The Climate Justice Charter, which has been endorsed by more than 200 organisations in SA and presented by activists to Parliament for adoption, lays out several systemic alternatives for transformative change.

One of the key sectors identified is set out in clause 4.2 (“socially owned and community-based renewable energy”), where it says that as an alternative to fossil fuels and nuclear energy:

“We will advance socially owned and community-based renewable energy systems supported by participatory budgeting and incentives for workplaces, homes and communities. Such energy technologies must be industrialised in South Africa using renewable energy. Efficient use of energy and technology will be crucial in this transition.”

To bring the charter to life and use it to develop and advance systemic changes, renewable energy must be at the forefront. In addition, the traditional energy-sector ownership models must be replaced with ones that serve this new reality.

One way to achieve this is when communities share the benefits of renewable energy and the income from these projects. But to understand how to roll out community-owned renewable energy (CORE) we need to understand what it is.

CORE refers to projects where a community group initiates, develops, operates and/or benefits from a renewable energy resource or energy-efficiency initiative.

This is where the resource, such as solar or wind, is viable and residents take part in the energy installation in one or more of the following ways:

• As an investor or legal owner;
• As an active participant/partner/investor;
• Where the energy installation is run by the community, and its members are employed to build, manage and operate it;
• Where residents are the beneficiaries, either as end users of the clean power or recipients of money from the sale of it.

Objectives of CORE

Decarbonise the power-generation sector

It is imperative that decarbonisation becomes the central theme of energy generation.

The need to limit global temperature gains to under 1.5 degrees Celsius is more important than ever. The last UN IPCC Report paints a bleak picture of current efforts and sounds a dire warning of species loss and climate-related risks for hundreds of millions of people by 2050. The report makes it clear that limiting global warming to 1.5 degrees should be the immediate priority to prevent catastrophic climate shocks.

Decentralise energy distribution

According to data from the International Energy Agency’s World Energy Outlook 2019, more than 600 million people in Africa have poor or no access to the grid.

The global figure is even scarier. Some estimates are almost two billion.

The old models of building new fossil fuel-based power generation and extending the grid (transmission lines and electricity sales) are archaic – they haven’t changed since the dawn of electricity.

Clearly, “business as usual” is no longer a viable model.

Decentralised energy generation should be the new normal. Microgrids, embedded generation and socially owned renewable energy will occupy this space and may be the panacea for energy access and climate change adaptation and mitigation.

Decentralised renewable energy, especially solar, is relatively quick to deploy at scale and becoming more affordable. It is also easy to bring new domestic users on board. Providing basic energy for a few LED lights and phone charging costs as little as a few cents a day, so users at the bottom of the pyramid can afford it. The proliferation of mechanisms such as pay-as-you-go solar and microfinance has the potential to make energy access possible for anyone, anywhere.

Democratise the energy value chain

The old energy utility model is predicated on state or investor systems that lock out community ownership. They are some of the earliest industrial capitalist endeavours of scale. Banks such as JP Morgan were the earliest funders of Nikola Tesla and George Westinghouse and still play an active role in the electricity sector almost 100 years later.

Socially-owned energy installations have the potential to disrupt the prevailing model.

Benefits of CORE

Science, technology, engineering and mathematics-based education (STEM) is supported in the renewable energy arena because of its potential for innovation. A robust renewable energy sector goes hand in hand with quality education.

This is evident from simple energy installations at schools to more complex scenarios where institutions of higher learning are central to the invention, development and research of new technologies.

Some of the more promising breakthroughs in energy generation and battery storage come out of research at universities and colleges. With the advent of the Internet of Things and the Fourth Industrial Revolution, STEM education has gained more importance and relevance. There are opportunities for citizens to take part at all levels of the value chain.

Job creation is an obvious benefit when it comes to engineering, procuring and building renewable energy plants. This initial phase creates more, meaningful, work, albeit temporarily. Long-term, quality jobs are created in operations, management and maintenance. For instance, in the US renewable energy jobs outnumber oil and gas jobs two to one.

The entire value chain offers opportunities for almost all skill levels and as the sector matures more may arise, and the sector can help in the just transition to renewable energy by training and employing workers in the fossil-fuel industry.

The burgeoning young population will also find opportunities that are easier to access than traditional-energy jobs.

Entrepreneurial opportunities are part and parcel of the energy sector, but more so owing to the decentralised nature of “new energy”. This is good news for project developers, joint ventures, installers and resellers of energy tokens at retailers and spaza shops. Repairs, installation upgrades and cross-selling should further encourage entrepreneurial endeavours.

