).In2013thestategovernmentofNRW

one-tierreferencerevenuemodelcanbefoundinAnnexA

10


enactedtheClimateProtectionLawwiththeambi-tious aim to reduce its total carbon emissions by25%by2020,andby80%by2050againstthebase-lineof1990(LANUV2015).Onemeanstoreachthisgoal is seen in thedeploymentofRETs,especiallywindenergy.Therespectivetargetonwindenergydeployment is to increase the share of electricityproduced fromwind power from the current 4%(5,9TWh)to15%(20,7TWh)in2020.Awindpo-tentialstudyfrom2012cametotheconclusionthatNRWcanproduceupto71TWh,iflessecologicallyvaluableforests(likeconiferous-monocultures)areharnessedforwindpowerdeployment.Mostofthelocationsforwinddeploymentrangebetween60%and90%ofthereferencerevenue(LANUV2015).With3’073windturbinesaddinguptoaninstalledcapacityof3’883MW(asofSeptember2015),NRWtakesthefifthrankofwindpowercapacityacrossthe 16 German states (LEE NRW 2015). Graph 5showsthedevelopmentofwindenergyextensioninNRW.Aftera firstboomphase lasting from2000-2002,theextensionratesdeclined.Thesubsequentstagnationcanpartlybeattributedtothecoalitiongovernment of the conservative and the liberalpartythatlastedfrom2005-2010,whichclearlyex-pressedtheirnegativeattitudetowardwindenergy.Thisattitudewasepitomisedthroughtheintroduc-tionofextremelyheightdistancerecommendationsand a ban onwind power deployment in forests.Thoserestrictionswereabolishedbythecurrentco-alition government of social democrats and the

greenparty,whichtookoverin2010.Sincethenasecondboomphasegainedmomentum,andthisisexpectedtocontinueatleastuntiltheintroductionofthecompetitiveauctionscheme.ImportantdocumentsforwindpowerdeploymentinNRW• WindEnergyDecree(latestversion2015)• GuidelineWindEnergyinForestAreas(2012)• Guideline Species and Habitat Protection in

WindEnergyPlanning(2013;tobeevaluatedin2016)

• ClimateProtectionLawandClimateProtectionPlanNRW(2013/2015)

• DevelopmentPlanofNRW(currentversionasof1995,revisioncurrentlyunderdevelopment)

• Regional Development Plan of the respectiveadministrative region (many of them beingevaluated)

• Land-useplanoftherespectivemunicipality

WindPowerDeploymentinNorth-RhineWestphalia2000-2015

Graph5:basedonBWE(2015)

11


NRWisdividedintosixadministrativeregions:Arns-berg,Detmold,Düsseldorf,Köln,Münsterand theRegionalAssociationRuhr(seeGraph6).Thosead-ministrative regions are in charge of the RegionalLand-usePlans,whichinturnaddresstheoverarch-ingobjectivessetbytheDevelopmentPlanofNRW.The draft of the Development Plan, which is ex-pectedtobeenactedin2016,issettoreserve1,6%(54’000 ha) of NRW area forwind power deploy-ment, distributed over the administrative regionsaccording to their respective potentials (rangingfrom18’000hawithinArnsbergto1’500hawithintheRegionalAssociationRuhr).Withregardtowindpower planning, the regional development plansonly point toward potential areas that are not inconflictwithother land-uses.Eventually,themostimportantplanningauthorities for theplanningofwind farms are the municipalities, as they are inchargeofauthorisingpriorityzonesforwindenergydeploymentintheirmunicipaldevelopmentplans.OnlywindprojectsinthosezonescanapplyforanapprovalundertheFederalImmissionControlAct.Municipalities have to consider the priority zonesprescribedintherespectiveregionalplans,buttheyarealsofreetoassignfurtherpriorityzonesontheirown.TheWind Energy Decree, whichwas recently up-dated in November 2015, includes recommenda-tionsand legal referenceswith regard to land-usedesignation,repoweringandheightlimitations,for

municipalities, investors,projectplannersandciti-zens.Itsprimaryaimistosimplifythewindpowerdeployment by setting internally obligatory refer-ences for subordinate authorities. So far, it is theonlyofficialdocumentbythestateofNRWwhichintroducestheconceptofCommunityWind(“Bür-gerwindparks”).Here,CommunityWind farmsareframedaswindfarmsthatallowforafinancialandconceptual participation of local citizens. It givesseveral recommendations on how a CommunityWindfarmcanbeset-up,butrefrainsfromestab-lishing a thorough definition or proposing stand-ards. In terms of planning law, Community Windfarms have to be judged as any other wind farm(LANUV2015).

To date, roughly 100 energy cooperatives with23’000membersexist inNRW.Mostof thoseen-ergycooperativesworkwithsolarenergy,andonly6energycooperativescanbeattributedtoCommu-nityWind.Thegeneraldeclineofnewlyfoundeden-ergycooperativescanalsobeobservedinNRW,asthenumbersmorethanhalvedfrom22in2011to8in2014.TheClimateProtectionPlantriestoaddressthisdeclinebyaimingfortheestablishmentof100new energy cooperatives in the upcoming years.Whilethenumbersofenergycooperativesaremon-itored by the regional cooperative association(RWGV),therearenostatisticsontheshareofCom-munityWindfarmsset-upasclosed-endfunds.

Graph6:www.brd.nrw.de

12


TheEnergyAgencyofNRW(EnergieAgentur.NRW)runs a project database of Community Power inNRW.Bytheendof2015,itcounted39projectsat-tributedtowindenergy,22ofthemhavingaport-folio including other RETs (Energieagentur.NRW2015).Thosenumbersarebasedonvoluntaryreg-istrationbytheprojectsandincludeminorityshare-holdings as well as debt and mezzanine capitalschemes,butfornowthisrepresentsthemostso-phisticatedapproachtotakingstockofCommunityWindprojectsinNRW.

ThroughoutNRWseveralmunicipalclimateprotec-tion or renewable energy initiatives were set up,many of them addressing Community Wind. TheCountyofSteinfurt,whichdecidedtobecomeen-ergy self-sufficient by 2050, can be depicted as abest-practice case of administrative CommunityWind initiatives. Steinfurt created a Wind EnergyService Centre under its Department for ClimateProtection and Sustainability. Additionally, thecounty developed a set of voluntary CommunityWindguidelines,andsincetheirintroduction,everynewly realized wind farm in the jurisdiction hascompliedwiththefollowingstandards:

CommunityWindguidelinesofSteinfurtCounty:

1. Inclusivestakeholderprocess/consultation:landowners,localresidents,farmers,citizens,municipalities

2. Participationopportunitiesandcompensationpaymentsalsoforindirectlyaffectedlandowners,residentsandotherstakeholders

3. Guaranteeofafinancialandconceptualpartic-ipationofcitizens:minimumequityshareof25%inthehandsofindividual,localresidents(notfromthegroupoflandowners)

4. Avoidanceofmajoritysharesofindividual/in-stitutionalowners

5. Lowminimumsharesofroughly1’000Euro6. Inclusionoflocal/regionalmunicipalpublic

utilitiesasmarketingpartners7. Inclusionofregionalbanksasfinancingpart-

nersfordebtcapitalandinvestmentshares(KreisSteinfurt2015).

2.StudyDesignandMethodologyOverthelastfewyearsmanystudiesonCommunityWindhavebeenconducted,especiallyfortheGer-manycase.In2014and2015,againstthebackdropof the upcoming auctions and their (mostly nega-tive) anticipated effects on CommunityWind, thetopicstoodhighontheagendaofassociations,re-search institutes and specialist journals. Unfortu-nately,mostoftheiroutputswerenot,orwereonlypartially,basedontheperspectiveofthepractition-ersofCommunityWind.Thestudyathandaimstofillthisgapaswellastodrawpolicyrecommenda-tions,whichcanassist inmaintaining,orevenen-hancing, the share of CommunityWind in the fu-ture. This also reflects the BMWi’s objective ofmaintainingthecurrent“diversityofplayers”intheupcomingauctions.Thecross-sectionalstudyfollowsanexplorativeap-proachasitaimstogiveathoroughoverviewonthecurrent challenges and potentials of CommunityWindinNRWfromanexperts’perspective.ExpertsaredefinedasCommunityWindstakeholders,pri-marilyCEOs(“projectimplementers”)andCommu-nityWindfacilitatorswithaminimumoffiveyears’experience in project development, theoperationofCommunityWindfarms,orfacilitationofthecon-ceptofCommunityWindthroughindividualorinsti-tutional activities (e.g. association work, admin-istration, and public sector). In addition, the per-spectiveofCommunityWindshareholderswas in-cluded, as a trickle-down effect from expertknowledge can be expected. However, this stake-holdergroupwasonlyincludedinthepopulationoftheonlinesurvey.

Overarchingresearchquestions:

1. HowdoCommunityWindstakeholdersdefinetheconceptofCommunityWind?

2. WhatarethebeneficialeffectsofCommunityWind?

3. WhathavebeenthedriversandbarriersforCommunityWindinNRW?

4. HowdoCommunityWindstakeholdersassesstheupcomingauctions?

5. WhatareattractivebusinessmodelsforCom-munityWindinthefuture?

13


Thoseresearchquestionsset the foundation foramixed-methodsapproach,comprisedofexpert in-terviewsandanonlinesurvey.Whilethequalitativemethodofexpertinterviewsallowsforaguidedbutopendialoguebetweentheresearcherandtheex-pert,theclosed-endedonlinesurveyprimarilyaimstoallowforamorenuancedquantitativeanalysisofabroadersurveysample.Asafirststep,aliteraturereviewonrelevantpolicydocumentsandstudiesonCommunityWind inGermany andNRWwas con-ducted.Subsequently, the firstdraftsof the inter-view guideline and the online questionnaireweredesigned and pre-tested by the project partnersWWEAandLEENRW,aswellasanexpertfromtheEnergieAgentur.NRW. In total, ten expert inter-viewswereconductedbetween26Octoberand16November2015,eightofthemasface-to-faceinter-views and two via phone. The online survey wasopenfrom30Octoberto30November2015.

The analysis of the qualitative interviewdatawasguidedbythe“pooling”methodofQualitativeCon-tent Analysis adapted fromMayring (2002). Afterthe transcription of the expert interviews, a codecataloguebasedontheresearchquestionswasde-rived.Afterafirstscanningofthequalitativedata,the deductively established codes were comple-mentedbyconceptsandcodesemergingfromtherespondents’ answers, rather than theones givenbytheresearcher.

Graph7:Mayring(2002)

Eventually, the resulting code catalogue was em-ployed to structure and reduce the complexity of

thetranscriptsandtoallow,wherepossible,acon-textualized comparison and interpretation againsttheresultsoftheonlinesurvey.Theanalysisoftheonlinesurveyresultswasbasedondescriptivesta-tistics.

3.FindingsandDiscussion

3.1.Compositionofrespondents

Asindicatedabove,therearenoabsolutenumbersavailable on the number and scale of CommunityWindprojectsinNRW.Hence,theonlyavailableref-erence valueof 39projectswas set as the surveypopulation.Inthecourseoftheproject,17CEOsofCommunityWindfarmshavebeenqueried,sevenofthemthroughexpertinterviewsandtenofthemthroughtheonlinesurvey.Instrictstatisticalterms,the sample does not allow for generalizations onthepopulation.However,thesamplealsoincludestwoCommunityWindfacilitators,severalCEOswithbigger project portfolios, as well as a CommunityWindprojectdeveloperwhich isadvisingupto80projects. With regard to the spatial composition,the overall sample includes respondents from alladministrative regions.Against thisbackground, itcanbeassumedthatthestudyhasastrongempiri-calbasis.Hence,theresultsgiveavalidoverviewonthe positions of CommunityWind stakeholders inNRW.

Compositionoftheexpertinterviewsample

• 1 expert on Community Power businessmodels working with the EnergieA-gentur.NRW

• 1 expert on energy cooperativesworkingwithRWGV(regionalcooperativeassocia-tion)

• 1CEOofaCommunityWindprojectdevel-opercurrentlyadvising80projects

• 1CEOofaCommunityWindprojectunderdevelopmentfor6years

• 1CEOsofaCommunityWindenergycoop-erative

• 5CEOsofCommunityWindprojectsorgan-isedasclosed-endfunds

• 3 of them with a bigger projectportfolio also cooperating withenergycooperatives

14


Themajorityofrespondents(COEsandsharehold-ers)canbeattributedtoclosed-endfunds.Twoin-dependentCommunityWindcooperativescontrib-uted,oneofthemthroughanexpertinterviewandone respondent via the online questionnaire. SixCEOs of closed-end fund projects indicated thattheyarecollaboratingwithacooperativeintheop-erationofwindfarms.

