Ways to value work

I was challenged this week to put my work onto a commercial basis. “If you can’t define where the salary will come from, you will come to resent all the volunteer work you are doing”.

I pushed back, “maybe the model is a startup one, the reward will come in due course but I need to work hard and for free at the moment”. [I have looked into a business model canvas for my work and I knew as I said it that I didn’t even have a rigorous business model, so I was bluffing about this being my model].

Which made me think about other models.

Social entrepreneurship sits with a foot in two camps. The social sector has a tradition of delivering services that Government and donors value. The sector is being encouraged to look at alternative ‘business streams’ of revenue.

Writing a book is somewhat entrepreneurial, in that it involves risk of time spent and uncertain reward. But the product is not innovative and the reward is not based on success through stunning growth. The model can be simply a promise. If the final years-of-work-product is valuable enough, you are promised in income from it in due course.

Enspiral is a freelance community built around an abundance of high paying work so that everyone can comfortably earn enough and unlock a substantial amount of discretionary unpaid time, ‘more people working on stuff that matters’

The Open Source community explore ways to support those who give more to the community – donations, big corporate funders, employers being asked to recognise time spent on open source etc. So to an extent it appears a “sponsor” based arrangement where smaller contributors essentially sponsor projects through their discretionary time.

And there is probably a good reason I have been daydreaming about Universal Basic Income. Many of those volunteers who provide the backbone for community organisations (like mine, CORENA) are retirees. Essentially, you can unlock plenty of good work from peeps if you take away the need to earn money.

I would love to see stronger systems to value discretionary effort. Community credits perhaps? At its heart, I am motivated to work hard and to give above-and-beyond when it is something I care about. The peer-to-peer community and the commoners are actively having these discussions. If we contribute to the creation of value, how can we ensure the value continues to benefit the community rather than being extracted? How much reward should entrepreneurs get for the risk they take in the commons environment? How do volunteer contributions and $$ earned work smoothly together? Does trading value undermine the joys of giving value and is this a negative or positive impact?

In the meantime, I’d better get back to working on that business model.

What do you think works in the not-easy-to-fund space of driving social change?

Posted in Random | Leave a comment

Governance and organisational structure

For a long time now I’ve been interested in self-organising ways of getting things done. Clay Shirky provides the metaphor of exploring the desert. The existing institution doesn’t need to explore the desert unless it is in crisis mode. The startup will race out and find the first oasis it can but after that it has little motivation to risk anything by exploring further. A self organising community will slowly but surely map the whole desert as each individual risks a little discretionary effort and shares learning with the whole community.

The key challenge, of course, is building the community that wants to self organise along with me – and if I’m lucky enough to capture that enthusiasm, that I provide operational clarity and tools to empower all.

To that end, I have been exploring governance models, this blog captures the insights I have found most useful.

[I had hoped to gather insights during my Churchill Fellowship but community energy organisations are largely a blend of traditional institutional forms (NGO’s, member based associations and cooperatives) that have adopted some digital tools like Facebook and GoogleDocs. That’s not the cutting edge governance I was searching for but it is a reminder that traditional forms have developed some robust ways of operating.]

I think the Constellation Model, Swarmwise and the creative coalitions model from Crisis Action (described here) all provide valuable lessons.

constellation modelThe Constellation Model coordinates diverse stakeholders to achieve an agreed aim. It recognises that different organisations will want to work on different parts of the challenge. It advocates for an independent secretariat to ensure that the responsibility remains shared across the partners. It resources all the activities flexibly and the core leadership through MOU/partnership arrangements. Most importantly, it refrains from building anything permanent into its structure, as institutional permanence tends to become self protecting rather than focused on finishing the task at hand and winding up.

swarmsSwarmwise is about the people movement that got the Pirate Party elected to European Parliament. It advocates for management of group sizes to achieve working groups of about 7 people and informal groups limited to 150, with a middle size of 30 when a number of working groups are collaborating. It operates with very loose control (you provide the vision, the swarm does the talking) and introduces the three-pirate rule. If three pirates agree on an action, then they can act in the name of the organisation. Acting without permission is acting with accountability – all pirates are empowered to ‘own’ this organisation. The organisation did have guiding values and structure for the flow of resources (but again, not really controlled). The principle of supporting pirates to do good work and good PR in the name of the organisation led to everyone being given the freedom to get on and do what they think would be most effective. Transparency is essential with this model of governance because it provides the dimension of accountability to each other.

coalitionsCreative Coalitions provide an opt-in model, recognising that ideas are best when they are collaboratively created but decisions are best when they are decisive and clear. I like the “decide like a dictator” mode because in consensus mode there is an unfortunate desire for most of us to join the talkfest regardless of how committed our personal resources are in creating the action. The self organising power I highlighted at the beginning of this piece is all about giving stronger decision making power to those who are providing the action resource. You can see that the dictatorship in this context is not the all powerful dictatorship we fear because the resources to act depend on the decision being a good one and generating partners who ‘opt-in’. Likewise with the pirates – the more people supporting an action, the more resources it will have. The other takeaway from the Crisis Action is the importance of being clear and explicit about your model for change. How an action will lead to change is an important part of the culture and beliefs that create and sustain a movement. As Caroline reminded me the other day, storytelling and narrative is an essential component and needs to be used early in every journey.

