Social organizations will play a key role in the energy transition. Here's why

When talking about the energy transition, it’s easy to be amazed: solar installations are hitting new records, while battery storage prices are breaking down at a level barely imaginable a year ago. However, clean technologies still have a limited impact on our society. How is that possible?

The annual growth rate from 2013 to 2017 was more than 13% for renewable resources, in comparison with a growth of around 1-2% for the conventional ones (oil, petrol, gas) during the same period. However, if we look at the last BP Statistical Review of the sector, it’s still a drop in the ocean in comparison with unsustainable energy sources. In 1997, the year of the Kyoto protocol, the coal percentage in the world energy mix was 38%. Today, 20 years later it still sits at 38%. In the meantime, we grew our electricity production by more than 80%. It means that clean techs are not replacing unsustainable solutions. In term of demand, both are growing, and just add up together. The absolute percentage of renewables in our energy mix is not growing fast enough to change our way of living. At this rate, we are far from being in line with Paris Agreement targets to limit global warming to 1.5-2°C.

To effectively engage the transition to a new world, relying on technology components isn’t sufficient. It’s vital to take into account social organizations to replace old patterns en route to a wider and better dissemination of sustainable technologies. At a local level, this would consist of understanding how stakeholders collaborate with each other and what strategies will be mandatory to involve them in the future to build resilient structures. That framework is essential to foster renewable solutions.

Organization mix

A resilient energy ecosystem must have three key players: public bodies, private actors and the general population. These are “pivotal actors” able to mobilize themselves depending on their roles and their interests.

The mission of the public sector is to provide public services, while promoting social solidarity by reducing inequality. Its administrative layers make it resilient, but hard to change. That’s why, with the increase of urbanization challenges, a lot of cities struggle today to shape a better future. Municipalities may lack in-house skills and might suffer from the decrease of their financial power and influence. But some others voluntarily set up local energy agencies aimed at reducing bills, while securing equal access to services.

For instance, Barcelona encourages energy efficiency, energy savings and local renewable sources. Enlightened management of this type could ultimately lower costs related to the national network, and thus reduce the related dependency. In addition, in Barcelona’s case, the participation of the population is a key pillar to co-design solutions. Therefore energy is really uses as a promoter of social cohesion. So, while they can be difficult to mobilize, local public agencies are essential to establishing a first framework in which solutions can flourish.

To do so, partnerships with private actors are essential. Despite their need to be profitable, they can be totally aligned with the general interest. More and more companies are offering integrated solutions in the form of micro-grids. Not only does it solve the urgent electricity issue, but it increases the return-on-investment of renewable projects. Historically, micro-grids have been set up for radical cases (military uses, isolated systems, etc.) where there is a single user/owner, like in the case of Princeton university. Other models are still emerging, such as the hybrid system of Borrego Springs, where distribution is operated by a local operator but the production assets can be owned/managed by final users or other third parties. Such mix-organizations have really good operating systems. In this way companies push further innovations and participate in the financial investment and technical update of the infrastructure.

And yet, it naturally encourages the population to pay for that innovation. Thus, huge differences in the price and the solutions’ access among the same territory can emerge. As a consequence, it can lead to silo services and inequalities that still make steering by a public body mandatory. Last but not the least, inhabitants are now taking a leadership role in the future of energy. They’re looking to reach a certain level of well-being and leverage more power by work in community groups. They can organize themselves within cooperative systems to achieve environmental targets and promote social cohesion. It’s increasingly adopted to jointly invest in renewable energy installations and then manage them.

This strategy is essentially based on robust and low-risk technologies. More and more, it takes on board existing, collectively owned housing units (condominiums) and small firms; a unique way to foster both economic and democratic success. But, by nature, the model is usually focused on certain technologies (PV panels most of the time) and confined to neighborhoods, districts or villages, making it interdependent with the two previous players.

So every pivotal actor has its own strengths and weaknesses, which make them complementary. It’s impossible to exactly know the future of the energy sector, but we should prepare to welcome mixes of all these organizations. They will plug into the main grid to transform our system at local level and then at global level. To do so, they will need to work more closely together to articulate their actions.

A new path

The form of such collaborations remains to be seen. In other words, strategic choices must be made today to create an inclusive and resilient future. While the final picture is still unclear, it’s already possible to depict certain key factors of success to pave the way forward.

On a technical level, while electrical solutions like PV panels are helpful in the transition, they’re just a part of it. More than 50% of the energy demand in EU cities is thermal energy. In other words, local organizations should be more focused on thermal installations with district heating/cooling (DHC) systems. That decision creates more connections between the different stakeholders. First, it can be compatible with all sources of energy and easily stored, but still enough “low-tech” to be appropriated by citizens. Second, in terms of regulation, it’s totally locally dependent, offering a higher degree of freedom for local actors. Third, the topic encompasses also retrofit planning, low-carbon budget actions, etc. Fourth, it’s connected to pressing social challenges, like fuel poverty issues.

To help the process of inclusion, actors in the energy transition process could be inspired by the approaches in the mobility sector. For instance, to deploy EV charging stations, Amsterdam promotes a demand-driven approach instead of top-down planning. After initial investment, inhabitants have to request new installations only if they need them. In this way, the city works around the classic trap of planning something that will not be used. It’s more reactive than pro-active, in order to welcome citizens into the process. It increases their motivation and lowers the risks of new installations. Likewise for urban energy systems, it encourages the establishment of incremental public-private partnerships for more adaptive infrastructures. Since the adoption rate depends on the end users, it helps municipalities to gain expertise to manage the related processes and solutions.

However, the governance question remains: how can we design organizations that articulate the relationships of all the parties? While high-potential tech projects have risen up recently to tackle that challenge, it’s also worth considering non-technical approaches. A first option would consist in welcoming inhabitants in the public-private partnerships by giving them the opportunity to subscribe to shares of the capital.

It’s hard to imagine co-management on a daily basis, but opening up the capital of the project would have many advantages. It would be based on clear, existing and proven contracts and financial vehicles to leverage new sources of financing. In addition, it would be a transparent platform for inhabitants to have right of inspection from time to time, without impacting daily operations. To date, such a system remains exceptional, except in certain situations like in the German stadtwerke, although it could be more commonly used.

These are just examples that come to mind. We must embrace all the forces of our society to create new, powerful alliances. In other words, either technical, economical or legal, our actions need to be based on a same philosophy of inclusion. That is condition number one that will determine an effective transition toward a sustainable future.