3.2.ReflectionontheconceptofCommu-nityWind

This following subsection is only basedon the re-sults of the expert interviews, as the semi-struc-tured interview guideline allowed for an open re-flectionontheconceptofCommunityWind.Mostof the interviewees pointed out that CommunityWindasaconceptisnotlegallydefined,neitherinGermanynorinNRW.Instead,theconceptisopentobeingdefinedaccordingtotheneedsandbeliefsofCommunityWindstakeholders.

Inthisconnection,projectimplementerswithsmallportfolios mentioned that the lack of a commonCommunityWind definition and standards leavesleewayforpurely“commercial”winddeveloperstoframe their projects as CommunityWindwithoutcomplyingwiththeunderlyingprinciplesofthecon-cept.Threerespondentsmentionedthatmunicipal-itiesthatareinterestedinfosteringthedeployment

ofCommunityWindintheirjurisdictionhavediffi-cultiesindifferentiatingbetweenCommunityWindprojectsandtheirmimics.Incontrast,intervieweeswith largerprojectportfolioswere less concernedaboutflexibleinterpretationsofCommunityWind.

ManyexpertsexplainedtheconceptofCommunityWindagainstthebackgroundofcommerciallyoper-atingwind farmsby largeprojectdevelopers. Thelatterwereframedasprojectsthatprimarilyaimtoproducelargeinvestmentvolumesforinstitutionalinvestors not connected to the region of deploy-ment. In addition, the project development costs(“softcosts”)ofcommercialwindprojectsweresaidtobesignificantlyhigher(insomecasesupto25%comparedto5-10%forCommunityWind),becauselargerprojectdevelopersare interested inmakingprofits by selling theprojects after realization, ra-ther than in theoperationphase.As a result, theaddedvaluegeneratedthroughtheprojects isex-pectedtobeextractedfromtheregion.

Thefollowingcataloguesummarizesrecurringchar-acteristicsascribedtoCommunityWindbythe in-terviewees; the numbers in brackets indicate thenumberofexpertswhostatedthosecharacteristics:

CEOofaCommunityWindproject;

10CommunityWind

shareholder; 9

otherCommunity

Windstakeholders;3

Statusoftherespondents

lessthan5years;6

5-9years;3

10-15years;4

longerthan15years;9

HowlonghaveyoubeenactiveinthefieldofCommunityWind?

16

3

1

2

Closed-endfund (GmbH&Co.KG.)

Cooperation: limited+cooperative

Energycooperative

Others

0 2 4 6 8 10 12 14 16 18

HowisyourCommunityWindprojectorganized?

0123456789

Münster Detmold Arnsberg RegionalAssociation

Ruhr

Düsseldorf Cologne

InwhichplanningregionofNRWareyouprimarilyactive?

Graph8

Onlinesurveysampleandbackgroundofrespondents

15


Frequentlymentioned(5-10times)

• Project development by local citizens, moti-vated through local citizens, financedby localcitizens(9)• Exception1:projectsthathavebeeniniti-

ated locally,but realizedbynon-regionalprojectdeveloperswiththeconditionthatprimarily local investors are given thechancetoparticipate(5)

• Exception2:Incasetheequitycapitalcan-notbe raisedby local investors, thepro-jectshouldbeopenedupforawiderpar-ticipationofindividualinvestors(8)

• Denomination structures (division of shares)thatallowfinancialcontributionsofabroadba-sisoflocalinvestors(9)

• Significantcontributiontolocaladdedvalue(9)• Community Power does not exclude larger

windfarms(8)• Debtfinancingthroughlocalbanks(5)• Optional local foundations for distribution of

projectrevenues(5)• Relativelyhighshareofhonorary/voluntaryac-

tivitiesinplanningandoperationofCommunityWind(5)

Lessfrequentlymentioned(2-4times)

• Wind farm owned by a small number of localfarmers and landowners is not a CommunityWindfarm(4)

• Shareofsoftcostsnothigherthan5%(2)or10%(1)

• Transparencyinallactivities,especiallyoffinan-cialaspects(3)

• LegalentityoftheCommunityWindproject inthesamemunicipalityastheturbines(3)

• Project development and operation by thesamegroupofpeople(2)

Fromallthementionedcharacteristics,onlyoneisnotinlinewiththeWWEAdefinitionofCommunityWind. Wind farms that are operated by a smallnumberof local farmersand landownerswereex-cluded from the concept of Community Wind byfour experts, because thoseprojectswere said toclusterthederivedbenefitsonlyinthehandsoffewlocal investors. A strict application of the WWEAstandardswould still identify this specific form ofprojectasCommunityWind.

Municipal participation in Community Wind pro-jectswasseenasarathercontestedissue.Someofthe interviewees included municipal participation(e.g. planning and/or operation, shareholding) intheirdefinitionofCommunityWind,justifiedbythelocal added value and the “people-oriented” ap-proachmunicipalities generally follow. Others ex-cludedwindprojectsprimarilyownedandoperatedbypublic utilities from theCommunityWind con-cept,asthoseareconsideredtoopposetheunder-lyingcommunityprinciple.

Therewasalsonoconsensusonthequestionhowtooperationalisethecrucialterm“local”.Thema-jorityofexpertsrefrainedfromdeployingstrictspa-tial boundaries for CommunityWind projects andpointedtoconceptualflexibilityincaseequitycapi-talcannotberaisedlocally.Someutilizedthespatialjurisdictionsofthehostmunicipalitytodefine“lo-cal”.Oneprojectimplementerfirstofferedprojectshares for residents of the host municipality andlaterwidenedthetargetgroupforresidentsofthehostcounty.Anotherintervieweesuggestedalocal-itycriterion,whichrequiresaminimumof75%oflimitedpartnersshouldcomefromthesamepostalcodeareaastheturbinelocation.

The two interviewees representing cooperativeswereaskedabouttheuniquefeaturesofcoopera-tives for Community Wind deployment. Both ofthemindicatedthatcooperativesarenotsolelyin-vestment vehicles, but inclusive business models,whichenableconceptualparticipationforallcoop-erativemembers.Furthermore,cooperativeswereframed as “easy and comprehensible” businessmodels allowing lay persons to contribute to sus-tainabledevelopment.

3.3.BeneficialEffectsofCommunityWind

In2015astudyofthebeneficialeffectsofCommu-nityPowerinGermanywaspublished.ItconcludedthatCommunityPowerprojects induced tenposi-tive socio-economic effects, of which five can beframedassocietaleffectsandtheotherfiveaseco-nomiceffects(IZES2015).Acatalogueofthoseteneffects was included in the online questionnairewiththeobjectivetomeasureandevaluatetheef-fects from the perspective of Community WindstakeholdersinNRW.Theintervieweeswerenotdi-rectlyaskedtoassesstheeffects;however,during

16


the interviews all of the effects had been men-tioned,excepttheeffectthatascribesthecreationandpreservationofjobstoCommunityWind.

Thefirstfivefactorsareframedassocietaleffects.AsGraph9shows,CommunityWindisseenashav-ingahighinfluenceoninducinginclusionofcitizensin sustainable economic activities (73%), ac-ceptance (100%), societal commitmentwithin theenergy sector (82%), participatory decision-mak-ing/transparency (81%), and regional identity for-mation (86%). None of the presented societal ef-fectswasratedwiththelabel“noinfluence”.

Across all of the teneffects, the societal effectof“acceptance”wasratedthestrongestfromtheper-spective of CommunityWind, a position thatwasalsomentionedbyallinterviewpartners.Theposi-tiveeffectofCommunityWindonlocalacceptanceisalsobackedbymanyempiricalcasestudies.Onestudy conducted in southeast Germany in 2011foundoutthat62%oftheresidentsnexttoaCom-munityWindfarmexpressedapositiveorverypos-itiveopinionandonly 1%hadanegativeor very

negativeattitude. Incontrast,mostresidentsnextto a commercial wind farm expressed a neutralopinion(47%),while26%feltpositiveorverypos-itiveand27%feltnegativeorverynegative(MusallandKuik2011).

Nonetheless, some of the interview partnerspointedoutthatthedeploymentoftheCommunityWindmodelisnotasufficientconditionfortheab-senceoflocalresistanceagainstwindfarms.Coun-termovementslikecitizen’sinitiativesalsoformupagainstCommunityWindprojects.However,thein-terview partners assessed the opposition levelsagainstCommunityWindfarmslowerthanforcom-mercialprojectsthatarenotlocallyembedded.

OutofthefivebeneficialeconomiceffectsascribedtoCommunityPower,onlyfoureffectsareassessedas being significantly influenced by CommunityWind.86%oftherespondentssaidthatCommunityWindhasahighinfluenceontherealizationofpro-jects,whicheitherfailedorwerenotapproachedbyotherplayersinthemarket.Thisfindingcanalsobeillustrated by the experience of one interviewee,

6

4

4

3

10

11

11

12

9

6

11

7

6

10

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

1.Inclusionofcitizensinsustainableeconomicactivities

2.Acceptance

3.Increasesocietalcommitmentwithintheenergysector

4.Participatorydecision-makingandtransparency

5.Regionalidentityformation

InhowfardoCommunityWindprojectsbringaboutthefollowing10beneficialeffects?Part1- Societaleffects

noinfluence mediuminflunce highinfluence veryhighinfluence

1

1

3

1

9

2

12

11

12

6

7

5

8

9

5

13

4

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

6.RealizationofspecificprojectsonlythoughCommunityWind

7.Contributiontodiversityofplayers

8.Formation/Professionalizationofanewbusinessbranch

9.Regionaladdedvalue

10.Creationandpreservationofjobs

InhowfardoCommunityWindprojectsbringaboutthefollowing10beneficial effects?Part2- Economiceffects

noinfluence mediuminflunce highinfluence veryhighinfluence

Graph9

Graph10

17


who realized a project, which first had been fol-lowedbya largeprojectdeveloper,but failedbe-cause of lacking local acceptance. Furthermore, itwasmentionedthatprojectswithexpectedlowre-turnoninvestment,forexample3-4%,arelesslikelytoberealizedbyinstitutionalactors,butforCom-munityWindstakeholdersthoseprojectsarestillanattractiveoption.

The second strongest rating amongall the effectswas attributed to the role that CommunityWindplaysforthediversityofplayers(95%).Incontrast,thecontributiontotheformationandprofessional-izationof a newbusiness branch received the se-condweakestrating,withonly52%ofrespondentsascribinghigh influencetothateffect.Thiscanbeexplainedby today’shighprofessionalization leveland the high share ofwind power deployment ingeneral.ManyexpertspointedtothefactthatCom-munityWindoncewasthecradleofwindpowerde-ployment and introduced the technology to themarket. In this regard, the once positive effectmighthaveweakenedovertime.

With93%,thethirdstrongestinfluenceofCommu-nity Wind was assigned to its effect on bringingaboutaddedvaluefortheregion.Thisopinionsnap-shotwasalsosharedbythe9ofthe10experts.Oneoftheexpertsquotedastudy,sayingthatone2MWturbinecancreateaddedvalueof2,8€millionovera period of 20 years, and if the CommunityWindmodelisapplied,mostoftheaddedvalueremainsin the region (Mühlenhoff 2010). Another expertsaid that Community Wind can be framed as ameans,withaddedvalueasanend.

Incontrast,CommunityWindisnotseenasahighlyinfluencingfactorforthecreationandpreservationofjobs,with60%oftherespondentsonlyascribingmediuminfluencetothiseffect.

3.3. Barriers and Drivers of CommunityWindinNRW

Inthissubchapter,thefocuswillbesetontheiden-tified barriers and drivers of Community wind.Graph11givesanoverviewonthequestionnairere-sultswithregardtotheoverarchingframeworkcon-ditions for wind energy deployment in Germany.Theresultsindicatethattheguaranteedfeed-intar-iff is seenas thesinglemost important regulatoryframeworkcondition fordevelopmentofCommu-nityWind. Thewhole study sample (22online re-spondentsand10experts)agreedconcordantlyonitspositiveinfluenceonCommunityWind.

