The Rise and Fall of Energy Democracy: 5 Cases of Collaborative Governance in Energy Systems

The concept of ‘energy democracy’ (ED) first emerged in the discourses of social movements and civil society. They saw the decarbonization of the energy system as an opportunity to change the means of control over energy production and distribution (Strachan et al. 2015) and, more generally, to achieve deeper economic and socio-political transformations (Burke and Stephens 2017). In recent years, this concept has been subject of increasing interest from the scientific community (van Veelen and van der Horst 2018; Szulecki and Overland 2020; Wahlund and Palm 2022). ED promotes the opening up of the energy sector to new actors and, in particular, to ‘prosumers’ (simultaneously producers and consumers), energy cooperatives, social enterprises or companies under municipal control (Szulecki 2018).

Szulecki (2018) distinguishes between ED as a ‘quasi-utopian idealization’ and a more concrete process influencing the energy system and its actors. Becker and Naumann (2017) furthermore identify essential elements important in different struggles: decentralization of energy systems, engagement of citizens in the decision-making process, collective (public and cooperative) forms of ownership, substantial economic benefits associated with energy activity, and self-determination and alternatives to extractivist development. Others characterize ED by its objectives, such as correcting structural inequalities linked to energy policies (Hess 2018), and resolving situations of energy insecurity and accessibility for the most marginalized populations (Teron and Ekoh 2018).

There has been a surge of ED in the last decade (Kunze and Becker 2014; Vansintjan 2015; Fairchild and Weinrub 2017; Szulecki and Overland 2020). The projects allow citizens to be politically, socially and financially involved in the production, distribution and use of renewable energies. ED as a process can thus be understood as a tendency towards (re-)embedding the economy in society, with regards to the energy sector (in the sense of Polanyi, 1944). Literature from Europe and northern America attributes higher popular acceptance of energy transitions to ED projects as they support the financial and political involvement of local populations (Vansintjan 2015; Bauwens et al. 2016; Becker and Naumann 2017; Brummer 2018; Szulecki 2018; Mundaca et al. 2018; Klagge and Meister 2018; Busch et al. 2021). The situation in the rest of the world, especially in nations with weak democratic institutions, has been often found to be very different if not detrimental. RES in the global south are often related to human rights abuses and corruption, similar to fossil energies, and there are very few processes that would qualify as ED (Avila-Calero 2018; Dunlap 2021).

ED is often equated with community energy (van Veelen 2018). Community energy involves the setting up of a dedicated entity, such as a charity or non-profit association, a limited company, or a citizens’ cooperative (Creamer et al. 2018). Social entrepreneurial tendencies as a result of market pressures and tight margins can however result in practical limits to their openness and participatory nature (Nolden et al. 2020). Less well researched but equally important in the context of ED are collaborative policy processes involving a variety of other participants involved in agenda-setting around democratization and decentralization such as civil society organizations, associations of users, political parties, city councils and administrations, incumbent as well as interested utilities, among other examples (see e.g. Becker and Naumann 2017). At the same time, a growing literature examines the dynamics and challenges of remunicipalizing energy and/or democratizing public energy systems (Blanchet 2015; Becker et al. 2016; Angel 2017, 2021; Brinker and Satchwell 2020).

More than any of these characteristics, however, the social movement roots of ED stress the need to change power relations and shift energy system outcomes towards environmental, social, racial, and economic justice and equality (see e.g. Angel 2016; Fairchild and Weinrub 2017). The democracy element of ED can have multiple meanings: forms of collective ownership or control; processes of internal participatory democracy; democratic access and equality, where energy is decommodified and not serving profit motives; just distributions of who profits and who suffers (Wenderlich 2021). Energy democracy outlines an alternative development path for the energy system, one that can serve to address root causes of uneven and extractive development models at the heart of the climate crisis. It is this emphasis on socio-ecological transformation that especially challenges collaborative governance frameworks (adapted from Heldeweg and Saintier 2020).

ED projects and processes favor accountability and participation. The more they do so, however, the more they must navigate important tensions, as they run on rationales that challenge the logics of homogenous commercial or state enterprises in order to support the assemblage of heterogeneous actors (Rogers et al. 2008; Bauwens and Devine-Wright 2018) and cope with institutional complexity (Bauwens et al. 2022). Much more complex to steer than single organizations, such collaborative structures are highly dependent on beneficial local contexts and thrive in symbiosis with the capacity for local participants to reach consensus, as well as overarching political, organizational and legal frameworks, which either support or hinder the democratization of energy systems.

