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Version:1.0;VersionDate:01/06/2016

D6.3 Chances, opportunities and impact

of an emerging social energy system

Work package 6

Responsible Unit: TNO Authors: TNO, UNITN



Document technical details

Document Number D6.3

Document Title Chances, opportunities and impact of an emerging social energy system

Version 1.0

Status Draft

Work Package 6

Deliverable Type R1

Contractual Date of delivery June 7nd 2016

Actual Date of Delivery

Responsible Unit TNO

Contributors TNO, TU DELFT, UNITN, KTH, EF

Keywords List .

Dissemination Level PU2

1 Deliverable Type: P= Prototype, R= Report, S= Specification, T= Tool, O= Other 2 Dissemination Level: PU= Public, RE= Restricted to a group specified by the Consortium, PP= Restricted to other

program participants (including the Commission services), CO= Confidential, only for members of the Consortium (including the Commission services).



Document change log

Version Date Status Author (Unit) Description

0.2 Draft Verweij(TNO) Ch.1

0.3 ‘’ Verweij(TNO) Ch.2

0.4 ‘’ Verweij(TNO) Ch.3

0.5 12-04-2016 ‘’ Ensing(TNO) Ch.4

0.6 18-04-2016 ‘’ Ensing(TNO) Ch.4,corrections

0.7 09-05-2016 ‘’ Poderi(UNITN) Ch4.ItalianSurveyresponse

0.8 11-05-2016 ‘’ Verweij,(TNO)Ensing(TNO)

Ch.5,Exec.summary

0.85 13-05-2016 ‘’ Ensing(TNO),Verweij(TNO),Hasselqvist(KTH)

SplittingChapter4.FinalisingConclusionsandintroduction.SwedishSurveyresponse

0.9 30-05-2016 ‘’ Ensing(TNO),Verweij(TNO)

InternalReviewComments

1.0 01-06-2016 Final Ensing(TNO) ReadyforqualitycheckbyUNITN



CIVIS Consortium CIVIS (Grant Agreement Contract No. 608774) is a Collaborative Project within the 7thFramework Programme, theme FP7-SMARTCITIES-2013, ICT-2013.6.4. As defined in theConsortiumAgreement,membersoftheConsortiumare:

No. Beneficiaries

1

UNIVERSITA DEGLI STUDI DI TRENTO, established in VIA BELENZANI 12, 38122 TRENTO - ITALY, represented by Ms Daria DE PRETIS, Rector, or her authorised representative, the beneficiary acting as coordinator of the consortium (the "coordinator" ).

2 AALTO-KORKEAKOULUSAATIO established in OTAKAARI 1, 00076 AALTO - FINLAND, represented by Mr Ilkka NIEMELÄ, Deputy President and/or Mr Martti RAEVAARA, Vice President, or their authorised representative.

3 FONDAZIONE CENTRO STUDI ENEL established in VIALE REGINA MARGHERITA 137, 00198 ROMA - ITALY, represented by Mr Francesco STARACE, President, or his authorised representative.

4

IMPERIAL COLLEGE OF SCIENCE, TECHNOLOGY AND MEDICINE established in Exhibition Road, South Kensington Campus, SW7 2AZ LONDON - UNITED KINGDOM, represented by Ms Carole MEADS, Senior Negotiator, European Policy and/or Mr James LLOYD, Contracts Administrator (Europe), or their authorised representative.

5 INSTITUTO SUPERIOR TECNICO established in Avenida Rovisco Pais 1, 1049-001 LISBOA - PORTUGAL, represented by Mr Arlindo OLIVEIRA, President, or his authorised representative.

6

Karlsruher Institut fuer Technologie established in Kaiserstrasse 12, 76131 Karlsruhe - GERMANY, represented by Mr Bernhard DASSELAAR, Head of Cost and Fund Management and/or Mr Wolf FICHTNER, Head of IIP, or their authorised representative.

7

KUNGLIGA TEKNISKA HOEGSKOLAN established in BRINELLVAGEN 8, 100 44 STOCKHOLM - SWEDEN, represented by Mr Peter GUDMUNDSON, President and/or Mr Kenneth BILLQVIST, Head of Research Office, or their authorised representative.



No. Beneficiaries

8 SANTER REPLY SPA established in VIA ROBERT KOCH 1/4, 20152 MILANO - ITALY, represented by Mr Luigi CICCHESE, Partner, or his authorised representative.

9

NEDERLANDSE ORGANISATIE VOOR TOEGEPAST NATUURWETENSCHAPPELIJK ONDERZOEK - TNO established in Schoemakerstraat 97, 2600 JA DELFT - THE NETHERLANDS, represented by Mr René Hooiveld, Director of Innovation, or his authorised representative.

10 TECHNISCHE UNIVERSITEIT DELFT established in Stevinweg 1, 2628 CN DELFT - THE NETHERLANDS, represented by Mr Theo TOONEN, Dean and/or Mr Jeroen VAN DEN HOVEN, Vice-Dean, or their authorised representative.

11

CREATE-NET (CENTER FOR RESEARCH AND TELECOMMUNICATION EXPERIMENTATION FOR NETWORKED COMMUNITIES) established in VIA ALLA CASCATA 56/D, 38123 TRENTO - ITALY, represented by Mr Imrich CHLAMTAC, President, or his authorised representative.

12 FONDAZIONE BRUNO KESSLER established in VIA SANTA CROCE 77, 38122 TRENTO - ITALY, represented by Mr Andrea SIMONI, General Secretary and/or Mr Massimo EGIDI, President, or their authorised representative.



Table of Contents

ExecutiveSummary.....................................................................................................................8

1-Introduction.........................................................................................................................101.1-Businessmodels..........................................................................................................................101.2-Impactofanemergingsocialenergysystem................................................................................111.3-Approachandcontents...............................................................................................................12

2-Agentsofchangearoundsocialenergyinitiatives.................................................................132.1-Endusers.....................................................................................................................................132.2-Energycooperatives....................................................................................................................142.3-Energysuppliers..........................................................................................................................162.4-Gridowners.................................................................................................................................17

2.4.1-Customerrelations......................................................................................................................182.4.2-Advisoryanddataservices..........................................................................................................182.4.3-Connectionservices.....................................................................................................................192.4.4-Intelligentcontrol........................................................................................................................19

2.5-Serviceproviders.........................................................................................................................192.5.1-Energyservicecompany(ESCo)...................................................................................................192.5.2-Neighbourhood(energy)company.............................................................................................20

2.6-Governments..............................................................................................................................212.6.1-Local/regionalgovernments........................................................................................................212.6.2-Nationalgovernments.................................................................................................................24

2.7-Impactofsocialenergysystems..................................................................................................24

3-Developingsocialenergyinitiatives......................................................................................263.1-Howtostart:astep-by-stepapproach.........................................................................................26

3.1.1-Theidea.......................................................................................................................................263.1.2-People..........................................................................................................................................263.1.3-Theworldoutside........................................................................................................................273.1.4-Organisation................................................................................................................................273.1.5-Legalmatters...............................................................................................................................283.1.6-Technicalissues...........................................................................................................................283.1.7-Finances.......................................................................................................................................283.1.8-Energyinitiativebestpractices....................................................................................................29

3.2-Theconceptbehindenergyco-operativesbusinessmodels.........................................................363.2.1-BusinessModelCanvas...............................................................................................................373.2.2-STOFmodel.................................................................................................................................41

3.3-Needforinvestments..................................................................................................................42



3.4-Communication...........................................................................................................................483.5-Energyco-operativesgrowthfactors...........................................................................................493.6-TheroleofICT.............................................................................................................................50

4-Energyinitiativematuritylevels............................................................................................524.1-Definition....................................................................................................................................524.2-Maturitylevelsofenergyinitiatives............................................................................................534.3-PlottingtheCIVISenergyinitiatives.............................................................................................57

5-Businessmodelsusedin(emerging)energyinitiatives..........................................................605.1-ExampleofbusinessmodelsintheCIVIStestsites.......................................................................60

5.1.1-HammarbySjöstad2020.............................................................................................................605.1.2-CEdiS............................................................................................................................................615.1.3-CEIS..............................................................................................................................................625.1.4-CIVISrelatedenergyinitiatives....................................................................................................63

5.2-Thefour(emerging)energyinitiativebusinessmodels................................................................64

6-Conclusions..........................................................................................................................666.1-Thetestsitescontinuetoflourish................................................................................................666.2-Concludingremarks.....................................................................................................................67

7-References............................................................................................................................69



Executive Summary Introduction

Inthisreportguidelinesareprovidedfordeployingandupscalingsocialenergysystemsanddesigningtheappropriatebusinessmodelfortheinitiative.Basedoncurrentinitiative’sbestpracticesandviewsonhowtostartanddevelopasocialenergy initiative, theCIVISenergyinitiatives areplotted against thesematurity levels andbest practices, resulting in areas ofimprovementandculminatingintoanadviceonhowtoimprove.

Usingthisdocumentasaguideline,localenergyinitiativesshouldnotonlybeabletodeviseanew or improved business model, but also to better articulate towards their stakeholderswhattheyneedfromthemandwhy.

Agentsofchangeandnewbusinessmodels

TheEuropeanUnionpreparesfortheconsequencesoftheenergytransition,expressedintheenergyandclimateobjectivesfor2030and2050.Regulatorsaswellasthetraditionalplayersin the energy chain such as energy suppliers and distributors agree on the importance ofparticipationofcitizensintheenergytransition.Buthowcangovernmentandmarketpartiesworktogether?Thisreportfocussesonthiscooperation,introducingtheconceptofagentsofchange in the energy transition. The focus is on social energy initiatives, and specificallyenergycooperatives,empoweredbytheendusersastheultimateagentsofchange.Butthereare other entities that can contribute to the initiative’s goal, thus creating new businessmodels.Energysupplierscanprovideadministrationservices,balancingofenergy,invoicing,smartgrids.Byworkingtogetherwithlocalcooperatives,energycompaniescouldenterintopartnershipswithlocalenergycooperativeswithouthavingtodealwithNIMBY-effects.Gridowners can react to the emergence of local renewable energy co-operatives by providingrelevantinformation,advisoryanddataservicesconnectionservices,orintelligentcontroloflocal balancing of demand and supply. To reap the benefits of energy cooperatives, (local)government policy should be aware of the positive influence of energy cooperatives andstimulate itbyactingascoach, facilitator,serviceprovider,participantorevenco-producer,keepinginmindthattheroleoflocalgovernmentsisnotastaticoneandshouldchangeovertimeasthelocalenergyinitiativedevelops.

Bestpracticesfordevelopmentofsocialenergyinitiatives

Sevenfactorstosuccessfullystartasustainablelocalenergyinitiativecanbeidentified:



1. haveaclearvision;2. getsupportthroughgoodcommunication;3. findpartiesthattheinitiativecanworktogetherwith,bothlocallyandregionally;4. haveaclearviewontheneededexpertise,rolesandstructureoftheorganisation;5. considertherightlegalform,investigatefiscalandliabilitymatters,applicablelawsandregulations;

6. maketherighttechnicalchoices;7. choosetherightinvestmentscheme.Relatedtotheseelementsareenergyinitiative’sbestpractices,whicharesubdividedintobestpractices for (financial) organization, relations with stakeholders and matters regardingconnection to the grid and sale of energy. A German study has shown that there are threedistinctive businessmodel elements that determine the success of a cooperative: the valueproposition, trust and the cooperative’s network, with the value proposition being key.Improvingonthesekeyelementswillimprovethecooperativeandcanmakeitgrow.Maturityofsocialenergyinitiatives

Thematurity levels of energy initiatives canbedescribed as either emerging, promisingorestablished.TheCIVIStestsitesinItalyareallwellestablished,whereastheSwedishtestsitesareeitheremergingorpromisingenergyinitiatives.

OnnewstylebusinessmodelsRegarding business models, we have learned that it is not so much about inventingrevolutionarynewbusinessmodels,butultimatelyabouthowabusinessmodelisapplied.Tothatextentwehope thatourmessage tobuildbusinessmodelsbeyondonly financialgoalsinspires energy cooperatives to include and empower their social nature to allow forenvironmentallyaswellassociallysustainablesolutions, thatwouldotherwisenotcometofruition. This we feel is the essence of ‘new style’ business models that we tried to makepossiblewithintheCIVISproject.



1 - Introduction ThisdocumentisDeliverable6.3oftheFP7projectCIVISandiscalled:Chances,opportunitiesand impact of an emerging social energy system. It is the output of task 6.3: Evolutionframeworkforapplication inpractice.Thetaskaimis:toevaluatethepractical instantiation,further development and impacts of business models to unlock the values of emerging socialenergy systems in the context of the test sites and to provide guidelines for deploying andupscalingemergingsocialenergysystems.

1.1 - Business models

Thepivotalconceptinthisworkpackageisthatofthebusinessmodel.Beforethisdocumentcanproceedinexplaininghowvariousbusinessmodelsapplytosocialenergysystems, it isimportant to explain how this concept is being interpreted and usedwithin the context ofCIVIS. InCIVISterms,abusinessmodeldescribes thevaluethat isbeingcreatedbyasocialenergy system, i.e. energy cooperative or local energy initiative. For that it is important tonotetwothings.

