The enormous growth in local renewable energy is decentralizing the electricity system, often supplanting energy from centralized power plants. But not all renewable energy is built locally, even in a country like Germany with massive local ownership of its renewable energy systems. The Germans are undergoing significant upgrades to their electricity grid as they push 25% renewable energy, and transmission is part of the plan.
And as with their wind and solar generation, the Germans are committed to letting ordinary citizens reap the economic benefits of the “energy change,” announcing a new plan to let citizens invest in transmission lines.
It’s certainly a novel idea. High-voltage transmission lines in the US are typically built by vertically-integrated utilities or big transmission companies that – even during a recession – get a rate regulated return on investment of 13%.
The German concept would allow up to 15% community ownership in a transmission line, with a guaranteed return of 5% for local investors. They’re upfront about the motive, too: “the minister is hoping the scheme will take the edge off opposition.”
Consider this. The Edison Electric Institute estimates that utilities and transmission companies will spend $66 billion on new transmission between 2011 and 2015, with the entire cost borne by ratepayers. The difference between a 5% return and a 13% return is nearly $11 billion over 20 years.
With the NIMBY opposition to large wind farms and transmission in the US, community ownership of transmission is an idea regulators should take to heart once they have exhausted the non-transmission strategies for meeting local power needs (distributed generation, demand response, efficiency, to name a few).
But community-owned transmission could save billions, reduce opposition, and spread the economic benefits of clean energy infrastructure. Sounds like a winner.
Front page photo credit: Jeremy Buckingham MLC (some rights reserved)
This post originally appeared on ILSR’s Energy Self-Reliant States blog.
John Farrell directs the Energy Self-Reliant States and Communities program at ILSR and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. His latest paper, Democratizing the Electricity System, describes how to blast the roadblocks to distributed renewable energy generation, and how such small-scale renewable energy projects are the key to the biggest strides in renewable energy development. Farrell also authored the landmark report Energy Self-Reliant States, which serves as the definitive energy atlas for the United States, detailing the state-by-state renewable electricity generation potential. Farrell regularly provides discussion and analysis of distributed renewable energy policy on his blog, Energy Self-Reliant States (energyselfreliantstates.org), and articles are regularly syndicated on Grist and Renewable Energy World. John Farrell can also be found on Twitter @johnffarrell, or at email@example.com.