In opinionof theexperts, the feed-in tariff estab-lishedsafetyofinvestmentsthroughouttheprojectlifetimeof20years.FromtheperspectiveofCom-munity Wind CEOs, once a project had beenproperlyplannedandall of thenecessarypermis-sionshavebeenacquired,aprojectwasseenhomeanddry.Additionally,theFITissaidtohavesentastrongsignalforbankswillingtofunddebtforCom-munityWindprojects.Incombinationwiththeref-erencerevenuemodel,whichonly40%ofthesur-veysampleconsidertobepositive,theconceptofCommunityWindwasabletoexpandfromasmallnumber visionary projects in areaswith very highwindspeeds toamainstreammodelofdecentral-izedsharedownership.

1

1

2

9

12

16

16

12

22

9

5

4

1

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Guaranteedfeed-intariff

Referenceyieldmodel

Costreductionoftechnology

Introductionofdirectmarketing

Prospectusrequirement

WhichofthefollowingframeworkconditionshavebeendecisiveforthedeploymentofCommunityWind?

negative neutral positiveGraph11

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However, theoverarching regulatory frameof theRenewable Energy Sources Act, which comprisesbothoftheabovementionedmechanisms,experi-encedfrequentamendmentssinceitsenactmentin2000.Intheexpertinterviews,projectimplement-ersmentionedthattheyalwayshadtocountonreg-ulatorychangesthatcouldhappenduringthereali-zation process. Negative comments on the refer-ence revenuemodelwerebasedon the fact, thatthe current EEG version does not include 70% or60%locations,whicharequitefrequentthroughoutNRW.Nosignificanteffectshavebeenattributedtothecostreductionofwindtechnologyorthelegalobligation for direct marketing, neither by theonlinesamplenorbytheexperts.

A barrier for CommunityWind, at least from theperspective of community stakeholders workingwithclosed-endfunds,wasattributedtothepro-spectusrequirements(forecastingofrevenues) in-troducedin2009.40%oftheonlinequestionnairerespondentsevaluatedprospectusrequirementsasanimpedingandcostlyfactorforCommunityWinddeployment.Threeexpertsandprojectimplement-ersquestioned thegeneralusefulnessofprospec-tuses,astheyonlyhavetocomplywithformalrules,rather then being evaluated on the basis of theircontent. In addition, prospectus exemptions forwindfarmsorganizedasclosed-endfundsownedbylessthen20shareholdersandlargedenominationsareinconflictwiththeCommunityWindmodel.

Renewable energy targets, both on federal andstatelevelarenotseenasdecisivefactorsforCom-munityWinddeployment(seeGraph12).With41%,

8TheWindEnergyDecreeinits2015versionwasnotyetenacted/publishedatthetimeofthesurvey/inter-views.

thepositiveratingoftherenewableenergytargetsofNRWwereminimallyhigherthantheonesfortheGermanrenewableenergytargets.Intheopinionoftheexperts,theNRWtargettoreacha15%shareofwindenergyintheelectricityportfolioisseenasanimportantpoliticalmessage,notmoreandnotless.Thetargetsareconsideredtobemoreuseful,iftheywouldbeformalizedinthenewdevelopmentplanofNRW,inordertobedecisiveforindividualcon-siderationsofwindpowerdeployment.Againstthebackgroundofthecurrentpaceofwindpowerex-tension,theachievementofa15%goalby2020wasdescribedtoberatherunrealistic.

Whenlookingattheassessmentofrespectiveregu-latoryandplanning frameworkconditions inNRW(seeGraph13),itcanbeobservedthatmostitemshave been considered as neutral for CommunityWind.OnlytheNRWWindEnergyDecreeinits2011

version8wasclearlyconsideredasapositiveframe-work condition (57%). The experts explained theWindEnergyDecreeprovidesaguideline toassistsubordinate administrations in forming their deci-sion for or against wind power deployment. The“verbal commitment” to the Community PowerconceptinoneofthefirstparagraphsoftheDecreewasconsideredpositive,butisnotsaidtohavehadanyinfluenceonthebasicworkofCommunityWindproject implementers. No specific support meas-urements are put in place, hence project imple-mentersgetthefeelingthattheyareleftaloneandthattheirworkisonlyappreciatedwhentheyman-agetorealizeaproject.Alsotheupcomingamend-menttothedecreewasnotexpectedtobringabout

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ArerenewableenergytargetsdecisiveforCommunityWind?


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ground-breaking changes,but rather toadd somedetailsandrelevantcourtdecisions.

Besides the Wind Energy Decree, a guideline forwindenergy inforestsandforspeciesandhabitatprotection and wind energy exists. Similar to theWindEnergyDecree,thoseguidelinesserveasaref-erenceformunicipalities,projectdevelopersandli-censing authorities dealing with wind power de-ployment ingeneral.Whilethetwoguidelinesarefoundonthebottomranksoftheevaluation–only13 % consider them as positive for CommunityWind, and in the case of the species and habitatguideline, thenegativefeed-backwasevenhigher(17%)–theopinionoftheinterviewedexpertsde-viatedfromthoseresults.

Someexpertspointedoutthattheimpactsofthosetwodocuments,aswellastheWindEnergyDecree,canonlybemeasuredagainstwindpowerdeploy-mentingeneral.Thisisbecausenoneofthosedoc-uments specifically incentivises Community Winddevelopments. From the developers’ perspective,theypointedoutthattheforestguidelineinitses-sence is useful, but that many municipalities stilltreat forests as taboo-zones for wind energy de-ployment.Withregardtospeciesandhabitatpro-tection, the experts mentioned that the require-mentsandassociatedcostofrelatedinvestigationsandpermissionsareveryhigh,hencetheyincreasethefinancialburdenonCommunityWindprojects.Becauseofthis,manyexpertsconsideredasimplifi-cationofproceduresasimportant.

Municipalclimateprotectionandrenewableenergyinitiativeswereratedaspositiveframeworkcondi-tions by 35 % of the survey sample. The expertsstatedthatwindenergyfriendlymunicipalcouncilsandmayorsaremoreandmoreinterestedinlocalacceptanceofwindenergy,whichbringsCommu-nityWind onto their agendas; however, they arenot entitled to legally enforce Community Wind.Nonetheless, their attitude canbe a very decisivefactor in favourofCommunityWind (seealso theexampleofSteinfurtcountyinChapter1.4.).Inonecase,amunicipalclimateinitiativewasconsideredtobemaindriver for thesuccessofaCommunityWindproject,whichpreviouslyfailed.ParticipationbylocalpoliticiansandmunicipalitiesinCommunityWind projects was also considered an importantfactor forenhancing localacceptance. Inaddition,experts believe that municipal renewable energytargets enhance the sense of urgency to deployRETsandserveasadriverforCommunityWind.

Graph14

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WhichofthefollowingplanningandregulatoryframeworkconditionshavebeendecisiveforCommunityWind?


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Graph14showshowtheparticipantsoftheonlinesurveyassessedthenetworkingstructuresforCom-munityWindstakeholdersinNRW.Themajority(45%)consideredthenetworkingstructuresasneutral,followedby40%whothinkthattheexistingstruc-turesaregood.Threerespondentswerenotsatis-fiedwiththeexistingnetworkingopportunitiesandtheresponseoption“verygood”wasnotchosenatall. When the experts were asked about existingnetworkingstructures,theymentionedregularget-togethersandweb-basedinformationplatformsbytheEnergyAgencyofNRW.Inaddition,theregionalassociationoftheGermanWindEnergyAssociationinNRW(BWENRW)wasmentioned.Sofar,noneofthe existing networking structures are specificallyaimedatCommunityWindstakeholders.TheexpertworkingwiththeEnergyAgencyofNRW,whichalsooffers a free initial consultation for CommunityWind stakeholders, when queried stated that aCommunityPowernetworkwillbelaunchedinthebeginning of 2016 (the initial event took place inJanuary2016).Furthermore,theregionalcoopera-tiveassociation(RWGV)offerstraining-sessionsandget-togethersforitsmembersonaregularbasis.

TheremainingfindingsofthissubchapterondriversandbarriersofCommunityWindinNRWaresolelybasedontheresponsesoftheinterviewedexperts.Whilethecommitmentofthestategovernment(atleastforwindpowerdeploymentingeneral)canbedepicted as a driver, all of thementioned frame-workconditionscanbecategorisedasbarriers forCommunityWind.

Politicalcommitmentofstategovernment

Thewind-friendlyattitudeofthecurrentstategov-ernmentwasseenasanimportantdriverforwindenergydeployment,However,someprojectimple-mentersremarkedontheslowpaceofpoliticalde-cision-makingprocesses in favourofwindenergy;thetrickle-downeffectofstateregulationstomu-nicipaladministrationsespeciallyisperceivedasbe-ing very slow. The state’s objective to foster 100new energy cooperativeswas seen as positive bytwoexpertsrepresentingCommunityWindcooper-atives. However, they doubted that this objectivewillbeachievedinthenearfutureandtheydidnotfeelthatsupportmechanismsforenergycoopera-tiveshavebeeninstitutionalizedsofar.

Competitionwithcommercialprojectdevelopers

Themajorityofexpertsexpressedconcernsontheveryhighleveloflandleases(upto12%ofthean-nual revenues) promised to land owners by com-mercialwindprojectdevelopers.CommunityWindprojectsusuallyofferlandleasesupto5%,hencetheycannotcompetewithlargerplayersinthemar-ket,atleastwherelandownersareonlymotivatedbyhigherindividualpayments.

With regard to the general costs of CommunityWindprojects, thesmallCommunityWindprojectimplementers considered their projects to have aleanercoststructureinthedevelopmentphase,assomeof theiractivitiesareconductedonavolun-tarybasisandtheirprojectsaredesignedtogener-ate profits in the operation phase. In addition,transparent and inclusive processes attributed toCommunityWindareexpectedtolowercostsaris-ingfromconflictsdueto localresistancetoapro-ject.Nonetheless,theactivitiesofCommunityWindstakeholders are believed to have higher transac-tioncostswhenitcomestotheactivationofpoten-tial investors, raising debt capital and negotiatingcomponentprices.

Complexityofplanningandprofessionalization

OneofthemajorbarriersforCommunityWindde-ploymentwasattributedtotherisingcomplexityofplanning processes, which requires CommunityWind stakeholders to professionalize their activi-ties. In this regard, project implementers withsmallerprojectportfoliospointedoutthattheyareheavily dependent on knowledge and expertise,which makes independent project developmentveryresourceintensive.Onepossibleoptiontoac-quireknowledgewasattributedtogoodnetworkingstructures and interpersonal relations betweenCommunityWindprojectimplementersandfacilita-torswhohavealreadybeensuccessful.Eventhoughindependent bottom-up development of Commu-nityWindprojectswaspossible in thepast,manyexpertsnowthink thatwithoutprofessionalassis-tanceandsupervision,aswellascommittedanden-duringindividualswhosteertheprojectthroughthedevelopmentphase,CommunityWindinitsclassicconceptionwon’tbepossibleinthefuture.

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Another aspect related to lacking professionaliza-tionisattributedtothelowlevelofagencyandlob-byingofCommunityWindstakeholders.Intheopin-ionofoneexpert,theelusivecharacterofCommu-nityWindandthelackoffinancialresources,aswellasthelackoftimeforadditionalvoluntaryactivities,areconsideredthecauseofthisproblem.Especiallyonthefederallevel,thelackofadvocacyisdeemedaproblemasCommunityWindstakeholdersareex-pected to loseoutagainstbigger, resource-strongplayersinthewindmarket.

Conflictswithwindenergyopponentsandspeciesconservationassociations

In general, Community Wind projects are said tocontribute significantly to the local acceptance ofwind turbine landmarksand cause lower levelsofresistance by citizens’ initiatives, but CommunityWind is not considered a panacea for any kindofconflict.However,incaseaconflictarisesduringthedevelopment phase, the experts consideredCom-munityWindprojectstohaveanadvantageoverex-ternaldevelopersasCommunityWindproject im-plementers are usually well connected and ap-proachable on the local level. Furthermore, Com-munityWindprojectimplementersmentionedthatthey deployed the following strategies to preventconflictsfromarisinginthefirstplace:transparencythroughfactsheetsandconsultations;directfinan-cial contributions through participation and landlease systems, including adjoining properties; andindirect financialcontributionsthrough local foun-dations to maintain rural infrastructure. When itcomestolocalconflicts,themediaisconsideredtoplayanimportantroleinmitigatinglocalresistancethroughbalancedandfact-basedcoverage.