First of all, from a CIVIS perspective we are interested in the value that is being createdbeyondpurelymakingmoney.Maximising profits as such is the domain of the commercialenterprise,whichisnotthefocusofthisproject.Thesocialgainsthatstemfromcooperativeinitiatives however, are the CIVIS focus and they should lead to increased welfare andimproved environmental conditions for the community at large. In that respect itmust bestressedthat,forCIVIS,moneyismerelyameansandnotagoalassuch.Secondly,achievingvalueasasocialenergysystemcanonlybedoneincooperationwiththevariousstakeholdersthatacooperativeinitiativeinteractswith–orthe‘agentsofchange’asfurtherdescribedinChapter2.It ispreciselythisinteractionthatisaddressedfurtheroninthisdocument.

So in terms of CIVIS a business model describes how an initiative creates, delivers, andsustains its value. It is a living, breathing thing that, as described byMagretta [16], is notunlike“writinganewstory,allowingtouseelementsofoldonesandapplyingvariationsofnewones”.It is good to mention here that this approach towards business models is also beingrecognized outside CIVIS, for instance in a recent paper [30] in which a framework is



describedtodesignviablebusinessmodelswhichtreatstheconceptofviabilitynotmerelyintermsofprofitabilitybutbesideseconomicvaluesalsousesnon-economic,socialvalues(e.g.loweringCO2emission).Theframeworkisvalidatedbyusecasesintheenergysector.

AspartoftheEUreviewprocessitwasadvised“thatinthenextdeliverableD6.3moreeffortisputinordertopresentpossiblebusinessmodelswithtangiblefinancialnature.”

This comment is addressed in this deliverable D6.3, which main purpose is to act as aguidelinetonewanddevelopinglocalenergyinitiativesintwoways.Firstofall,anapproachtoorganizinganenergyinitiativeisillustratedwithtangibleexamplesofbusinessmodels(orpartsofthem)throughoutchapters2and3.Theseexamplesshowtheinventivenessofenergyinitiatives in catering to their specific situation and member base. Both chapters provideattention to the financialand legalaspectsofanenergy initiativeanddiscuss theways thatstakeholderscansupporttheseinitiativesinatangibleway–eitherfinanciallyorbyremovingbarriers. Secondly in chapter 5. an extra effort has been made to provide more detailedfinancial background surrounding the energy initiatives that havebeen executedorwill beexecutedby theCIVISpilotsites.Theoutcomeofwhichshouldnotonlyprovide thereaderwithmoreinsightintotheirbusinessmodelthinkingbutalsohowthisappliestotheirlevelofmaturity.

1.2 - Impact of an emerging social energy system

To put this deliverable in context, this is the final of three documents that addresses theimpactofanemergingsocialenergysystem.Thefirstdeliverable(D6.1)focusedongettingtoknowourpartnersitesbetter,figuringoutwhatdrivesthem,howtheyfunctionandhowtheyinteractwiththeirenvironment.Continuingthatworkinthesecondyearleadustoderiveageneric approach for local energy initiatives to “identify, qualify and adapt their businessmodel and to empower these currently running initiatives in their ambition to sustain andpotentially expand their activities”, as described in the second deliverable (D6.2).Emphasizingthecreationofvaluewhichisnotonlyfinancialinnature,butspecificallyaimedat improving the social fabric and reaching the environmental goals as set out by theEuropeanUnion.



Soafterprovidingabroadperspectiveontheenvironmentofourtestsites inyearoneandfocussing our attention on their business models, resulting in tooling andmethodology toenhancethepilotsites leadershipsunderstandingtowardscreatingvalue,thisdeliverableisdiverging again, culminating the experiences of the years past, to provide what could bedescribed as a guidebook to start or to enhance a local energy initiative – or cooperativeenergyinitiative3.

1.3 - Approach and contents

AstheEuropeanUnionsupportstheenergytransitionbycommittingtoenergyandclimateobjectives for2030and2050,cooperationandpublicsupportareexpectedtobecomeevenmore essential for a successful transition.All countries approach this transitiondifferently,according to their national context, opportunities, resources and stakeholders’ interests.However,therearesomecommondenominatorsandrecommendationsthatcanbeappliedingeneral,irrespectiveofcountryorregion.

Inotherwords, decisions arebeingmade that result in change, andbehindany intentionalchangeliessomeone’sintentions–i.e.anagentofchange.

3 Both the abbreviation LEI and the term cooperative are used throughout this document as our test sites consist of

energy cooperatives and housing associations that also include energy aspects in their operations.

LocalenergyiniVaVve's“Agentsofchange”

Endusers

Energyco-operations

Energysuppliers

Gridowners

Serviceproviders

(Regional)government



Figure1Thelocalenergyinitiative’s‘AgentsofChange’

To start with, this report therefore wants to focus on the agents of change in the energytransition (Figure 1). In Chapter 2 - , the main focus is on social energy initiatives, andspecifically energy cooperatives. For each agent of change that surrounds a local energyinitiative, this deliverable highlights how these agents of change can contribute to theinitiative’sgoal thusprovidingguidelines fordeployingandupscalingsocialenergysystemsanddesigningtheappropriatebusinessmodelfortheinitiative.Next, inChapter3- amorepracticalviewonhowtostartandfurtherdevelopasocialenergyinitiativeisoffered,makinguseofcurrent initiative’sbestpractices.Chapter4 - furtherdetails thematurity levels thatco-operations will undergo throughout their lifecycle are discussed and the CIVIS energyinitiativesareplottedagainstthesematuritylevels.Chapter5-providesuswithexamplesofbusinessmodelsusedinthetestsitesandoutlinesthefourtypesofbusinessmodelsandtheirroleineachofthethreematuritylevels.Finally,conclusionsarepresentedinChapter6-.

2 - Agents of change around social energy initiatives Thefollowingparagraphsdescribeswhateachpotentialagentofchangecandointheenergytransition.Firstof all, the focus ison theenduseras theultimatedriverof change in localenergydevelopments.Thenwehighlighttheenergyco-operationasagentofchange.Whataretheintrinsicvaluesthatdrivetheenergyco-operation?Whatistheirbusinessmodel?Then,inthesubsequentparagraphs,wehighlightotheragentsofchange.Foreachagentofchange,wedescribehowthisspecificagentcancontributetoenergycooperativesintheirgoaltodeploysocialenergyinitiatives.

2.1 - End users

End users are the ultimate agents of change. The role of end users can be explained fromseveraldevelopments:

• From global challenges to local solutions. The beginning of the 21st centurycomes with huge global societal challenges [25]. Systems that have broughtprosperity are beginning to fail, excesses have become visible, the climate ischanging and natural resources are diminishing rapidly. Local solutions canplayanimportantroleinmanyofthesesocietalchallenges.Theinterestinlocalfoodproductionisincreasinganditisbecomingmorecommontocarefortheelderly and sick in their own environment. Also the concept of locallygenerating energy is related to thewishof citizens to takematters into their



ownhands.

• The energy transition. More and more citizens and companies see thatsustainablesolutionsareunavoidable.Pricesoffossilfuelsarerisingandatthesametimemanybelievethatfossilfuelsarethemaincauseofclimatechange.That iswhy the European Union aims to reduce the emission of greenhousegasses by at least 80-95 percent in 2050 (compared to 1990) [26]. In theintermediateperioduntil2030[27],emissionreductionshouldbe40percent,energy savings should be 27 percent and 27 percent of all energy in theEuropeanUnionmustcomefromrenewableenergysources.

• Share economy. Another trend in society is the emergeof the share economythatcomprisesinitiativestopromotepeopletosharepossessions[28].Inthiskind of economy, value creation is not about consuming raw materials, butaboutre-usingwhatisalreadythere.Valuecreationisintheserviceinsteadofthe product. Characteristics of the share economy are a large local basis, astrong belief in group interests and mutual trust. The result of the shareeconomy is that more value is given to sharing and solidarity, causing amovementthatcanmakesocietystrongerandmoresustainable.

2.2 - Energy cooperatives

Forthelastfewyears,acleartrendhasbecomevisibleinwhichcitizensareplayinganactiveroleintheenergymarketbystartinglocalsustainableenergyinitiatives,usuallyintheformoflocal energy co-operatives. These co-operatives are organisations by and for the citizens.Participantscollectivelydeterminetheinsandoutsoftheco-operative,creatingastronglocalbasis.Energyisusuallycreatedfromsolarpower,windpowerand/orbiomass.Participantsconnectthemselvestoacommongoal,thatcouldbetocreatesavingsontheenergybillortocontribute to a sustainable society. As such there is a clear group interest that is stronglyrelatedtotrust.Membersof thecollectivehavetrust in theircollectivebecausetheyhaveacommongoal,andoftenalreadyknoweachother.Sustainabilitycanbeastrongmotive,oftenbecausetheeffortsofthegovernmentandcommercialentitiesarelookeduponasinsufficient,causingsociallycriticalcitizenstotakemattersmoreintheirownhands.So,with increasedpossibilities togenerateenergy inadecentralizedway,new ‘players’areentering the market. These decentralized energy collectives can be looked upon as socialenterprisesthatgiveprioritytosocialgoalsovercommercialgoals.Theirgoalsaremainlyto:



• Speeduptheenergytransition;

• Reduceenergycosts;

• Strengthenthelocaleconomy;• Strengthenthelocalcommunity(socialcohesion);

• Havemore“sayingpower”overownenergyprovision.

Thedecentralizedenergycollectivescombineseveralrolesintheenergychain:• As clustered end-user: collectively buying and/or financing. The energy collective’s

mainassetisthetrustofitsmembers.Theinterestsoftheenduserarethefocalpoint.• Asclusteredproducers:collectivelyproducingsolarandwindenergyandsellingthis

togridoperators.Thecollectivecanalsooperateasanintermediaryforprosumers.

• Asgridoperator:currentlyhardlyexisting,butinthelongruncollectivesmayseekaroleinthemanagementandownershipoflocalprivateenergygrids.

• As supplier: energy that is beingproduced locally, is alsoused locally. Currentlynotwidespread,asmostcollectivesselltheenergythattheyproduceandbuytheenergythatisneededsomewhereelse.

As an example, Figure2 shows anoverviewof projects that areundertaken according to astudythatwasperformedamongagroupoflocalenergyinitiativesintheNetherlands[1].



Figure2OverviewofprojectsasperformedbyaselectionofDutchlocalenergyinitiatives[1]

2.3 - Energy suppliers

Energyco-operationandtheirprosumermembersneedaccesstootherservicesthatcanbeprovidedbyotherplayersontheenergymarket:administrationservices,balancingofenergy,invoicing,smartgridsetc.Byprovidingtheseservices, it isanopportunityforcompaniestoworktogetherwithenergycooperatives. Largeenergycompanieshaveproblemssettinguprenewable energy sourcesproduction sitesbecauseofNIMBY-effects.Tomeet their energyproduction targets, it would be a good idea to enter into partnerships with local energycooperatives(seebox:KilbraurWindEnergyCo-opLtd).

LocalenergyiniXaXve

(Re)sellingofenergy

EnergygeneraXonandstorage• CollecVvebuyingofPVpanels• Solarroofsonpublicbuildings• Solarplants• Windenergy• Electricvehicles• OthergeneraVonsources(e.g.biomass)• Energystorage

Energyawarenessandsavings• Energysavingsadvice• Monitoringenergyuse



2.4 - Grid owners

How can grid owners react to the emergence of local renewable energy co-operatives? ADutchstudybytheNetherlandsAssociationofDSO’s[11]hasdescribedwhatgridownerscandointermsof:1.Customerrelations:energyco-operativesasanewcustomersegment.

2. Advisory and data services: the grid owner as project and knowledge-partner and assupplier of data services (insight in energy flows, administrative connection of supply anddemand).

3.Connectionservices:connectionorfittingdecentralizedproductionfacilitiesintothegrid,

KilbraurWindEnergyCo-opLtd(KWEC)fromtheUK[7]KilbraurWindEnergy Co-op is a local renewable energy sources co-operative setup by Energy4All for the solepurposeoffacilitatinganownershipstakeintheKilbraurwindfarmthatwasdevelopedbyFalckRenewablesLtd.Theaimoftheco-opwastoraiseasmuchcapitalasitcouldfromthelocalcommunitythroughacommunityshareofferandinvestthesefundsinthewindfarmtocreateasustainablefinancialreturnforitsmembersandretainincomegeneratedbytheprojectinthelocalarea.Ashareofwindfarmprofits isdistributedtotheco-operative inproportiontothe£1.1millionstakeheldwhichhas a projected average annual return on 10 percent per annum for the life of the project. There is also aguaranteed6.5percentperannumminimumreturntotheco-operativeandmember’scapitalinvestmentispaidback after 20 years. This is underwritten by Falck and provides a good level of security to non-sophisticatedinvestors.In Kilbraur the local co-operative functions as a platform to align the interests of different stakeholders in theproject. For Falck and Energy4All the local co-operative is a great asset because it helps to educate and raiseawarenessofwindturbinesandrenewableenergy.Thiswasnotachievedeasily,becauseofalotofmisconceptiononwindturbinesandthebadpublicitycreatedbyopponentsoftheKilbraurwindfarm.With localstakeholders,suchastheScottishNaturalHeritagethedeveloperundertookavarietyof initiativesaspartoftheConservationManagementPlanfor thesite.Theplanundertook initiatives likethedirectsupportofthesecurityandreproductionofindigenousspeciesofbirds,wildlifeandplants.IthelpedtoidentifyandprotectKilbraur’sancienthistoricsitesandmonuments.NativetreeswerealsoplantedtofurthermitigatetheeffectofCO2emissionsandclimatechange.Inaddition,theagreementwithFalckincludedasmallfundtobecontrolledbythelocalco-operative.In2010theboardofKilbraurco-operativeofferedthreelocalschoolseach£1000towardsaspecific project that would enhance the school environment and meet criteria relating to sustainabledevelopment.



tariffs.