Finally, I’ll touch on some tips from Enspiral, the NZ golden child of experimental, sharing economy, organisational structure. They use the magic group numbers of 30 (inner sanctum) and 150 (broader network). They have developed Loomio – a decision making tool that can cope with anything on the spectrum from consensus to dictatorship-informed-by-rich-discussion. The culture then develops to guide people as to when to participate in decision making – will your input help the organisation get a better result? Does participation help you grow as an individual? They also have a co-budgeting process to give everyone back control over the common resources that they are accumulating, in the proportion that each person has contributed.

Conclusion? There are no right answers, but you can see from the collection of resources above that people are exploiting some common features of group behaviour in order to unlock powerful and nimble collaborative efforts. Indy Johar is worth a read on this subject – he suggests 10 starting points:

  1. An authentic invitation to a shared challenge
  2. A love for the outcome, not the attribution
  3. Open whiteboarding, open planning
  4. Invest in collective capacity and shared learning
  5. Many-to-many accountability
  6. Mission goals
  7. Brand the mission, not your organisation
  8. Open data
  9. New models of financing
  10. New organisational infrastructures

As an aside, I have just read Together, the rituals and pleasures of cooperation by Richard Sennett and I must blog about it. It doesn’t dwell on organisational form but it has been an unusual journey for me through the thinking of philosophers and sociologists of the last 300 years. The resources above all touch on relationships and rich conversations, which the forms described are all trying to achieve. Sennett provides insights into the rituals and informal interactions that are needed to give rise to essential dialogic conversations – not dialectic debates aimed at being right but open-ended interactions where the participants learn, follow their own thoughts and benefit from the serendipity of whatever comes up.

Posted in Booknotes, Changemaking | Tagged , , | Leave a comment

Good Luck Dr. Finkel

community energy benefitsAustralia needs an excellent energy review by the Chief Scientist, Dr. Alan Finkel, more so now than ever. It is an unenviable task, and in his Adelaide briefing Dr. Finkel showed he already has his head around the issues and he is ready to recommend viable technical solutions. An immediate fix framed by a long term vision – great stuff!

Submissions to the Finkel review closed on Friday, mine made a few points, backed up by my recent Churchill Fellowship and last week’s Community Energy Congress:

  1. Decentralised Future
    The best energy system will have substantial neighbourhood / local scale generation and control. A smart, efficient network of decentralised grids was shown by Amory Lovins in the 70’s to be the most cost-effective if one looks at the system-wide economies. This is what we should be aiming for.
  2. Paradigm shift for ownership, control and beneficiaries
    Our energy transition provides a unique opportunity to challenge the current paradigm. While the system claims to deliver value to customers and long term benefits to the Australian public, it has repeatedly failed on measures of fairness and climate change outcomes. It is clear that changes to the ownership of the system, the control of the system and the immediate beneficiaries could deliver these needs far more effectively. This is what the community energy sector is currently proving.
  3. Climate change demands we reach 100% renewables by 2030…
    …and technology could sprint us there tomorrow.  The climate change imperative is more pressing than official reports and the preliminary Finkel report states. Remember that the world has agreed to limit warming to 2°C and agrees that 1.5°C would be better. Remember also that the sum of commitments doesn’t get us there yet. Australian government projections rely on the international community to sell us surplus credits while ignoring the sun shining strongly in our own backyard. The technology could give us 100% renewable electricity in the next 5 years if we wanted and I believe we could do it affordably by 2030. We need our electricity systems to race to a target of 80% renewables because the transitions of heat and transport rely on us getting this sector moving first.
  4. International Insights
    My international experience showed that other countries are benefiting from stable policy environments, a culture of support around community involvement in the energy system and a specialised NGO sector often with 20 years presence in their communities. Energy markets are often more innovative and experimental because the energy transition is built into the regulatory culture. Australia has done well in its 15+ year support for rooftop solar but is yet to unlock the mid-scale and local opportunities. There is no suitable structure in place for regulatory and system innovation.
  5. Community Energy will play a significant role
    The community energy sector in Australia is emerging at pace. There are now over 90 groups around Australia, many of whom convened in Melbourne this week. There is much to be learned about why communities are mobilising in this space and the ways that support from all tiers of government can unlock community effort and benefits. This is a sector that warrants significant funding and policy attention.
  6. Address the barriers to local scale energy solutions
    The energy corporations and individual sites are not incentivised to build local scale energy solutions. At the neighbourhood scale, a project carries the overhead of collective decision making and multiple stakeholders. Compounding this are the barriers to entry in the market for a modestly scaled project and a number of market failures which sees financial value and local benefits underpaid in the NEM.
  7. Resource the process of planning our energy transition
    Finally, the process by which we arrive at good solutions to the current energy market crisis needs a rethink. A single report such as this one will only start the conversation. Or worse, make no progress at all in the hostile, childish buffoonery that is our political environment on this issue. Lets recognise that it is worth resourcing a deliberate process of designing, experimenting, listening and doing for at least the next three years. We need to crack open good solutions, get stronger agreement amongst stakeholders and consistently improve the financial, technical and regulatory systems in the NEM. No single entity or Government can lead this process. Creating a neutral space with an independent secretariat and shared understanding of the ability of good process to deliver good changes is the key to success in how our energy transition planning and delivery proceeds.

