A workshop was held in the IFSC on December 8th 2016, looking at financial incentives to promote citizen investment in renewable energy. The workshop was organised by Dr. Celine McInerney, Cork University Business School, and Joseph Curtin, UCC. It was funded by the EPA Research programme.

1. Promoting citizen investment
in renewable energy:
experience from Germany and Switzerland
rolf.wuestenhagen@unisg.ch
http://goodenergies.iwoe.unisg.ch
Prof. Dr. Rolf Wüstenhagen
Good Energies Chair for Management of Renewable Energies
Director, Institute for Economy and the Environment
University of St. Gallen
Dublin, December 8, 2016
@wuestenhagen

2. 2
Outline
1. Status of citizen investment in renewable energy (GER & SUI)
2. Drivers of citizen investment in renewable energy
3. Does citizen investment increase social acceptance?
4. Three caveats
5. Conclusions

3. 3
German and Swiss energy transitions have
resulted in a changing investor landscape
Source: Helms, Salm, Wüstenhagen 2015
Old Energy World New Energy World
Big Four, 5%
Citizen
Investors,
47%
Institutional
Investors,
41%
Other
Utilities, 7%

4. 4
Increasing number of energy cooperatives
in Germany
Source: trend:research and Leuphana 2013, DGRV 2013
• >90% of energy cooperative members are private citizens (125‘000 people)
• German energy co-ops have invested €1.2bn in renewable energies (417 MW)
• Solar PV & onshore wind are cooperatives‘ dominant investment targets
Numberofenergycooperatives

5. 5
Swiss Community Finance Landscape
Source: Ebers & Wüstenhagen 2015
• 60% of surveyed Swiss retail investors are interested in community finance
• Of those, two thirds can imagine investing up to 1‘000 CHF, another 35%
between 1‘000 and 10‘000 CHF

6. 6
Different models of community financing RE
Level of local involvement
Pure
grassroots
projects
Large
investor-
owned
projects
Municipal
utilities
co-investing
(“Partnerwerke”)
Large investor
with citizen
co-ownership
www.buergerkraftwerke.atwww.windpark-rheinau.chwww.appenzellerwind.ch

7. 7
Outline
1. Status of citizen investment in renewable energy
2. Drivers of citizen investment in renewable energy
3. Does citizen investment increase social acceptance?
4. Three caveats
5. Conclusions

8. 8
1) Switzerland and Germany have a strong
tradition of community-owned infrastructure
Community energy, A.D. 1897:
Sankt Galler Stadtwerke
Community financing, A.D. 1908:
Berlin municipal utility bond

9. 9
2) Energy policies creating low-risk environment
RE capacity in Germany since introduction of feed-in tariff in 1990
• Between 1990 and 2015, the share of renewable energy in German power generation
increased from 3.4 to 30.0%.
• Cumulative installations by 2015 led by wind (44 GW) and solar (40 GW).
• Other policy instruments can be designed in a „community-friendly“ way, too.
Source:GermanFederalMinistryoftheEnvironment
http://www.erneuerbare-energien.de
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
InstalledCapacity[MW]
Geothermal
Biomass
Solar PV
Offshore Wind
Onshore Wind
Hydropower

10. 10
3) Slow-moving incumbents...
...provoking citizen action
„Solar energy in Germany
makes as much sense as
growing pineapples in
Alaska.“
Jürgen Großmann
20.1.2012 Photo: Greenpeace Nicolas Fojtu

11. 11
Outline
1. Status of citizen investment in renewable energy
2. Drivers of citizen investment in renewable energy
3. Does citizen investment increase social acceptance?
4. Three caveats
5. Conclusions
Source: Wüstenhagen, Wolsink & Bürer 2007

12. 12
Social Acceptance =
f(Citizen Investment)?
• Social acceptance of large-scale energy infrastructure (e.g.
hydro and wind) is a contested issue in Switzerland (et al.)
• Using experimental empirical methods & large-scale surveys
of residents, we have investigated the relative importance of
factors influencing social acceptance
• Research Questions:
• What are the most important determinants of community
acceptance of hydro & wind in Switzerland?
• How important are local ownership & distributional justice
(fair allocation of cost and benefit) in determining social
acceptance?
• Results suggest that community energy can positively
influence social acceptance
Tabi & Wüstenhagen 2015, 2017; cf. also Salm/Hille/Wüstenhagen 2016

13. 13
Data and Methods
• Two surveys using choice experiments (Choice-Based
Conjoint Analysis)
• Hydro survey: N=1004, representative for Switzerland,
Oct/Nov 2014
• Wind survey: N=1095, representative for 16 districts in
North-Eastern Switzerland around planned wind projects,
July 2015
• Recruiting via online panel (Intervista, N=60’000)
Wind
Hydro
Source: Tabi & Wüstenhagen 2015, 2017

