The story of the first Spanish renewable energy cooperative
By Urszula Papajak
In 2010 Gijsbert Huijink and a group of friends launched a campaign to find 350 people to join the first renewable energy cooperative in Spain. Six years later Som Energia reached 27,000 members, 37,000 customers and is now generating enough renewable energy to meet the annual needs of 3,200 families!
Huijink explains how, despite the legislative barriers and the financial crisis, he and a group of friends managed to run a successful cooperative.
SOM Energia produces electricity from its own renewable energy sources (sun, wind, biogas, biomass) and is funded with voluntary financial contributions of its members. The cooperative is organized horizontally, with local autonomous groups in towns and cities who determine the future of the organization. It currently sells its electricity at cost price lower than the price offered at the conventional electricity market. The price of each kWh is half a cent cheaper than the market price.
How did it all start?
– When I moved to Spain with my wife in 2005, we bought an old farm — explains Huijink. — We were so surprised how difficult it was to get the electricity there. At first we were looking into installing solar panels and batteries — says Huijink — then we became interested in putting up a small wind turbine next to our house. But then we got to legislation, the economic and practical parts and it all started getting more complicated…after some time I realized that it would be much easier to invest with other people in a bigger wind turbine. I started to look for a cooperative in Spain and couldn’t find any existing one, so I decided to set one up. I shared the idea with friends and before I knew it, lots of friends were interested.
In December 2010 157 people joined together with the common aim to produce and consume their own renewable energy. In January 2011 they started to work on applying for all necessary permits and by October the service was launched, initially for just a few hundred clients.
Overcoming the odds
– Finally a first PV project of 100 kW on an industrial building in Lleida was selected — explains Huijink. The installation started in early 2012 and by April it was fully functional. Consequently 8 other projects were selected and realized, leading to a portfolio of 732 kWp solar and a 500 kW biogas plant. The total investment amounted to 3.5 million Euro. Around 1100 of our members participated. Collecting the money commenced in June 2012 and within 10 months we were fully funded. All these investments kept us pretty busy until the beginning of 2014. At that time we were less than 10 people in the office for all the tasks at hand. Then, the government decided that Spain had produced more than enough renewable projects and could not afford paying any more feed in tariffs (FIT), so no more projects were going to be accepted, leading to a full stop in new project development.
Also, despite a unanimous parliamentary decision to quickly implement self-consumption legislation four years later, no practical solutions have been implemented. There is a small legal loophole so it is not impossible but the reality is that only a few hundred pioneers have put solar panels on their roof. The government tactics have been to delay coming up with anything practical and fair. So we are currently looking at legal proposal #3, with no net balance and a ´solidarity tax which makes you pay for all kWh you produce yourself, even the ones you use yourself instantaneously and so never enter the grid! So the solution that has created so much enthusiasm and citizen participation in other countries was firmly closed for our members.
With the two main mechanisms for increasing renewable production basically blocked, we started to look around for inspiration at other initiatives in Europe.
We were looking for a model that would allow us to:
- Set up new renewable energy projects (and not re-finance existing projects)
- Give a minimum return to our investors
- Not promise things we cannot deliver
- Make it easy for people to participate
- Create confidence for people to invest in projects with a life-time of 25 years (this in a Mediterranean country where 5 years is about as long term as things get)
- Allows everybody in Spain to participate, not just the people who have their own house and have a suitable roof for solar PV, but also people who rent an apartment with little practical possibilities to set up their own project
– The project also started in the middle of the financial crisis though — he adds. — There was no access to banking financing of any sort whatsoever. Banks were simply closed. They were trying to manage existing business and reduce their losses and they weren’t interested in new business, certainly not a cooperative business without any financial background or any numbers behind it. However, because of those barriers we quickly realized that if anyone is going to make it work, it has to be us. We couldn’t rely on any support but therefore we became very focused and strategic.
We came up with our own model. With a mix of solar, wind and hydro projects around Spain we tried to simulate the typical demand curve of our members as well as possible. As there was no FITs, all projects had to compete in the ´market´ and even paid a 7% electricity production tax to the state. Only the most efficient projects guaranteed that the money invested would return, so we were looking at a solar project in the south of Spain with 1600 full-load hours, in very windy spots with over 2700 full-load hours and re-powering of hydro projects where the civil works were still in a good state and we ´only´ had to put in a new turbine.
Any of the 27,000 members we currently have can participate by making a special, 25-year loan to the cooperative at zero interest. Your investment is in the system and not in one specific technology. We all share the advantages and disadvantages of each project. For each 100 Euro participation, participants will get an estimated 170–200 kWh/year compensated on their electricity bill with Som Energia. Participants keep paying taxes, grid access fees, etc.
Simply get started!
– We do realize that our model isn’t easily replicable. There are many ways to do this successfully. But my advice to anyone who wants to start their own cooperative is simply get started! Find your own focus — whether it’s an energy efficiency project, local production, biomass or solar. Keep in mind that banks are paying historically low interest rates at the moment and that many people lost their trust in the banking system but they still wish to invest their savings in meaningful projects and get started!