You can view my full submission, complete with recommendations here.

Posted in Climate change policy, Community energy, Energy Efficiency, Policy Ideas | Tagged , | Leave a comment

Nine inspiring MESSAGES from the 2017 Community Energy Congress

C4CE congressLast week over 600 people attended the 2017 Community Energy Congress in Melbourne. There was a wave of positive energy as delegates from the 90+ community energy groups all around Australia shared insights and worked toward greater levels of local renewable energy and community self-sufficiency.

Attendees were given insights from international speakers. Soren Hermansen spoke about his community’s journey to 100% renewable energy. Candace Vahlsing talked about the national community solar partnership under the Obama administration which supported towns and cities across America to provide access to solar energy to those without appropriate roof space. Indigenous leaders from Canada spoke passionately about moving communities away from welfare dependence and back toward pride and self determination. Chief Gordon Planes & Melina Laboucan-Massimo spent much of the congress working with first nations delegates from across Australia, culminating in the announcement of the First Nations Renewable Energy Alliance.

I was inspired, here are my nine key take-aways:

  1. This is a growing sector. There are many more groups and success stories than 2.5 years ago at the inaugural Congress. (90 groups Australia-wide as mapped here  bit.ly/CEGroups).  Many groups are yet to install their first projects but numerous success stories have emerged and the next measure in this space promises to show a genuine explosion of activity.
  2. Communities soon turn their attention to positive projects. Many stories of community energy have their genesis in communities who have been brought together to fight mining and fracking. Before long, these groups take the desire to do something positive and turn it into local action.
  3. Renewable energy offers self sufficiency and greater local control. Many regional communities are on the fringe of the electricity network or off-grid and tolerate poor energy security and high energy costs.  Aboriginal communities are often the worst hit with astoundingly high costs to provide for basic needs. Locally owned community energy promises new opportunities, a revision of local economics and self determination for towns.
  4. Communities care about everyone in the community including those on low income. Many groups want to ensure that savings from renewable energy are enjoyed by those in the community that can least afford the capital outlay of rooftop solar. In a small regional town, any savings made by those on low-income is likely to recirculate in the local economy and can be a gain for local jobs and small businesses.
  5. Energy services are needed everywhere. There is no coincidence that many of the groups have invested in delivering energy efficiency to local residents and businesses. Eg Enova has a not-for-profit arm with energy coaches, Uralla has delivered home energy audits throughout the town as part of its zero-net energy commitment. Energy efficiency (EE) is the most cost-effective source of energy capacity in a region and investment in EE will deliver high levels of local economic value. The sector will continue to advocate for regional energy hubs – independent, community-based advisory services that can support each local area in its own energy and economic transition.
  6. There are so many models of community energy. Different ownership structures, different beneficiaries, different partnerships. Legal, financial and technical approaches that all vary. At first glance this might seem overwhelming but the rich diversity of community energy models signify that a) every community can develop an approach that will work best with its unique needs and b) there are plenty of models to copy or modify in order to suit local needs. Community Power Agency have developed some great resources to get started.

  7. Big renewable energy projects can involve communities positively. The latest projects underpinned by contracts with the ACT Government have part-community ownership stipulated. While communities and corporate project developers are still defining the detail, the sentiment proves that the benefits of major projects should be shared widely.
  8. Communities will rise above political divisions. The squabbling of our politicians at both state and federal levels is completely unhelpful. The energy transition and the community energy sector relies on the incentive structures in the market to promote new renewable energy investments. Nevertheless, local projects continue to adapt to the conditions of the day and create business cases that allow investment to proceed.
  9. There is a wealth of knowledge and a willing, helpful sector ready to share its resources. 600 people, many self-funded to attend, many actively volunteering and working in their communities to make the energy transition work at a local level. Stories of success, lessons learnt and willingly shared. This is a grass roots sector that is set to grow as energy projects in towns and suburbs across Australia fund groups to do good work in their communities.

What next? I predict we will see an expansion of the sector, the explosion of which will depend on government policy settings and energy market settings. It would be nice to believe that the momentum created by the Victorian and NSW governments could be replicated and expanded around Australia. If you are not yet convinced that community energy needs to play a strong role in our energy transition, here’s a diagram that captures the promise of the local energy pathway:

community energy benefits

Posted in Community energy, Energy Efficiency, Policy Ideas, Solar Energy | Tagged , | 1 Comment

What is community energy?

