promoting citizen investment in renewable energy - experience from germany and switzerland

Promoting citizen investment in renewable energy: experience from Germany and Switzerland

[email protected]://goodenergies.iwoe.unisg.ch

Prof. Dr. Rolf WüstenhagenGood Energies Chair for Management of Renewable EnergiesDirector, Institute for Economy and the EnvironmentUniversity of St. Gallen

Dublin, December 8, 2016

@wuestenhagen

2Outline

1. Status of citizen investment in renewable energy (GER & SUI)2. Drivers of citizen investment in renewable energy3. Does citizen investment increase social acceptance?4. Three caveats5. Conclusions

3German and Swiss energy transitions have resulted in a changing investor landscape

Source: Helms, Salm, Wüstenhagen 2015

Old Energy World New Energy World

Big Four, 5%

Citizen Investors,

47%

Institutional Investors,

41%

Other Utilities, 7%

4Increasing number of energy cooperatives in Germany

Source: trend:research and Leuphana 2013, DGRV 2013

• >90% of energy cooperative members are private citizens (125‘000 people)• German energy co-ops have invested €1.2bn in renewable energies (417 MW)• Solar PV & onshore wind are cooperatives‘ dominant investment targets

Num

ber o

f ene

rgy

coop

erat

ives

5Swiss Community Finance Landscape

Source: Ebers & Wüstenhagen 2015

• 60% of surveyed Swiss retail investors are interested in community finance• Of those, two thirds can imagine investing up to 1‘000 CHF, another 35%

between 1‘000 and 10‘000 CHF

6Different models of community financing RE

Level of local involvement

Pure grassroots projects

Large investor-

owned projects

Municipal utilities

co-investing (“Partnerwerke”)

Large investor with citizen

co-ownership

www.buergerkraftwerke.atwww.windpark-rheinau.chwww.appenzellerwind.ch

7Outline

1. Status of citizen investment in renewable energy 2. Drivers of citizen investment in renewable energy3. Does citizen investment increase social acceptance?4. Three caveats5. Conclusions

81) Switzerland and Germany have a strong tradition of community-owned infrastructure

Community energy, A.D. 1897: Sankt Galler Stadtwerke

Community financing, A.D. 1908:Berlin municipal utility bond

92) Energy policies creating low-risk environment RE capacity in Germany since introduction of feed-in tariff in 1990

• Between 1990 and 2015, the share of renewable energy in German power generationincreased from 3.4 to 30.0%.

• Cumulative installations by 2015 led by wind (44 GW) and solar (40 GW).• Other policy instruments can be designed in a „community-friendly“ way, too.

Source: Germ

an Federal Ministry of the Environm

enthttp://w

ww.erneuerbare-energien.de

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

Inst

alle

d C

apac

ity [M

W]

GeothermalBiomassSolar PVOffshore WindOnshore WindHydropower

103) Slow-moving incumbents......provoking citizen action

„Solar energy in Germany makes as much sense asgrowing pineapples in Alaska.“

Jürgen Großmann20.1.2012 Photo: Greenpeace Nicolas Fojtu

11Outline


Source: Wüstenhagen, Wolsink & Bürer 2007

12Social Acceptance = f(Citizen Investment)?• Social acceptance of large-scale energy infrastructure (e.g.

hydro and wind) is a contested issue in Switzerland (et al.)• Using experimental empirical methods & large-scale surveys

of residents, we have investigated the relative importance of factors influencing social acceptance

• Research Questions: • What are the most important determinants of community

acceptance of hydro & wind in Switzerland?• How important are local ownership & distributional justice

(fair allocation of cost and benefit) in determining social acceptance?

• Results suggest that community energy can positively influence social acceptance

Tabi & Wüstenhagen 2015, 2017; cf. also Salm/Hille/Wüstenhagen 2016

13Data and Methods

• Two surveys using choice experiments (Choice-Based Conjoint Analysis)

• Hydro survey: N=1004, representative for Switzerland, Oct/Nov 2014

• Wind survey: N=1095, representative for 16 districts in North-Eastern Switzerland around planned wind projects, July 2015

• Recruiting via online panel (Intervista, N=60’000)

WindHydro

Source: Tabi & Wüstenhagen 2015, 2017

14Focus area of wind survey Wind

15Focus area of wind surveyWind

Source: Tabi & Wüstenhagen 2015

16

Local Ownership

Distributional Justice

Social Acceptance of Hydropower

Ecological Impact

Procedural Justice

Type of Owner

Water Tax

Jobs

Impact on Flora and Fauna

Participatory Decision-Making

Moderators:• Sociodemographic Variables• Psychographic Variables

Explaining Social Acceptance with Choice Experiments

Hydro

Source: Tabi & Wüstenhagen 2017

17

Project Developer Local Utility National Utility Cooperation of Local Utility & Specialized

Investor

Use of Proceeds No local value added Compensation to one local land owner (50’000 CHF/year)

Compensation to the Community (50’000

CHF/year)

Location On agricultural land In significantlandscape (BLN)

Close to residential area

Ecological Impact Almost none Large Small

Participation Public informationevent

Only legally required participation

Participatory siting (incl. number and

location of turbines)

O O O


Investor



CHF/year)








O O O


Investor



CHF/year)








O O O


Investor



CHF/year)








O O O

Which of the following three wind energy projects would you accept?