As mentioned above, changes in governance such as those that democratize energy or transition energy systems towards zero carbon are an illustration of CG dynamics more generally. The literature on CG relies on a variety of academic traditions, including research streams on collective action and common resource pools (Ostrom 1990), public network management (O’Toole 1997), or deliberative and participatory democracy (Bingham 2011). The frameworks that have emerged around the notion of CG thus cover a wealth of phenomena, such as the research on policy networks (e.g. Klijn 1996), inclusive management (e.g. Quick and Feldman 2014), purpose- and goal-oriented networks (e.g. Provan et al. 2007; Nowell and Kenis 2019), or multi-stakeholder and sectoral partnerships (e.g. Herranz 2008).

According to Ansell and Gash (2008), CG is concerned with collaborations among formally independent organizations across sectors. These collaborations are consensus-oriented and produce collective outputs in the form of decisions, plans, services, that are attributed to the collaborative and not to one participant only. Against this background, Emerson et al. (2012, p.2) insist on the fact that CG includes “processes and structures of public policy decision making and management that engage people constructively across the boundaries of public agencies, levels of government, and/or the public, private and civic spheres in order to carry out a public purpose that could not otherwise be accomplished.” This view further echoes the wide spectrum of policy processes aforementioned, from participatory governance and civic engagement to public network management, and many other instances of cross-sector partnerships.

A major distinction of the CG framework by Ansell and Gash (2008) is its interest with the inner structure, organization and functioning of the collaboratives. Specifically, Ansell and Gash (2008) conducted an analysis of 137 cases that were using a variety of models and policy processes (from deliberative to highly structured instances of collaboration) with an interest in starting conditions as well as in other inner variables that influence a collaborative’s success. Effective collaborative governance requires situated combinations of four specific dimensions. Adequate starting conditions include the history of conflict and cooperation, power, resources and knowledge asymmetry, incentives and interdependence between actors. Secondly, institutional design (e.g. explicit rules, transparency of decision-making) and some form of facilitative leadership (e.g. ability to convene actors or mediate in conflicts) impact the collaborative process. And the collaborative process itself builds on face-to-face dialogue, commitment to process, trust building, shared understanding, and achieving intermediate results.

Amid this interest in the internal dynamics of collaboration that are conducive of effective CG regimes, research from a variety of policy domains have shown that tensions, such as the ones we discussed regarding ED, are inherent characteristics of collaborative governance (Ansell and Gash 2008; Provan and Kenis 2008; Saz-Carranza and Ospina 2011; Berthod and Segato 2019). Focusing on the tensions amounts to a conception of CG as a set of co-existing, key contradictory forces that need to be reconciled in practice for ED to succeed. Tensions in CG can concern a variety of issues, such as the pull between collective and organizational resources, interdependence versus autonomy, integration versus fragmentation, or inclusivity versus efficiency, to name but a few (see Berthod and Segato 2019 for a review). A failure to attend and resolve such tensions can doom collaborative efforts at any maturity stage (Human and Provan 2000; Cornforth et al. 2015). This perspective offers a particularly dynamic view on CG efforts and their development, shedding light on their fragility as they evolve.

As Ulibarri and colleagues (2020) highlight, CG arrangements often experience turbulent beginnings. These turbulent early phases lead to a working mode that promotes stability. In the particular case of ED, however, extant frameworks point to the role of bottom-up actors challenging incumbents and attempting to change the embedded values of the energy system, along with its processes, in creating conflictual relations. At the end of the road, the energy system is notable for the intransience and difficulty of shifting actors locked into past configurations (Arthur 1989; Kuzemko et al. 2016). It is these issues of the importance of the specificity of actors (grassroots or public) attempting specific changes (non-profit orientation and opening of process and decision-making along with decentralization of physical infrastructure) up against a system with strong incumbency dynamics, that challenges CG in ED efforts. CG approaches are ambivalent about the type of actors involved and the ends they are seeking (Herranz 2008), while ED proposes democracy as a mechanism for paradigm change and shifting power relations. Therefore, we explore efforts to introduce ED concepts into local energy systems and the tensions that arise from ambitions to increase societal participation in the CG of energy system change.