Onemajordriverofconflictswasattributedtotheactivitiesofsomenatureconservationassociations.Manyexpertspointedtothefundamentalopposi-tionwithinthisstakeholdergroupwhenitcomestowindprojectdevelopments,nomatterwhethertheprojects are realizedasCommunityWindor com-mercial wind farms. The example of the HilbeckCommunityWindfarmwasmentionedbyeveryex-pert. In this case, an already commissioned windprojectwassuedincourtandhadtoshutdownitsoperationbecauseathreatenedspecieswasspot-tedinitsvicinity,eventhoughtheprojectdevelop-

erscompliedwiththeregulationssetbythemunic-ipality.Thisspecialcasewasconsideredtohavehadstrong signal effects for Community Wind stake-holderswhomightbedeterredbythecourt’sdeci-sion,astheycouldfearsomethingsimilartohappentotheirprojects.

SocietalbackingoftheEnergiewende

Anotherfrequentlymentionedfactor,claimedtobean impediment for thedeploymentofCommunityWind,was the general decline of societal backingforCommunityWind,renewableenergyandtheEn-ergiewendeingeneral.Whilepoliticalsupportandsocietal backing of Community Wind was verystrong intheaftermathoftheFukushima incidentin 2011, today the general interest is decliningagain.One expert said that the longer Fukushimaliesinthepast,thebiggerthecriticismofwinden-ergy.Anotherexpertremarkedthatacceptancelev-elsdecreaseand“Not-In-My-Backyard”mentalitiesareontherise,fosteredbythemediacoverageonrenewablesthatfocusesontheissueofrisingelec-tricityprices.

However,duringtheinterviews,threerespondentsexpressedthefeelingthatthe(atthattimestillup-coming) COP21 meeting of the United NationsFramework Convention on Climate Change ParishadthepotentialtosetrenewablesandCommunityWindbackon the agenda.Oneexpertwasof theopinion that commitment towards renewables onaninternationallevelcanhaveastronginfluenceonthegroundaspeoplecheckwhat isbeingdone inother countries,andare reluctant tochange theirattitudeifnobodyelsedoes.

3.4.CommunityWindandCompetitiveAuc-tioning–OpinionsandExpectations

ThefollowingsubchapterwilldealwiththeopinionsandexpectationsofCommunityWindstakeholderson theupcomingcompetitiveauction scheme.Upuntilthetimeoftheinterviewsandtheonlinesur-vey,theBMWihadonlypublisheditsfirstversionofkey points on auctions for onshore wind energy.Thisinitialversiondidnotyetincludeadecisiononthede-minimisruleortheone-tierreferencereve-nuemodel (see latest version in Chapter 1.3. andAnnex1),thoughotherkeypointswereincludedinthefirstversion.

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Graph15

Theresultsoftheonlinesurvey(Graph15)showaveryclearpicture.Alloftherespondentsassessedtheupcomingauctionsasbeingnegative,with68%of the respondents expecting “very negative” im-pacts on the activities of CommunityWind stake-holders.Thisbleakoutlookwasalsosharedbymostofthequeriedexperts.Inparticular,theshareofin-dependentbottom-upCommunityWindprojectsisexpectedtodropsignificantly,andtheexpertswit-nessedthatsmallplayersarealreadypullingoutofprojectdevelopment.TheexpertworkingwiththeEnergy Agency indicated that many CommunityWind stakeholderswhowant to initiate new pro-jectshesitatetotakeaction.

Allexperts,whowereintheprocessofprojectde-velopment spokeof a “final spurt”with regard toCommunityWindprojects.Thismeansthatmostof

theprojectimplementersaimforapermissionbe-foretheendof2016inordertoreceivetheguaran-teedfee-intariffandnottotakepartintheupcom-ingauctions.However,bythetimeoftheexpertin-terviews, there was still hope for a properly de-signed final versionof theauctioning scheme,ad-dressingtheneedsofCommunityWindstakehold-ers,especiallyastheBMWistatedthepreservationofthecurrentlyhighshareofthediversityofplayersasoneoftheirkeyobjectives.

Graph 16 shows the online survey results on thequestioninhowfarthepositedpositiveoutcomes,whichproponentsoftenrelatetoauctions,areex-pected to be achieved. Again, the general picturelooksrelativelybleakfromtheperspectiveofCom-munityWindstakeholders.Theonlylikelyoutcomeseems to be the steering of extension quantitieswithaslightmajorityof53%,whichalsocomprisesthethreerespondents,whothinkthatthisoutcomewillbeachieved.Intheopinionoftheexperts,the“steering”ofextensiontargetswasalreadypossiblewith the feed-inmechanism as the remunerationrateswerecalculatedagainstextensionrates.

In contrast to the steering of extension qualities,only22%oftherespondentsthinkitislikelythattheauctionscancaterforaregionallybalancedexten-sionofwindpower.However,someexpertsframedtheregionalbalanceofwindenergyextensionasavery pressing issue, as in somewind intensive re-gionsintheNorthofGermanywindproducershave

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Fairprice-setting

Inhowfarwill thefollowingobjectives/outcomesbeachievedaftertheintroductionofauctions?

willnotbeachieved unlikely likely willbeachievedGraph16

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tobecurtailed,whileremunerationratesformod-erate wind regions with stable distribution net-works(like inNRW)donotenableviableprojects.Against this background, someexperts pointed totheusefulnessofone-tierreferencerevenuemodelincluding60%locations,whichbythattimewasstillunder development and not yet integrated in thekeypoints.

Themajorityof the respondentsdonot share theassumptionthatauctionswilldriveinnovations.73% assume that auctionswon’t create a conduciveenvironment for innovation, while the remaining27% considers innovation through competition aslikely. One expert pointed out that the upcomingauctionswillputenormoustimepressureonwindprojectdevelopersastheyhavetofearpenaltiesiftheprojectisnotrealizedintime.Thisaddstothepressureofdesigningaprojectascheaplyaspossi-ble.Thosetwofactorswereseenasamajorimped-iment forCommunityWindproject implementers,toworkwith innovative technologies thatarenotyet business-as-usual components, and to try outprocessinnovationswithregardtointegrativeplan-ning.Thisisseenasamajorstep-back,becausetheexpert considered that in the past, CommunityWindwas able to introduce innovations tomain-streamprojectdevelopment.

The likelihoodofauctionsbringingabouta reduc-tionofelectricityproductioncostswasratedasun-likelyby82%oftherespondents,including27%ofrespondentswhothinkthatthereductionwillnot

beachievedatall. In thesame light, therespond-entsareveryscepticalaboutthepostulatethatat-tributes “fair price-setting” mechanisms to auc-tions.50%oftherespondentsdon’tthinkthatauc-tionswillbringabout“fair”prices forwindpowerprojects; 40%evaluate this potential outcomeasunlikely.Alsofromtheexperts’pointofview,pricesarenotexpectedtodropinthelongterm.Onere-spondent predicts prices to drop during the firstauctionrounds,buttoriseagainwhenstrategicbid-dingispracticedandriskpremiumsareaddedtothebids, also pointing to some international experi-encessuchasthatoftheUnitedKingdom.Anotherexpertmentionedthatheexpectsthelegislatortointroduceamaximumprice,whichwouldonlyallowforpricereductionsortoadjustpricesbychangingextensionquantities,which to theexpert’sunder-standing cannot be claimed as fair price-settingthroughmarketmechanisms.

Graph17summarizestheassessmentofexpecteddisadvantagesforCommunityWindundertheup-comingauctions.Ingeneral,alltheexpectedeffectswhichhavebeenincludedinthequestionnairearerated as negative; only one respondent rated thepenaltyriskstohavenoinfluenceontheactivitiesofCommunityWindstakeholders.

Therising (bureaucratic)complexityofprojectde-velopmentthatgoesalongwithauctioningschemesisseenasamajorimpedimentforCommunityWindprojects.52%oftherespondentsexpectthiscom-plexitytohaveverynegativeeffects;theremainderexpectnegativeorlownegativeeffects.Allqueried

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HowdoyouassessthefollowingriskstypicallyassociatedtoauctionsfromtheperspectiveofCommunityWind?

noinfluence lownegativeeffect negativeeffect verynegativeffectGraph17

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experts expect that “first-time” CommunityWindimplementers, who independently develop theirprojects,facehugedifficultiestobeingsuccessfulinauctions.OnlyCommunityWindprojectsofexperi-enced implementersareexpected tohave the re-sourcesandtheknow-howtobecompetitivewithlargerplayersinthemarket.ThisisalsobackedbythepredictionthatsingleCommunityWindprojectsand inexperienced implementerswon’tbeable topracticestrategicbidding,whichleadstoacompet-itivedisadvantageofthisgroup.Thepossibilityofnotwinningabidisseenasama-jorriskforCommunityWindprojects,with55%ofthe respondentsconsidering this risk tohaveverynegative effects. Theexperts explained thatCom-munityWindprojectsgenerallydonothavehighercosts than commercial wind projects, hence theyareabletocompetewithlargerprojectdevelopers,but this level playing field is said to change onceauctionswillbeintroduced.Giventheriskofnotbe-ingsuccessful,CommunityWindimplementersmaynotbe inaposition toacquireventurecapital forrequiredpre-developmentactivitiesandasaresultmaywithdrawfromthemarket.Inmostcases,Com-munityWindimplementerswithsingleprojectsarenotseenasbeingabletodistributefinanciallossesincaseoffailingintheauction.Withaguaranteedfeed-intariff,CommunityWindimplementerscaneasilycalculatethereturnofin-vestment for potential shareholders, members orinvestors.Auctionsmakethisprocessmoredifficult,asthefinalremunerationthataprojectisexpectedto receive cannot easily be predicted in advance.48%oftherespondentsconsiderthistohaveaverynegativeeffectonCommunityWinddevelopmentandtheremainingrespondentsexpectnegative(42%) or lownegative impacts (10%).Oneof the ex-pertspointedoutthataninsecurerateofreturncanprolongtheacquisitionofequitycapital,delaytherealizationprocessofaproject,hencethepenaltyrisk isenhanced(seenextparagraph). Inaddition,the prospectus requirement poses another chal-lenge forCommunityWind implementersworkingwithclosed-endfunds,hencethereturnoninvest-mentisnearlyimpossibletocalculate.Furthermore,unsuccessfulbidsmayhave tobe recalculated forbeingabletoparticipate in futurebiddingrounds,

whichentailsadditionalcostsattributedtoprospec-tusrequirements.Lastly,penaltyrisksareaddinguptothelistofim-pediments for CommunityWind projects. 40% ofthe respondents considered penalty risks to haveverynegativeeffectsforCommunityWind,onlyonerespondentdidnotconsiderpenaltyrisksto influ-enceCommunityWindprojects,andtheremaining55% share the categories “negative effects” and“lownegativeeffects”.Theexpertsconsideredbidbondsasanadditionalbarrierforsmallprojectde-velopers and questioned the usefulness of bidbonds(30’000€perMW)asthecapital,whichisputin thepre-developmentofaproject (estimatedat100’000–300’000€perturbine)canalreadyserveasaproofforthewillingnessofadevelopertoreal-izeaproject.AnoptiontoevadethisnegativeeffectonCommunityWindprojectsisseeninthepossibil-ityof requiringasafetydepositonly incaseofanacceptedbid.Inthiscase,banksarebelievedtobelessaverseingrantingtherequiredamountasaddi-tionaldebtcapital.Based on the previous findings the following riskcatalogueforCommunityWindprojectscanbede-rived:

RiskcatalogueofCommunityWindprojects

• windresourceassessment(yieldrisk)• speciesandhabitatassessments• political consent with regard to land-use

plan• emissioncontrolapproval• complaint proceedings (ex-ante/ex-post

projectapproval)

Additionalrisksunderauctions

• riskofbidacceptance• financial feasibility (equity,debtandven-

turecapitalacquisition)• penaltyrisks

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Thede-minimisrule,includedintheEnergyandEn-vironmentStateAidGuidelinesbytheEuropeanUn-ion(seeChapter1.3.),generallyallowsfortheex-emption of small renewable energy projects fromauctions. According to the EU Commissioner forcompetitionpolicythelargestwindfarmthatcouldbebuiltwithouttakingpartinauctionswouldbenolarger than18megawatts. By the time theonlinesurveyandtheexpert interviewswereconducted,several de-minimis designs and eligibility criteriawerediscussedandfedintotheofficialconsultationprocess. As a properly adapted de-minis rulewasexpectedtobeseenaspositivefromtheperspec-tive of Community wind, three possible optionswereproposedtothesurveyparticipants.

