Big Energy Battle: An Unlikely Effort to Buy Berlin’s Grid

March 7th, 2013

Published on Spiegel Online International, by Joel Stonington, March 05, 2013 (Photo Gallery).

Even as Germany turns to renewables, the power supply in Berlin comes mostly from coal. Two recent university graduates are trying to change that — by buying the grid. It is an ambitious attempt to fix a system that may not be broken.  

Back in 2011, Arwen Colell was finishing up an undergraduate degree in political science and thinking about what to do next when her friend Luise Neumann-Cosel had an idea. They had met in a youth choir in Berlin and the friendship had blossomed through a shared passion for environmental issues.

“She called me up and said, ‘We should buy the grid,’” Colell said in a phone interview. Colell didn’t have to think long before responding: “Sounds like a good idea.”

Neumann-Cosel was referring to Berlin’s energy grid, up for sale next year. Consisting of some 35,000 kilometers of underground cable, 8,000 medium- to low-voltage substations and 80 high-voltage substations that feed electricity to 2.3 million customers, the grid is a heavily-regulated monopoly that is available for purchase as a concession every 20 years. Depending on who you ask, it is worth somewhere between €1 billion and €3.1 billion.

In anticipation of the auction in 2014, the two founded a group called BürgerEnergie (People’s Energy), which has raised €3 million in its drive to take the grid from Vattenfall, the Swedish company that currently owns the concession. It’s an impressive amount of money for such a small initiative, but a far cry from what they would need to make a serious bid.

BürgerEnergie isn’t the only group targeting the sale, though. A second citizen’s group, called Berliner Energietisch (Berlin Energy Table), has undertaken a drive to re-communalize the grid. Their plan is to gather enough signatures to put the issue onto the ballot in hopes of forcing the city-state of Berlin to buy back the grid with public funds. There are also six other bidders, including Vattenfall. But these two citizen-based groups have created an unusual movement by politicizing something most people take for granted.

Lagging On Renewable Energy: … //

… Important to the Community:

  • The ambition to buy Berlin’s grid, Germany’s largest, helped interest many who have signed on for the effect they could have if it succeeds. An attorney with a background in energy issues, Peter Masloch, spent a year as a BürgerEnergie managing director, helping develop the organization and fill the board. As the organization grew, dozens have pitched in with volunteer work. Colell, now co-managing director alongside Neumann-Cosel, is both a new mother and starting a job in a few months working on infrastructure for electric vehicles.
  • The group has already been successful in steering the debate on the role of energy grids, specifically when it comes to questions regarding investments in the grid to provide a new strategic direction. They want to see power over Berlin’s energy supply in local hands, with the profit from the grid staying in Berlin too. Vattenfall is not doing enough to support renewable energy in the city, they say. And finally, they want to increase democracy and transparency when it comes to how the grid is run.
  • “Grid operation is not just any kind of contract,” Colell said. “It is important to the community … and the time has come to say we need to think about the way we distribute renewable energies.”
  • The challenges, of course, are huge. BürgerEnergie isn’t just facing a major multi-national corporation — it is also confronting the tattered reputation that publicly-run infrastructure projects have earned here in recent years. Exhibit number one is the fiasco of Berlin’s ultra-modern new airport. Construction began in late 2006, but there have been numerous delays and the facility still has no firm opening date. Furthermore, the cost of the project has more than doubled to €4.3 billion ($5.7 billion), up from an initial projected cost of €2 billion. It’s something no one in Berlin would like to see repeated with a publicly-run electricity grid. And it offers Vattenfall an easy argument in its efforts to keep hold of the reins.

Coal-Fired Power: … //

… Keeping the Lights On:

  • The hurdles facing BürgerEnergie are high. Vattenfall has estimated the value of the grid at between €2.5 billion and €3.1 billion. Even if the cost is closer to the €1 billion estimated by the citizens’ group, it is still a massive amount of money to raise for a couple of recent university graduates.
  • Berlin Energy Table likewise faces an uphill battle. It must gather 200,000 signatures by June 10 in order to get the issue on the ballot and force the city-state of Berlin to buy the grid. The state, however, is billions in debt already and would be hard-pressed to come up with the asking price.
  • And then there is the question as to whether either of the citizens’ initiatives can improve on the job done by Vattenfall. Can Neumann-Cosel and her group really ensure that the lights stay on in Berlin?
  • “I won’t do it alone,” she says with a wry smile. “That’s clear.”

(full text).

Links:

Berlin Start-Ups: Chasing the Distant Dream of a German Google, on Spiegel Online International, by SPIEGEL Staff, March 05, 2013 (Photo Gallery): Boosted by its hip image and low rents, Berlin has gained a reputation as the epicenter of the European Internet start-up scene. There is no question that it is attracting young entrepreneurs and developers. But analysts and industry insiders doubt whether the German capital can produce truly global leaders …;

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