The Berlin case began with comparatively poor starting conditions. Energietisch, a coalition of over 50 groups, initiated collaboration as a means to remunicipalize energy in the city-state of Berlin. This idea, however, was at odds with the incumbent system and major political forces in government (Blanchet 2015). The group opened participation as it used plenary sessions and civic participation to write a referendum law proposing the creation of a publicly owned and democratically controlled grid operator and public energy supplier. The referendum law, among other things, set explicit goals against energy poverty, aimed to reach 100% regional renewables, asked for a board with seats for employees and elected members, as well as yearly assemblies and tools to petition the board. Social justice and democratic control were ends in themselves, as well as mechanisms through which a decentralized and ecological energy transition could be implemented and the main protagonists held accountable.

Due to its grassroots and conflicting origins, this movement never became part of a new, collaborative regime, in which it would contribute to develop ground rules and see these rules applied. In line with an orientation to openness, most of the internal organization of the movement was democratic. There was a steering committee, a few prominent campaign speakers and a paid campaigner, but decisions were made collectively through voting in open plenaries. There were working groups to help develop the social, ecological, and democratic elements, and lawyers to help draft the collective proposals into legal language. What is more, the movement successfully contributed to increase civic participation in energy policy and demonstrate its legitimacy in representing the people’s will. Once the proposed referendum law was developed, the coalition had to go through two rounds of signature collection – one collecting about 20,000 signatures, the second about 200,000. The structure of referendum law in Berlin is that initiatives can write their own laws to be voted on with binding implementation if they are approved, but 25% of eligible voters have to vote yes. Amid these developments towards inclusiveness, the city took action that restricted participation in the energy system. In a context where the government thought the referendum too far-reaching, the city postponed the date of the referendum vote, which was supposed to take place together with federal elections for practical reasons, to a different date a few months later, thereby provoking distrust regarding procedural integrity (Becker et al. 2016). Nevertheless, 600,000 Berliners came out to vote overwhelmingly in favour (82%), but missed the participation quorum by 0.9%, meaning that the government didn’t have to implement the result.

Although the coalition did not meet its goals of commoning, it did force a number of intermediate and, perhaps more surprisingly, delayed outcomes in the city. The overwhelming result of the referendum pressured the Berlin government towards taking on the issue of renewable energy (albeit at a diminished scale), while setting aside the social and democratic elements. Shortly before the referendum took place, the Berlin government created a public utility to sell renewable energy and compete with the incumbent firms; this utility, however, was supposed to produce renewable energy itself. In 2017, a new government lifted most of these limitations. The public utility is now a major actor for solar and energy retrofit projects for the public sector and for tenant energy subscriptions, although its customer numbers have grown slowly. Although this represents a very limited version of the original demands by Energietisch, the advisory council of the public utility contributes to offering a public forum and more transparency for face-to-face discussion on energy policy for a variety of stakeholders. There are on-going formal and informal talks between Energietisch actors and the by now two public utilities (in 2021 Berlin bought the grid back).

The Minneapolis Energy Options (MEO) campaign began with similarly moderate to poor conditions. MEO attempted to remunicipalise electricity services when the concession to the private utility was due to be renewed as a means to open the field of energy to citizens. MEO organized a coalition of social movement organizations. In this particular case, the city council would need to vote to put a question to authorize looking into municipalization on the ballot. The campaign focused on informing residents that there were other options in energy provision, and using various tactics to put pressure on the council, including: petitioning and educational presentations; going through the party endorsement process for the ballot initiative; choosing to run their campaign during a municipal election year; having candidates take positions on it. MEO managed to place the issue front and centre in campaigning and election discussions.

Similar to Berlin, the campaign was able to shift council opinion and built enough public and media pressure that the council had to act to adopt a new approach with the utilities. The council did not agree to put the initiative to authorize municipalization on the ballot, though. After a period of study, the city went forward with an alternative proposal for a partnership that was restricted to the two utilities and the city, called the Clean Energy Partnership (CEP), with a formal board, work plans towards meeting the city’s climate and energy goals, and a community advisory council. MEO had also built up pressure on the utilities and awareness of energy issues within the city so that the utilities agreed to some important concessions in the process of negotiating with the city, including a drastic shortening and reworking of the contract to make it possible to cancel after five years.

Here the city adopted the campaign’s renewable goals and to a certain extent its framings (if not action) around social, democratic and local elements but restricted participation in its application. It could not picture public ownership for two reasons. First, the electric utility Xcel had mobilized significant opposition, particularly from the business community. What is more, a state law in Minnesota requires that, in municipalization proceedings, cities consider lost profits to the utility, which created significant financial and legal doubt about the feasibility of going the municipalization route under those circumstances. Nevertheless, the campaign had forced the city to become involved in energy decision making, which it was not previously. Additionally, the advisory board in the CEP offered a stage for intervening in this discussion, including the pushing of several policy proposals.