Graph18showstheaverageassessmentbythere-spondentsonascalerangingfrom0(optionisseenasnotimportantforCommunityWind)to3(optionisessentialforCommunityWind).Thefirstoptionofa general exemption mechanism for smaller pro-jects (with a maximum amount of 6 turbines x 6MW)wasratedwithameanof2,4,indicatingthatthisde-minimisoption isconsideredas feasibletocater for the needs of Community Wind farms.However,expertspointedoutthatanapplicationofthe6x6thresholdcouldcausetwoquestionableef-fects.Ontheonehand,itmayconfineCommunityWindstakeholderstorealizeonlysmallprojects.Ontheotherhand,largerwindplayerscouldbeincen-tivised to develop small projects. Amore generalproblemwasattributedtothefactthatthecurrentmarketshareofwindfarmswithlessthenfivetur-binesismorethan60%,hencethemajorityofnew

windfarmsisexpectedtofallunderthe6x6thresh-old.The second option, a general exemption mecha-nismforaone-timemarketparticipation,wasalsoratedasveryimportant(averagevalueof2,3).Thisoptionwasseenas favourablebysomeof theex-perts,asindependentlydevelopedbottom-upCom-munityWindfarmsareexpectedtorealizeonlyoneproject.However,expertsdoubtedthatsuchade-signcanbeeasilyputintopractice,andpointedtothedifficultiesofdefining“one-timemarketpartic-ipation”.Lastly, a separate auctioning mechanism only forsmallerprojectswasproposed.Thisoptionyieldedanaverageof1,8which is less thantheotherop-tions,butisstillseenasaveryimportantoptionforCommunityWindprojects.Noneoftheexpertsex-plicitlymentionedorcommentedthiskindofoptionwhenaskedaboutpossiblede-minimisdesigns.Oneexpert proposed an exemptionmechanism basedon the criterion that a minimum of 75% of theshareholderscomefromthesamepostalcodeareainwhichthewindfarmislocated.Thismechanismwouldensurethatthemajorshareofaddedvalueremainsintheregionofdeployment.ManyCommunityWindexpertspointedtothegen-eralproblemofexemptionmechanisms.IncasetheexemptedprojectswouldreceivetheremunerationbasedonthecurrentEEGrates,bytheendof2018theywould only receive 7,68 euro cent per kWh.

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HowdoyouassesthefollowingexemptionoptionsforCommunityWindunderauctions?

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Graph18

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Against this background, it was suggested to ex-cludeCommunityWindprojectsfromthemainauc-tioningprocessandtoautomaticallygrant themaremunerationbasedontheaveragepriceofthelat-estthreeauctions.AsmentionedinChapter1.3,theBMWi decided not to include an exemption forsmallplayersbasedonthede-minimisruleasofthefinalversionofkeypoints.Besidesexemptionmechanisms,otherpossibleauc-tion designs reflecting the competitive disad-vantageofCommunityWindfarmsexist.Fourpo-tential design options have been included in theonline questionnaire. The option, which rankedhighestwithanaveragevalueof2,1weresimplifiedqualification requirements for Community Windprojects.Theansweroptionincludedthreecompo-nents: lower bid bonds, lower penalty rates andlonger realizationperiods.Furthermore, simplifiedqualificationrequirementscouldalsoincludeapar-ticipationinbidroundswithouthavingacquiredanapprovaloftheprojectundertheFederalEmissionControl Act (BImSchG approval). Another optionconnectedtosimplifiedrequirements forCommu-nityWindprojectscouldbeseenintheintroductionofasafetydeposit,whichwouldbedueonlyafteraprojectwassuccessful inthebiddingprocess.Thissafety deposit would replace the currently pro-posedbidbond,whichhastobepaidwhenthebidisentered.Thatparticularoptionwasseenasaper-tinentsolutiontomitigatepenaltyrisksforCommu-nityWindprojectsandwasalsomentionedbysomeoftheexpertsandthesurveyrespondentsconsid-ered this design option as very important (1,9).Against the background of those results, the

BMWi’sdecisiontolowerthequalificationrequire-ments(noBImSchGapprovalrequiredandasplitofthebidbond)forCommunityWindprojectsinthelatestversionofproposedkeypointscanbeconsid-eredasanimportantbutstill insufficientfirststepintothedirectionofamore levelplayingfieldbe-tweenthecompetingmarketplayers.Financial support programs for the developmentphaseofCommunityWindprojectsyieldedanaver-ageof1,6,henceconsideredtobesomewherebe-tweenimportantandveryimportant.Sofar,Com-munityWindprojectsaresaidtohavenoproblemswhenitcomestoacquiringequity,debtorventurecapital.Expertsindicatedthatingeneralthereisahuge demand from potential Community Windshareholders to invest inprojectswith single-digitrates of return and (mostly local) bankswilling toprovidefordebtcapital.However,theneededven-ture capital for pre-developmentofwindprojectshasrisenoverthelastyearsandnow,therestruc-turing towards auctions is expected to introducehighbidacceptancerisks.Asaresult,smallCommu-nityWindimplementersareexpectedtohavediffi-culties inacquiringcapital fortheirprojects,espe-ciallyventurecapital.So far, therearenoventurecapitalsupportschemestargetingCommunityWindprojectsinNRW.However,expertswereawarethatthe statebankofNRW(NRW.Bank) is consideringtheintroductionofaventurecapitalschemeaimedatCommunityWind,whichwasconsideredpositivebytheexperts.Lastly,theoptionofstatutoryshareholdingquotasfor local residents for all auction participantsyieldedanaveragevalueof1,2,makingthisoption

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HowdoyouassessthefollowingauctiondesignoptionsfromtheperspectiveofCommunityWind?

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Graph19

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theleastattractive(butstill“important”)oneintheproposedcatalogue.Thisresultwasalsoreflectedbytheexperts’opinionwhoexpressedthatshare-holdingquotasareconsideredtobedifficulttoen-act andmay be conflictingwith regulations, bothfromthenationalandtheEuropeanlevel.Denmarkintroduced a shareholding quota of 20% for localresidents foronshorewinddevelopments in2009andthestategovernmentofMecklenburg-WesternPomeraniaplanstoreplicatethismodel,currentlywaiting for the state parliament to pass the pro-posedlawinMarch2016.ThequeriedCommunityWind experts considered the initiative by the re-spective policy-makers as positive, however, theyalsoexpressedthatlegallybindingminimumshare-holding quotas only scratch on the surface of theproblemandarenotexpectedtomitigatethecom-petitivedisadvantagesofCommunityWindprojectsinauctioningschemes.ChancesforcommunitywindprojectinauctionsTheinterviewsmethodalsoenabledtheresearchertoaskCommunityWindstakeholdersforanyposi-tiveaspectstheyrelatetoauctions.Themajorityofexpertsmentionedthat inthe longterm,auctionsmayinducehigherremunerationratesforproducedelectricity than the currently determined feed-intariffrates.However,itwasdoubtedthatthelegis-lator would accept such a price development tohappen (the recently introduced minimum pricevalidatesthisassumptionbytheexperts).Further-more,someexpertspointedtothepossibilitythatveryhighlandleasescoulddisappearandexcessre-turns might be reduced, which in turn could en-hance the competitiveness of Community Windprojects.Therewasaconsensusbetweenmostofthe experts that a proper auction design, whichtakes intoaccountthespecificchallengesofCom-munityWindand,furthermore,valuesthespecific

beneficialeffectsthosekindofprojectsbringabout,mightintheorybesuitabletomaintainthecurrentlevel of diversity of actors, however, such systemwouldneedtotakeintoaccountmanycomplexfac-tors.

3.5.TheFutureofCommunityWind

Thelastpartofthesurveyandtheexpertinterviewswas designed to identify future business modelsandways toprofessionalize the activitiesofCom-munity Wind. The online questionnaire includedthreethematicblocks(repoweringactivities,futureactivitycatalogueandtheusefulnessofnetworks,informationplatformsandassociations),whiletheinterviewguidelinewasstructuredmoreopenlyandalsoaimedtoidentifyconduciveframeworkcondi-tionsforfutureactivitiesbyCommunityWindstake-holders.

Besides wind power extension through newlyaddedcapacity,repoweringofwindfarmsiscrucialtomeettheambitiouswindpowertargetsofNRW.Graph20 shows the assessmentof the survey re-spondentswithregardtofuturerepoweringactivi-tiesforCommunityWindprojects.Whilerepower-ing of already existing Community Wind projectswasconsideredtohaveahighpotential(71%),theoptionof transforming a “commercial”wind farmintoaCommunityWindfarmthrougharepoweringprocesswasconsideredtohavelesspotential.19%oftherespondentsclaimedthatthisoptionhasnopotentialand43%attributingalowpotential.

Totheopinionoftheexperts,repoweringprocessesare said to be very resource intensive, especiallywhenlandleasestructuresneedtoberearranged.Usually, smaller Community Wind formations areconsideredto lackknow-howandthefinancialre-sources to perform repowering activities withoutthehelpofprofessionalprojectdevelopers.Incon-

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TransferofconventionalwindprojectstoCommunityWindthrough repowering

HowdoyouassessthepotentialofrepoweringactivitiesforCommunityWind?

nopotential lowpotential highpotentialGraph20

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trast, more experienced Community Wind imple-menterswithlargerprojectportfoliosalreadyprac-tice repowering.Oneexpertwas involved in a re-powering process that resulted in the decommis-sioningofseventeenturbines,whichwerereplacedbynineturbineswithahighercapacity.Thenegoti-ationsandrearrangementof land leasestructuresrelatedtothisprojecttookaroundthreeyears.

The expertworkingwith the regional cooperativeassociationexplainedthatuntilnow,noCommunityWindcooperativeinNRWrepoweredaproject,butobservedthatthereisageneralinterestonrepow-eringactivities in the future.Thisobservationwasshared by the expert working with the EnergieA-gentur.NRW,whichalsooffersfreeinitialconsulta-tionofCommunityWindstakeholdersinterestedinrepowering.Someexpertsconsideredthetransfor-mationofa“commercial”windfarmintoacommu-nitywind farmtobean interestingoption for thefuture.However,mostof theexpertspointedoutthatthecurrentframeworkconditionsaswellastheupcomingauctionsarenotexpectedtofostersuchanoption.

Graph21summarizestheresultsoftheonlinesur-veys’questionblockoninnovativeactivitiesorbusi-nesslinesbesidethebasalrealizationandoperationofCommunityWind farms.Therespondentswereabletoindicateiftheyarealreadyactiveinthere-spectivelineofbusinessorplantodosointhefu-

ture.Lastly,therespondentswerealsoabletoindi-cate,whethertheproposedactivitiesarenotonthefutureagendaoftheirCommunityWindprojects.

Theprovisionofelectricitytariffsspecificallyforlo-cal/regionalcustomersranksthetoppositionoftheproposed list. 53% of the respondents are inter-estedinregionalmarketingoftheirproducedelec-tricityandthreeoftherespondentsalreadyimple-mentedsuchatariff.Only32%oftherespondentsdonotconsiderregionalelectricitytariffsasafuturebusiness line. To the opinion of the experts, lo-cal/regionalelectricity tariffspresent themostat-tractivebusinessopportunityforCommunityWindprojectsatthemoment.Oneexpertindicatedthatincaseconduciveregulatoryframeworkconditionsforregionalelectricitytariffswouldexist,everysin-gle Community Wind project would include suchtariffs in its portfolio. Moreover, local tariffs areconsideredtoleadtohigheracceptancelevelsaslo-cal people who do not directly participate in theprojectcouldhavethechancetobenefitfromlowerelectricityprices.However,aftertheabolitionofthegreen electricity privilege (Grünstromprivileg) andthe introduction of obligatory directmarketing in2014, Community Wind projects face regulatorybarriersinsettingupregionalelectricitytariffs.Thiscouldexplainwhy32%oftherespondentsdonotplantoimplementregionalelectricitytariffsinthefuture.

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Energyproduction fromotherRET

Energyefficiency

Storage

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Whichinnovativemodels,processes,andtechnologiesareyoupursuingorplantopursueinfuture?

notplanned ofinterest alreadyactiveGraph21

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EnergyproductionbyotherRETsrankedsecondonthe list as four respondents (22%) indicated thattheydoalreadyhaveother renewables thanwindenergyintheirenergyproductionportfolios.Onthecontrary, the majority of respondents (56%)pointed out that they are not planning to widentheirportfolio.Theremainderof (22%)still showsinterestinotherRETs.Thisratherbleakoutlookformore versatileRETportfoliosofCommunityWindprojectswasalsosharedbytheexperts,whoaboveall considered the remuneration cutbacksand thealreadyintroducedauctionsforsolarenergytobeareasonsfortheirnegativeassessment.

