Som Energia: the rise of Spain’s first renewable energy co-operative
A look at how Spain’s first renewable energy co-op is growing despite the country’s financial crisis
From the picturesque province of Girona emerged Spain’s first renewable energy co-operative. Photograph: Alamy
Som Energia is Spain’s first renewable energy co-operative. We sell electricity to our members, competing with the big energy companies. We also produce our own renewable energy with relatively small projects, set up close to where our members live. We started as a small initiative focused around people at the University of Girona but soon spread to Barcelona and the rest of Catalonia. We already have 30% (and growing) members living in other parts of Spain. Our 17 local support groups hold regular town meetings to explain our business model to people around the country.
Our production/consumption model is successfully implemented in Belgium (Ecopower) and Germany (EWS, Greenpeace Energy) where people are members of co-operatives that provide them with affordable electricity generated by wind turbines, solar panels and biogas plants.
How does it work?
To become a member requires a deposit of €100 into the co-operative’s social capital. After 17 months, we now have more than 2,786 members, putting our social capital at €260,000..
As a non-profit co-operative Som Energia started selling green energy from existing sources in October 2011. It is electricity bought from the market and sold to our members. This renewable claim is certified via a government supervised system of certificates of origin. As around 35% of electricity produced in Spain is from renewable sources, and the demand for green electricity is still in its infancy, there is currently an oversupply of these certificates. Selling green electricity does not carry an extra cost.
If this was all we were doing, it wouldn’t amount to much of a change. Most of the big electricity companies also offer this. What makes us different is our goal to produce 100% of our members’ consumption via new renewable production projects, owned by the co-operative and financed by its members.
We recently asked our members to invest and 215 members have now invested €638,000. In the long term, we expect the average contribution to fall to €2,500 per member, with roughly half of our members investing. We will open 10 year investment bonds to our members by the end of the June and expect to get €3.5 million in investments from our members over the next 12 months.
A first project (100kW solar panels on an industrial building) was bought last year. It has been producing electricity for two months. Eight more solar projects are in various stages of being purchased, totalling 416 kW. Meanwhile, we have also purchased a 500kW biogas project – the first biogas project in Spain to be owned by a co-operative. Construction will start within the next week and the total investment stands at €2.2 million.
Interesting developments and barriers
We do not get any subsidies. In some countries government subsidies, lottery funds or other private foundations support co-operatives like us. In Spain such money is not available. The current crisis has only made us more determined to succeed, be efficient and earn our own bread.
The financial crisis has been good for us
Normal bank finance is not available anymore in Spain. Nobody finances anything anymore. As our financing model is based on direct investments by our members, we are not affected. Even more, trust in the banks has decreased enormously over the past few years and people seem to be more open to alternatives. At least they know where the money is going to. The consequence is that we got a lot of projects presented on a plate to us with the feed-inn tariff already assigned. This has saved us two to three years of development time. It also allowed us to the choose the projects we like.
Complicated energy laws and administrative requirements
It took us nine months to get a permit to operate in the Spanish system. The financial cost was not very high, the cost in time was. We repeatedly had to send (the same) documents to various ministries and organisations. This is clearly a big barrier to entry.
Minimum purchase requirement in the electricity sector
The Spanish energy system has a minimum purchase of 100kWh in the daily market and 1000kWh in the future market. This is problematic for smaller players since, especially in the beginning, you often do not attain the minimum and, have to enter ‘zero’ as your purchasing forecast for that hour of the day.
Later, you get punished for your bad ‘prediction’ as all the consumption of your clients during that hour is invoiced at ‘deviation’ cost price. Another problem is that, even though we made our first purchase of electricity six months ago, we still do not know the final price per kWh for that purchase. It will take a few more months before the ‘system’ will let us know.
The combined consumption of our members is growing by the week but we need a minimum 5,000 members for a sustainable business operation.
Web only, low cost business model
Currently, all we have are three computers, a database somewhere in the cloud and lots of enthusiastic members who are our ambassadors and help us grow. We do not advertise, we have a small office in Girona Technological Park. We do not send paper invoices to our members, paper membership certificates, etc. We have no company cars, do not pay travel costs for the moment and only pay normal salaries to our two full-time and one part-time employee. During the first year we worked with volunteers only. Most peopled participated part-time but a few volunteered full-time. We use Facebook and Twitter to reach new people.
Cancellation of feed in tariffs
At the beginning of this year, the Spanish government froze all feed in tariffs to new renewable energy production projects. This means if we had started only as a production co-operative (like the large majority of UK co-operatives) our project would be on hold right now. Fortunately we have a bigger social goal (transforming the energy system), another business line (selling electricity) and the possibility to invest in energy saving and heat production projects which do not require subsidies.
We have benefitted enormously from contacts with other RES co-operatives. In particular, Ecopower (Flanders), have been very generous in taking the time to explain their model to us. Currently there is an initiative to streamline the learning from best practices on a European level via REScoop, the European federation of groups and co-operatives of citizens for renewable energy. The project has received Intelligent Energy Europe funding and is expected start shortly. UK members of the consortium are Energy4all and ALIenergy.
We advise all other interested initiatives to join via the websiteREScoop.eu. We have a lot to learn from each other.
Gijsbert Huijink is co-founder and currently vice-president of the board ofSom Energia sccl. David Montgomery is co-founder and was member of the board of Som Energia sccl until March 2012.
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