Mutual for Energy Communities
The European federation of renewable energy cooperatives (REScoop.eu) recently announced the foundation of REScoop MECISE, a European Mutual for Energy Communities Investing in a Sustainable Europe at their international conference in Brussels.
Renewable energy projects are capital intensive investments, especially at the beginning. At the same time, citizens often only come on board once a project is up and running and they can see it with their own eyes. If you want to involve citizens in renewable energy projects, cooperatives need to be able to put in the upfront investment. REScoop MECISE will provide the bridge funding needed for cooperatives to achieve this goal.
REScoop MECISE will facilitate renewable energy cooperatives in financing their projects with less risk for individual cooperatives. By pooling funds from cooperatives, local authorities and even private investors from across Europe, the mutual can provide temporary equity to help energy communities finance their projects, thus giving them time to raise equity locally. Moreover, the Mutual can act as a mediator to buy commercial projects from traditional investors and open them for local communities and citizens to invest. Once the project is up and running, aggregated funds from local citizens will replace the Mutual. REScoop MECISE will retain its revolving character and ensure the project directly benefits the local communities.
Community-owned offshore wind
REScoop MECISE will support the aggregation of small community energy projects and assist them in accessing financing tools typically reserved for larger projects. Upscaling projects to over EUR 25 million would make them eligible to soft loans from the European Investment Bank or other institutional investors. Big projects produce more economies of scale, and increase negotiating and purchasing power.
Municipalities and citizens working hand in hand
Finally, REScoop MECISE will foster collaborations and solidarity between energy cooperatives and local authorities, particularly by helping the latter overcome the challenges they face. By aggregating renewable energy, energy efficiency and urban transport projects at the local level, municipalities and REScoops could for instance reach the EUR 30 million threshold that is required to apply to the European Local Energy Assistance (ELENA) and get grants for those projects.
The energy transition to energy democracy
The energy transition will require a considerable investment that will be paid for by citizens: as consumers, tax payers or even as clients of banks. To ensure fairness, citizens should enjoy equal opportunities and take ownership of the required investments to make this transition. Putting citizens at the heart of the energy transition will be essential to keep the transition just and affordable for everyone. Through REScoop MECISE, we hope to contribute substantially to the transition to energy democracy.
Citizens Energy Communities will benefit from our financial services as from 2020
Our Mutual has been operational for a few months now and we are currently testing and streamlining things internally. Many challenges remain regarding governance, decision-making, investment policy, etc. If things go well we hope to announce our first investment in the course of 2019.
For practical reasons we decided to start off with five of our members. That is Ecopower, Courant d'Air, Enercoop, Som Energia and Energy4All. Those are also the partners that were involved in the REScoop MECISE H2020 project. We also decided to only consider investments in Belgium, France, Spain or the UK at this start-up stage. We know the context those countries, the people, the language, the projects, the legislative framework, etc.
So before opening up to other cooperatives and prior to considering investment in countries that are not listed above, we want to be sure that things have been tested successfully at least a few times. We hope to open up our Mutual to new Citizens Energy Communities and even cities, municipalities and private investors in the course of 2020.
Before changing governments in Spain in 2018, renewable energies were going through a rough time. The acting government had decided to stop all support for renewable energy generation – a dubious decision at a time when the impacts of climate change all over Europe are calling for more, not less clean energies.
Som Energia - a REScoop from Spain - decided to take matters in its own hands. They raised EUR 3,5 million to invest in solar energy projects. How? Through ‘Generation kWh’. Members of the cooperative were invited to provide a long-term zero-interest loan of EUR 100 minimum each. Som Energia guarantees that the investment will be paid back in 25 years. In the meantime, the investors pay electricity at cost price for the duration of the loan. A win-win for everyone! After the first successful investments through this model in 2016, Som Energia used the approach to finance over EUR 3,5 million sustainable energy projects in Spain.