Elektrizitätswerke Schönau

Community energy action at scale in Germany

The Story

ElektrizitätsWerke Schönau, is a community-owned energy cooperative that was started in the small town of Schönau in the German Black Forest region.

Driven to action in the aftermath of the 1986 Chernobyl disaster, a group of Schönau residents founded a local action group called Parents for a Nuclear-Free Future and advocated strongly for a regional transition to clean energy. Through widespread community engagement, fundraising, and experimentation the group explored how Schönau could help lead a transition into a nuclear-free future. Parents for a Nuclear-Free Future tried to encourage the incumbent Schönau electricity supply company (KWR) to move away from nuclear, increase renewable energy generation and start an energy saving programme. When KWR refused to make any of these changes, the citizens decided to try to take over operation of the grid themselves.

When in 1992, KWR offered Schönau municipality 155,000 Deutschmark for an exclusive 20-year grid operator contract extension the citizens’ group offered the same amount to reject the KWR’s offer. Yet the license was still extended. Furious, the citizens group demanded a local referendum to overturn this decision, which they won after a tough campaign (with 56% of votes from a 75% turnout).

In the following years the citizens of Schönau built further local momentum, established demonstration hydropower and solar PV assets, set up the ElektrizitätsWerke Schönau company, and eventually secured the grid concession from a more-aligned municipal council in November 1995. This decision was then challenged by KWR and opponents to the community co-operative model with a second local referendum. Eventually ElektrizitätsWerke Schönau prevailed again with (52% of the vote with 85% turnout) — finally gaining the right to operate the Schönau grid for 20 years.

In a final twist, KWR overvalued the Schönau electricity grid assets at 8.7 million Deutschmarks while ElektrizitätsWerke Schönau’s experts came to a total of 3.9 million. Agreeing to pay the higher price in order to move forward, with provision to challenge the final valuation in court, the citizens movement embarked on the daunting mission to raise the needed funds. Support from across Germany proved overwhelming, while KWR revised their valuation down to 5.7 million following strong public criticism. Having finally raised the required capital ElektrizitätsWerke Schönau officially became the energy supplier to 1,700 customers in Schönau in July 1997 (and eventually they also won a court ruling in 2005 confirming their valuation of 3.5 million Deutschmark!)

Liberalisation of the German electricity market in 1998 proved an important opportunity that allowed ElektrizitätsWerke Schönau to start to offer electricity supply services nationwide, and to move to exclusively using electricity generated from renewable and co-generation sources. ElektrizitätsWerke Schönau was the first power operator to supply 100% renewable electricity in Germany.

Today the ElektrizitätsWerke Schönau co-operative produces and distributes clean energy across Germany to over 215,000 customers; owns wind farms, solar PV installations, gas and electricity grids; while supporting and financing multiple sustainable energy projects. Climate action has become a greater priority for Elektrizitätswerke Schönau. Schönau is has the densest concentration of solar power for any town in Germany. They are now working on gas phase-out and replacement with sustainable biogas (having also taken over the local gas network).

The citizens movement in Schönau suffered some defeats along the way, but also picked themselves up and tried different avenues to build momentum over decades. ElektrizitätsWerke Schönau today brings international recognition to the local area and the co-operative is a major employer, taxpayer and source of pride for the local population.

We had to do something ourselves, because neither the energy companies nor the government were taking action. The transition from campaign to proper business and management of a public good was rocky at times. Even once we became a company, many of us were still working unpaid. It was a proper company in terms of legal status but still had a lot of the spirit of an NGO.

- Ursula Sladek — EWS

Success Factors

Collaboration and Business Models

The initial Parents for a Nuclear-Free Future movement was anchored by the strong will and perseverance of about 20 fully committed people from Schönau (led by the couple Ursula and Michael Sladek). The first business entity they formed was Netzkauf Schönau GbR in November 1990, a civil law partnership.

Elektrizitätswerke Schönau, and Parents for a Nuclear-Free Future before that, have invested a lot in communication and engagement with other citizens on the need to transition from nuclear power to sustainable energy sources. This is an essential foundation of their business model. Such civic engagement has included energy-saving consultations, going door to door with energy-efficiency tips, running regular events and publishing energy-saving advice, and organising electricity-saving competitions (with prizes such as holidays). Gaining media coverage early took hard work, but was vital as it provided publicity when marketing campaigns could not be funded. Elektrizitätswerke Schönau today publishes their own magazine and newsletter to make energy issues more accessible.

Running local referendums as a direct democracy tool also played an essential part in the start-up phase of the Elektrizitätswerke Schönau story. While the results were close and the campaigns heated, with the town council making conservative decisions the referendums were a way for the inhabitants of Schönau to break through and have their voice heard and respected.

Elektrizitätswerke Schönau was initially formed as a collectively owned company with Netzkauf as the main shareholder, which by that stage already had over 650 citizen shareholders (already working on a one shareholder, one vote model). Needed technical expertise was secured through a support contract with the neighbouring municipal energy company of Waldshut-Tiengen.

In 2009 the legal status of the established Elektrizitätswerke Schönau was shifted to a co-operative (Netzkauf EWS eG) to provide more flexibility for growth of membership and capital raising. There are now more than 9,000 co-operative members from across Germany. While the cooperative structure aims to be a democratic and engaging form of ownership, in practice it is impossible for all members to be involved directly and attendance at the annual meeting is generally only about 300 members. A four-person Board is elected every three years by members to make key decisions. Employees of Elektrizitätswerke Schönau are not obliged to be members of the co-operative, but most are.