The CEP does have a clear structure, moderate transparency, and supposedly clear goals, but has had mixed to scant results overall. One primary factor limiting the CEP was argumentation from the utilities that they couldn’t provide funding for partnership activities because a regulatory “non-discrimination” clause kept them from spending money preferentially in one part of their service area. Another was that a structure attempting coordination between three large bureaucratic institutions created even more institutional slow-down points. Additionally the parity of votes on the board means that things that are controversial will likely not be advanced in this space. Consequently most of the results of the CEP have been actions taken by the city, often on an original idea proposed by the advisory council. Finding a funding stream for city energy activities falls under this category, as well as the city championing a policy that would allow low-income people and renters to pay for energy upgrades out of the savings they create, on their bills (inclusive financing/PAYS^® model). The utilities, with city support, have made progress especially in expanding uptake of and practices of engagement around their state-mandated efficiency programs, or in sharing data with the city, but many of the larger goals have not been met.

The Jena case began in very positive starting conditions, from a clear understanding on the need to increase participation to a generally favorable ground for such discussions in the field. Jena is one of the first cities in Germany in which a citizens’ energy cooperative acquired shares in the municipal utility company. Three local key players in the environmental policy field, with support from the local Green Party, initiated the idea of setting up a cooperative. These three actors were the current head of the finance department and former chairman of the Green Party in the city council, the former director of the municipal energy company, and the current Green deputy mayor for the environment and urban planning. A campaign of communication and fund raising took place over the next four years to finance this project. This initiative culminated in 2011, when citizens founded the Jena Citizens’ Energy Cooperative (BürgerEnergie Jena eG).

This structure, based on co-ownership, offers clear decision rules, transparent processes of decision-making and is fairly open in terms of participation as it is supposed to give direct access to citizens through the cooperative (Blanchet and Herzberg 2019). The official aim of the cooperative is to promote a decentralised, affordable, environmentally and climate-friendly energy supply based on 100% renewable energy sources. Supported by the political majority (Christian Democrats, Social Democrats and the Green Party) in the city council, the cooperative acquired a 2% share in the municipal energy company in February 2012. Through its organization and mode of operation, the cooperative makes it possible to instill principles of participatory democracy into the local energy system, such as the participation of a representative of the citizens’ cooperative in the shareholders’ assembly, or the creation of venues for debate between citizens and experts on local energy policies. The members of the cooperative bring the actors of local energy policies in direct contact with the inhabitants of Jena, who can thus discuss the functioning and strategies of the municipal company in an open manner and take note of important and sometimes even unpublished information (Herzberg and Blanchet 2020). Citizens’ meetings and general assemblies represent, according to some local political leaders, ‘a real democratic experience’, as local elites debate directly with citizens, to whom they have to justify their actions and decisions.

However, the outcome of this particular collaborative arrangement is very nuanced. The founding members of the cooperative aimed to invest systematically in renewable energy projects and to make an important contribution to the local energy transition. But the cooperative undermined its own legitimacy. At the first general meeting, a decision was made on what to do with the 4.1% interest that was to be returned to the members of the cooperative. A clear majority voted for a complete reversal of profits to the members of the cooperative at the expense of investments in renewable energy, thereby creating a substantial boundary between cooperative members and other citizens. Trapped in the democratic principle of the cooperative’s operation, the cooperative’s management faced harsh criticisms by the different local political parties (Blanchet and Herzberg 2019). In September 2015, the members of the cooperative offered the purchase of new shares in order to reach 5% of the capital of the utility. The parties of the majority coalition opposed the request on financial grounds. In 2016, the city council refused a new request, this time to sell 3% of the shares in the municipal company, arguing that the municipal company should serve the interests of citizens and not those of investors.

The UK case began with moderate conditions. It involved an umbrella organization for local community energy groups (Community Energy South), an experienced environmental campaigning organization (We are Possible), a leading environmental consultancy (Ricardo), two universities (University of Birmingham and University of Bristol), and Great Britain’s railway infrastructure provider (Network Rail). The group that coalesced around the creation of a community and commuter co-owned distributed solution for railway traction supply had no prehistory of cooperation (Murray and Bottrell 2017; Murray and Pendered 2019). Despite some incentives and sense of interdependence, the imbalance in terms of power was strong, especially due to the reliance on Rail Network to create a route to market for this supply solution through procurement (Nolden 2020).

