Session 3Step one: we need to talk about energy ownership

In order to participate in the energy transition we need to understand the infrastructure that enables us to access energy.

Firstly we have the procuring or producing of energy sources, fossil fuels or renewable.

From these, energy is then generated. This is often in power stations, often from fossil fuels, but also from solar (sun), wind or hydro (water).

This energy is transmitted to energy distribution centers, and then supplied to houses, buildings etc - usually via energy grids, pipelines, transmission lines and managed by supply companies.

In some countries, all of this infrastructure is owned by the state or the local government. In many more countries this is owned, or part-owned, by private companies. Most often the main purpose of these companies (unless they are not-for-profit) is to generate profit for their shareholders. This means that any decision on tariffs or infrastructure upgrades has to serve the primary function of profit generation, before they can serve their customers. With energy, an essential service, being held in the hands of private companies it is easy to see why action on climate change is far too slow for the scale of crisis we are facing.

The mPOWER project has identified some key reasons why it is important for energy infrastructure to be owned and managed by local authorities, in ways that are not for profit.

Local authorities are close to local citizens

Local authorities are often the closest level of government to citizens and as such are best placed to enact the democratic will of the people. With citizens around the world facing rising fuel prices, the impacts of climate change and fuel poverty, it is essential that we strengthen local systems to be able to respond to people's needs. One of the ways to do this is to make the energy system clean, green and fair.

Data for the transition

Private data ownership is a significant barrier to the energy transition. Research conducted by the mPOWER consortium found that local authorities struggled to access the energy data they needed to make assessments on how much energy households were consuming and therefore, how much they would need to generate as they transition to renewable energy sources. This was because the energy is owned by private companies who keep the data closely guarded, to ensure maximum profit gain.

Learn more about the importance of data here:

Profit based decision making

The commonly-held idea that competition in the market will decrease prices has not been successful in providing the best services for citizens. Market logic has failed to deliver fair, affordable and transparent prices or a climate friendly energy system, with infrastructure that will enable the climate transition. A key way to develop systems that are equitable and just is to ensure the-overall energy infrastructure is managed and developed on a local, municipal (local authority) level.

Our experience has led us to conclude:

  • The municipality is the most appropriate government level to take climate action and that our energy future should not be left to the discretion of governments or companies alone.

  • Local authorities know their local energy resources and energy saving potential best.

  • Cities and citizens are the most relevant change makers in the energy transition, and they can be empowered by sharing and developing better, effective, democratic sustainable alternatives.

  • People most affected by climate change and (energy) poverty need to be part of the solution.

In this website, we highlight models that use different forms of public and/or commons ownership as best practice. We are also interested in the values that these models incorporate, and the end goals of such projects - to provide cheaper, cleaner energy to their locality.

We should also make clear that we are not saying that all forms of private ownership are undesirable. In Session 9 we explore how different local partnerships can be an effective tool in the energy transition - and in some cases this includes local businesses. However, from an economic perspective, we value smaller private companies that are rooted in local areas over large multinational companies, where the profits very rarely go into cost-efficient, local development.

Across the world, there are fantastic examples of public or community owned energy systems, that not only provide clean, green energy for their ‘customers’ but also use any profit made to continuously reduce tariffs and invest into assets for the local community - such as bikes, childcare, schools etc. In these examples, citizens move from being passive consumers to active consumers. They own the energy they use and people are able to feed into decisions on how profit from their public asset is used. Discussions around who owns our energy are a key part of moving towards a world with better local democratic systems that truly create equitable societies.

A term that is useful for you to get to know is ‘energy democracy’.

Energy Democracy understands that the energy transition must be rooted in social and environmental justice. Under the current global energy system huge amounts of people face inadequate access to energy, increasing hardship in paying the soaring costs of energy and immediate impacts on their health and wellbeing from pollution caused by fossil fuel extraction and burning.

These are systemic issues. Energy democracy argues that we should have a system in which everyone can access affordable, clean energy. And that the power to make decisions regarding our energy system should be in the hands of people, not in the hands of multinational corporations or states that often pander to the needs of private companies.

To learn more about how energy democracy drives a just transition - check out our video below and read the chunk on energy democracy.