Today Elektrizitätswerke Schönau has a number of subsidiary business entities:

• EWS Netze GmbH operates and upgrades power grids in Schönau and eight surrounding communities, and two gas networks in Schönau and Wembach
• EWS Energie GmbH was established in 2011 as a new entity focussed on designing, funding, building and operating solar power, combined heat and power, district heating and wind energy systems. This team also develops renovation concepts for municipalities
• EWS Vertriebs GmbH is one of the largest independent green electricity providers in Germany and also offers nationwide services in the areas of electricity and gas sales, energy procurement and metering point billing.
• The EWS Windpark Rohrenkopf GmbH established five wind turbines in Gersbach in the Black Forest. The wind farm produces climate-friendly energy for up to 15,000 households.

Elektrizitätswerke Schönau also has significant shareholdings in other aligned enterprises; for example Stuttgart and Titisee-Neustadt municipal energy companies.

A provocative, experimental and learning mindset remains an integral part of the Elektrizitätswerke Schönau model and culture. The company now has a special department of 5 people devoted solely to strategic innovation — financing new technologies, expanding philanthropic initiatives, and supporting other local grassroots community energy initiatives. Together with the Schönau Council an awards showcase for “Electricity Rebel of the Year’’ has run from 1999 until today. It is designed to ensure that a new generation of energy action groups carry on the idealism of Elektrizitätswerke Schönau with their own actions and projects.

Financing Approaches

A creative approach to funding and resourcing has been essential in the development of Elektrizitätswerke Schönau. Firstly, the time and commitment of the core local citizens group has been significant, and no doubt fundamental their success. They have been able to harness contributions in both cash and kind from across Germany, for example to help raise the initial capital:

• A guarantee for the 155,000 Marks to force the first referendum was secured from 280 citizens.
• Technical experts volunteered technical and many of the biggest German advertising agencies offered to help develop their campaign for free.
• The community bank GLS Bochum set up a specific 2.4 million Deutschmark fund to support the grid asset purchase.
• Direct contributions from individuals country-wide came to over 3.2 million DM

Elektrizitätswerke Schönau was established with this community capital and has been profitable since inception. The co-operative now turns over more than €230 million annually. They note that energy supply is a good business to be in and therefore is an attractive investment. The difference is that they are reinvesting profits in the energy transition and sharing returns with community members. To help achieve this balance, annual dividends are capped at 3.5% of the profit (while up to 6% would be viable). Shares of members are limited to €1,000, to focus membership on the wider cause of a clean and just energy system.

The Sonnencent scheme has been embedded within the co-operative’s business model since the beginning — every customer pays into this support fund for renewable energy project as part of their bills. Sonnencent now also supports other cooperatives and initiatives working to install wind turbines, photovoltaic systems, cogeneration units, biogas and small hydropower plants. In 2020 €1.8 million was reinvested in the energy transition through the Sonnencent programme.

To further encourage investment in new-generation facilities, Elektrizitätswerke Schönau only buys power from renewable generation facilities built in the last six years.

If the idea is good, and you do the right thing, you will find the money that you need.

- Sebastian Sladek — EWS

Impacts

Elektrizitätswerke Schönau now supplies more than 200,000 customers all over Germany with almost carbon-free power. In 2020 Elektrizitätswerke Schönau customers together avoided a total of 291,000 tonnes of CO2 (352 g/kWh)

Elektrizitätswerke Schönau has distributed almost €11 million in economic value back to community member investors over the last 10 years.

In total, more than 3,100 citizen power projects have been supported across Germany through the Sonnencent programme, with a combined 30MW capacity producing around 30 million kWh of clean electricity per year, roughly the electricity needs of a small town with 15,000 people.

Elektrizitätswerke Schönau makes an important contribution to the local economy in Schönau as the second largest employer, with more than 100 employees, and as a leading business tax contributor.

As well as being a successful carbon and nuclear-free community business, Elektrizitätswerke Schönau has a clear aim to help drive the energy transition in Germany and to empower communities to take action. The culture-change emanating from their funding programmes, awards, advice and events is something that they are very proud of. It also brings international renown and recognition to the local Schönau area.

Lessons for Others

In most countries in Europe communities are struggling with transitioning energy supply systems to more sustainable and equitable models. Taking over the grid operator role will not be the right solution for every community, yet there are important lessons to draw from the ElektrizitätsWerke Schönau experience:

• Identify a clear collective goal that resonates across the community while motivating a core committed group of people.
• Take a creative and positive approach to local communication and engagement to build support in the community.
• Build flexibility and experimentation into ways of working from the start. There will be a lot to learn and many conflicts to navigate. Being too rigid tends to put many people off. Make sure to listen to feedback and adapt.
• Recognise where power and vested interests in the incumbent system are going to keep blocking change. Invest your efforts in building a better model — realising that this will be hard work and a collision will eventually need to be overcome. In Schönau they realised that KWR would never embrace the changes they were working for, so they decided to completely replace that business model and were able to win the inevitable fight for the right to do so (making the most of the local referendum mechanism available to them).
• Where policy and political decisions are a constraint rather than enabler, tackle them using direct democracy approaches. Recognise that these processes will draw underlying disagreements and conflicts to the surface, so be ready to navigate these with both care and persistence while campaigning clearly and strongly for what you aim to achieve.
• Be creative and ambitious in crowd-funding resources in both cash and kind in multiple stages. Don’t underestimate what people are willing to offer for a great idea that is well communicated.
• Follow through by reinvesting financial returns into your mission, right from the start.

The research for this case study was originally undertaken as part of an assignment under the Care4ClimateLife project (published in Slovenian). This revised version of the case study was produced with support of the Interreg Danube project ‘Danube Energy Communities Accelerator’ (DECA).