In 2019, Riding Sunbeams was set up by We are Possible and Community Energy South as a company limited by guarantee (not-for-profit) to create such a route to market for community and commuter (co-)owned RES as a means to power trains. Following the termination of subsidies in 2020, the diffusion of such sustainable energy supply innovations hinges on the direct procurement of electricity, often using Power Purchase Agreements (Nolden et al. 2020). These contractual agreements necessitate collaborative governance which increase in complexity the more actors are involved.

This particular case offers a very nuanced view on institutional design as the rules of participation among the core members were clear and aimed to open the fields of energy and public transportation to citizen-based, locally produced renewables, but the whole project stumbled upon the expectations and organizational rules of Network Rail as central gatekeeper to a full roll out. The UK Department for Transport (DfT) provided several rounds of Small Business Research Initiative (SBRI) First of a Kind (FOAK) funding to support demonstration and commercialization of this innovation (Murray and Pendered 2019).

Collaborative governance underpinning the demonstration helped address several technological issues and enabled Network Rail to take solar power traction through compliance. The creation of a route to market, however, still hinges the demonstration of technical, commercial and legal feasibility at scale. Any benefit from this new form of electricity provision needs to fulfil procurement specifications of one central actor, Network Rail, in its attempt to obtain economies of scale and reduce the number of contractual obligations. This implies that the collaborative governance which was essential to develop this innovation and increase its technology readiness level (TRL) will need to be replaced by a traction power supply contract between one supplying party and Network Rail to create such a route to market. Network Rail’s prioritization of economic efficiency principles, such as economies of scale, suggests that current contractual arrangements stand in opposition to the maintenance of collaborative governance arrangements, not to mention energy democratizing ambitions championed by Riding Sunbeams’ parent companies We are Possible and Community Energy South. Collaborative governance therefore appears to play a key role in the emergence of such potentially energy democratizing socio-technical innovations but both ED elements are in danger of being side-lined when the route to market hinges upon procurement by organizations bound by principles of economic efficiency.

In comparison to countries such as Germany and Denmark, where community energy projects are much more prevalent (Ruggiero et al. 2021b), Sweden does not provide a policy framework that is conducive to these kinds of projects. Against this backdrop, it is not surprising that some community energy projects in Sweden do not have the traditional setup of grassroot initiatives but instead are a product of different (state) actor collaboration with local inhabitants (Ruggiero et al. 2021a). One example for this phenomenon is the Kalmarsund Sol community energy association. The project was developed by Kalmar Energy, the local public energy company in the Kalmar municipality in the South-East of Sweden. The municipality holds a majority of shares of Kalmar Energy, making this project effectively a case of collaborative governance between a municipality, a publicly-owned energy provider, inhabitants and local businesses.

Kalmar Energi has a long-standing history of initiating and managing community energy projects in the region, which is blessed with ample potential for wind and solar energy production. In 2006, the company started the Kalmarsund Vind project, which was de-facto a community energy project for the company’s local customers. A decade later, in 2016, the Nöbble Solar Park started operating. The Nöbble Solar Park is one of two collectively owned solar park with a capacity of 600.000 kWh/a. The following year saw the addition of the Törneby Solar Park, which added some 2.300.000 kWh/a, making it Sweden’s biggest solar park at that time.

After facilitating the construction and putting the two solar parks into operation, Kalmar Energi legally handed over the facilities to the consortium of shareholders. The consortium consists of (1) the Kalmarsund Sol association, which unites all the participating households; (2) a number of local businesses and (3) the county administration who has bought shares in the parks to power public buildings such as the local courthouse. Kalmar Energi now serves as a service provider who manages the day-to-day operation of the two solar parks. Each owner - whether they are a private household, a local business or a public body - has a limit of shares in the project they can purchase. The limit is set to 80% of the consumption of the previous year. A set of investment rules makes sure that no owner can become a majority shareholder, which in turn ensures a democratic distribution of the shares. In addition, all shareholders have one (and only one) vote when strategic decisions on the two parks are taken.

The project brought about a number of benefits to the parties involved. The municipality of Kalmar supported the project as it strengthened its green image, which can be considered a form of green city branding (Busch and Anderberg 2015). Kalmar Energi also used the project for green branding and to create stronger bonds to its customers. In addition, Kalmar Energi uses its knowledge from the establishment of the two solar parks by selling the concept to other local energy providers in Sweden. For local businesses and involved households, the project was an easy way to become prosumers and thus take an active part in the governance of the energy system.