Sample Choice Task Wind

4 levels per attribute

Fiverelevant attributesof a wind park

11 Choice Tasks

per respondent(with varying

attribute levels)

Respondentchooses

preferred project

3 hypothetical wind parksto choose from

Tabi & Wüstenhagen 2015

18

05

1015202530354045

HydroWind

Results (1): Importance of AttributesR

elat

ive

Impo

rtan

ce [%

]WindHydro

• While environmental impact is the #1 concern of Swiss residents, local ownership and distributional justice are important drivers ofsocial acceptance.

19Results (2): The Most Preferred Wind Project

-70 -60 -50 -40 -30 -20 -10 0 10 20 30 40 50

Nur gesetzlich vorgeschriebene Partizipation

Informationsbroschüre und Webseite

Öffentliche Informationsveranstaltung

Mitbestimmung über Anzahl und Lage der Windturbinen

Kaum lokale Wertschöpfung

Abgeltung für 1 privaten Landeigentümer (50 kCHF/Jahr)

Direkte Auszahlung an alle Einwohner (50 CHF/Kopf*Jahr)

Abgeltung an Gemeinde (50 kCHF/Jahr)

Auswärtiges Energieunternehmen

Kooperation lokales EW & spezialisierter Investor

Lokales Elektrizitätswerk (EW)

Einzelperson aus der Region

In bedeutenden Landschaften (BLN-Gebiet)

In der Nähe von Wohngebiet

Auf landwirtschaftlichen Nutzflächen

In Industrie- und Gewerbezonen

grosse

mittlere

geringe

fast keinePa

rtizi

patio

nVe

rteilu

ng

Erträ

gePr

ojek

t-en

twic

kler

Stan

dort

ökol

ogis

che

Ausw

irkun

gen

Contribution to social acceptance (Part-Worth Utilities)

Attr

ibut

es o

fa W

ind

Park

• (Co-)Investment of local utility, financial contributions to local community andlocal participation in siting decisions positively influence social acceptance.

20Outline


21Caveat 1: Social acceptance changes over timePolicy makers need to be mindful of the project valley of death

DevelopmentFeasibility OperationConstruction

Project cost Project riskProject “Valley of Death”

22Caveat 2: Silent majorities vs. vocal minorities

Le Q

uotid

ien

Jura

ssie

n17

.12.

2010

http://www.arcinfo.ch/articles/regions/jura-jura-bernois/le-parc-eolien-de-st-brais-remis-en-service-596241

23Caveat 3: More players involved = higher complexity

www.energeticcommunities.org.au

24Outline


25Conclusions

– Community ownership of renewable energy assets is a widespread phenomenon in Germany & Switzerland

– This has been facilitated by (a) strong tradition of community ownership in infrastructure assets, (b) energy policies that created a low-risk environment for amateur investors, (c) slow-moving incumbents provoking citizen action.

– A variety of community finance models exist, including mixed models between pure grassroots projects and large investor-owned projects.

– Community ownership tends to correlate with higher levels of social acceptance, but there are exceptions to the rule.

– TANSTAAFL in social acceptance, but it is quickly becoming a conditio sine qua non in renewable energy project development.

26Thank you!

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27Further Reading

– Wüstenhagen, R., Wolsink, M., Bürer, M.J. (2007): Social acceptance of renewable energy innovation: An introduction to the concept. Energy Policy, 35 (5): 2683-2691.

– Tabi, A., Wüstenhagen, R. (2017): Keep it Local and Fish-Friendly: Social acceptance of hydropower projects in Switzerland. Renewable and Sustainable Energy Reviews, 68: 763-773.

– Salm, S., Hille, S., Wüstenhagen, R. (2016): What are retail investors' risk-return preferences towards renewable energy projects? A choiceexperiment in Germany. Energy Policy, 97: 310-320.

– Karneyeva, Y., Wüstenhagen, R. (2017): Solar Feed-in Tariffs in a Post-Grid Parity World: The Role of Risk, Investor Diversity and Business Models. (under review)

– Ebers, A., Wüstenhagen R. (2015): 5th Consumer Barometer of Renewable Energy. Univ. St. Gallen. www.iwoe.unisg.ch/kundenbarometer

– Tabi, A., Wüstenhagen, R. (2015): Befragung der Anwohner von möglichen Windparks in der Ostschweiz [Determinants of Community Acceptance of Wind Power in Eastern Switzerland], Project Report, Univ. St. Gallen, www.iwoe.unisg.ch/ostwind

@wuestenhagen

promoting citizen investment in renewable energy - experience from germany and switzerland

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