Community energy can bring economic benefits to local citizens, it can strengthen communities’ social ties and it can offer solutions to our energy challenges. So what is community energy exactly?

community-energy-copenhagen-wind-turbine

 

Copenhagen’s offshore wind turbines are 20% community owned

 

Below, I’ve described the variety of initiatives that could be described as ‘Community Energy’. In particular I’ve looked at three financial models in operation in Australia – donations, investments and bulk buys. Community activism leading to re-municipalisation and community-led energy program delivery are covered as international trends.

The common theme of all versions of community energy is that they engage citizens in non-traditional ways around energy supply and use. The carrot that community energy dangles is the unlocking of local benefits that existing energy markets have failed to deliver so far. The transformation of our energy systems is underway – community energy can play a key role in shaping the energy systems of the future and demanding that they are equitable, efficient and resilient.

Community energy advocates are motivated by the opportunity to:

  • Deliver the profit of renewable energy projects to a broader section of the community (eg rather than a single corporate investor)
  • Unlock projects that wouldn’t otherwise occur (eg by developing projects, reducing costs and offering finance)
  • Help all of us rethink what the energy system of the future might look like. (therefore the sector plays a role in advocating for policy changes and supporting innovative energy solutions)

Governments are motivated to support community energy because:

  • Community-scale projects sit between utility and household scale and is a missing part of the market at present, even though the financial opportunity is already there.
  • Community support creates social licence for renewable energy more generally and de-risks innovative projects.
  • Community energy fits with the policy ambitions of cleaner, more affordable energy and secure supply. Governments can benefit as this sector develops an effective community delivery model.

Community energy is not every community scale project or every off-grid / embedded network project. Without community ownership or community benefit these are simply private sector business models. Likewise, local government could start to play a stronger role in owning and operating community scale energy systems and government models would emerge. Regardless of the key players behind a project, it seems important that a diversity of local projects continues to develop and, over time, Australian communities can have a richer appreciation of the benefits that are unlocked under the different models.

Community Energy Examples

DONATION MODEL

Donations can come in the form of grants or many ‘crowdfunded’ donations from individuals. Donations can be used as a gift to the project, but also as a loan. The advantage of the latter is that donated funds can be re-used in a type of revolving fund.

The donation model allows supporters to contribute to something practical and long lasting. In some cases the supporters value growth in clean energy and reduction of greenhouse gas emissions. Often donors are supporters of the host organisation which will ultimately benefit from reduced energy bills.

The donation model could also be powerful when a project is not sufficiently profitable for the private sector, or when there are risks involved due to technology or the host organisation.

CORENA (Citizens Owned Renewable Energy Network Australia corenafund.org.au) runs a revolving fund sourced from individual donations with the aim of reducing greenhouse gas emissions. CORENA only loans to not-for-profit community organisations and works with each organisation to make sure the project reduces emissions and will pay for itself – usually within 5 years. Each loan is interest free. Once the loan is repaid, the organisation keeps the system and the monthly energy bill savings. CORENA has also supported other groups to set up revolving funds.

The People’s Solar (thepeoplessolar.com) is a dedicated crowdfunding platform for community energy projects. Such projects also regularly appear on other crowdfunding sites like StartSomeGood and Chuffed.

Totally Renewable Yackandandah (totallyrenewableyack.org.au ) is a typical community which has successfully driven a range of projects throughout the town. Each project has been cobbled together using grants, loans, donations and finance from the host organisation as necessary.

Powershop, an electricity retailer, encourages its customers to donate to clean energy projects and collects the money in small amounts through its billing arrangements.

Return to the Top

INVESTMENT MODEL

Many citizens are keen to invest in renewable energy projects, particularly for causes that are dear to them, organisations that are local to them or sites that will have an impact on them.

International precedents

In Denmark, creating social licence by allowing those affected to own and profit from renewable energy is seen as a key to wind energy development. Denmark runs four community programs to support wind power: 1) 20% of each project must be opened up to community shares, 2) community coops can access up to 10mKroner for project feasibility studies, 3) green scheme pays for projects to ‘enhance local scenic and recreational values’ and 4) a compensation scheme recognises changes in land values due to wind turbine proximity

In the UK, community shares is a particular organisation model with light handed financial regulations that allows for community investment from many individuals. Organisations from football clubs to renewable energy projects have used the model to create investments that are ‘owned’ by their supporters. The projects typically pay dividends back to both their supporters and to a local cause or community and the profitability can range markedly from a nominal return up to 8%.

Hepburn Springs Wind Farm (hepburnwind.com.au/ ) was the first site in Australia to build a community owned wind farm. The site has two wind turbines which feed power to the local community in Hepburn Springs, Vic. The group learnt so much about how to develop a project of this magnitude and navigate the energy market that it created a community wiki – embark.com.au to share the learning with other communities that also wish to develop community energy.