Clean energy is a prerequisite for quality life and CORE installations have a positive effect on the lives of residents. Pollution, lack of lighting, poor or no access to technology and lack of safe spaces are clear and present dangers for marginalised communities and other spaces without access to power.

For all these reasons the provision of clean and reliable energy through the CORE model must be pursued with vigour since it offers untold benefits.

Finally, climate adaptation and climate mitigation are also both addressed in the rollout of CORE and their benefits trickle down to all beneficiaries in direct and indirect ways.

Requirements for CORE to thrive

Policy and legislation

To create an environment for CORE to thrive there needs to be a realignment of policy and legislation.

South Africa’s legislative landscape is narrow and restrictive; it is designed to exclude new entrants and stifle competition. The national utility is monopolistic and controls the three most important levers of the sector: generation, transmission and distribution (sales); although the municipalities are also resellers and/or agents of the utility.

For CORE to live up to its promise laws must change to favour competition in the energy sector and the restrictive monopoly of Eskom must be broken up. To this end, the creation of the Independent System and Market Operator (ISMO), first proposed in 2012, must be accelerated and the requisite laws promulgated soon.

The ISMO would act as the market exchange for buying and selling energy from the traditional operators, the independent power producers and, in time, from the new category of micro-generators such as CORE projects and virtual power plants. Of course, the transition to a smart grid must be in tandem with the modernisation and rebuild programme that is essential to service the increase in demand as the economy improves and as new generation methods and modalities emerge.

Funding

The success and rollout of renewable energy in general and CORE projects in particular will demand more investment in the sector.

It is encouraging that the sector is already a hive of activity and attracts capital inflows from far and wide, although these have been from traditional sources. New, innovative funding models must be developed and the injection of new thinking must prevail. Pooling community resources, creating new financial instruments such as Green Bonds and Renewable Energy Certificates, offer potential for new inflows.

Immediate discussion should begin with the “stokvel” movement to enable investment in community renewables, offering competitive and profitable returns to investors and giving them direct ownership of energy infrastructure in their communities.

Cooperatives

The potential of cooperatives, the ease of setting them up and the support of the state for this form of ownership position them as the preferred vehicles for CORE projects, thanks to their developmental nature.

The Cooperative and Policy Alternative Centre has done important work on cooperatives and should undertake a study of the potential for cooperative ownership of community energy installations. We should look to European countries such as Germany and the Nordic nations who have perfected these funding models and who lead the way in private ownership of renewable energy assets.

Stakeholders

End users must be encouraged to adopt renewable energy.

The benefits of renewable energy, especially solar, over fossil fuels must be properly explained and implemented with the buy-in of residents so they see the benefit themselves; they must be able to gauge the improvement in quality of life and in their pockets.

Investors must be given certainty and competitive returns and encouraged not to be exploitative, and must develop the habit of “patient capital” so their expectations are managed and are not unrealistic. This applies to the traditional mature investor and the new community investor.

Project developers must develop new projects bearing in mind that residents expect to be, and should be, active partners. This will foster ownership and buy-in so all stakeholders are invested in the success of new ventures. Too often investors and project developers are parachuted into a new project with a “quick escape” foremost in their minds. CORE projects require that everyone stays the course.

NGOs and activists are already active partners in communities and have credibility, and their inclusion cannot be ignored. The same goes for faith-based organisations which have credibility, influence and access to capital.

Key concepts such as the Just Transition must be fully explored.

Micro- and mini-grids are ideal for the rapid rollout of community-owned renewable energy. It is possible to design microgrids from the smallest 20kW to more than 1000kW. It is also possible to design microgrids with solar photovoltaic and battery storage that will ultimately replace polluting diesel generators.

Advances in mobile payment systems, payment tokens and the Internet of Things all offer more efficient and immediate billing solutions that are easy to scale.

I am confident that CORE offers a clear path to poverty alleviation. This is evident in the economic opportunity that is unlocked when renewable energy is installed in areas with no access to energy. The need to fight climate change is fully addressed by CORE projects, especially through microgrids built around solar and containerised energy storage. Falling component prices in solar modules and an increase in battery efficiency open the way to address the twin evils of poverty and climate change. DM/MC

Sunny Morgan is a climate activist and social entrepreneur. He is the owner of Enerlogy Pty Ltd, a solar installer.

Daily Maverick’s Our Burning Planet and Maverick Citizen are partnering with the Climate Justice Charter Movement to report on issues central to our survival – the climate crisis and people’s democratic alternatives. This article is part of the series.

Further reading: Mike Barker, The Balance of Power: modelling of a microgrid in Durban