ParisTech Review / Editors / 2015-07-28
As noted in a previous article, the very notion of a responsible consumer faces certain limits. The truth is, significant changes in the energy mix cannot be achieved through the goodwill (or conversely, the guilty conscience) of individuals. Does that leave us with no other choice than following decisions from above or waiting for technological solutions from daring entrepreneurs like Elon Musk? If we wish a new, more sober way of life to emerge, we should also trust social imagination, based on the dynamics of sharing and pooling.
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This article follows: Is there such a thing as a citizen consumer?
To work successfully, energy sobriety requires certain conditions that sustainably commit consumers towards alternative behaviors. Environmental awareness can help, but it isn’t enough. By definition, coercive policies are not compatible with modern democracy. On the other hand, tax incentives used by Western states are costly and difficult to implement. Public authorities are not entirely resourceless, but the challenge is such that they are unable to coerce or compensate their population at the level of what is at stake. So should we give up hopes on a change of model? Certainly not. The development of innovative technologies, which we will examine in the third article of this short series, will help shift the terms of the question. Moreover, between the unrealistic dream of a responsible consumer who will save the planet by washing diapers and the technocratic solutions imposed by public authorities, there is vast space for cooperation and pooling. Historically, this is how humanity has progressed. And even if over the last two centuries, the development of modern States has given a pyramidal and centralized form to cooperation between people, today, other forms are resurfacing.
Peer-to-peer
P2P prefers horizontal and reticular structures to vertical organizations inherited from past centuries. It also encourages a more proactive stance: whereas in vertical structures, the “top” provides a service or a good that is used or consumed by the “bottom,” in a horizontal structure, both parties are active. This distinctive pattern is that of Web 2.0, with social networks that have transformed Internet users into publishers and content producers. It is also the pattern of the sharing economy.
This new type of exchanges has two distinctive features. Firstly, it works by disintermediation: individuals trade directly between themselves, through a simple digital platform. They thus bypass the heavy organizations that organized all transactions until then. Secondly, the emphasis on ownership and exclusive use of property or services is gradually undermined by pooling dynamics: tools, premises, means of transport can be shared.
“Energy sobriety” therefore appears as one of the dimensions of this new world: rather than owning a car, we will share one. A society based on this philosophy will produce fewer cars and consume less energy to use them.
Thanks to digital technologies, social innovation has become a game-changer that could promote a collective and fluid passage, from one generation to the other, towards greater energy sobriety.
An author such as Jeremy Rifkin goes even further, by prophesying a “third industrial revolution” based on an increasing use of energy self-production (thanks to photovoltaics) and large-scale pooling, based on the Internet model. His starting point is best expressed by Jean-Marc Jancovici: it is the laws of energy that govern economic activity and the current crisis should be read as a slowdown of energy evolutions of the past.
Fortunately, say Rifkin, a “third industrial revolution” should emerge from the “junction between Internet communication and renewable energy.” Citizens will eventually generate their own green energy and share it on the grid, as they already create, share and exchange their own property, knowledge or areas of interest on the Internet. In this new organization, energy will no longer be delivered vertically, but horizontally, and circulate between peers.
Theoretically, this is a possible future. But we aren’t there yet, and reading Rifkin’s book leaves many doubts unresolved: some utopian aspects of technology (for example, Rifkin is a longtime supporter of hydrogen – an energy that has hardly emerged at this day) add to a certain inaccuracy regarding figures. Aiming primarily an American audience, the author also refers to European experiences, such as the C02 market in the EU or the German Energiewende. But he obviously knows very little about these models – or he pretends to ignore their flaws: “The wind and the sun don’t send bills,” he joked, openly ignoring the price increases suffered by German consumers.
That’s why we should stay cautious: if Rifkin outlines a horizon that we can examine carefully, we cannot however ignore the weight of the real world, that of existing infrastructure, of technical and physical boundaries that separate us from the hyperfluid universe of his dreams. A world, for example, where electricity – the form of energy most easily shared and distributed – represents only 24% of the energy consumption in a country like France, wellknown for its addiction to electric power.