ClearSky Solar (clearskysolar.com.au/ ) The clearsky model is to develop projects at the $100,000 size, often on the rooftop of mid-sized businesses who don’t want to make the upfront capital investment. ClearSky limits each project to 20 investors and typically offers returns from 5-8%. The projects are each set up under a trust mechanism. An investment offer usually sells out within 24hrs, demonstrating that project development is the bottle neck.

Pingala (pingala.org.au/ ) demonstrates that partnering with a business like Young Henry’s Brewery and reaching their fans can create a robust investment community.

Sydney Renewable Power Company (www.sydneyrenewable.com/ ) has taken a traditional approach and will raise $1.5m from over 500 shares in a share offer, for a 520kW solar array on the Sydney Convention Centre.

Return to the Top

BULK BUY MODEL

The third model attempts to cover those scenarios where the funders and the beneficiaries are the same people but the benefit has been gained by working together as a collective. Bulk buy models emerged as rooftop solar started to become popular. In return for reducing the costs of customer acquisition, equipment providers often provide a benefit to aggregators, or discounts to the community of buyers.

There have been many once-off initiatives with little ongoing presence. The following list gives a sense of the different models that have been explored.

Sun Crowd (suncrowd.com.au/ ) is currently running bulk buy initiatives for solar systems with battery storage, capitalising on the market’s need for vetters of new technology.

Victor Harbour Council (victor.sa.gov.au/solar ) granted the tender for their solar program to Zen Energy in 2009 to provide a reliable solar panel installation service to residents. Essentially the Council provided vetting of the provider and (from memory) Zen provided a small community benefit in return. Other versions of this model such as Our Solar Future (oursolarfuture.nsw.gov.au/) use independent community groups such as the Alternative Technology Association or the Moreland Energy Foundation (MEFL) to provide the vetting services.

There are many other ‘collective’ scenarios where a private sector partner seeks to reach a community through a trusted community partner and share the benefits with that partner.

A school in WA sold solar panels to its parent community in return for a free panel on the school.

Energy Locals (energylocals.com.au/ ) is a new social enterprise retailer seeking to sell electricity through community groups in return for benefits (such as a solar system) for the community group.

The housing development sector often has captured communities in apartment buildings and other multi-residence housing developments. Sometimes these developers deliberately choose to install an embedded network and capture the electricity sales to those within the development. Sometimes this is simply a historical decision. More recently, new development projects are driven to consider this option by the increasing cost of connecting to the electricity grid. Fremantle in WA[1] will have a grid connected system with storage and peer to peer trading – an experiment in new technologies and reducing the capacity required from the grid. Newcastle in NSW[2] will have a development that chooses to be completely off-grid. There are just two of many examples.

[1] https://onestepoffthegrid.com.au/peer-peer-solar-trading-kicks-off-wa-housing-development/
[2] smh.com.au/it-pro/business-it/offgrid-suburb-a-perfect-storm-for-energy-giants-20151207-glh7l5.html
Return to the Top

RESPONDING TO COMMUNITY DEMANDS

In USA and Germany there has been multiple examples of disenfranchised communities taking energy matters into their own hands. When private sector utilities have failed to deliver cleaner energy, despite repeated requests, communities have voted to change the status quo.

Some of these movements have focused on bringing grid ownership and control back into Local Government hands. In the case of California, the wholesale purchasing of energy became the role of groups of Councils under community choice aggregation schemes. This drives the development of locally produced power projects.

Enova Energy (enovaenergy.com.au/ ) in Northern NSW is Australia’s first example of community ownership within the mainstream National Electricity Market (NEM). Enova is an electricity retailer with an ownership structure similar to a Trading Coop – voting rights are limited so large funders do not control the entity. Approximately $300 million a year is spent on electricity in the Enova region. The company estimates it can return as much as $80 million a year locally in the form of profits, jobs, and sourcing local staff and suppliers. They are also working in partnership with local businesses and the wider community to harness more renewable energy sources, reflecting the values of their local shareholders and customers.

Return to the Top

ENERGY PROGRAM DELIVERY

Finally, one of the features of international community energy that is mostly lacking in Australia is the richness of program delivery across the energy sector by numerous NGOs with differing relationships to governments. NGOs tackle everything from energy efficiency and fuel poverty to electricity market innovation and industry development. Invariably government or legislated targets create foundational funding streams but the community sector is able to reach multiple sources of funds and be agile enough in its business model to be continuously providing those services which are most needed and valued.

Moreland Energy Foundation (http://www.mefl.com.au/ ) exists because the Moreland Council owned its own electricity infrastructure at the time of privatisation in the 90’s in Victoria. As a result they made the decision to re-invest the value of selling assets into energy service delivery.

Community Powerhouses (see cpagency.org.au/ ) featured in the Home Grown Power Plan for the last federal election campaign, supported by GetUp and Solar Citizens. The concept of communities delivering energy options and services for locals (possibly under a Landcare for energy model) is well supported by international successes.