4.Intelligentcontrol,theroleofdecentralizedcollectives.

2.4.1 - Customer relations

DSO’s and grid owners can be of help emerging energy cooperatives by providing relevantinformation for instance in an online internet portal, that can refer the starting energy co-operativetothecorrectinformationaccesspoints.Forexperiencedenergyinitiativesamorecustomizedapproachiswarranted.Especiallyifthelocalenergyinitiativeiswellembeddedintheregion,adirectlinewithregionalgridmanagersiskey.

It is important for grid owners to make room for new customers and adjust customerapproach and services accordingly. Experience andknowledge level of thesenewcustomerdeterminewaysofcommunicationanditscontent.

2.4.2 - Advisory and data services

A close relation with energy co-operatives has clear advantages for grid owners: earlyinvolvement inprojectplansandearlypreventionofpotential connectionproblemsorgridoverload. In cases where grid owners have already developed advisory services for thecommercial market, it is a small step to developing similar dedicated services fordecentralized collectives. Examples are: advice on regional opportunities for energyproductionandenergysavingoractivesupportofdesignandrealizationofprojects(adviceonlocationforwind-orsolarprojects).

Also data services can be offered because local initiatives need insight into their energyproductionanduse.Thelocalinitiativesneedthisdatatodeterminetheirstrategyandpolicywith regard to the local energy initiative, but also to determine the potential for energysavingsand–productioninaneighbourhood,cityorbuilding.Itconcernsdataonthelevelofindividual households, areas (streets, neighbourhoods, municipalities, provinces) andcollectives.

Itshouldbenotedthatenergyco-operationscanalsogiveadvicetogridowners.Experiencedenergy cooperatives (category 3) are front runners and offer grid owners insight into theimpact of large scale decentralized energy sources on the grid. Energy cooperatives arecreative and know local consumers and local municipalities and are as such intermediarybetweencitizensandgridowners.Theycangiveadvicetogridownersonhowtoembednewtechnologyandsocialinnovationsinalocalsetting.



2.4.3 - Connection services

Decentral collectives are asking for timely, flexible and affordable connections to the grid.Flexibility is needed with respect to a transparent tariff structure, a flexible approach oftransportservicesand(pre)financingofconnectioncosts.

2.4.4 - Intelligent control

Intelligentcontrolinthiscontextisaboutlocalbalancingofdemandandsupply.Thesubjectcould be relevant with respect to (1) balance maintenance or enforcement (2) capacitymanagement and (3) costs of transport. The question is whether there could be systemicbenefits and if so, whether this could lead to cost savings or earnings for decentral co-operatives.

Withrespecttobalancemaintenance/enforcementthecurrenttrendistodiscussthisonahigher, European level. Currently, there seems to be no specific role for decentral co-operatives.

Capacitymanagementdoesnotseemtobeproblematicintheshortterm,soactivecontrolinthis field is not needed. However, in the long run smart technology could contribute tobalancing of demand and supply of energy on a local level, leading to better capacitymanagementinthelowergrids.Thiscouldleadtosubstantialsystemicbenefits.Theassumptionthatshorterdistancesbetweenthepointwhereenergyisgeneratedandusedcouldleadtolowercostsfortransportcannotbevalidated[11].

2.5 - Service providers

2.5.1 - Energy service company (ESCo)

Anenergyservicecompany(orenergysavingscompany)isacompanythatprovidesenergysolutions to itscustomers, includingauditing, redesigningand implementingchanges to thewaysthecustomerconsumesenergy,themaingoalbeingimprovedefficiency.Otherpossibleservices provided include energy infrastructure outsourcing, energy supply, financing andriskmanagement[12].Typically,compensationtotheESCoisperformancebasedsothatthebenefitsofimprovedenergyefficiencyaresharedbetweentheclientandtheESCo(seebox).Iftheprojectdoesnotprovidereturnsoninvestment,theESCoisusuallyresponsibleforthedifference,thusprovidingariskfreeserviceandaconvincingincentivetoitsclientstoinvest.



EnergycontractsintheCityofStockholmTheCityofStockholmisinvolvedinthedevelopmentofenergycontractsbetweenenergyefficiencycompaniesand clients. To support sustainable energy initiatives,the City has developed a template that can be usedbilaterally between energy auditing companies andpotential clients. The energy efficiency companyperformsanenergyauditthat includesadviceonhowto save energy. The implementation of these energysaving measures, is performed by other companies.Theagreement inthecontract isthat30%ofrealizedenergy savings, flows back to the energy efficiencycompany asearnings.70% ofenergy savings thatareaccomplished following from the energy audit, flowsbacktotheclient[13].

Anenergysavingsprojectusuallybeginswithdeveloping ideas thatwouldgenerateenergysavings,and in turn,costsavings.During the initialperiodofresearchand investigation,anenergyauditorsurveysthesiteandreviewsthe project’s systems to determine areaswhere cost savings are feasible. This is theenergyauditandisusuallyfreeofchargetotheclient.Oncetheownerofthepropertyisaware of the possibilities of an energysavings project, he may choose to place inout for bid to another company (as is thecase in the Stockholm example), or stickwith the original ESCo. In case the ESCo isalso doing the planning, implementing andmonitoring of the cost saving measures, atypical transaction involves the ESCoborrowingcashtopurchaseequipmentortoimplement energy-savings for its clients.The client pays the ESCo for its regularenergycosts (oa large fractionof it),but theenergysavingsenable theESCo topayonlyafractionofthattotheenergysupplier.Thedifferencepaystheinterestontheloanandprofit.The advantage to clients is that the ESCo is able to implement and finance the energyefficiencyimprovementbetterthantheclient.

2.5.2 - Neighbourhood (energy) company

Theaimofaneighbourhoodcompanyistocreateasustainableandliveableneighbourhood,leadingtolowercostsoflivingandjobcreationwhileincreasingthewayinwhichcitizensareconnectedtotheirenvironmentandneighbourhood.

Anactualexampleofaneighbourhoodcompanyis“Bilgaard”intheDutchcityofLeeuwarden.Driving force behind Bilgaard is Ekwadraat, a company that is specialized in conceptdevelopment for sustainable solutions.BesidesEkwadraat,Bilgaard consists of an architectbureau, a contractor and a residents’ committee. Client of Bilgaard is WoonFriesland, ahousing association. The neighbourhood had little social cohesion, but now Bilgaard hasenergycafé’s,energycoachesandeventsarebeingorganizedinordertoreachpeople.Atfirst,only 8 people visited the café, for the fourth meeting the number had increased to 180.Members were offered a 5 percent discount on the energy bill through a collective



arrangement.Another5percentenergysavingswererealizedbyhiringanenergycoach.

Another concept is paid voluntary work. Each resident is allowed to earn € 1.500 yearlywithouthavingtopaytaxes.Itwasdecidedtogiveresidentstheopportunitytodothingslikemaintenance,gardeningandadministration themselves.Thismeanssavings for thehousingassociationandmoresocialcohesionintheneighbourhood.

AcontractorwaspreparedtostartanEnergyServiceCompany(ESCo,seeparagraph2.5.1-),resultinginbetterinsulationofhousesandsolarpanels.Thismeansthattheneighbourhoodcompanyisgeneratingitsownenergy,resultinginlowerenergycostsforresidents.Theseareguaranteedforthelongertermthroughcontracts.

The company structure of Bilgaard is such that all investments (partly) flow back into thecompany.Withthismoneynewprojectscanbestartedthatfurtherincreaselivingconditions,participationandagreenenvironment.

2.6 - Governments

This paragraph focusses on how local/regional and national governments can help energycooperativestoflourish.

2.6.1 - Local/regional governments

Thefinancialcriseshasreducedfamilyincome,especiallyinremote,ruralareas.Communitymemberscanrealizeextraincomeand/orgenerateenergysavingsbysettingupanenergyco-operation. Often, energy cooperatives use local businesses to help them setting up andrunningtheco-operation,whichinturnstimulateseconomicactivityinthearea.Toreapthebenefitsofenergycooperatives,(local)governmentpolicyshouldstimulateit.Especiallylocalgovernment should be aware of the positive influence of energy cooperatives. However,bureaucracyandregulationmakeithardtoentertheenergymarketandarelookeduponasbeing a big hurdle to realize an energy co-operation. This is especially hard for energycooperatives,sincetheyhavelimitedresourcesandpeopletotacklethebureaucratichurdles.It would help beginning energy cooperatives if bureaucracy and regulations would pose asmallerhurdle, perhapsby the local government giving administrative and/or legalhelp tostartingenergycooperatives.

Howcan local governments stay involved in local energy initiativesas timeprogressesandlocal co-operatives develop? The role of local governments is not a static one and shouldchangeovertimeasthelocalenergyinitiativedevelops.Fiverolescanbedistinguished[14]:



theroleofcoach,facilitator,serviceprovider,participantandco-producer.SeeFigure3foragraphical depiction of the various roles over time. These roles are notmutually exclusive.Local governments’ involvement in the energy initiative could expand and intensify as theenergyinitiativeprogresses.LookingatFigure3,thedistancebetweenlocalgovernmentandtheenergyinitiativegetshorter,movingfromthebottomofthefiguretothetop.Also,movingfrombottomtotop,themoreintensiveandformaltherelationshipgets,bothfinanciallyandlegally.Thedifferentroleswillbedescribedmoreextensivelyinthenextsections.

Figure3Rolesforlocalgovernmentsanddevelopmentovertime[14]

2.6.1.a - Coach

Whenalocalenergyinitiativeapproachesthelocalgovernmentormunicipality,manythingsarestillunclear,suchas:

• Whoarethepeoplebehindtheinitiative,whatistheirknowledgelevel,whataretheirintentions,whatistheirexperienceandwhataretheirconvictions?

• Whataretheambitionsoftheinitiativeandtheapproach?

• Whyaretheyapproachingthelocalgovernment:whataretheneedsandquestions?

As longas thequestionsaboveareunclear, it is impossible toascertainwhat thechangeofsuccess is and towhat extent the initiative contributes to the local governments’ goals. Byaskingtherightquestions,thelocalgovernmentcanhelpthelocalenergyinitiativetodevelop



a critical self-view, which in turn can lead to adjustment of the energy initiative’s plans,profiles and processes. Even if the relationship between local government and energyinitiative develops over time, the role of coach should continue. However, once therelationshipdevelopsintoamoreformalizedone,theroleofcoachwillbecomerelativelylessprominent.

2.6.1.b - Facilitator

Often starting local energy initiatives have limited means. Once the local government hasdecided that the initiative has sufficient potential, there are possibilities to support theinitiative, without entering into a formal relationship. The local government can providemeans which the energy initiative is unable to afford, such as meeting space, technical orfinancialexpertise,orhelpingtheenergyinitiativetogetintocontactwithotherinitiativesorknowledgeproviders.

2.6.1.c - Service provider

Oncetherelationshipbetweenenergyinitiativeandlocalgovernmentisaformalizedone,thelocalgovernmentnolongeractsasfacilitator,butasserviceprovider.Asserviceprovider,thelocalgovernmentusesitsformalcompetencestosupporttheinitiative.Forinstance:helpingin obtaining the right permits, using the local governments’ communication channels topromotetheinitiative,andlookingactivelyforsuitedlocationsfortheinitiative,suchaswindparksorlargeroofsforsolarPVinstallations.

2.6.1.d - Participant

Participationofthelocalgovernmentintheenergyinitiativecantakedifferentforms:

• Become an official member of the local energy initiative and actively stimulateparticipationofothers.

• Becomeacustomerofthelocalenergyinitiativebybuyingenergy.

• Becomea financial partner, for instance as co-investor, shareholder,money loansorguarantees(alsoseesection3.1-).

It is important that improper use of government funds is avoided and that the energyinitiativeisnotunfairlyfavouredoverother,perhapssimilarinitiatives.



2.6.1.e - Co-producer

Asco-producer,thelocalgovernmentisconnectedtotheenergyinitiativeasacollaborationpartner,basedonmutualaddedvalue.Examplesare:

• Starting a sustainable local energy company, in which substantial tasks andcompetencesaretransferredtotheenergycompany;

• Startinga joint-ventureofmunicipality(s) anda local energy initiative forbuildingawindpark.

• Developing a multi-stakeholder approach for energy efficient renovation of houseswithinthemunicipality.

2.6.2 - National governments

There are a lot of differences between European countries when it comes to the energymarket and renewable energy sourcespolicies. Energy cooperativeshave abusinessmodelthat isbasedoncollaboration insteadof competition.Thismeans that themoredifferencesthere are, the harder it is for energy cooperatives towork together in a European context.Evidenceshowsthatenergycooperativesaremostwidelyseenincountrieswhererenewableenergypoliciesarestable.