Let’s examine instead the heart of his argument: the idea of a greater pooling of resources. It should be noted at the same time that existing electricity networks have been designed in this spirit. They even represent one of the most successful forms of centralized pooling. But in this centralized model, the main responsibility lies with the producer: the utility and/or the grid manager are responsible for managing the balance between supply and demand. While waiting for a hypothetical revolution in self-production, this is the context we must handle, if only because of the structure of existing networks (high and very high voltage lines, etc.).
Is it possible to introduce new, innovative pooling forms into this system?
Progressive pricing or erasing?
We can start with a prosaic question. What is the real elasticity of demand? In other words: if we start raising the prices of energy, from what level will consumers start changing their behavior? Progressive pricing of electricity is a well-tried idea that has a long history in California.
From 1976 to 2009, the average residential consumption of Californian households increased by only 18.8%, while at the same time, that of all US households (Californians included) increased by 59.4%. Translated in volume, the average growth gap between a Californian household and an American household was of 1,320 kWh between 1976 and 2009. In addition to its redistributive, environmental and economic qualities, the Californian pricing system has clearly contributed to the development of solar energy as it encourages households to adopt renewable energy generation systems. To maintain an acceptable electricity bill and pay low bands of consumption, Californians have invested heavily in photovoltaic systems. By producing part of the energy they consume, they use less energy produced by energy suppliers and reduce their bills.
The success of California in controlling the electricity demand prompted a dozen other US states to opt for progressive electricity pricing. And yet, despite the undeniable success of the Californian model, progressive pricing is not universally popular. Progressive energy pricing achieves consensus only for hot countries that rely heavily on air conditioning (California, Japan, Italy) for which it is easier to save money while providing comfort. However, Belgium and Germany abandoned their progressive pricing projects.
François Lévêque and Bastien Poubeau explain in Les Echos that, regarding electricity, this pricing mechanism misses its aim: the production of electricity is expensive and polluting during consumption peaks, that is to say when the power demand of the consumers is high. Therefore, the economic and environmental cost of electricity depends on the time and the day when it is consumed, not on total or average consumption – at least not directly. They conclude: “If we want electricity price to reflect its economic and environmental costs, we should pay more when its impact is greatest. This requires a real-time pricing rather than a universal progressive rate.”
Or, one might add, through load management.
Load management is a type of control meant to temporarily reduce the electricity consumption of a site in relation to its normal consumption. Utilities provide their customers (individuals or corporate consumers) with technical solutions to interrupt, during a few minutes or a few hours, some of their equipment whose consumption is flexible (electrolytic cells or furnaces for manufacturing plants, radiators, balloons of hot water or air conditioners in households).
Load-shedding can be subject to a contract between supplier and consumer (a reduced rate throughout the year against the possibility of reducing the supply a number of days per year). To these rewarded individual efforts, one must add milder forms of consumption reduction which are no longer considered as efforts. Technological innovation can collect the efforts of numerous players. This is the logic of diffuse load-shedding, which consists of temporarily reducing electricity consumption of a large number of homes by interrupting the supply of some appliances, through a controller installed on their electric panel. The controller is activated remotely by an operator and requires no direct action from users.
This has led to the development of specialized providers i.e. load-shedding operators, who value on the market the energy cuts they “bought” from individuals. This is particularly the case in France where a 2013 law establishes a regulatory framework for the valuation of electricity consumption savings on energy markets, coupled with a bonus for the benefits provided by load-shedding in the community.
The potential of playing collectively
In these solutions driven by information systems, consumers can “play collectively,” on the basis of one’s best interest, and without the need of any real effort. Scale makes the difference.
This is a key point. As noted by Bernard Delpech, Associate Director of R&D for the EDF Group, in a 2011 article for ParisTech Review: “while the dimensions of individual consumers may allow them achieve flexibility in the general sense of the term, by creating a truly intelligent network in which each actor plays a role, creating the critical mass necessary to harness the true power of the grid will require a more unified vision in which multiple actors work together. Energy consumers will have to team up in various subsystems that will interact with the backbone.” It’s a process, he adds, “that’s already well under way.”