Return to the Top
Posted in Community energy | Leave a comment

Five reasons why we need a broader set of voices to shape our energy transition

community energy congress 2014.png

Attendees at the 2014 community energy congress – next on 27-28 Feb 2017*

The electricity market is a unique complex beast. When we discuss how it must change, it is easy to get drawn into technical issues that rely on detailed knowledge of how the system works. Even inside the system, those across the electrical engineering, the regulation and the financial markets are rare and it is all three of these systems that function in concert.

The insiders to this system use this complexity to their advantage. Energy reform discussions involve the energy companies, the regulators and market operators and the energy policy experts within governments. Outsiders may be consulted but rarely get opportunities to set the agenda and are frequently at a knowledge disadvantage when advocating for changes. The attitude toward the general public can be downright patronising at times.

The situation is not unique to energy – all experts tend to place faith in their ability to see what is needed in terms of a change agenda and implement it in what appears to be the best way from their perspective. Various academic fields of study point to the limitations of an expert and insider led approach to change.

I’ve been thinking about what the ‘change agenda’ in electricity is missing because insiders give little credence to the views and involvement of outsiders. This blog is an attempt to highlight some opportunities that would flow from a different approach.

1. Missing voices – experts are valuable, especially if they come from other disciplines.

At the heart of the story is that the electricity sector doesn’t know what it doesn’t know. How will we use energy in future? What priorities will we place on sustainability, flexibility and ownership? What technology is over the horizon? We don’t have great ways to experiment with the future either in order to learn. One of our challenges is to see a broader set of voices designing our future energy supplies – from industry and economic development, product manufacturers, the cleantech sector and consumers themselves.

2. Reform vs Transform – a paradigm shift relies on an outside perspective

When one is completely surrounded by a context, the context becomes invisible and never challenged. A paradigm shift is more easily imagined from outside the system. If we were to design our electricity system from scratch, it could look completely different with today’s options – especially if we included the entire supply chain from raw materials to the end needs of consumers.

3. Values vs Knowledge – some design questions are about fairness and sovereignty 

Our current Government has recognised that ordinary citizens can play an important role by spending time with an issue and moving from a flippant opinion to a deeply considered judgement. This deliberative process allows the Government to understand how citizen values from representatives of different demographics in our community can be applied to the decision at hand. The design of our energy market could change the relative contributions of business and households, of high and low income and of solar owners compared to those who can’t produce their own electricity for whatever reason. The structure of our market could change who owns and profits from electricity supply and where the jobs are generated. Without citizen voice, the electricity sector makes an enormous assumption that they can speak to the priorities of citizens or that the existing balance of values remains suitable.

4. Timeframes – we need a clearer picture of the end destination before focusing on small changes

100% renewable energy can seem an unrealistic goal for someone within the electricity system, steeped in the culture of ensuring the lights don’t go out. 100% renewable energy seems like a necessary and immediate priority for a climate change activist. The ordinary punter sees the debate play out in the media with each side amassing its most convincing evidence that they are right. This is hardly a good platform to explore what our options might really be. In the meantime, energy market reforms inch along delivering greater ‘efficiency’ and fixing hiccups without a clear eye to the future. The decision making chain can only be empowered to set reforms in the longer term context when we create the opportunity to engage the insiders and the outsiders in helping shape and believe in an ambitious low carbon vision.

5. Only the community can determine the goals of the changes

I’ve assumed throughout this piece that the electricity system needs fundamental changes. The biggest reason is climate change. Energy is the biggest contributor to Australia’s carbon emissions and the world is already a decade behind the critical window to act that the IPCC identified in 2007. Renewable electricity may well play a key role in serving our transport and heat needs in addition to electricity. The technology we need is rapidly becoming available at costs that are under the price of fossil fuels. Achieving fundamental systems changes within our energy regime is the key to heralding a new clean energy era in a timely way.

I remember the Total Environment Centre lobbying governments over a decade ago to recognise the need to tackle climate change explicitly in the objectives of the Electricity Act. The proposal was considered unnecessary by the economists in charge of electricity market reform and I have no doubt that we would have seen different outcomes if the sector had stepped up to play a role in reducing Australia’s carbon emissions. Even the renewable energy target, which has been a fundamental driver of changes, is tacked on outside the core design of the electricity market.

I think our energy transition will happen in a more timely way and with better and more transformative outcomes – if we broaden the participants in our energy change agenda.

If you are interested in a more academic perspective, it looks like Andy Stirling agrees with me in this paper: “From a normative view, participation is just the right thing to do. From an instrumental perspective, it is a better way to achieve particular ends. In substantive terms, it leads to better ends.”
And this paper on Transforming the UK Energy System: Public Values, Attitudes and Acceptability shows us how what the public want and what we talk about in the energy sector can be aligned but different – super important when a divisive issue such as climate change needs to be turned into an everyday issue like a better electricity system.
Finally, I think Judith Innes is on the right track here and would like to see us try creating the conversations, institutions and agreements that her DIAD process advocates – Diversity, Interdependence and Authentic Dialogue.
* more information on the 2017 community energy congress can be found here: http://c4ce.net.au/congress/
Posted in Changemaking, Community energy, Policy Ideas | Tagged , , | 1 Comment

Who is leading our energy transition?

churchill

With thanks to the Winston Churchill Memorial Trust of Australia

Today the ideas from my Churchill Fellowship had their first big outing – I was asked to speak at Adelaide’s Festival of Ideas. Here is the speech I prepared, slightly more polished than the one I gave.