2.7 - Impact of social energy systems

According to RESCoop, there are some 2500 European renewable energy sources co-operatives,locatedmainlyinWesternEurope.ThereareveryfewcooperativesinCentralandEastern Europe, according to RESCoop due to unfavourable support mechanisms forrenewables, andbecause theword “cooperative” is still easily associatedwith communism.ThemostpopularEuropeancountriesforrenewableenergysourcesinitiativesareGermany,Denmark and Austria. Today REScoop.eu represents 1,240 initiatives and 300,000 citizensactive in the energy transition. Ever since their start-up members have jointly invested 2billion euro inproduction installations for renewable energy. These installations have aproductioncapacityof1GW.ThecombinedannualturnoverofRESCoopmembersisashighas950millioneuro,andtheyprovidesustainablejobsformorethan1,100Europeancitizens[5].ResearchbytheNationalRenewableEnergyLaboratoryhascalculatedthatwindprojectswith 100% local ownership generate twice the long-term jobs and one to three times the



economicimpactofabsentee-ownedwindprojects[6].

A literature study [6] has shown that other, perhaps more ‘softer’, benefits of renewableenergyco-operativesare:

• Moreenergysecurityandenergypricestabilitybyreducingdependenceonimportedfuelsandenergysourcesthataresubjecttovolatilepricing;

• A community ownedmodel maximizes local citizen engagement in energy projects,andpromotessocial innovationandsocialentrepreneurship.Acommunityledmodelhelpscitizensacquirenewskillsandknowledgeandbuildscapacityforfuturecitizen-ledinitiatives;

• Renewable energy co-operatives deliver ‘triple bottom line’ returns, addressingenvironmentalandsocialissueswhilealsogeneratingeconomicbenefitsformembersand/ormembers’communities.

• Whencommunitymembersownashareofarenewableenergyprojectandareactiveindecision-makingabouthowtheprojectdevelops,theytendtobemoreacceptingofany compromises thatmust bemade in their local communities to have the projectbuilt(e.g.alargewindturbineinplainviewonahillside);

• Being connected to the initiative educates people on energy issues andmakes thembecome more aware of their personal energy use pattern. This makes them moremotivatedtochangetheirbehaviourinordertoreduceenergyconsumption.

• Renewableenergyco-operativescanhelpcommunities,particularlysmallandremoteones, to become more self-reliant, greener and more sustainable and moreeconomicallyindependent.



3 - Developing social energy initiatives

3.1 - How to start: a step-by-step approach

Whatisthebestwaytostartalocalenergyinitiative?Thereisnoclear-cutanswertothisquestion.However,alotcanbelearned fromexisting initiativesbecauseknowledge sharingis an essential part of such initiatives. This paragraphdescribes - in a step-by-step approach - seven factors tosuccessfullystartasustainablelocalenergyinitiative[15].Itshould be noted that this step-by-step approach is notintendedasalinearprocessasmanyroutestowardstheendgoal are possible. The seven factors of success that will besuccinctlydescribedinthissectionaredepictedinFigure4.

3.1.1 - The idea

The idea: what are the reasons behind wanting to start aninitiative. Independency from large companies? Lowerenergycosts?Desire for social cohesion?Theseare thecorevalues from which the initiative will have to grow andfunction. Next step is to definemission, vision and goal. Amission describes what to achieve. A vision should beinspiring and describes a ‘dream scenario’ for the future. Agoaldescribes thetangibleresults thatarebeingpursued inmission and vision. Goals should be as ‘SMART’ (Specific,Measurable, Acceptable, Realistic and Time bound) aspossible. Next element is to make a business plan thatdescribeswhat the local energy initiative isgoing todo, e.g.energysupply,collectivebuyingand/orenergysaving.

3.1.2 - People

Creatingsupportfortheenergyinitiativeisofutmostimportanceinordertobesuccessfulin

Figure4Factorsofsuccessforastartinglocalenergyinitiative

Theidea

People

Theworldoutside

OrganisaXon

Legalma^ers

Technicalissues

Finances



CollectivelyhiringenergyadvisorsIn Stockholm a group of – in this case – housingassociations decided to collectively hire energyconsulting expertise. The fact that they could joinforcesmade it possible for theenergy consulting firmtoofferalowertariffthaninthesituationwhereeachhousingassociationhiresanenergyconsultantontheirown.

thelongrun.Thechallengeistogetsupportfromasmanypeopleaspossiblewithoutlosingsightof the initiative’s corevalues,missionandvision.Toattractpotentialmembers to theinitiativeithastobeclearwhattheycanexpect.Whatisinitfortheindividualmembersandfor the community? What is the offer? Energy savings? Solar panels? Services? Shares?Evidenceshowsthataspecialmembersoffer-e.g.aheatscanofpropertiesorafreeconsultonsolarpanels–workswelltointerestpeoplefortheinitiative.Goodcommunicationiskey.As a minimum, the initiative should have a name, a logo, an actual website and an emailaddress. But next on the agenda are organizing contact- and information meetings, presscontacts,etc.

3.1.3 - The world outside

Theworldoutsidethelocalenergyco-operativeisimportant.Itcanobstructtheinitiativebutitcanalsohelp.Theco-operativeshouldinvestigatewhatishappeningintheworldarounditand find out if there are parties that they canwork togetherwith, both local and regional.Examples are: housing associations, welfare organizations, industrial areas, schools,commercial entities, sports clubs, music associations, churches, local rotary clubs etc. Thebusiness model of many clubs and associations is faltering, offering opportunities for theenergy co-operatives. And of course, theremay be other co-operatives that can be used tocollaboratewith(seebox).

Another important stakeholder is themunicipality. The starting co-operativeshouldfindoutwhatthesustainabilityplansofthemunicipalityare,inordertoseeiftheco-operative can be of help in attaining themunicipality’s goals. The municipality canalso provide knowledge and advice on legalmattersandpermits.Lastly,themunicipalitypossiblyhasfunds(subsidies,sponsoring in-kindetcetera)thatcanhelptheco-operative initsstart-upphase.

3.1.4 - Organisation



ChoosingtherightownershipmodelInadditiontothecooperativemodel,thelegalformofalimitedliabilitycompany(GmbH&Co.KG)becameamuchusedmodelforcommunityownedwindparksinGermany [22] (the so called Bürgerwindparks). Thislegal form allows for a simple organization structure,separating theproject initiating investors from furtherinvestors and provide some possible tax advantages[23].

It is important to findoutwhatkindofexpertise isneededandwhere toget thatexpertise.Usually knowledge of legal matters is needed, as well as financial knowledge,communications, taxes, sustainable energy technology and local circumstances. A lot ofexpertisecanbefoundinsidethelocalcommunity.Itiskeytofindoutwhocanhelpinwhatway and to try and win these people for the initiative. Once the group is complete, it isimportant to divide roles. Initially the group will consist of volunteers. Once the initiativegrowslarger,itcanbedecidedtogivethesevolunteersafeefore.g.expenses.Finally,theco-operativeshouldthinkofastructureinwhichtotakeontasks,e.g.workinggroups.

3.1.5 - Legal matters

Whena local energy initiative is at its earlystage, an informal structure is sufficient.However,oncethegoalsof the initiativeareclear, it is time to start thinking of a legalform that best fits the future organization.Legalformsarenotstatic,duringthelifetimeof the initiative it is allowed to transformintoother legal formsor legal forms canbecombined.Besideslegalform,therearefiscalandliabilitymatterstoconsider.Thentherearethe lawsand regulations thathavebeenmade for theenergymarketby local, regional andnational entities. It is important that there is sufficient knowledge about these laws andregulationswithintheco-operation.

3.1.6 - Technical issues

Technical choices are linked to the goal of the initiative. Is the initiative going to use solarenergy, wind energy, water power, biomass, warmth? Linked to these choices are varioustechnicalsolutionsthatneedtobeconsidered.

3.1.7 - Finances



Oncetheinitiative’sgoalsareclear,theinitiativefacesthechallengeofraisingfunds.Asmallamountofseedmoneyisusuallyenoughtostartwithandinthebeginningcontributionsinkindarecommon.Acombinationoffundscanspreadrisks:membershipfees,participations,provisions,sponsors,subsidiesandprofitmarginareallpotentialwaysofcollectingmoney.Onceaprofessionalbusiness case is available, abank loanenters the realmofpossibilities,althoughbankscanbehesitanttogiveloanswithoutamoreorlessriskfreebusinesscase.Ifso, it can be worthwhile to look for municipal or regional funds. Crowdfunding is analternative way of financing projects with a potentially high risk factor. There are variousforms of crowdfunding: donating, investing, lending or trading. Although crowdfunding fitsthecorevaluesoflocalsustainabilityinitiatives,itisoftennotwithoutlegalandfinancialrulesandregulations.Moreaboutinvestmentissuescanbefoundinparagraph3.3-.

3.1.8 - Energy initiative best practices

ThroughoutEurope, therearesome2500 localenergy initiatives [7]. In2012, theRESCoop20-20-20 project was launched4. One of the tasks of the project was to make a top lineinventoryofallrenewableenergysourcesco-operativesinEurope,resultinginanoverviewofbest practices across Europe. The study also carried out an in-depth research on businessmodels,communityengagementandinvestmentschemes.Thestudyshowedthatbestpracticesforlocalenergyinitiativescanbesubdividedintobestpracticesfor:

• Organization

• Financialorganization

• Relationwithstakeholders

• Gridconnectionandsaleofenergy.Inthenextsectionsthesebestpracticeswillbesuccinctlydescribed.

4 The REScoop project (Renewable Energy Sources Co-operative) was launched in 2012 and was sponsored by the

Intelligent Energy Europe program of the European Commission. The goal of the REScoop 20-20-20 project is to accelerate RES energy production capacity, leveraged by the co-operative model with local citizen involvement.



3.1.8.a - Organisation

Mostenergycooperativeshavedeveloped inanorganicway:peoplestartaprojectand theorganization follows.During this process,most commonmistakeswere repeated, and fromthis,severalimportantcommonaspectscanbederivedthatareconnectedtosuccessful,realenergycooperatives:

1. They have clear and unambiguous principles. It turns out that almost all renewableenergy sources cooperatives in Europe follow the seven co-operative principles thatwereestablishedin1995bytheInternationalCo-operativeAlliance(ICA):

a. Voluntaryopenmembership:opentoallwithoutdiscrimination.b. Democraticmembercontrol:onemember,onevote.

c. Membereconomicparticipation:members contributeequally to the capital oftheco-operativeandcontrolitinademocraticway.Theeconomicbenefitsofaco-operativeoperationarereturnedtothemembers,reinvestedinthecoop,orusedtoprovidememberservices.

d. Autonomy and independence: co-operatives are autonomous self-helporganizationscontrolledbytheirmembers.

e. Education, training and information: co-operatives provide education andtraining formembersso theycaneffectivelycontribute to thedevelopmentoftheirco-operative.Theyinformthegeneralpublicaboutthenatureandbenefitsoftheco-operation.

f. Co-operation among co-operatives. Co-operations strengthen the co-operativemovement by working together through local, regional, national andinternationalstructures.

g. Concern for the community: co-operatives work for the sustainabledevelopmentoftheircommunitiesthroughpoliciesacceptedbytheirmembers.

2. Theystartsmalltocreatefastsuccesseswithminimalcomplexity.Mostco-operativesstart with a happy and dedicated few. By starting small, projects can be createdquickly.After the first success,mediaattentioncanbecreatedaswellasgoodwill inthecommunity.

3. Theyuse the social andorganizational strengths of itsmembers as stakeholders.Allmembers are potential volunteers for the organization. The skills and free time thatmembers put into the organization are key assets of the cooperatives. Successful



cooperatives use the fact that most members also have skills, experience and anetworkinotherfields.

4. They are transparent. It is important thatmembers can trust, knowandunderstandthe organization, its goals andmethods. Transparency is of utmost importance andsuccessfulcooperativeshaveacontinuouscommunicationprogrammetoinformtheirmembersabouttheorganization:i.e.itsstatus,plans,andorganizationalstructure,itsunderlyingvaluesanditsimplications.

5. Theyenableopenanddemocraticmembership.6. Theyarewillingtolearnfromothercooperatives.Becausethecooperatives’business

model is usually not based on growth and is not trying to capitalize on experience,cooperativesareusuallyverymuchwillingtosharetheirknowledge.Itisaknownfactthatsomecooperativeshavecopiedtheirorganizationmodelandbusinesscasefromothercooperatives.

7. They develop the co-operative with innovative projects. A way of growing theorganization is to participate in innovation projects. A co-operation is a popularpartner in such projects because of its member base, which makes it easier forinnovation projects to reach potential customers. However, the goal of the co-operationistoserveitsmembers,nottocontributetotheprofitorR&Dobjectivesofother companies. Innovation projects include risk. Oneway to reduce this risk is tonegotiate thatco-operation (board)membersare included in in the learningprocessand project team, leading to more knowledge about the energy market andorganizational skills. A big advantage of joining innovation projects is that they canpotentiallygeneratealotofmediaattention,whichinturnhelpscommunitysupport.