Thethreeanswercategoriesenergystorage,e-mo-bility andenergyefficiency all received similar re-sults with the exception that one respondent al-ready claimed to be active in the latter category.Thereisarelativelyevensplitofrespondentscon-sideringstorage(47%),efficiency(39%)andmobil-ity (44%) as future business lines of interest andthosewhodonotplantobeactiveinthosebusinesslines.Intheopinionoftheexperts,alloftheabovementioned subsectors are pertinent for the tar-getedenergysystembasedonRETsandthereforepresent attractive opportunities for CommunityWind.However,thelevelofrequiredprofessionali-zationaswellas the lackofconducive frameworkconditionsor financialsupportmechanismsaimedatCommunityWind stakeholders areexpected todeter thisgroupfromenteringthosemarkets.En-ergy efficiency and e-mobility were framed asbranchesthatareexpectedtohaveahugedissemi-nator effect of the “prosumer” concept once suc-

cessfullyintegratedinthewiderenergysystem.Ac-cording to the experts, energy storage is still per-ceivedasatechnologythatrequiresveryhighup-front investments which CommunityWind imple-mentersarenotyetabletolayout.However,itwasmentioned thatenergy storage shouldgohand inhandwiththeextensionoftherenewablesandthatCommunity Wind implementers could serve aspathfinders for decentralized energy storage de-ployment.

One expert mentioned that small wind (not in-cludedintheonlinesurvey)constitutesaninterest-ingtechnologyforsmallermarketplayersandCom-munityWindprojects.However,thecomparativelyhighelectricitygeneration costsof smallwindareconsideredtoposeamajorimpedimentinthedif-fusionanddeploymentofthistechnology,both inNRWandinGermany.

Itcanbeassumedthatnetworks,informationplat-formsandassociationsserveanimportantfunctionwithrespecttodiffusionofinnovations,theestab-lishmentofnewbusinesslinesandprofessionaliza-tion.Basedon thisassumption,aquestionon theusefulnessofthose institutionswithdifferentspa-tialscaleswasincludedintheonlinesurvey.There-sults(seeGraph22)showarathercleartendency.Thelargertheoperationalscopeoftheinstitution,thelessusefultheyareperceivedtobeforthefu-tureactivitiesofCommunityWindstakeholders inNRW.Institutionsonthestateandfederallevelareconsideredtobeofhighusefulness(bothwith73%)for future activities of the respondents, whilethemajorityofrespondentsconsideredInstitutions

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HowdoyouassesstheusefulnessofCommunityWindnetworks,informationplatformsandassociationsforyourfutureactivities?

notuseful mediumusefulness highusefulnessGraph22

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focusingontheEuropeanlevel(73%)andinterna-tionallevel(60%)tobeofmediumusefulness.

This trend can be explained against the followingfindingsoftheexpertinterviews.TheactivitiesandinterestsofCommunityWindstakeholdersarecon-sideredtobehighlydependentonspecificdomesticframework conditions, hence experiences fromothercountriesaregenerallyseenas lessrelevantfor Community Wind stakeholders. Institutions,whichfocustheirworkonthefederalandstatelevel(in this case NRW) are seen as very important astheycanprovidenetworkingopportunitiesandas-sistinquestionsonthelegalframeworkconditions,hence lowering the transaction costs for Commu-nity Wind stakeholders. Even though the expertssharedtheopinionthatEuropeanandinternationalCommunityWind organisations are considered tobe less useful than their counterparts onnationaland sub-national level, their importance for theglobaldisseminationoftheCommunityWindcon-cept,bestpracticesandinnovativebusinessmodelswashighlightedbytheexperts.

Furthermore,associationsoperatingonthestateorthefederallevelareconsideredtobeimportantastheyareabletoinfluencepoliticaldecision-makingprocessesandtopushtheneedsCommunityWindstakeholders on the political agenda. However,someexpertswereconcernedabout the fact thatorganisations representing the wind sector aremostlydominatedbylargerplayerswhoseinterestsare not always in line with those of CommunityWind stakeholders. One respondent mentionedthatregionalagriculturalassociationscouldplayanimportant role inenhancingCommunityWindde-ployment,astheyhaveanoutreacheffectontheirmembers, which constitute a large share of land-owners.

CommunityWindimplementerswithsmallportfo-liospointedout,thattheirsuccesswasratherbasedon local inter-personal networks than on their in-volvementinlargerinstitutions,asthelatteroftengoesalongwithhighertransactioncosts.Inthisre-gard,alsoshowcaseexamplesofCommunityWindwereconsideredtoserveanimportantfunctionforthediffusionofinnovativebusinessmodels.Energycooperatives are considered tobeprimarily inter-estedinchangingtheenergysystemthroughlocal

initiativeswithastrongfocusontheregionaliden-tity. As a result,members of energy cooperativesusuallylimittheirfocusononespecificgeographicalarea.

4.ConclusionThe research revealed that Community Wind re-mains,toacertaindegree,elusiveconceptorbusi-nessmodelthatisnotlegallynorpoliticallydefinedinNRW(norinGermanyortheEU).However,Com-munityWindisregardedasaformofwindenergydeployment which entails many beneficial socialandeconomiceffects,mostimportantlyitisseenasmeans of enhancing local acceptance and localaddedvalue.TheNRWexpertsframingofCommu-nityWindisinmostofthecasescoincidingwiththeWWEACommunityWinddefinition,whichpointstothe latter’s usefulness as a basis for a potentiallybinding definition. Until now, a legal definition ofCommunityWind in Germanywas not needed astheguaranteedfeed-intariffdoesnotputCommu-nityWindatadisadvantage.However,withtheup-comingauctions,therelativelylevelplayingfieldforcommercial developers and CommunityWindwillbeabolished.

To the opinion of the queried experts, the singlemost importantdriverofCommunityWindcanbeattributed to the guaranteed feed-in tariff intro-ducedonthefederallevelbytheRenewableEnergySourcesAct (EEG) in2000.Otherdriverscomprisethecurrentwind-energy-friendlystategovernmentofNRW,regional/municipalrenewableenergyiniti-atives, voluntary Community Wind standards aswellasregulatoryguidelinesaimingonthesimplifi-cation of planning/permission procedures, eventhough the latter are not primarily addressed atCommunityWindprojects.Ontheotherhand,ris-ingcomplexity,highlandleasesofferedbycommer-cialwinddevelopers,theoppositionbynaturecon-servationassociationsandageneraldeclineofsoci-etalinterestinRETsaresaidtohinderthedeploy-mentofCommunityWind.Inaddition,theupcom-ingauctionsforonshorewindareexpectedtoentailtremendousimpedimentsforCommunityWindde-ployment inNRWandGermany. The current auc-tiondesignissaidtoputCommunityWindprojectsat a strong competitive disadvantage, thus inde-pendent bottom-up development of CommunityWindprojectswillnolongerbepossible.

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The recently proposed simplified qualification re-quirements for Community Wind projects (as ofFebruary2016)canbeconsideredasafirstbutin-sufficient step into the rightdirection to level theplayingfieldforCommunityWindintheupcomingauctioning scheme. However, these simplified re-quirements only resolve the problem of enteringtheauctionsinthefirstplaceandCommunityWindprojectsstillhavetocompetewiththoseofexperi-encedmarketplayerswithahighercompetitivead-vantage.

Acatalogueofattractivefuturebusiness linesandadditional market activities for Community Windprojectsincludesinteraliarepoweringactivities,re-gionalelectricitytariffs,storage,e-mobilityanden-ergyefficiency.However,thecurrentlevelofCom-munity Wind professionalization as well as thechanging regulatory framework conditions do notallowforabroadbaseddiffusionofthosebusinesslines,exceptforsometrailblazerprojectsofexperi-encedCommunityWindimplementers.CommunityWindnetworks, informationplatformandassocia-tionsareconsideredtobecrucialmediumsforthediffusionoftheCommunityWindconceptsandtheidentifiedinnovativebusinesslines,butsofar,theirleveloforganisationandpoliticalcloutisnegligiblecomparedtothose institutionsrepresenting large,commerciallyorientedwindprojectdevelopers.

In summary, Community Wind in NRW and Ger-many is at cross-roads.On theonehand, it holdsvastpotentialsfortheenergytransitionfromacar-bon-based(andtoa lesserdecreenuclear)energyregimetowardsademocratic,decentralised,emis-sion-free, inotherwords: truly sustainableenergysystem. Moreover, it brings high levels of muchneededacceptanceandcontributestolocaladdedvalue. On the other hand, the upcoming auctionsare expected to put CommunityWind at a strongdisadvantage. As a result, the externalization ofwindpower“acceptancecosts”couldhavedrasticeffects on the outcome of the German Ener-giewende,orasoneexpertputit:

“The Energiewende wont be successful withoutCommunity Wind projects. Wind energy can onlyserveas themainstayof the future renewableen-ergysystem,ifitsdeploymentisaccepted”

Withregardtothe international level, itmayhap-pen (and can already beobserved in some areas)

thattheGermandecisiontodropFITsandtointro-duceauctionsforRETswillagainsendstrongcopy-catsignals(liketheFITintroduction)toothercoun-tries.Therefore,aGermanauctioningdesignwhichcatersfortheneedsofCommunityWindcouldalsohavepositiveeffectsonthedisseminationofCom-munity Wind on a global scale, given that othercountriesdecidetoadoptpoliciesofacountryusu-allyreferredtoasatrailblazerofRETdeployment.

ThestudyathandaimedtogiveabroadoverviewofCommunityWindinNRWbylookinginthepast,thepresentandthefutureofthisparticularconceptfromanexperts’ perspective. This rather compre-hensiveapproachdidnotalwaysallowforadetailedcausal analysis on single drivers and barriers ofCommunity Wind. However, the results revealedthe bigger picture of Community Wind in NRW,hencetheycanserveasastrongfoundationforup-comingin-depthanalysisintherealmofCommunityWindandCommunityPoweringeneral.

FurtherresearchactivitiesintherealmofCommu-nityWindinNRWandGermanyshouldalsoincludelongitudinal study designs to explore how singleprojectsorCommunityWindatlargedevelopsovertime,especiallywithafocusontheexpectedauc-tions.Thisshouldalsoincludeathoroughstocktak-ingofalreadyexistingcommunitywindprojects,inordertobeabletoobservetheshareofCommunityWindprojectsinthediversityofplayers.Moreover,itisimportanttorevealhowpolicymeasurescouldbemodifiedtoenhancehighersharesofcitizenpar-ticipationinfieldsthatarenecessaryforasuccess-ful transitionof theNorth-RhineWestphalian andtheGermanenergysector.Finally,analysingCom-munityWindinothercountrieswouldcertainlyalsoprovideimportantfindings.Thoseshouldcovertheappraisalofbusinessmodelsindifferentcountries,researchontheinteractionofdifferentpoliticalandinstitutionalframeworksaimingatthediffusionofCommunityWindaswellasresearchonthetrans-ferability of existing businessmodels to countrieswherecitizensarenotactiveinCommunityWind.

ThestudycloseswithaquotebyaCommunityWindexpert that points towards the importance of“prosuming”energy:

“Onlywhenweactually livetheEnergiewende,weareabletounderstandit.”