———————-

For years I have imagined a different type of energy system to the one we have.

I worked in industrial energy efficiency – with co-generation, we could improve the energy efficiency of electricity from 40% to 80%. There were so many energy efficiency opportunities that businesses and buildings didn’t pursue. With demand management, we could take a woefully under-utilised electricity infrastructure and improve it. With renewable energy, we could clean up our energy system and move toward sustainability

There was so much we could do better.

I was influenced by Amory Lovins. Way back in the 70’s, in the wake of the oil crisis, he popularised the notion of the soft energy path. He coined the term Nega-watts and showed how the energy you don’t use is the cheapest energy of all. And most importantly for me he showed that a decentralised system could have much more cost-effective economics than the centralised systems we are lumbered with. The hierarchy introduces numerous cost inefficiencies as we build infrastructure that is poorly utilised – because we need to cover the peak moment. The individual scale also introduces inefficiencies, as we cover for every possibility. In fact the improved economics of neighbourhood scale repeats itself across infrastructures, from telecoms to sewerage systems. A pattern that is repeated in the nodal thinking of networks.

So finally, 20+ years later, we are getting our energy transition – the drivers for change are getting stronger and change is essential if we are going to tackle climate change – and we must.

The energy system I imagine has changed somewhat – Who knew solar panels would be so cheap, batteries would be sexy and Tesla would be a household name?

And more than ever, that vision of a decentralised system, a renewable, efficient, resilient – and smart – system seems possible. It seems right. It seems better.

So now I imagine a network of microgrids, something akin to the internet. Every grid can act self-sufficiently and there is plenty of interconnection. The energy we need can be generated close to the point where we use it. And I suspect our heat and transport needs will increasingly be provided as well by the renewable electricity we can generate.

Which brings us to our question, “who’s leading our energy transition”.

I’ve just been fortunate enough to travel on a Churchill Fellowship to look at energy transitions in different countries through the lens of community energy and citizen-led changes. I wanted to see how the decision making about energy systems at the local level might be helping provoke change at the system level. I went to the world leaders – Denmark and Germany, I saw three quite different markets and systems across three different past of the United States and I went to the UK and Japan.

I looked at the technology, but really we have the technology and have had for quite a while.

I looked at markets and incentives but increasingly renewable technologies are becoming the cheapest alternative regardless of government policies.

So really the areas of change where we need to look most closely are in our social and political systems. This is where the answers lie and this is what I needed to investigate.

How do we get the energy transition that:

  • We want
  • We need
  • And is the best we can have?

Lets run through the obvious contenders for who should be leading our energy transition?

The energy ‘system’

I often refer to the energy regime as all those energy companies, energy regulators and policy makers that work together in the paradigm/framework that is the current design of our energy system. We mustn’t think of this as a monoculture or a strictly bounded group but nevertheless, they work with similar perspectives on how the system operates and should operate even with the changes that they see coming.

Of course, with all the levers these people control, they are the obvious candidates to lead an energy transition but they can’t. They don’t do disruption, they do incremental change, they don’t do paradigm shift. The innovation literature, and more recently that on sociotechnical transitions describes how the disruptors to a system need to come from outside. Disruption starts as a niche is turned into a success after which the mainstreaming of technology, ideas and business models seems to grip hold of the whole industry. Thomas Kuhn also described the value of this outside perspective when he coined the term ‘paradigm shift’ in his “Structure of Scientific Revolutions”.

Many in the system are aware of the changes and trying to figure out what to do. Green Mountain Power in the US has asked itself, what does our business model look like when we sell 40% less power because our customers produce their own electricity. Market operators in California are pondering what the value proposition of the grid looks like when you start from the basis of off-grid.

There are plenty of smart cookies inside the system, some are champions for a better system and many are good folk with deeply held values about the importance of the work they do, keeping our lights on. But I don’t believe the leadership we need will or should come from inside the system.

The clean tech businesses

So the obvious replacement to insider driven change would be disruptor driven change but I’m not convinced these guys will lead the energy transition either – they are definitely part of the solutions though. We have to be honest with ourselves that our energy systems do not operate like free markets. They are a much more artificial construct where every change in profitability is negotiated and arbitrated within the rule making system.

I have often met alternative energy businesses and felt they are not invested in fixing the system over the long term, but rather focused on how to make the existing rules profitable. This is necessary for them and the main measure that their product offers value. For example we get discussions about ‘behind the meter systems’, operating beyond where the rule making reaches and ‘self-consumption’ to offer the solar owner value by using their own surplus inside the household. I believe, though, that the real value of surplus solar is in our community at the time the load is needed. If I am not home but over at the library, surely it makes sense that the library could buy my surplus instead of paying premium rates on the market.