3.1.8.b - Financial organization

Financing structures differ verymuch between cooperatives and between countries. Somecooperativessellsharestomembers,otheraskforanannualfeewhileofferingtheirmemberstheoptiontoparticipateinloanstotheco-operation.Someusethismoneytogetleverageatabank,whileotherssetupspecificcompaniesforspecificprojectsasjointventureswithotherpartners,suchasenergycompaniesand localauthorities.Overall, therearesomeprinciplesthathaveprovedvalidforsuccessfulcooperatives.

1. Theymakeuseofloworganizationalcostsandresilience.Cooperativesgenerallystartsmall using member contributions. No external money is needed. This makes



cooperatives very flexible and resilient. Usuallywork isdonebyvolunteers initiallyandprofessionalsupportishiredoncetheprojectbecomeslargerandmorecomplex.

2. Theyactivelycommunicatechanges to the financialmodel.Formembers to invest incooperatives, trust is key. Therefore, it is important to pro-actively communicateprogressandchangesrelatingtotheproject.Inevitably,therearegoingtobechangesand adaptations of the financial model. These have to be assessed and formallyreviewed both at critical moments – such as large investment decisions, largepurchases,changesinsubsidiesetc.–andatregularintervals.

3. They contain risk. For most cooperatives, technical problems ultimately lead tofinancialproblems.Ithelpstohaveagoodservicecontractthatwillguaranteeup-timefor production. An ‘up-time’ guarantee clause in amaintenance contract could be tohavetheguaranteethatfore.g.97percentofthetimeawindturbineisoperational,itwillbeable toproduceelectricity.Should thispercentagebe lower, theco-operationreceivesacompensation.

4. They provide transparency about their finances. For co-operation members tounderstandthefinancialstructure,itisimportanttokeepitassimpleaspossibleandcommunicateitregularly,forinstanceonwebsites.

5. Theyprovideforflexibilityandpayvariabledividendswhenappropriate.

6. Theyexplore theopportunities in thecrisis.During the financial crisismanycitizenshave grown suspicious of traditional channels for their savings and investments,making itmore attractive to invest theirmoney in anorganization that they controland where they can see where the money is going and put to use. To put thisopportunitytouse,cooperativesmustbeclearandtransparentabouttheirplansandinvestments.

7. Theytap intoothermotives for investment.Often,citizens invest incooperativesnotonlyforthereturnontheir investment,butalsoforother-socialorenvironmental-reasons.Thisiswhatmakescooperativesmoreflexiblethancompaniesthatworkforprofit only. Of course, projects that are not economically profitable must becompensated by more profitable projects, in order to stay financially healthy as anorganization.

3.1.8.c - Relation with stakeholders

Everyrenewableenergysourcesprojectinvolvesseveraldifferentstakeholders.Itdependson



the project and local context which stakeholders to include. Cooperatives know thecommunity and this gives theman advantageover external companies. TheREScoop studystatesthatcooperativesaremostsuccessfulifthefollowingprinciplesarebeingfollowed:

1. Theyconsidermembersasstakeholders.Thisseemsobviousbut ithasvalue that isoften not recognized. The advantages are twofold: most citizens/members have aprofessionorareattachedtootherorganizations.Asaco-operationyoucantapintothis knowledge or ask members to connect with organizations. Also, membersunderstandthelocalcommunityandculturalvalues,whichcanbehelpfulinselectingandapproachingpotentialstakeholders.

2. Theyknowtheirassets.Inordertocommunicateassets-objectives,whytheprojectisimportant,whyitwasstartedinaparticularcommunity-effectively,aclearvisionofwhattheyareisessential.

3. Theyknowtheconcernsofotherstakeholders.Itisnecessarytohaveaclearviewofwho the different stakeholders are andwhat their interests and concernsmight be.Localmemberscanhelpwiththis.

4. Theygetsupportoflocalauthorities.Localauthoritiesarekeystakeholdersandgoodcollaborationwithlocalauthoritiesspeedsupthedevelopmentprocessandcreatesafeelingoftrustinthelocalcommunity.

5. They contact other cooperatives for ideas and learn from their experience. Asmentioned before, most cooperatives are willing to share their knowledge andexperience,makingiteasierfornewcooperativestostart.

Figure5belowisanexampleofanactornetwork,specificallyHS2020/Energi.Therearethreetypes of lines in the figure. Thin lines depict a formalized agreement or established co-operation, in form of a consultancy agreement or some other form of formal agreement. Aboldlinedepictsafundingrelationship.Dottedlinesdepictarelationshipofmutuallearning,sharingexperiencesandpotentially formalizedco-operation.Therearenoestablishedtasksor formalized responsibilities. Nodes are in dialogue, sharing their experiences results inmutuallearning.



Figure5ActornetworkinHS2020/Energi[3]

3.1.8.d - Grid connection / sale of energy

TheEuropeanenergymarketisverydifferentiatedwhenitcomestoregulationsandmarketstructureconcerningthegridandsaleofenergy.Forexample,intheNetherlandstherearealimitednumberofgridcompanies, controlledbypublic shareholders. InGermany therearearound900smallgridcompanies, someownedby local cooperatives.However,despite thenationaland localdifferences, theREScoopstudystates thatsomegeneralobservationscanbemade:

1. Different business models are possible. A co-operation can focus on production ofrenewableenergyoronthesaleofenergyprovidedbyotherproducers.Oritcanfocusonenergysavingprojects.Combiningbusinessmodelsisalsoapossibilitywhichoftenstrengthens the organization, because it provides different streams of income andreducesrisk.SomEnergiahasacombinedbusinessmodel(seebox,SomEnergia[7]).



2. Usetheenergyproduced.Membersoftenhavethepreferencetoconsumetheenergythat is produced within the co-operation, but this is often not possible in largercooperativeswheretheenergyproducedexceedstheirownneedforenergy.Thishastriggeredsomeinterestingtechnical,commercialandsocial innovationsanddifferentmodelsareusedtoselltheenergythatisproduced.Inseveralcases,theco-operationdelivers free energy to their members, as a return on their investment in theinstallation.

3. Decide how energy is sold. There is a distinct difference between traditional energycompanyandenergycooperatives.Traditionalcompaniesfocusonmaximizingprofitsand selling more and more energy. Often, these energy companies promote energysaving by selling LED lamps to customers or something similar, but ultimately thefocus isonenergysale.Therealprice forenergy ishardtounderstand,duetomanydifferent types of contracts with different price structures (day/night tariffs, lower

SomEnergiafromSpainSomEnergiawasfoundedon10October2010afteritbecameclearthataconnectiontotheenergygridinGironawouldcost80.000euro.Theaimwastohave350membersbytheendoftheyear.Fouryearslaterthecompanyhas 18.000 members and 20.000 customers. The higher aim is to transform the Spanish energy market thatfunctionsasanoligopoly, intoadecentralized,cleanenergysystem.SomEnergiagrowsenormously.Morethancheapenergy,memberwantindependencefromthecurrentenergysystem.Being a real social movement, the local groups havemeetings inwhich subjects like the co-operative, Spain’senergysystem,transparencyoftheenergybillandenergysavingsarehighontheagenda.The16associatedco-operatives jointlybuyenergy. The17.000members have eachput in 100euro.This ‘social capital’makes SomEnergia independent from subsidies. Currently, some 20.000 energy contracts are closed. Each members isallowedtoclose5extracontracts.Themarginoncontractsislow,only15europeryear,allowingtobreakeven.Pricesarefixedforoneyear,soitiskeytomakeanasgoodaspossiblepredictionofcomingdevelopments.Thelessonsthathavebeenlearnedduringthepastyearsarethat:

• Money isnotthemainreasontoparticipate:3-5% interestseemssufficientformembersfortheir100eurocontribution.Moreover,20%ofmembersisvoluntarilypaying1centextraperkWh.

• Peopleliketoseewhatishappeningwiththeirmoney.• Independencyisimportant.• Volunteersarekey.Tasksareclearandlimitedintime.• SomEnergiahasa largegoodwill factor. There is a “DavidversusGoliath”sentimentamongmembers,

withGoliathbeingtheSpanishenergymarket.• Besidesacompetitiveprice,excellentcustomerserviceiskey.



prices for bigger consumers etc.). For consumers it is hard to figure out howmuchcostsarebeingsaved,whenenergyconsumption is reduced.Anenergyco-operationalsosellsenergy,butat thesametimewantstosupportenergysavings.Byusingsetfixed and all-inclusive tariffs, it becomes transparent to co-operationmembers howmuch costs can be saved by reducing energy consumption. Energy co-operationDieElektrizitätswerkeSchönau(EWS)[7]chosetoselltheirenergyat ahighkWhprice,becausethatencouragestheirmemberstosaveenergy.Thisisanexampleofhowanenergyco-operationchangestheproductionbusinessmodel.Largeenergycompanieshaveabusinessmodel that isbasedongrowthandprofit.Someenergycooperativeshaveadaptedtheirbusinessmodelbyaskingarelativelyhighyettransparentpriceforenergywhilecharging low fixedcosts,whichencouragessavings.Thisspeedsup theenergy transition by changing the energy market from a production driven marketownedby largepower companies to a demanddrivenmarketwith local companies,andsmallscale,decentralizedrenewableproductionofenergy,ownedbyconsumersthatbecomeawareenergy‘prosumers’.

4. Planforthegridconnection.Anenergyco-operationshouldunderstandwhetherthereissufficientcapacityintheelectricitynetworktoallowfeedingintheproposedenergygeneration,andwhattheconnectionwillcost.

5. Use smartgrids.A statedearlier, energy cooperativeshaveapreference touse theirownproducedenergy.Thismakesthemanaturalpartnerinsmart-gridprojects,butitis important to keep inmind that energy cooperatives exist for the benefit of theirmembersandnotfortheprofitofR&Dofothercompanies.

3.2 - The concept behind energy co-operatives business models

Answeringthequestion:Whatisabusinessmodel?(Magretta,2002)statesthattheyare,atheart, stories - stories that explain how enterprises work. It answers the fundamentalquestions:Whoisthecustomer?Whatdoesthecustomervalue?Andhowdowemakemoneyinthisbusiness?AccordingtoMagretta,creatingabusinessmodelisalotlikewritinganewstory,allowingtouseelementsofoldonesandapplyingvariationsofnewones.(Osterwalder,2004),statesthatitisadescriptionofthevalueacompanyofferstooneorseveralsegmentsof customers and the architecture of the firm and its network of partners for creating,marketinganddelivering thisvalueandrelationshipcapital, inorder togenerateprofitableandsustainablerevenuestreams.Thebusinessmodelconcepthasbeenusedrepeatedly for



describing renewable energy technologies and their related business models. It should benotedthatabusinessmodelisnot(solely)aboutcostsandrevenues,i.e.numbers.

Theheartofeverybusinessmodelisadescriptionofthevaluepropositionthatisofferedtothecustomer.Abusinessmodeldescribeshowaninitiativecreates,delivers,andsustainsitsvalue.Abusinessmodelisnotstatic.Itcanchangeovertime.Taketheexampleofvolunteersthatarebeingaskedtolendtheirexpertisetoaninitiative.Usuallythesevolunteersarehappytospendtheirfreetimeandexpertiseonaninitiativeonaone-offbasise.g.tocloseadealoncollectivelybuyingsolarPVpanelsfromacompany.Butwhentheinitiativeexpandsandtheyarebeingcalledupononamoreregularbasis,thingsoftenchange,meaningthatotherwayshavetofoundtoguaranteetheneededexpertiseinasustainableway.

Based on our experienceswith the CIVIS test sites, we came across the following types ofbusinessmodels:

- ownershipmodels;focussingonfinancingandriskmitigationconcerns(primarilytheCIVISItaliantestsites)

- servicemodels;providingspecifiedservices,highlightingdifferentmethodsofoperationandmaintenance(primarilytheCIVISSwedishtestsites).

Ingeneral,mostreal-worldbusinessmodelsofcoursecombineelementsofvarioustypesandapproaches. For example, in Fårdala, a utility (Fortum) or private service company maydevelopandownalocalenergygrid,whichisoperatedandmanagedinturnbyacooperativeorganisation (the Fårdala housing association), while a private maintenance companyprovidesthetechnicalbackupandsupportservices.Therearevariousframeworksthatdescribeabusinessmodel.Themostwell-knownaretheBusinessModelCanvas(Osterwalderet.al.)andtheSTOFmodel(Faber,Ballon,Bouwman,&Haaker,2003).Theseframeworksarediscussedinthenextparagraphs.

3.2.1 - Business Model Canvas

The Business Model Canvas consists of nine elements (Figure 6). By considering anddiscussingtheseelements,alocalenergyinitiativecancreatesupportandinvolvementofthecommunity[4]:1. Customer segments: This element describes the people and organizations that theinitiativewantstoserve.Foranenergyinitiativethestakeholdergroupsare:



• Privatecustomers,whobuyenergyofsolarpanels.

• Localcompaniesandentrepreneurs

• Members,forinstancecitizenswhofeelsympathetictowardstheinitiative’sideasbutarenotsomuchinterestedintheinitiative’sproductsandservices.Thesepeoplecouldbeveryimportanttocreatesupport.