5.Policyrecommendations

5.1.Policyrecommendationsmunicipal-level

• Makecommunitywindabasicpartofthelocalenergyprogramme,aspartofalocal100%renewableenergystrategy

• Fosterandincentivisetheset-upof(voluntary)municipalguidelinesforcommunitywind• Utilizeexistingplatformsforconflictmediation

5.2.Policyrecommendationsstate-level

• Set-upoffinancialandconceptualsupportmechanismsforCommunityWindprojectsforthehigh-riskphase

• ElaboratecommitmenttowardstheCommunityWindmodel,andCommunityPoweringeneral• Supportprogramsformunicipalclimateprotection/renewableenergyinitiatives• Facilitateroundtablesforconflictresolutionbetweenwindpowerdevelopersandrepresentativesof

speciesconservation• Continuecommitmentwithregardtoanappropriateremunerationsystemdesign

5.3.Policyrecommendationsfederal-level

• Set-upasoundremunerationsystemforonshorewindwhichdoesnotputadisadvantageonCommu-nityWindprojects

• DesignofelectricitymarketthatallowsCommunityPowerprojectstomarkettheirelectricityregion-ally

• Increasingtheannualextensionrateofonshorewindenergyfromnow2.000MWto4.400MW• SupportmechanismsforholisticRETapproachesincludingE-mobility,energyefficiencyandclimate

adaptation

5.4.Recommendationsforfurtherresearch

• LongitudinalstudiesonCommunityPowerandCommunityWind• Researchonthefinancialandorganisationalneedsduringthehigh-riskphase• Researchonmunicipalguidelinesandclimate/renewableenergyinitiatives• StocktakingofprimarydataonCommunityWindandpubliccommunicationofdata,especiallyofpro-

jectssetupasclosedendfunds

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SectionB:SummaryWWEACommunityWindSymposium2016

On26 January2016more than110CommunityPowerexpertsandpractitionersfrom20countriesofsixcontinentsjoinedthefirstinter-nationalCommunityWindsymposium(“TailwindandHeadwind forCommunityPower”–RegionalandGlobalCommunityWindPerspec-tives”)inBonn,Germany,hostedbyWWEAandLEENRW.TheguestswerewelcomedbyPeterRae(WWEAPresident)andStefanGsänger(WWEASecretaryGeneral).Furtherwelcomingspeeches,focusingonthe current developments and challenges of Community Power inGermanyaswellasthestrongsignaleffectsemanatingfromtheCOP21’sParisAgreement,weregivenbyJanDoberin(AssociationforRe-newable Energy NRW), Viktor Haase (Foundation for EnvironmentandDevelopmentNRW)andDr.HermannFalk (FederalAssociationforRenewableEnergyGermany).

Againstthebackdropofthe30thanniversaryoftheChernobylnuclear incidentandthe5thanniversaryoftheFukushimacatastrophe,Dr.TetsunariIida(In-stitute for Sustainable Energy Policies, Japan) ad-dressed the importance of Community Power forthesuccessoftheglobalenergytransitioninhiswel-coming speech. According to Iida, this transitionneeds to be deeply embedded in the society. Al-ready80%oftheJapanesepeoplerejectnuclearen-ergy, while the government still pursues a ratherbackward oriented nuclear policy. However, since2011 renewable energy is ranking high on theagendaofactivecitizensandthecivilsociety.Theintroductionofaguaranteedfeed-intariffsetupaconduciveframeworkforthedeploymentofrenewablesthroughoutJapanand200CommunityPowerprojectsdisplaythehugeinterest in“bottom-up”anddecentralizedenergygeneration. In2016theemblematic locationofFuku-shimawillbethesceneofJapaneseCommunityPowerwhenthecityhoststheWWEACommunityPowerCon-ferenceinNovember;inadditiontothis,theWorldWindEnergyConference2016willtakeplaceinTokyo.

Thesubsequentsectionssummarizethesessionsofthesymposium.AllpresentationsoftheCommunityWindsymposiumcanbefoundontheWWEAwebpageunder:http://www.wwindea.org/presentations-international-symposium-on-community-power/

WWEAPresidentPeterRae

ParticipantsoftheWWEACommunityWindSymposium

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1.PanelDiscussion:TenderingCommunityWind–ExpectationsonStateandFederalPolicy

Panellists:

• GünterPulte,RothaarwindGmbH&Co.KG• WernerSoika,BürgerEnergieIssum• HeinzThier,BBWind• KlausSchulzeLangenhorst,BWENRW• JakobMüller,GLSBank• Dr.KatrinGehles,Energieagentur.NRW

SubsequenttothepresentationoftheNRW-casestudy’smainfindings,apanelofNRW-basedCommunityWindpractitionersandexpertschairedbyJanDobertin(LEENRW)discussedthefutureofCommunityPowerintheregion.Themainfindingsofthecasestudywereconfirmedbytheexperts.Inthefurthercourseofthediscussion,theupcomingauctioningschemeanditsimplicationsforCommunityWinddeploymentwereatthecentreofattention.Below,theessentialthemesofthediscussionaresummarized:

WhoisdrivingandimplementingtheGerman“Energiewende”?

• SincetheFukushimaincidentin2011Germanpolicymakersfromallthemajorpoliticalpartiesarepay-inglipservicetotheconceptofCommunityPower.However,thepeopleonthegroundwhoreallywanttoimplementCommunityPowerprojectsdonotfeelsupported,theyratherfeelthatmoreandmorebarriersarebeingsetup.

• Currently,thenumberofnewlyregisteredenergycooperativesisdecliningafterastrongboomphasefrom2012-2014.ThisdevelopmentisseenasproblematicbecausetheCommunityWindmodeliscon-sideredtobeastrongacceptancedriver.Withoutthismuchneededacceptance,onshorewind,whichcanberegardedasthebackboneoftheGermanEnergiewende,isexpectedtobethwarted.

• Sofar,thebigGermanutilitiesoverslepttheEnergiewendeandtheupcomingregulatorychangesareexpectedtosolely favourbigmarketplayers.Ontheotherhand,smallmarketplayers,whopushedrenewablesfromthenicheintothemainstreamandgeneratedlocaladdedvalueaswellashighac-ceptancelevelsareexpectedtobeexcludedfromthemarket.

HowtodefineCommunityWind?

• TheWWEACommunityWinddefinition(oranothersuitabledefinition)andanexemptionmechanismshouldbeincludedintheGermanRenewableEnergyAct(EEG),eventhoughapreciseandlegallybind-ingdefinitionofCommunityPowerorCommunityWindwillbehardtoagreeuponasCommunityPowerisaveryheterogeneousconcept.

• Thecornerstonesofsuchadefinitionshouldcomprise:o Aspectsoflocalityo Aspectsofparticipation(financialandconceptualparticipationandvotingright)o NolimitswithregardtothemaximumcapacityofaCommunityWindproject

• VoluntaryactivitiesareessentialforthesuccessofCommunityWind,however,asaconsequenceoftherisingcomplexityofplanningprocesses,CommunityWindstakeholdersshouldalsoconsidertocollab-oratewithpublicutilitiesandexternalCommunityWinddevelopersincasetheycannotrealizeaprojectontheirown.

PanellistsoftheNRWexpertdiscussion

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Expectedeffectsoftheupcomingonshorewindauctions

• Inmostcases,CommunityWindprojectsareexpectedtobeone-timemarketparticipants.Ifaprojectfailsinthelateplanningphaseorduringtheauctionprocess,thelosscannotbecompensatedbyotherprojects.ThisadditionalbidacceptanceriskisexpectedtodeterpotentialCommunityWindimplement-ersinthenearfuture.Fromtheexperienceoftheexperts,awithdrawalofthoseactorscanalreadybeobserved.Ontheotherhand,manyprojectsarecurrentlytryingtoacquireaBImSchGapprovalbefore2017inordertocircumventaparticipationintheauctioningscheme.

• Themainmotivationbehindtheintroductionofonshorewindauctionsseemstobetocontroltheex-tensionquantitiesratherthanbringingdowntheelectricitygenerationcosts.Smallextensioncorridorsallowbiggermarketplayerstopracticestrategicalbidding,while inexperiencedandfinanciallyweakplayersloseout.Ingeneral,smallextensioncorridorsareexpectedtoslowdownthepaceoftheEner-giewende.

• TheunderlyingrationaleofprospectusrequirementsforCommunityWindprojectsorganisedasclosed-endfundswastoensureriskdisclosureandtransparency.However,thiswillhardlybepossibleinanauctioningmechanismasthefinalbidcannotbepredictedinadvance.Currently,developerscalculateaprojectbasedontheexpectedrevenue,whichwillnotbepossibleinthefuture.

• ThefinancialrisksrelatedtotheplanningprocessalreadyposeseriousobstaclesforCommunityWindprojectsandthesituationisexpectedtodeteriorateunderauctions. InordertosupportCommunityWindprojects,somecooperativebankinginstitutionsarealreadyintheprocessofdevelopingriskcap-italsupportmechanisms.WhilesoundlyplannedCommunityWindprojectsarenotexpectedtofaceproblemswithregardtotheacquisitionofdebtcapital,equityraisingisexpectedtobemoredifficultunderauctions.

DemandsoftheCommunityWindexperts:

• Tokeeptheguaranteedfeed-intariffforCommunityWindprojects• TogeneratePlanningsecuritythroughastableRenewableEnergyAct• TointroduceasoundandlegallycertainCommunityWinddefinition

IncaseCommunityWindprojectshavetotakepartintheregularauctionprocess:

• Tointroducesafetydeposits(“bidbonds”)onlydueafterbidacceptance• Tointroduceaone-tierreferencerevenuemodelcateringforallpossiblelocations• Tointroducelargerannualextensioncorridors(upto4’400MW)topreventstrategicalbeddingandto

keepthepaceofwindenergydeployment• NottolimitCommunityWindprojectstoamaximumcapacityof18MW

2.Key-NoteSession:CommunityPowerinEurope

Speakers(allpresentationsonline):

• SiwardZomer,REScoop:EnergyCooperativesinEurope• Dr.PrebenMaegaard,NordicFolkecenter:StatusQuoofaCommunityWindTrailblazer• KatherinaGrashof,InstituteforFutureEnergySymstems:ThebenefitsofCommunityPower• Dr.JosepPuig,EurosolarSpain:CommunityPowerinSouthernEurope• Dr.JelteHarnmeijer,JamesHuttonInstitute:FinalSpurt?CommunityWindintheUK• JonathanBonadio,EuropeanCommission:RenewableEnergyandCooperativesintheContextoftheEU

Thefirstkey-notesessionofthesymposiumwaschairedbyRolandRoesch(IRENA)andleftthegroundsofNRWandGermanywithafocusonthebiggerpictureofCommunityPowerandCommunityWindinEurope.Twoof

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theshortpresentationsapproachedCommunityPowerfromthepan-Europeanperspective.TherepresentativeoftheEuropeanCommissionpointedtothekeyroleofCommunityPowerfortheEuropeanEnergiewende,whichleftsomeparticipantsofthesymposiumpuzzledastheCommissionisregardedastheinitiatoroftheupcomingauctions.ThreeofthepresentationsgaveanoverviewofthestatusquoofCommunityWindintheirrespectivecountries(Denmark,UKandSpain)andonepresentationfocusedonamoregenerallevelbythoroughlyexam-iningthebeneficialeffectsofCommunityPowerprojects(seesectionAchapter3.2.).Moreover,inthissessioncriticalexpectationsontheupcomingauctionschemesaswellasanobservedlackofconduciveframeworkcon-ditionsforRETandCommunityPowerdeploymentwereputattheheartofmanypresentations.Nevertheless,thekey-notesalsopointedouttheenormouspotentialofCommunityPower,asthisformofRETdeploymentisable tocontribute to localaddedvalueand localacceptance,nomatterwhether theprojectsarerealised inCentral,Southern,NorthernorEasternEurope.

3.Key-NoteSession:CommunityWindWorld-Trip:StatusQuo,ProblemsandSolutions

Speakers(allpresentationsonline):

• Canada:Dr.ChristineKönig,OntarioSustainableEnergyAssociation• Japan:Dr.TetsunariIida,InstituteforSustainableEnergyPolicies• Australia:Hon.PeterReaAO,WWEAPräsident • Mali:Dr.IbrahimTogola,MaliFolkecenter• Mexico:SergioOceransky,YansaGroup • SouthAfrica:NeilTownsend,justenergy

Thesecondkey-notesessionwidenedtheperspectiveonCommunityPowerandCommunityWindontheglobalscale.Dr.MichaelKöberlein(GIZ)chairedthe“world-trip”thatcomprisedpresentationsontheframeworkcon-ditions,driversandbarriersforCommunityPowerprojects insixcountries.WithpresentationsfromCanada,JapanandAustralia,thefirsthalfofthesessionwasassignedforspeakersfromindustrialisedcountrieswhoseenergysystemsareheavilybasedonfossilfuels(especiallyCanadaandAustralia)andnuclearenergy(JapanandOntario/Canada).However,renewableenergydeploymenthasalreadygainedmomentuminthesecountries.ImpedingfactorsforgreateruptakeoftheCommunityPowermodelcomprisestronglobbyorganisationsbackingtheincumbentcarbon-intensive(ornuclear)energyregimesaswellasinconsistentorinsufficientpoliticalandeconomicframeworkconditionsforrenewables.Ontheotherhand,sinkingRETcosts,theParisAgreementandnew,renewable-friendlygovernments(AustraliaandCanada)areexpectedtopropeltheenergytransitionandCommunityPower.

