Headline: Germany’s Federal States: Drivers of Participation in the Energy Transition?

Are Germany’s federal states becoming the drivers of citizen and civic participation in the energy transition? This hypothesis was the focus of debate at a workshop held in late June at the IASS in Potsdam to consider the implications of the new Citizen and Municipal Participation Law adopted in Mecklenburg-Vorpommern (M-V) and the “Fair Wind Energy” guidelines promoted by Thuringia’s Energy and GreenTech Agency (ThEGA). Rolled out in late 2015, ThEGA’s certification programme for “Fair partners for wind energy” requires developers to subscribe to a five-point code of conduct. Meanwhile, legislation in Mecklenburg-Vorpommern requires developers to offer a twenty per cent stake in the development or its earnings to citizens and municipalities within 5 km of new wind farms. The workshop brought IASS researchers together with around thirty representatives from the federal and state governments, municipal administrations, civil society, and the private sector. Participants at the workshop considered what opportunities the new approaches create, what it takes to ensure their success, whether the models adopted in M-V and Thuringia provide a role model for other states, and whether the federal government, municipal administrations, and state governments are working together to create an environment that is conducive to participation in the energy transition.

M-V’s Citizen and Municipal Participation Law needs to be bolstered by additional measures

The discussions showed that municipal administrations can potentially benefit considerably under both models, but in particular through the quality assurance for fair wind projects provided by Thuringia’s office for “Wind Energy Services”. The two schemes have already initiated a process that could be conducive to building trust between wind farm developers, citizens and municipal administrations, and have created more opportunities for the participation of local residents, according to participants. Nevertheless, both models still leave room for improvement.

In the course of the workshop, it became clear that M-V’s Citizen and Municipal Participation Law while have to be backed by additional measures. While the law ensures that new wind farms benefit communities financially and strengthen local economies, it does little to promote the involvement of citizens and communities in planning and decision-making processes. Both developers and communities affected by projects can benefit from the involvement of a neutral agency that provides early outreach, consultation, advisory, and support services to ensure that citizens and municipalities are empowered throughout the project development process. This role can, for example, be fulfilled by state agencies such as ThEGA’s “Wind Energy Services Office” or the “Energy and Climate Protection Agency” currently being established in M-V. Ultimately, M-V may opt to adopt a combination of both mandatory participation and consultancy services provided through a state-owned agency.

Concessions for citizen owned wind farms and federal states in Renewable Energies Act (2017)

The workshop closed with a discussion, attended by a representative of the SPD’s Federal Parliamentary Group, of how the active engagement and participation of citizens and municipalities could be further enhanced within the complex policy landscape of the energy transition. The discussion focussed in particular on two issues relating to the reform of the Renewable Energies Act (2017), which was still under way at the time. The first of these was the challenge of ensuring that smaller actors are still able to contribute to the energy transition despite the barriers to market access created by the auction system while also sharing the benefits of wind farms with those unable or unwilling to participate financially.

Some aspects of this discussion are reflected in the Renewable Energies Act 2017 adopted by the Federal Parliament and Council on 8 July. With this reform, legislators have recognised that implementing auctions for onshore wind farms could diminish the ability of some actors to engage in the wind sector. As a result, special exemptions were introduced for officially recognised “citizen-led energy initiatives”. These regulations enable citizen-led energy initiatives to submit so-called “non-competitive bids” without first applying for a federal emissions permit and grant initiatives 24 months to submit their permit following an auction. As a result, these initiatives automatically receive the highest feed-in tariff accepted in the respective round of auctions rather than the price actually offered in their bid. This theoretically provides highly favourable conditions for citizen-led initiatives, as it enables them to bid very low prices while ensuring that they receive the highest feed-in tariff in any given round. While this has minimised their overall risk exposure, a measure of uncertainty remains, with the level of the highest bid still an unknown factor. However, participants’ risk perceptions and local factors such as the actor landscape also play a significant role in the establishment of citizen-led energy initiatives. It remains to be seen what administrative burdens the new system will entail and whether these exemptions will be perceived by citizens as sufficient measures towards risk mitigation.

The new legislation also addresses the role of municipalities in a participation-focussed energy transition. Citizen-led energy initiatives are now required to offer the municipality at the development site (or a municipality-owned utility) a ten per cent stake in new projects. The aim of this measure is to ensure that citizens who are unable or unwilling to participate financially in projects still share indirectly in their benefits through, e.g. public services provided by the municipal actors.

Discussion also focussed on coordination between federal and state government and the implications of the new legislation for state-level measures such as those adopted in M-V and Thuringia. Neither state has ruled out the possibility of modifying their schemes if the new legislation puts them at a disadvantage to other federal states. In M-V, the Citizen and Municipal Participation Law was adopted ahead of the 2016 reforms to the Renewable Energies Act to ensure that financial participation was enshrined in state law. And the 2017 Act does in fact include a political concession on the part of the federal government to measures at the state level: the parliamentary group of the SPD successfully argued for the inclusion of a provision to the law (Section 36g, Paragraph 6) (Plenarprotokoll 18/184, Anlage 2) that grants federal states the authority to enact additional regulations to promote citizen participation and enhance the acceptance of new projects.

Will other states follow the examples of M-V and Thuringia?

This provision leaves the door open for other states to follow the examples of M-V and Thuringia. Representatives from six state ministries and energy agencies attending the workshop agreed that regional differences would play a large role in determining whether individual states chose to exploit this opportunity, with socio-cultural, political, and legislative factors (municipal codes, for example) as well as the existence of other models of participation all weighing in on the decision. North Rhine-Westphalia, for example, already boasts a large number of citizen-owned wind farms and is unlikely to adopt any legislative measures. There, Energieagentur.NRW already provides support to citizen-led initiatives and cooperatives. Many federal states, it seems, are already working to encourage participation through a variety of targeted measures. Developments in Brandenburg offer the promise of a few surprises in the months ahead, with Brandenburg’s Minister for Rural Development, Environment and Agriculture calling for the creation of a mechanism to ensure that local residents share in the earnings generated by wind farms  following last week’s unsuccessful attempt to introduce more restrictive planning requirements through a non-binding referendum. Participants at the workshop called for improved communication flows between state agencies to facilitate the sharing of insights between bodies working in this area.

In conclusion, what this workshop showed was that the knowledge needed to drive transformations and create a sustainable and citizen-oriented energy transition can only be developed through the cooperation of diverse actors across multiple levels of the policymaking community and administrative sector together with actors from business, science, and civil society. The IASS will reflect on the findings of the workshop and consider the questions that it has raised in its future research to make a contribution how federal states and regions can design and implement schemes.

Header image: IASS/Sabine Zentek