The traditional market is wondering how much of these new markets it can incorporate into its own business but it seems unlikely that they will make much headway into consumer products markets they can’t control – choices in appliances, vehicles, solar systems, batteries etc will become the norm for households.

GE has developed a start-up style spin off called Current, to try and innovate in this space. They know their existing business model might not survive.

Nest thermostats, part of Google, highlight how well they help householders manage energy and get the best electricity deals. They know how to deliver service offerings to customers and believe they could take over from retailers.

It is clear that part of the paradigm shift we need is to see the whole system, right down to how we use energy and including heat and transport.

The politicians

As we understand the changes needed to be less related to technology and its price and more related to social constructs and its governance, politicians are the obvious candidates to lead our energy transition. But through my travels I was reminded that politicians are constrained in how much they can achieve by how much the voters will let them. They are also easily captured by the sector, because the access, lobbying and resources that energy industries can afford is far greater than individual citizens.

Importantly, we can’t expect politicians to get heavily involved in the details of change and the system controls the information flows about possibilities and opportunities because at the end of the day the technical and regulatory operation of an electricity system is complicated. As an ex-bureaucrat I’m aware that the guardians of the system often have many reasons to slow down change.

Citizens and community

So that leaves us. We are the ones that can lead and need to lead our energy transition.

My travels have reinforced that our community provides essential insights into this journey. We can provide the innovation – not only which technology works best for us but which values we bring to its use and its ownership. We can provide different perspectives and pose different paradigms for the value that energy use adds to our lives.

Only community can create the conversation about change, draw more people in and provide the political cover our (formal) leaders need.

And it must be left to community to define the values and the goals of the system.

I went to many communities that had asked nicely for energy systems to better support climate action goals. In the cases I studied, the governments and energy companies failed to respond to these requests and pushed those communities into a determined fight – often lasting up to a decade. In most cases the communities were winning the fight and speeding up the purchase of significantly more renewable energy with better support for rooftop solar, local generation and energy efficiency. Governments and companies ignore the community’s desire for a low carbon world at their peril. But we don’t have a decade for a long protracted fight, we urgently need faster climate action.

When I talk about community I am thinking about a spectrum with a role for everyone from activists to system defenders. Because all those other actors I have mentioned also have a role as citizens.

We need the pragmatists to get things done, but we can never lose sight of the highest principles we need to achieve. If we don’t build an equitable, community serving system we will fail, so we need those activists who defend the principles and advocate for the best possible system.

We need those willing to work on co-designing the future, happy to engage deep into the details of the system architecture. And we need those working in the big picture, co-opting folk to think about the vision and the values we bring to bear.

I am interested in working in the middle spaces where people check their power at the door and bring an open mind to the discussion about what could be. The interpreters speaking the language of electricity and community, the convenors, the bridge builders. [Although I am reminded that we can all find a common place to start from and stop treating ourselves like different worlds that need to be bridged.]

We need to understand that change starts from within. Being open to others’ ideas and open to learning and growth makes this a more effective journey. And because we are a social species we need to enjoy the process and the journey.

Here are some further recommendations from the experiences of my Churchill Fellowship:

Every community’s solution is unique, we need to do the work of understanding ours. Many things from elsewhere won’t work. I marvelled at the solar heating in Denmark because we don’t need to heat our houses when the sun shines. Our resources are different, our industrial base is different, our loads are different. We have an opportunity to really exploit our abundant renewable resources for economic benefit. Most of the places I visited are rolling out solar panels despite the fact that the same panel there produces half of what it would produce in sunny South Australia.

So many of the places I visited told me a deeper story about their place and community – what’s our story? Some say South Australia was founded on a utopian vision and that striving for better is simply part of our DNA. Barbara Pocock points out that even early on we created land rules that would squash speculation and ensure land was used for the benefit of the wider economy. And we are famous for our progressive social policies giving early rights to women to vote and overturning discriminatory laws in the 70’s under Dunstan. We need to bring these stories to the fore in order to believe our ability to lead and to develop an excellent energy system. Because in those stories lie the values that need to be embodied in our system – low carbon and sustainability, broad economic benefits and equity.

I think a useful place for us to start this work is in articulating the desired goals of the system. In even the most simple system diagram we can see that the goal of the system is hugely influential in where the system heads. The understanding of everyone about how new alternatives better meet the goal is part of the movement building that must be done. And the feedback on how the system is failing to meet even existing goals is also crucial. In the wake of Adelaide’s recent blackout, these conversations are alive and well – although disappointingly politicised.

My ultimate goal is tackling climate change. Electricity and the wider energy system are not the only systems that need reimagining. Our food, waste and mobility systems all leave us sighing, “we could do so much better”. But in our transition toward 100% renewable energy we have made an impressive amount of progress and we are poised to tackle our challenges quickly and well.

This gives me hope. The smarter we get about this transition, the better we can tackle the bigger challenges that await us.

Thank you.

Posted in Bright Ideas, Changemaking, Community energy | Tagged , , , | 2 Comments