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Ce blog rassemble une séléction de mes textes. L'approche est plurilingue et interdisciplinaire. Les sujets sont internationaux et concernent notamment la durabilité, l'économie, la politique et certains aspects sociaux. Bonne lecture! - JJ Bürger -

Tuesday, August 11, 2015

Energy from the crowd


Insolvencies involving fraud at the level of millions and billions of euros get a lot of media attention, especially if they come from the "green energy" industry, such as the Prokon insolvency. However, this is not necessarily the fate of every sustainability project, especially if it's a smaller project that invites us everyday normal citizens to invest just a little bit of our funds - a concept also known as crowd funding projects. Indeed, there are several interesting examples for crowd-funded energy projects.

One of them is Econeers, a platform which has been used to bring together developers and investors in order to finance several solar, bioenergy and efficiency projects in the past. For example, for one PV farm in the German region of Saxony-Anhalt, 442.750 EUR were invested by 322 people, implying an average investment of 1375 EUR per person. At an expected profitability of 4,5% per year over seven years, this average investment of 1375 EUR is of course not going to replace your financial plans for retirement. However, this is not what people should aim for with this kind of investment, since it becomes a "subordinated loan" given by the multiple citizen investors to the project developer - which means that in case of insolvency of the project, those loans might not be paid back to the investors. Nevertheless : if the minimum threshold of total investment is not met, like for example in this biogas project, the investors' money will of course not be lost but reimbursed, given that the project was not able to get started.

Actually, those are principles which are in general quite common for crowd-funded energy projects. As a matter of fact, they are common to Econeers and also to Bettervest. The latter is a crowd-funding platform specialised mainly in energy efficiency projects in Germany and in solar projects in Africa, as their impressive record of successful projects shows. They currently even offer the possibility to participate in a crowd-funding towards the further development of their own website! Also, Bettervest calls for "energy detectives", meaning third persons identifying potential further projects, against a compensation derived from the project's success.
Bettervest allows users to invest sums as little as 50 EUR, whereas Econeers seems to imply a minimum of 250 EUR, at least for currently ongoing projects. Another difference might be that Bettervest mainly aims at smaller total investment amounts than Econeers, which makes it easier for the necessary amount of investment to be reached, and for the users to diversify their investment into different projects.

In any case, both of these examples have in common that they represent crowd-investments, which could perhaps be regarded as a sub-category of crowd-funding. Indeed, crowd-funding can also work without promising a financial return on investment.
An energy-related example of this "non-profit" kind of crowd-funding is the following campaign from the Greek branch of Greenpeace :

Source : Greenpeace Greece
By calling for a "Solarization" of Greece, the NGO intends to raise funds for a project delivering PV panels to low-income households on the Greek island of Rhodes. They argue not only on environmental grounds when advocating this alternative instead of the consumption of fossil fuels, but also on a micro- and macroeconomic level, as fuelling the island's oil generators comes at a certain price to customers, and also to the State (via fossil fuel subsidies ; also by a contribution to the trade deficit). However, no return on investment is foreseen for the users who participate in this fund-raising campaign, except for certain small gifts (called "perks") that can be claimed. Also, it does not seem possible to make your participation count as a donation eligible for tax reductions.
Of course you could argue that this Greenpeace campaign might not have answers to all the further questions it implies (e.g.: even if the idealistically high target sum of 1 million EUR was reached, would that really be enough to provide sufficient PV panels to all low-income households in Rhodes? And even if that was the case, could you really just phase out fossil fuels on Rhodes - what about night and backup needs? Not to mention their long-term goal to "kickstart the solarization of the Greek economy (and beyond!)"...).
Yet, gathering some amounts of money for this project could still be a pragmatic way of people helping people directly in these difficult times. For example, as one of its similar projects in the past, the NGO quotes a project (PV plus heat pumps) carried out recently on Rhodes for a children's orphanage that could not have afforded heating during winter. This kind of help is probably an example of useful crowd-funding that everybody can agree on...