Thesecondpartofthekey-notesessionfocusedonthestatusquoofCommunityPower inthreedevelopingcountries.Mali,MexicoandSouthAfricaareblessedwithabundantrenewableenergyresources,butasyet,thisabundancedoesnotentailimprovedlivelihoodsofthecountries’inhabitantsasRETsarenotyetontheagendaofpolicy-makers.MexicoandSouthAfricacanclaimtobefront-runnersinlargescalewindpowerextensionoverthelastfewyears.However,therevenueandtheaddedvalueofthewindfarmsinthetwocountriesaremostlydirectedoutofthecountryandintothehandsoflarge,internationalInvestors.InMexico,largescalewindpowerdeploymenthas leadtoserioushumanrightviolationsof indigenouspeoplewhowereneither informednoradequatelycompensatedforlandgrabsbythemultinationalcompanies.Thisresultedinaviolentconflictbe-tween locals,whoarenotnecessarilyopposedtowindpower(one100MWCommunityWindfarmisunderdevelopment)andtheownersofthewindfarm.Accordingtothespeakers,theCommunityPowerandCommu-nityWindmodelsallowforaholisticapproachtotackleproblemsofenergyaccess,povertyalleviationandlocalsustainabledevelopment.Atthemoment,CommunityPowerstakeholdersfaceabroadcatalogueofchallenges,spearheadedbythemarketandlobbypowerofbig,internationallyactiveutilitiesandprojectdevelopersandunfavourableframeworkconditions(likeauctioningschemeswithveryhighparticipationrequirements)forsmalldomesticmarketplayers.

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4.SynthesisDiscussion:WhataretheGuardrailsofGlobalCommunityPower?

Panellists:

• SiwardZomer,REScoop• NeilTownsend,justenergy• Dr.Hermann Falk, Federal Association for Re-

newableEnergyGermany• Dr.RolandRoesch,IRENA• StefanSchurig,WorldFutureCouncil• GadiHareli,IsraeliWindEnergyAssociation• Dr.Tetsunari Iida, InstituteforSustainableEn-

ergyPolicies

Theinternationalcompositionofthesymposiums’lastpanelsessionallowedforamulti-facetedsynthesisofthedayandgaveoutlookonthefutureofCommunityWindandCommunityPowerontheglobalscale.ThechairDr.HarryLehmann(FederalEnvironmentalAgency)guidedthediscussion,inwhichthefollowingrequirementsandconduciveframeworkconditionsforthediffusionoftheCommunityPowermodelhavebeenidentified:

• Policy-makersaroundtheglobeneedtorecognisethatthemajorityofpeopleareinfavourofaclimatefriendlyrenewableenergysystem.ThebeneficialeffectsofexistingprojectsandinitiativesintherealmofCommunityPowerneedtoberecognisedandambitiousCommunityPowerstakeholdersneedtobestrengthenedfurtherthroughfavourableframeworkconditionsandsupportivepolicies.

• Anoftenneglected,butpositiveeffectofCommunityPoweristhesocialisationandtheimprovedsoci-etalcohesivenessbroughtalongbysuccessfullyrealisedCommunityPowerprojects.Consequently,thetransitiontowardsarenewableenergysystemisnotonlyaboutinvestmentopportunitiesandsustain-ableenergyproductionbyahandfulofindependentshareholders,butalsoaboutamoredemocraticandinclusivesocietyasawhole.Assoonasthepeopleonthegroundgetafeelingfordecentralizedrenewableenergyandtherightframeworkconditionsareinplace,theenergytransitionwillbeasure-firesuccess.

• Citiesandmunicipalitiesplayanimportantroleinthetransitionprocesstowardsarenewableenergysystem.Theyshouldtakeapro-activerolebyroadmarkingthetransition,settingindividualrenewableenergygoalsandbypushingthetopicontheagendaofnationalpolicy-makersaswellasontheagendaoftheircitizens.

• Inordertoachievetheenergytransitionassoonaspossible,largeinvestmentvolumesarerequired.InadditiontoindividualinvestmentsbyCommunityPowershareholderstheprivatesector,institutionalinvestorsandmunicipalitieswillalsojumponthebandwagonofdecentralizedrenewableenergypro-jects.However,everyindividualshouldhavethechancetoparticipateintheenergytransitionbypro-ducingandconsumingrenewableenergy.

• Asuccessfulandfast-pacedenergytransitionrequiresmassiveamountsofvalidandreliabledata.Pro-jectdevelopers,citizens,plannersandpoliticiansrequireastronginformationbasetomaketherightpolitical,infrastructuralandinvestment-relateddecisions.Internationalorganisationshaveakeyroleincoordinatingdatacollectionaswellasindistributingrenewableenergyrelateddata.

• Decision-makersindevelopingcountriesneedtorealiseboththeimportanceandthebenefitsoftheCommunityPowermodel. Inthisregard,notmuchhasbeendonetohightentheawarenessof theCommunityPowermodelonaglobalscale.IntimesofsinkingRETcostsandmoreconduciveinvestmentenvironments,CommunityPowerhasthepotentialtotackleproblemsofenergyaccess,povertyallevi-ation,sustainableeconomicdevelopmentandclimatechangemitigation.

• TheParisAgreementsentastrongsignalinfavourofarenewableenergysystem.However,thismo-mentumhastobepreservedandtheguardrailsforthefuturehavetobesetup.PriortoCOP21the

PanellistsofthesynthesisdiscussionwithStefanGsänger,WWEASecretaryGeneral

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mostpressingquestionswas:Whohastocarrytheburdenandwhoisresponsibleforclimatechange?AfterCOP21thequestionhasratherbecome:Whowilltakeupthenewopportunitieswhichevolveinthewakeofaglobalenergytransition?ManydevelopingcountriesnowhavethechancetoleapfrogcarbonintensiveenergytechnologiesbyRETdeployment.

SectionC:TenElementsofaGlobalCommunityPowerStrategy

1. CommunityPowerisadriverandanessentialpreconditionforthesuccessoftheglobalenergytransi-tionasdecidedinParis2015

2. CommunityPowerbringsaboutanequitabledistributionofthebenefitsandadvantagesentailedbylocalandsustainableenergyproduction,further,itenhanceslocaladdedvalue,especiallyindevelop-ingcountries

3. CommunityPowergeneratesandsecuresacceptanceandenhancessocietalsupportfortheenergytransition

4. CommunityPowerprojectsmustnotbediscriminatedandtheyshouldhavethesamemarketaccessopportunitiesasanyothermarketplayer

5. Guaranteedfeed-intariffsareproventobethemosteffectivepolicyinstrumenttoprovideequitablemarketaccessopportunitiesand,simultaneously,stimulateadynamicexpansionofrenewables

6. ThereisaneedforfurtherpolicyandmarketinstrumentsfortheintegrationofrenewablesintotheenergysystemwhichspecificallyharnessthepotentialsandbeneficialeffectsoftheCommunityPowermodel

7. CommunityPowerhasacentralrolefora100%REfuture,especiallywhenitcomestothedecen-tral/localintegrationofrenewables

8. PromisingfuturebusinessmodelsforCommunityPowerinclude:directsupplyof100%renewableelectricity,e-mobility,heatingandcoolingandenergystorage

9. CommunityPowerstakeholdershavetoimprovetheirlocal,regional,nationalandinternationalnet-worksandcooperationinordertostrengthentheirvoiceinthepoliticalarena

10. CommunityPowerindevelopingcountriescanbekick-startedandstrengthenedbyaGlobalFITpro-gramme(seeGraph23),forexamplewithinthecontextoftheGreenClimateFund.

Graph23:WWEA(2014)

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AnnexOverviewonshorewindauctionkeypointsandone-tierreferencerevenuemodel

Source:BMWiKeypointsforRenewableEnergySourcesActamendmentasof15.02.2016

Keypointsfortheupcomingauctionsforonshorewind

AsofFebruary2016

• Firstbiddeadline1May2017• Futurefundingonlyforinstallationssuccessfulinanauction,itwillnotbepossibleforapprovalstobetrans-

ferredtootherprojects.o Exception:installationsupto1MW

• Prerequisitesforparticipation:o ApprovalundertheFederalEmissionControlAct(BImSchGapproval)

§ CommunityPowerprojectsexemptedo Bidbondof30€perkW

§ Community Power projects: 15 € per kW for participation, 15 € per kW after bid ac-ceptance

• 3-4auctionsperyear,conductedbytheFederalNetworkAgency.• Auctionroundsopenforsingle,sealedbids.• Bidsmustbebasedonthe“value-to-be-applied”,whichiscalculatedusingaone-tierreferencerevenue

modelatareferencesite(the‘100-per-centsite’).ThisadvancedmodelistoleveltheplayingfieldacrossGermanyandprovideincentivesfortheconstructionofefficientinstallations.

• Anewreferencesitewillbedefinedwhichwillprovidestrongerincentivesfortheconstructionofeffi-

cientinstallations.Infuture,thereferencevaluewillbecalculatedbasedontheassumptionthatthewindspeedat100mabovethegroundis6.45m/s.Forhigher installations,thewindspeedistobecalculatedbasedonthe‘power-lawformula’,usingaHellmannIndexof0.25.

• Operatorswillsubmittheirbidsbasedonthesecalculations,oncethesehavebeenadjustedsothattheyfitthe‘100-per-centsite’.Thismeansthattheactualreferencevalueexpectedfortheinstallationwillbemultipliedbyastatutoryadjustmentfactor,andthusbeconvertedintoareferencevaluefora‘100-per-centsite’.Thismakesitpossibleforthevariousbidstobecompared.

• ItallowstheFederalNetworkAgencytodecidewhichbidswillbeaccepted.Fundingforthoseonshorewindinstallationsthathavebeenacceptedwillthenbecalculatedbasedontheactualreferencevalue(ratherthanthevalueadjustedto100percent).Thisactualreferencevaluewillbedefinedforeachindividualinstallation,basedontheresultsofexpertopinionsdrawnupinaccordancewiththeFGWGuidelines.

• Oncecalculated,thefundingratecalculatedwillapplyfortheentire20-yearfundingperiod.Thefigureusedasareferenceyieldwillberevisitedafter5,10,and15yearssothatthefundingcanbeadjustedinlinewiththeinstallation’sactualyields.

• Additionalinformationonhowthelevelofthefundingwillbecalculated:Thepriceatwhichtheprojectwasacceptedwillbemultipliedbyanadjustmentfactor,toyieldthe100-per-centadjustmentfactor.TheRenewableEnergySourcesActwillsetoutinterpolationvaluesinincrementsoften(between70and150percent).Linearextrapolationwillbeusedtocalculatevaluesthatfallinbetweentheseinter-vals.Belowareferencevalueof70percent,theadjustmentfactorwillnotbeincreasedfurther.TheadjustmentfactorshavebeenchosentoprovideincentivesfornewinstallationstobebuiltacrossGer-many,butwithevenstrongerincentivesforthemtobebuiltonsiteswherethereisstrongwind.Thefollowinginterpolationvalueshavebeenputforward:

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• Themaximumlevelforbidswillbe7.0centsperkilowatthourforthe100-percentreferencesite,

over20years.Thisrateisroughlythesameastheonethatcurrentlyappliesunderthetwo-tierreferencerevenuemodel(basedonmixedcalculations).Everyyear,thisfigurewillbereducedby1percent.TheFederalNetworkAgencyisfreetoincrease/decreasethismaximumratebyuptotenpercentifthis iswarrantedbycircumstanceslinkedtothecompetitivesituationand/orthecostsituation.

• Bidswillbeaccepted,startingwiththelowest,anduntiltheamountofcapacitythatisbeingauctionedis

reached.Inprinciple,theamountoffundingcorrespondstotheindividualbid(pay-as-bidprinciple).• Installationsshouldbecompletedwithintwoyearsafterthebidhasbeenaccepted.After30months,the

acceptancewillnolongerbevalid.Thisdeadlinecanbeextendedonceincaseswherealawsuithasbeenfiledagainstaproject.

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World Wind Energy Association e.V.

Charles-de-Gaulle-Str. 553113 BonnGermany

Tel: +49-228-36940-80Fax: +49-228-36940-84

www.wwindea.org

Landesverband Erneuerbare Energien NRW e. V.

Corneliusstraße 1840215 DüsseldorfGermany

Tel: +49-211-9367-6060Fax: +49-211-9367-6061

www.lee-nrw.de

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Headwind and Tailwind for Community Power...The WWEA “Community Power Strategies” project aims to identify favourable framework conditions for Community Power on a global scale