2. Valueproposition:Thispartofthebusinessmodeldescribeswhatproductsandserviceswillbeofferedtotherespectivecustomersegments.Forinstance:

• Privatecustomers:supplyingsustainableenergyorloweringtheenergybill.

• Localcompaniesandentrepreneurs:supplyingsustainableenergy,providinga‘green’certificatetothecompany.

• Members:membershipthatgivesasayaninvolvementintheinitiative.

Figure6TheBusinessModelCanvasTemplate

3. Channels:Thiselementdescribes theway inwhichstakeholdergroupsare reachedandhow to communicate with each stakeholder group. Examples: advertising, starting an‘energycafé’,orderingofproductsandservicesviawebsitesorashop.

4. Customerrelations: this elementdescribes thekindof relationship the initiativewould



liketohavewithitsstakeholdergroups.Thefollowingrelationshipscouldberelevantforalocalenergyinitiative:

• Personal:clientsarenotnumbersandtheycantalktoarealperson.

• Self-reliant:clientscanhelpthemselvesandcanorderarticlesandservicesthroughawebsite.

• Community:byofferingaplatform,clientscanhelpeachother.

• Co-creation: organizing work groups for development and improving products andservices.

5. Revenues: this elementdescribes theway inwhichmoney ismade.Whatdo customerswanttopayfor,andhowmucharetheywillingtopay?Examplesare:

• Margin related to the selling of solar PV panels. Collectively buying panels orinsulation.Usuallytheco-operativebuysandresellstoitsmembers.Theco-operativegetsasmallpercentage.

• Marginrelatedtosupplyingenergy.

• Paying for services rendered, suchaseducationalprograms/excursions,organizingasavingsworkshop.

• Membershipcontribution.

• Revenues from selling advertising space on the co-operatives website to greenentrepreneurs.

6. Resources: this element describeswhat is needed (people and other ‘stuff’’) to run thelocalenergyinitiative.Examplesare:Physicalmaterials:• officespace,

• administrativesystems,oftenoutsourcedtoenergysupplier,

• windmills,solarpanels,theproductionfacilitiesoftheenergyco-operative.

• Permittosupplyenergy.Intellectualproperty:• Co-operative’sbrandname:thereasonwhylocalpeopleareattractedtotheinitiative.

• Partners: the companies that the co-operative is working with. For instance: many



windco-operativeshaveacontractwithacompanythatbuystheirenergy.

• Customers/clients: a database with individuals that are the co-operative’sclients/members/partners.

Manpower:• Activevolunteersandtheirprofessionalbackground,theirworkandtheirrole.

• Professionals.Financialmeans:• Grants,gifts,seedmoney;

• Subsidies;

• Bankloan;

• Loanfrommembers.7. Key activities: this element describes the most important activities that are needed torealizetheambitions.Whatistheco-operationgoingtodo?Forexample:

• Supplyenergy;

• Recruitmembersandclients;

• Organizemeetings;

• Executeprojects.8. Keypartners:Thiselementdescribesthenetworkofpartnersandsuppliers.Forinstance:

• Municipality: to what extent does the co-operative contribute to the municipality’ssustainabilitygoals?

• Housing association: the co-operative can help the association to reach itssustainabilitygoals.Thehousingassociationcanbuyenergyfromtheco-operative.

• Greencompanies:collectivelyorganizeactivities.

• ‘Friends of the co-operative’: enterprises that help the co-operative in its start-upperiodbygivingacontribution(inkind).

Usuallythesepartnershipsarestartedbecauseofoptimizationandeconomiesofscale:i.e.whenapartnerfocussesonspecificactivitiesandbydoingsocreateseconomiesofscale,e.g. several energy co-operatives that work together to create economies of scale in



administrativeservices.Anothermotivesforenteringintopartnershipsisriskcontrol.

9. Cost structure: This element is the counterpart of item 5 (revenues) and describesrelevantcostelements,suchas:

• Costsofpersonnel.

• Housingcosts

• Insurancecosts

• Costsofcommunicationandmarketing.

Clearly,forafinanciallyhealthybusinessmodeltherevenuesshouldexceedthecosts.

3.2.2 - STOF model

TheSTOFmodel(Faber,Ballon,Bouwman,&Haaker,2003) finds itorigin in theneedforatheoretical underpinning of designing viable business models for electronic services,includingmobileservices.Theframeworkappliesaholisticviewonbusinessmodels.Withinthebusinessmodel context, the conceptof value is central in thedefinitionof thebusinessmodel concept. When describing and designing a business model, the framework takes anetwork-view, since mobile services typically require co-operation in a complex valuenetwork.Asaresult,theSTOFmodelusesthemulti-actorapproachinsteadoffocusingonthesinglefirm.



Figure7TheSTOFmodelframeworkforbusinessmodelling

Numerousbusinessmodelscanbeconstructed,basedonspecificchoicesineachofthefourdomainsfromteSTOFmodel(Figure7):1.Servicedomain:Intendedvalue,deliveredvalue,expectedvalue,perceivedvalue,customer,context,tariffandeffort,bundling.

2.Technologydomain:technicalarchitecture,backboneinfrastructure,accessnetworks,serviceplatforms,devices,applications,data,technicalfunctionality

3.Organizationdomain:actors,valuenetwork,interactions,relations,strategiesandgoals,organizationalarrangements,valueactivities,resourcesandcapabilities,roles4.Financedomain:Investmentsources,costsources,performanceindicators,revenuesources,risksources,pricing,financialarrangements.

3.3 - Need for investments

Tostartanenergyinitiative,ortotransitiontoanextmaturitylevel,investmentsareneeded.Initial investment costs inmost energy production projects, typically include the followingtypeofexpenses:



• Equipmentandconstructionexpertise;

• Connectiontothegrid;

• Pre-constructionpermitdevelopmentstudies;

• Postconstructionpermitstudies;

• Financialcosts.Theamountofmoneyneededdependsonthetypeofrenewablesourcethatisgoingtoused.Table1presentsanoverviewofthetypical investmentandoperations&maintenancecostspertypeofrenewableresourceforelectricityproduction.

Table1Costspertypeofrenewableenergysource(RES)[9]

Aninvestmentschemecanbedefinedasatypeofinvestmentwhichfulfilsseveralobjectivesdirectly linked to the nature and identity of the renewable energy sources co-operativeproject.IntheREScoop20-20-20project,amethodisdevelopedthat‘selects’theappropriateinvestment scheme,basedon the several aspectsof theproject thatwill be thebaseof thebusinessmodel.Themethoddistinguishesfourphasesforthedevelopmentofanenergyco-operativeproject,seeFigure8below:



Figure8Phasesforthedevelopmentofarenewableenergysourcesproject[8]

Given a certain phase, some types of investment are more suitable than others. Table 2presentsanoverviewofappropriateinvestmentschemesforeachprojectphase.

Table2Mappingofappropriateinvestmentschemesonrenewableenergyprojectphase[8]

Investmentscheme Pre-planning Development Construction Operationsand

maintenance

Self-financing P

Crowdfunding P

Traditionalbankloan P P

Jointventures P

Ethical/nottraditionalbankloan P P

Co-operativefund P P

Leasing P P

Projectfinancing P



Investmentscheme Pre-planning Development Construction Operationsand

maintenance

Europeanco-operativefund P P

However, other factors are also of importance when selecting an investment scheme. TheREScoopprojectmethodologydistinguishestwodimensions:

• Dimension1:Levelofcomplexity:technicalandlegalfeaturesoftheproject.

• Dimension 2: Level of citizens’ involvement: business and governancemodel of theproject.

Thesetwodimensionsareevaluatedonacontinuumfromalowleveltoahighlevel.Thelevelofeachdimensionisdeterminedbyseveralindependentvariables.

Table3 shows the independent variables thatdetermine the first dimension: complexityofthe project (see first column). Table 4 shows the independent variables that togetherdeterminetheseconddimension:levelofcitizens’involvement.Thecombinationofthesetwodimensionswillpointoutwhichinvestmentschemeisbestfortheproject(Figure9).Referto[8] for a full description of the methodology and fact sheets of the respective investmentschemes.



Table3Scopingaprojectondimension1:fromsimpletocomplex[8]



Table4Scopingaprojectondimension2:fromcollectivetoprivate[8]



Figure 9 Choice of an investment scheme following from complexity of the project andbusiness/governancemodel[8]

3.4 - Communication

Often,energycooperativesstartfromanincentiveofenthusiasticandtechnicallycompetentindividuals.Theeffortsthatthesetechnicallyskilled,voluntaryexpertsputintotheenergyco-operation, makes it a low-cost yet high value form of innovation. This potential could beexploitedevenfurtherifagoodnetworkofknowledge-sharingisestablishedbetweenenergycooperatives(bothnewandexisting),knowledgepartnerslikeuniversitiesandotherplayers



in the energy market. However, this requires another type of volunteer who iscommunicatively strong. Communication oriented volunteers are more inclined to sharesuccessesthantechnicallyorientedpeople.

3.5 - Energy co-operatives growth factors

A study among German co-operatives has shown that three potential business modelelementsareabletopinpointthereasonswhysomeco-operativeshavebeengrowingfasterthanothers[10].AfterhavinginterviewedvariousGermanrenewableenergyco-operatives,itwas concluded that thereare threedistinctivebusinessmodel elements thatdetermine thesuccess of a co-operative: value proposition, trust and network. The assumption is thatimproving on these three elements will improve the co-operative. However, the valueproposition iskey.Thevalueproposition isavitalelement, sincenoco-operative isable toexpandwithout a value proposition. The elements network and trust represent supportiveelements,becausetheyallowsomeco-operativestogrowfasterthanothers.

Figure10Businessmodelelements:valueproposition,trustandnetwork[10]

The sizeof eachbusinessmodelelement canbedescribedbyusinga circle,with its centrepointlocatedatoneofthecornersofthetriangle,asseeninFigure11.Intime,theradiusofacirclecangrowordeclinedependingondevelopmentswithintheco-operativeanditsvaluenetwork.Thestudyrevealedthatseveralco-operativesarestronglyexpandingthetrustofthelocalcommunityintotheirco-operative,whereotherco-operativeshavebeenexpandingtheirvaluepropositionbyaddingelectricitysalesorheatinggrids.Thenetworkofaco-operativecanshowgrowth,wheneitheritsexternalpartnerortheco-operativeitselfexpandsitsabilityto effectively communicate the co-operative’s value proposition to future members or



companies. The value proposition circle can decrease when the co-operative is unable toprovide the same value proposition to its new members as it is providing to its currentmembers.Whenco-operativesfailtodelivertheirintendedvalue,theyareexposedtotheriskthat the trust of the community in the co-operative will start to decrease. The networkelementnetwork starts towanewhen the co-operativeneglects its organizational relationswithotheractorsorgroupsofindividuals.Sincethethreebusinessmodelelementsrepresentthebuildingblocksofmanygrowingco-operatives,theyarelabelledastheexpansiontriangle.

Figure11Expansiontriangleandbusinessmodelelement-sizecircles[10]

3.6 - The role of ICT

ICT enables new business models. ICT enables management of energy cooperatives byincorporatingsmartmeterdataandenergygenerationdata.Therefore,amicrogridorganizedbyanenergycooperativecanbeseenasahuman-machinesystemthatinteractsintermsofmonitoringandcontrol.Thus,thecoordinationandmanagementoftheinfrastructureofthemicrogridisenabledbyICTasdiversedatasourcesneedtobecollectedandusedfordecisionmaking.ThebenefitsofICTtocooperativesarenumerous:

• Through fullyutilizing ICT, cooperatives can reachout todifferent customerson theweb, they can keep up-to-datewith developments and new innovations and receivetrainingremotely.

• ICT can help transform themanagement of cooperatives by improvingmanagementpractices, financial information and reporting and records management as well as



create an online presence. These improvements help increase efficiency and loweroperatingcosts.

• ICTcanbringdirectefficiencygainsbymeasuring,monitoring,intelligentmanagementandcontrol,etc.

• ICTcandrivebehaviouralchangebyprovidingreliabledata tocitizensaboutenergyconsumption,includinghomeenergycontrollinghubsthatwillcollectrealtimeornearreal time data on energy consumption data from smart household appliances andenableintelligentautomation.



4 - Energy initiative maturity levels

4.1 - Definition

InDeliverable 6.1 thematurity of a community projectwas envisioned through a life cycleapproach[20] . Four main phases were considered: introduction, growth, maturity anddecline/revival(Figure12).

• In the introductionphase,an initialgroupofpeoplestartgatheringarounda looselydefined idea, objective, or activity, that is of interest to them. The organizationalstructure isquite informaland there isnoneed foractivemanagementof resources.During this phase, activities are centred around discussing the core idea that is thebasisfortheinitiative.

• Inthegrowthphase,theinitiativestartsattractingmoreandmorepeople.Thisphaseischaracterizedbyspecializationofactivitiesandtasks;therefore,morecoordinationis needed. At this stage, the need for adequate governance instruments andcommunicationneedstobeaddressed.

• Inthematurityphase,thenumberofmembers,andtheorganizationalstructureoftheinitiativeismoreorlessstabilized.Goals,activities,communicationproceduresetc.areclear. Formalization of ley processes, roles and regulations are achieved during thisphase,ortheygetfine-tunedandbetterconsolidated.