In the same vein, one can reflect on the sharing and pooling of equipment on a local scale, for the level of households and individual homes is seldom relevant. In older neighborhoods, an entire building allows only for modest progress that, for a relatively high investment, will reduce consumption by only 10 to 15%. However, truly innovative solutions can be designed when planning at the scale of a block, a neighborhood, a micro-district, or even a whole city.
The presence of a positive-energy building in a neighborhood can compensate that of older buildings. On this basis, the local management of electricity can also be improved by maximizing what is produced on site, using direct current in order to reduce losses and storing electricity on site by using flywheels or other storage devices…
But how will these investments be financed, how will consumers unite?
The answer to this question lies in the sporadic emergence of collective dynamics. While the people involved may represent themselves as “responsible consumers,” these models are not so much driven by an activist state of mind than by a strong sense of collective efficiency. They don’t build on morality, but on scale effects.
Conversely to eco-friendly behaviors – which form a personal discipline or effort, even a sort of moral code – collective mobilizations rely on technique. But they originate from bottom-up approaches, not from technocratic decisions proposed or imposed in a conventional, centralized, top-down process, but from the will of citizens.
This bottom-up process, which is already an active reality in the Netherlands and Germany, has the effect of stimulating social innovation by encouraging local initiatives, including participatory housing operations. A group of residents formed before the construction is actively involved in the project.
In this regard, the example of Culemborg (Netherlands) has become emblematic. A local foundation launched the Lanxmeer project with 80 families who participated in the design of the urban development plan by partnering with locals. Eva-Lanxmeer is a socio-ecological area of 2.47 acres, built on a former farmland surrounding a protected area for the abstraction of drinking water: 250 apartments, over 430,000 sq. ft of offices and business units, an ecological urban farm, an information center, a wellness center, a conference center, bars, restaurants and a hotel. Environmental protection measures include a closed water circuit, a complete water treatment system, a biogas unit, the use of sustainable building materials, the use of renewable energy and the production of organic food. The people of Culemborg played a direct and active role throughout the planning process. They convinced the municipality of co-financing the project. Other financing came from Dutch and German ministries and private funds that support architectural designs. The association of residents handles the allocation of housing to newcomers.
Another example is Denmark, which hosts the largest wind farm installed by residents. Many “participatory” energy projects are financed by citizens. The Middelgrunden wind farm, off the coast of Copenhagen, is held by 8,500 people. Danish law imposes a minimum threshold of 20% citizen participation in the financing of wind farms.
Citizen energy power clearly disrupts traditional institutional networks.
Symmetrically, political, administrative and urban culture also affects the sobriety of a country, as explained by the Centre de recherche pour l’étude et l’observation des conditions de vie (Research Center for the Study and Observation of Living Conditions known as Credoc) in a 2014 study (in French).
Unlike Germany, the Netherlands and countries of northern Europe, open to experiment in urban planning , French eco-neighborhoods are designed and implemented as classic urban planning operations. Users are not involved in the urban design itself. High technological ambition isn’t supported by a collective participation of people as actors of the operation of buildings and networks. This technocratic stance is typical of a top-down approach. Given its highly centralized system, France is a top leader in technological innovation. But it is also falling behind in the collective involvement of inhabitants in the design of housing districts.
In France, according to the Credoc, collective and participative initiatives exist in the form of “participatory housing,” “eco-hamlets” or “ecovillages,” but they rarely include more than ten families each. This is the case of the Eco-Logis in the Neudorf district of Strasbourg, hosting ten families that have joined together in a real estate non-trading company. It is also the case of an eco-village of twelve families in Chevaigné, a town of 2,000 inhabitants in the urban area of Rennes.
These microstructures are far from the critical mass that would allow optimal management of the flow of electricity, for example, a critical size that can be found today at the scale of a city of tens of thousands of inhabitants. Which drives us from “citizen power” to technological solutions managed by professionals.
(to be continued)
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