• Aproblemofsustainingtheinitiativemayariseifpeopleleavethecommunityarenotreplaced by sufficiently adequate others. In case the key problems are tackled andsomereorganization isachieved, the initiativecouldenter intoarevivalstage that isabletoattractandengagenewmembersintotheinitiative.Ifnot,theinitiativecouldreachadormantstageorbecompletelyfadedout.



Figure12Asimplifiedmodelofacommunity’slifecycle[19]

4.2 - Maturity levels of energy initiatives

Thelifecycleandmaturityofenergyinitiativeshavebecomeofsomeinteresttotheutilitiesthat are confronted with their emergence in the energy domain. In a research paper ondecentralizedenergymarkets,published in2013[21], theNetherlandsAssociationofDSO’s(NetbeheerNederland)described the segmentationof energy initiatives in theNetherlandsanddefinedproduct-marketcombinationstogowiththissegmentation.



Table5:Product-MarketCombinationsestablishedbytheNetherlandsAssociationofDSO's

Segment Need ProductCategory Services ProductsStartersor

‘scouts’(looseactivities)

Informationandpointers

Informationprovidingservice;singlecustomerpointofcontact

Webportal;mannedinformation-andservicepointforcollectiveinitiatives;pointerstowards

relevantdepartmentswithinDSO’s

InstallingPVorwinddevices;

installingconnectionandmeteringfitfor

decentralizedgeneration.

Youngenergycooperatives(projects)

SupportandInformation

Informationprovidingservice;Insightinusage

andproductionofenergy;supportforconnectingtothe

grid

Interfacetowardsproductionandusage

data;dataservices

regardingenergychain

Integratingdecentralizedgenerationinstallations;

flexibletransport,demandsidepricing.

Experienced

Energycooperatives(companies)

Workingtogetherinprojects,expertiseabouttheenergygrid

Projectmanagementforimplementing

sustainableenergyprojects

Projectrealisation;pre-financingofgridconnections,inordertoincreaseproject

throughput

Intelligentnetworks;flexibletransport,

demandsidepricing;storage.

Table 5 shows not only an overview of the services that DSO’s can provide to energyinitiatives(whicharethereforepotentialactivitiesthatcanbeoutsourcedbyLEI’s),butalsoaninsightintotheperceivedneedsofenergyinitiativesaswitnessedbyDSO’s.Itwillcomeasno surprise that several products and servicesmentionedhere are also visible as activitieswithinCIVIS,forexamplethecollaborationplatformandthemobileappsbutalsothedemandsidepricingasdevelopedfortheItaliantestsites.Coincidentally, this segmentation complements the community lifecycle by Latteman andStiglitz [19], detailing the phases with more energy specified characterizations and adescriptionofthespecificneedsandwantsofanorganizationinaparticularphase.Allowingustoproceedanddefinethreemainlevelsofmaturityforenergyinitiativesmoreclearly.

Level 1: Emerging Energy Initiatives (scouts): These initiatives are characterised by alooselystructured,ad-hocorganisationorevenjustatemporarycollaborationthatdoesnot



knowaformalorganizationform(e.g.legalentity).Thesekindsofinitiativesarebasedontheworkofvolunteersusinganetworkof friendsandfamily.Theyshowawide(andoftennotvery concrete) range of sustainability ambitions (e.g. an energy neutral city, autarkic,combined with urban agriculture, healthcare and mobility). Their primary activity is tocollectively buy PV panels or other energy saving equipment. Though in some cases, thereexistsalatentambitiontobecomean‘energyprovider’(withoutin-depthresearch).Intermsofinnovation,theseinitiativesshowrelativelyfewsubstantialprojectsandarehamperedbyno or very smallmeans of financing. Also, the available knowledge of the energy sector isgenerallyquitelimited.

Level 2: Promising Energy Initiatives (becoming sustainable): These initiatives havetaken the next step by adopting a formal organisation structure and a legal entity. Theorganisationisnowdrivenbyacoregroupofdedicatedpeoplewhooftenhaveaprofessionalbackground in the energy sector, sometimes supported by active pool of volunteers.Significantly,astablegroupofmembers(customers)starttoariseandmoreattentionisgiventomarketingandcustomercare.Notonlyisthereaclearfocusonlocalenergyproductionandsaving methods, but the initiative also operates in close cooperation with commercialpartners, citycouncils,buildingco-operationsand the like.Thisgrowthresults in increasedeffortstomakethefinancialmeansareavailabletostartsignificantprojectlikewindfarmsorsolar parks. At this stage license is obtained (or shared) to become an energy supplier isbecomingmoreandmorefeasible(andinsomecasesevennecessary)

Level3:EstablishedEnergyCooperatives(evolvingintocompanies):Thenextlevel isaprofessionally organized entity that to all intents and purposes has become a company,although still cooperative in nature and ownership. The continuity of the organisation hasbecome the task of a project management organisation whose responsibilities are the in-houseenergyproduction,distributionandenergy innovations.Themember/customerbaseandthereforerevenuebasehasgrowntosuchanextentthatseveralemployeesarehired.Thefocus of the energy projects is now clearly on the scale-up, for which partnerships areestablished with commercial entities (such as developers, building companies, technicalintegrators). At this stage, the fully licenced energy initiative has become a valued partneritselfwhenitcomestolocalenergygenerationandordistribution.



Figure 13: CIVIS maturity scheme: graphical representation of energy initiatives maturitydevelopment

Combiningalltheaboveandasameanstoputthematuritylevelsoflocalenergyinitiativesinperspective,agraphicalrepresentation, theCIVISmaturityscheme(Figure13)wascreated.This graphic shows the three levels plotted against the lifecycle curve, but also against theEmotional Cycle of Change model by Don Kelley and Daryl Conner [24] . By adding theemotional cycle of changes it becomes possible to include the ‘motivational’ aspect - or inotherwords:thewayadevelopmentis‘felt’bythepeopleinanorganisation-toanotherwiseabstractimageandmakeit‘cometolife’.Thiswasforinstancenotedinleadershipinterviews,where the combined image had a clear response in terms of recognition and resultedextended discussions on the development of the respective initiatives. Further discussions,workshops and research of cooperatives beyond the test sites allowed the CIVIS project toplotthevariousdevelopmentstagesoflocalenergyinitiativesandvalidatetheCIVISmaturityscheme.Thisschemenowallowsacooperativetocompareitselfagainstotherorganisationsandwillhelp them understand why similar initiatives do things differently and which approach ismostlikelythemosthelpfulinaspecificphase.



TakingMaturityintoaccount:ShoppingMallforEnergyInitiativesAn interesting idea based on the concept of energyinitivesmaturityand their specific needswas recentlyputforwardinathesis[31].Itdescribeshowprosumercommunities can be facilitated in their growth path,from incubation towards a mature, self-supportinglocal energy community. In this thesis a prosumercommunity shoppingmall isdevelopedasametaphorreflecting an integrated, full-service environment. Theshoppingmallisanonlineportal,whichcanbeusedbyprosumer communities and their members (i.e. thecustomers) to find and select information, tools, andservices in the various shops that they need in aspecificstageoftheirmaturitystage.

Summarizing, the scheme shows thedevelopment starting with the emerginginitiative, full of enthusiasm. Which is thenconfronted by its first wave of growth andthe accompanying teething problems eithertechnical, more vocal membership ordealings with institutional entities. Thisrealisation of ‘informed pessimism’ thenbecomesaturningpointwherecooperativeseither become experts in their own right orin any case now how to utilise availableinformation,expertiseandestablishmutuallybeneficial partnerships. Ultimately thecooperative will plateau in its local area ofoperationas themaximumpossiblenumberofmembersisachievedaswellasthemaximumservicelevel.Intermsofgrowthwethentalkabout decline, a term less denigrating than actuallymeant because the services offered tomembersarestillwellreceivedandcanbemaintainedoveralongperiodoftime.Itisthenuptotheorganisationto‘rediscover’or‘revive’themselvesandstartnewinitiatives.

4.3 - Plotting the CIVIS energy initiatives

StartinginthefirstyearoftheCIVISproject,anoverviewwasmade(andgraduallyupdated)ofthevariousCIVISassociatedlocalenergyinitiativesandtheirneeds.Theseneedsreflectthestate inwhich the respective local initiatives reside at themoment, andwhat is needed toprogresstothenextlevelofmaturity(Table6).

Table6:OverviewofCIVISandotherlocalenergyinitiatives,theirmaturityandserviceneed2016

Initiative Aim By How Lifecycle&maturity

Serviceneed

HS2020 Improvelivingexperiencein

area

Broadrangeofsustainableandsocialgoals

Furtherformaliseand

fundkeyprojects

Growth/Maturity–yes

organization,nostillalotof

Projectmanagement,

finance




Serviceneed

differentprojects

Fårdala Providehousingformembers;provisionof

heatingandhotwater

Optimizinglocalareaheating

grid;increasingenergyuseawareness

Housingassociationactivities

Growth/Maturity–provisionofheatingandhotwaterismature;

energyuseawarenessisgrowing

Knowledgesharing

SanL./CEIS Provideelectricityservicesformembers

Producingandsellingenergytocooperativemembers

(hydroelectricandsolarplants)

Energysoldwithvariable

discountupto4cents/kWh,

comparedtothenationalrate

Foundedin1905,Mature:establishedorganisation

Supportenergyefficiencyand

saving;additional

productionfromrenewable

sources;fibre-to-the-home;cooperationwithotherstakeholders

Storo/CEdiS Produceanddistribute

electricity(andprovide

broadbandconnectivity)

Producingandsellingenergytocooperativemembers

(hydropowerplantand

photovoltaic)

Energysoldwithdiscountof

±20%comparedtomarketprice

Foundedin1904,Mature:establishedorganisation

Knowledgeandexperienceof/withnewinnovativeenergy

initiatives;expansion

outsideoriginalservicearea

So.L.E. Increaseenvironmentalresponsibility(youngerpeople)

CollectivePVproject

Useenergysurplusforsocialgoal

8years–Mature:

establishedorganization

Organizationstructure,financing

Co-Energia Realizefairtradeeconomy

Renewableenergy

Tariffstructureformembers

5years–Growth:focus

Informationintegrationand




Serviceneed

generation onpromoting sharing.EnergyLand Reduceenergy

costforcitizensand(SM)E’s

CollectivePVproject

Systemofshares

4years–start:progressingbeyond‘idea’

Informingmembers,cooperatingwithnetworkoperators

RetEnergia Producesustainableenergyformembers

PVprojectonrentedroofs

Collectivebuyersgroup

5Years–mature:

established(hasESCostatus)

Projectmanagement,

finance

WeforGreen

Self-produceenergybymembers

PVplant Quota’s(shares) 4years–start:progressingbeyond‘idea’

Informingmembers,cooperatingwithnetworkoperators



5 - Business models used in (emerging) energy initiatives Throughvariousdiscussionswiththepilotsitespartners,theCIVISprojectwasprovidedwithactualexamplesofhowenergyinitiativeshaveimpactedtheseorganisations.Combinedwiththe description of roles that agents of change can play (Chapter 2) and the step-by-stepapproach (Chapter 3) it is possible to organise these examples and match them to thematuritydevelopment(Figure13).Theseexamplesofchangearemeanttoillustratethelevelofmaturity,butalsoasashowcaseofpossibilitiesforothercooperativesintermsofactivitiesandinitiatives.

5.1 - Example of business models in the CIVIS test sites

5.1.1 - Hammarby Sjöstad 2020

TheHammarby Sjöstad area contains amembership organisation for housing cooperationscalledHS2020.Currentlyconsistingof44housingassociations,whichhavetheiroriginsinthedevelopmentoftheareainthe1980'sand1990's.Partofthisdevelopmentwastheambitionto create a housing area with increased energy efficiency that lasts to this day. Wellestablishedwhenitcomestoprovidinghousing,thehousingassociationsarebeingsupportedbyanenergyprojectmanageraspartoftheHS2020organisation.Oneofthoseenergyprojectsisanoffertoallmemberhousingassociationsforafreeenergyaudit,whichhasbeentakenupbyalmostthreequartersofthememberhousingassociations.

Theeffectofprovidingthiskindofservicehasbecomequiteapparent.Basedontheoutcomeof these audits several housing associations now have entered into specific energy systemoptimisations that would otherwise not have taken place or would have resulted in lessefficientsolutions.Forinstance,alargehousingcooperativewith137apartmentswasabletoreducetheiryearlyheatingcostfromEur.141.000toEur.84.000(asavingofEur.57.000)inthe first year of operating the new system. With an investment cost of Eur. 400.000 theestimatedpay-offtimeisestimatedtobearound7-8years.Withsimilarinvestmentsanotherhousingcooperativewith165apartmentswasabletoreducetheirenergyuseforheatingandhotwaterby50%,comparedtothesameperiodinthepreviousyear-cleverlyre-usingwasteheatfromagrocerystorelocatedonthegroundflooroftheapartmentbuilding.

These just two examples of the benefits ofworking together and reaping the benefits of adedicated energy project manager that is able to provide a service to the membershiporganisation as a whole. In effect this initiative not only steered the member housing



associations towards investing their money wisely, but also ensured the image of theHammarbySjöstadareaasanexampleforenergysustainabilityinthegreaterStockholmareaandSweden.Another interesting energy project inHS2020 is called 'target driven energymanagement',madepossiblebytheSwedishEnergyAgency.Thisinitiativeisdevelopingperformance-basedcontracts for energy and buildingmanagement. Currently tested at 8 housing associations,with 10 housing associations ready to start in the coming months. Housing associationsemployingtheseenergy-andbuildingmanagementcompaniesenterintoacontractthatmakethe two parties share the energy savings. There are different models for sharing, e.g. theservicecompanygets30%of thesavingsandthecooperative70%,or theservicecompanygetsallsavingsfromthefirstyear,afterwhichthecooperativegetstokeeptheirsavingstothefull.

Oneofthegoalsofthisinitiativeistodeveloptemplatesfortargetdrivenenergymanagementcontractsthatareeasyforhousingcooperativestounderstandanattractiveforbothparties.Thisinitiativeisfairlynew,sothereisnotmuchtosayabouttheresultsyet,buttheservicecompaniestypicallyestimatethattheycanreducetheenergyuseofanaveragecooperativeby20%,justoptimizingexistingsystems.

5.1.2 - CEdiS

AsmentionedinTable6,CEdiSisalongstandingorganisationthatcanbeundoubtedlyputinthe‘established’category.Thefollowingexamplesunderscoretheirmaturity.Producing(andselling)12GwHofenergybyrenewablesin2015resultedinnetearningsofEur. 500K, despite a reduction in produced energy, compared to the previous year. Thispositiveresulthasbeenattributedtominor(butregular)improvementsingridmaintenanceandoptimisationwork.

Revenues generated by this amount of energy generated stem not only from selling thisenergy tomembers and energy retailers, but also from trading the energy certificates thatresultfrombeingabletoproducerenewableenergy–ineffectmultiplyingthevalueofeachKilowattofproducedenergy.However,itmustbesaidthattheirbusinessmodeliscomplementedbythefactthattheystillbenefit from a subsidy scheme for PV generated energy that is currently not availableanymoretonewentrants.

WellestablishedorganisationstendtoreorganiseonaregularbasisandCEdiSisnoexample,



introducinganewcorporatestructurein2015.Nowconsistingofonlytwodivisions(insteadof4)reducingtheoperationalcomplexities.

• A technical division, covering the operational aspects is of telco and energymaintenance/services

• Anadministrativedivisioncoveringall financial, accountingandbudgetingactivities,aswellasthe‘customer’service.

This structurecompareswell to theorganisationstructureasdescribedat thebeginningofchapter3.ThiskindofmaturityallowsanorganisationasCEdiStoexpandtheiractivitiesbeyondtheirtraditionalscope.Twocurrentexamplesare:

• It is now possible for non-residents to become associate member of CEdiS, whichmeansthatthegeographicalareainwhichCEdiSisoperatingisgraduallyexpanding.

• Participating inco-generatingprojectsasa(minor)shareholder,withthesoleaimtobuildexperienceonnewheatingtechnologiesandsolutions.

CEdiS is taking these steps, firstly because they can – the structure is in place and thenecessary effort is marginal. Secondly because it is a cost-effective way of learning andbuildingexperiencejoiningandsupportingnewinitiatives(byothers).

5.1.3 - CEIS

Similar to CEdiS, CEIS is also a well-established organisation, operating in a similar butdifferent geographical area. It has generated 11,5 GwH of energy in 2015, of which animpressive7,5GwHisgeneratedbydecentralisedinstalledPVpanelsonmemberpremises.Thematurityandeffectivenessoftheorganisationallowsforactivitiesbeyondproducinganddistributingenergy.Somecurrentexamplesare:

• CEIS is currently providing administrative services to other cooperatives.Demonstrating that their systems are developed to such a standard that they canprovideservicestootherswithoutnegativelyimpactingtheirownoperations.

• CEIS is now also a telecom service provider, offering communications services (likeinternet) to theirmembers.Thisactivityservesseveralpurposes.On theonehandasocialone,providingconnectivitytomembersandareasthatotherwisewouldnotbe



available.While on the other hand enabling the future roll-out of smart meters foralmostalloftheresidents.

• Whilepublic authoritieshave theopportunity toacquire licences/concessionsoutoftenders fornew(hydro)energyplants, they lack the technicalknow-how toactuallyexecute these. CEIS has provided several planning and implementation services toenablethesehydroplans.Effectivelycreatingawin-winsituation.

• Awonderfulexampleofa social influenced initiativewas theway inwhichCEIShasdevelopedtheirnewheadquarters,withanA+energystatus.Whileseenasa‘cost’intheshortrun(i.e.anegativefinancialbusinesscase),theconsciousdecisionswasmadeto let the building be constructed by local SME, giving them the chance to gainexperienceincreatingenergyefficientbuildings.Somethingthatwouldnototherwisebepossible.Theexpectationisthatthisdecisionwillhavepositiveconsequencesinthelongrun.Becauseofthegainedexperience,itwillbemorefeasiblefornewhousestobe built in an energy efficient fashion – creating a SME base that can also performadvancedconstructionforCEISinthefuture.

5.1.4 - CIVIS related energy initiatives

ApartfromthelargerenergycooperativeslikeCEISandCEdiS,whichactastestsiteswithintheCIVISproject, thereareanumberofotherenergyinitiativesneartheTrentinoareathatarerelatedtoCIVIS,beingpartofthestakeholderboardforinstance.Severalof these initiativeshavetheirorigin in the“ForGreen”company, thathasanexplicitgoal to develop “innovative energy models” [29], such as cooperatives. For instance, the“WeForGreen” cooperative that initiated the development of a large photovoltaic plant(consistingof80members)in2014.Afollow-upinitiative“WeForGreenSharing”wasstartedin2015andwasset-upasanopencooperative,whichmeansthatthiscooperativecanacceptanunlimitednumberofmembers.FromaCIVISperspective this is an interestingnew initiative, as their statedobjective is todecreaseenergycostfortheirmembers,while“respectingtheintegrityoftheregionanditsenvironment”.Currently theequityof all three cooperatives ispartmemberequity (30%)andbank loans(70%). With a total investment of around 3 million euro’s, the cooperatives were able toprovide a consistent return on investment in the order of 6-8%. Resulting in “drastically



reduced”orinsomecaseseven“eliminationofthecostoftheenergybill”forthecooperationmembers.Insomecases,wheremembershavebeenverycarefulwiththeirenergyuse,itwasevenpossibletomakemoney.Inadditiontomembershavingaccesstoanonlineportal, tocheck(inrealtime)theenergyproductionandphotovoltaicplantoperations, anewprogrammewasproposed recentlybythe board to raise awareness amongst members, promoting energy saving technologicalinstruments – inspired and based on experiences gained through the association with theCIVISproject.

5.2 - The four (emerging) energy initiative business models

As a result of researching businessmodels for emerging local energy initiatives, the CIVISproject cannowestablish fourmain avenues inwhichorganisations can choose todeveloptheir own businessmodel, each loosely tied to thematurity stage that an organisation hasreached.Efficiencyeffects:Or,becomingbetteratwhatyouaredoing.Foraneworganisation,theseare thevery first setofactivities thatarebeingdeveloped,when the firstphaseof creatingandestablishinga local energy initiativehaspassed.Within theCIVISproject attentionhasbeengiventoexamplesofinitiativesthatfitinthiscategory.Namely,themobileenergyappand the community platform. These are prime examples of activities that enhance brandawarenessandincreasecustomerengagement.Of course, more mature organisations continue to be on the look-out for efficiencyimprovements,butthisgenerallyisbeingdonefromacost-,ratherthangrowthperspective.Diversification: Or, introducing products and services that are different that the initialdomainof theorganisation.Onmanyoccasionsenergy initiativesareseen to foray into therealmof telecommunication. This of course being an interesting proposition for an alreadytechnologyintensiveorganisationthatisusedtoworkwithnetwork.ThisdiversificationhasbeenapparentattheItaliantestsites,citingsocialaswellas(longerterm)financialbenefitsasargumentsfortakingthisstep.Serviceprovisioning:Or,facilitatingotherswithavailableexpertise.Therecomesapointintimewhere organisations become so efficient at what they are doing that it is possible to



provide already available services to other organisations. Just as our established test sitesshowed,theeffortinvolvedtosupportotherLEI’sisminimal.Whileanattractiveservicecanbeprovidedtoastilldevelopingorganisationatmarginalcosts;awin-winforallinvolved.Incubation:Or,enablinginnovation.Someofourmostestablishedtestsiteshavethemeans(orexperiencetoattractoutsideinvestment)toactivelyinitiateorsupportexistinginnovativeinitiativeswithouttheneedtoplayadrivingrolethemselvesatthatstage.Thisisahighriskexerciseeitheraimedatachievingacertainrateofinvestment(citedtobebetween6%-10%)ortoseedaninnovationinthehopethatonedayitcanbeincorporatedinone’sownactivities(asinthebuildingofCEdiSnewheadquartersbyinexperienced,localSME).



6 - Conclusions The CIVIS project cannot state enough that it has had awonderful opportunity ofworkingtogetherwithdiversecooperativesfromItalyandSwedeninthepastthreeyears.Usingthematurityschemewecannowdescribetheirstageofdevelopmentwithconfidenceandusingstep-by-step approaches and methods such as BMC and STOF described in Chapter 3,cooperativesshouldbeabletoplottheirnextdevelopmentstep,shouldtheychoosetodoso.

6.1 - The test sites continue to flourish

Asanexample,thenextstepsourpilotsitepartnersmaytake(orinsomecasesarealreadypreparing)arevisualisedinFigure14below.WeseetheSwedishtestsites(whicharewell-established in their role ashousing association) starting todevelop froma situationwhereenergy initiatives are being tried and tested for suitability to become much more well-organised,morefocussedwhenitcomestoharnesstheopportunitiesofenergyefficiency.

Figure14:CIVIStestsitesplottedagainstCIVISmaturityscheme



Theefficiencyeffectsthattheseorganisationsareaimingforaretheresultofseveralthings,but partneringwith external consultants (energy service providers) in combinationwith asupportivemunicipalitymakesforabusinesscasethatisbeneficialfortheirmember’squalityoflivingaswellasbeingfinanciallysoundinthemediumtolong-term.TheItaliantestsitesdiffer,becausetheirprimaryfunctionhasalwaysbeentoprovideenergyservices towards theirmembers.Theyhavemastered theartofgeneratinganddistributingenergyinwelloveradecadeandineffectbecomemastersintheirownright.Theyarenowpursuing the opportunity to rediscover themselves and are skilfully employing theirexperience,resourcesandrelationshipwithstakeholderstocreateanextstep.Regardingbuildingabusinessmodel froma socialpointofviewour test sites learnedusavaluablelesson,namelythatsuchaninitiativedoesnotimplythemembersthemselvesalwaysbeingtheprimarypointoffocus.Beingabletoincubateorfurtherdevelopmentsisastrongargumentforawell-establishedcooperativetoinvesttheirresources.Particularlycloseby(inaliteral,geographicsenseandintermsofsimilaritytothecoreoperations),astheresultswillultimatelybenefitthemembersbecauseofnewfutureservicesorimprovedemployabilityinanarea.Inawaythiscompletesthecircle,becausethistypeofsupportcouldjustbewhataninspiringnewenergyinitiativeneedstobecomesuccessful!

6.2 - Concluding remarks

Starting CIVIS,wehad a vision. A vision that social change could introduce a social energysystemthatcouldtransformthewayenergyisproducedandconsumedinoursociety.Iftheexperiencesof the last threeyears taughtusanything, it is that theopportunities that localenergyinitiativesprovidetosocietywhenitcomestotransformingenergygeneration(andinparticularelectricity)inamoresustainablefashionarenumerous,tangibleandinsomecasesevenbeyondourexpectation.InmanyEuropeancountriestheamountofenergycooperativeshasgrownsubstantiallyduringthethreeyearsoftheproject.If there is one thing that - based on our experiences – we feel ubiquitously applies to allenergycooperatives,itmusttheimportanceofpartnerships.Itisstrikingthatontheonehandcooperation,asthecornerstoneofanycooperativeisseenasself-evident.Whileatthesametime organisations are putting in huge efforts to re-invent how to approach potential newmembers, learning to know stakeholders, try to become matter experts in areas in which



commercialservicecompanieshavealreadyoperatedformanyyearsandinmundanetopicslikebillingandcustomerrelationshipmanagement(CRM).Fortunately,wehaveseengoodexamples,inSwedenaswellasItalythatshowthebenefitofincreased cooperation. For that it definitely helps to have more organisations that areoperating on higher maturity levels – and we have described examples where thosecooperativeorganisationshavetakentheirresponsibility.Regardingthetopicofthisworkpackage:businessmodels,wehavelearnedthatitisnotsomuch about inventing revolutionary new business models, but ultimately about how abusinessmodelisapplied.Tothatextentwehopethatourmessagetobuildbusinessmodelsbeyondonlyfinancialgoalsinspiresenergycooperativestoincludeandempowertheirsocialnature to allow for environmentally as well as socially sustainable solutions, that wouldotherwisenotcometofruition.Thiswefeelistheessenceof‘newstyle’businessmodelsthatwetriedtoempowerwiththeCIVISproject.



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