14. 14
Focus area of wind survey Wind

15. 15
Focus area of wind survey
Wind
Source: Tabi & Wüstenhagen 2015

16. 16
Local
Ownership
Distributional
Justice
Social
Acceptance of
Hydropower
Ecological
Impact
Procedural
Justice
Type of
Owner
Water Tax
Jobs
Impact on
Flora and
Fauna
Participatory
Decision-
Making
Moderators:
• Sociodemographic Variables
• Psychographic Variables
Explaining Social Acceptance with
Choice Experiments
Hydro
Source: Tabi & Wüstenhagen 2017

17. 17
Project Developer Local Utility National Utility Cooperation of Local
Utility & Specialized
Investor
Use of Proceeds No local value added Compensation to
one local land owner
(50’000 CHF/year)
Compensation to the
Community (50’000
CHF/year)
Location On agricultural land In significant
landscape (BLN)
Close to residential
area
Ecological Impact Almost none Large Small
Participation Public information
event
Only legally required
participation
Participatory siting
(incl. number and
location of turbines)
O O O
Project Developer Local Utility National Utility Cooperation of Local
Utility & Specialized
Investor
Use of Proceeds No local value added Compensation to
one local land owner
(50’000 CHF/year)
Compensation to the
Community (50’000
CHF/year)
Location On agricultural land In significant
landscape (BLN)
Close to residential
area
Ecological Impact Almost none Large Small
Participation Public information
event
Only legally required
participation
Participatory siting
(incl. number and
location of turbines)
O O O
Project Developer Local Utility National Utility Cooperation of Local
Utility & Specialized
Investor
Use of Proceeds No local value added Compensation to
one local land owner
(50’000 CHF/year)
Compensation to the
Community (50’000
CHF/year)
Location On agricultural land In significant
landscape (BLN)
Close to residential
area
Ecological Impact Almost none Large Small
Participation Public information
event
Only legally required
participation
Participatory siting
(incl. number and
location of turbines)
O O O
Project Developer Local Utility National Utility Cooperation of Local
Utility & Specialized
Investor
Use of Proceeds No local value added Compensation to
one local land owner
(50’000 CHF/year)
Compensation to the
Community (50’000
CHF/year)
Location On agricultural land In significant
landscape (BLN)
Close to residential
area
Ecological Impact Almost none Large Small
Participation Public information
event
Only legally required
participation
Participatory siting
(incl. number and
location of turbines)
O O O
Which of the following three wind energy projects would you accept?
Sample Choice Task
Wind
4 levels per
attribute
Five
relevant
attributes
of a wind
park
11
Choice Tasks
per respondent
(with varying
attribute levels)
Respondent
chooses
preferred project
3 hypothetical wind parks
to choose from
Tabi & Wüstenhagen 2015

18. 18
0
5
10
15
20
25
30
35
40
45
Hydro
Wind
Results (1): Importance of AttributesRelativeImportance[%] Wind
Hydro
• While environmental impact is the #1 concern of Swiss residents,
local ownership and distributional justice are important drivers of
social acceptance.

19. 19Results (2): The Most Preferred Wind Project
-70 -60 -50 -40 -30 -20 -10 0 10 20 30 40 50
Nur gesetzlich vorgeschriebene Partizipation
Informationsbroschüre und Webseite
Öffentliche Informationsveranstaltung
Mitbestimmung über Anzahl und Lage der Windturbinen
Kaum lokale Wertschöpfung
Abgeltung für 1 privaten Landeigentümer (50 kCHF/Jahr)
Direkte Auszahlung an alle Einwohner (50 CHF/Kopf*Jahr)
Abgeltung an Gemeinde (50 kCHF/Jahr)
Auswärtiges Energieunternehmen
Kooperation lokales EW & spezialisierter Investor
Lokales Elektrizitätswerk (EW)
Einzelperson aus der Region
In bedeutenden Landschaften (BLN-Gebiet)
In der Nähe von Wohngebiet
Auf landwirtschaftlichen Nutzflächen
In Industrie- und Gewerbezonen
grosse
mittlere
geringe
fast keine
Partizipation
Verteilung
Erträge
Projekt-
entwicklerStandort
ökologische
Auswirkungen
Contribution to social acceptance (Part-Worth Utilities)
AttributesofaWindPark
• (Co-)Investment of local utility, financial contributions to local community and
local participation in siting decisions positively influence social acceptance.

20. 20
Outline
1. Status of citizen investment in renewable energy
2. Drivers of citizen investment in renewable energy
3. Does citizen investment increase social acceptance?
4. Three caveats
5. Conclusions

21. 21
Caveat 1: Social acceptance changes over time
Policy makers need to be mindful of the project valley of death
DevelopmentFeasibility OperationConstruction
Project cost Project risk
Project “Valley of Death”

22. 22
Caveat 2: Silent majorities vs. vocal minorities
LeQuotidienJurassien17.12.2010
http://www.arcinfo.ch/articles/regions/jura-jura-bernois/le-
parc-eolien-de-st-brais-remis-en-service-596241

23. 23
Caveat 3:
More players involved = higher complexity
www.energeticcommunities.org.au

24. 24
Outline
1. Status of citizen investment in renewable energy
2. Drivers of citizen investment in renewable energy
3. Does citizen investment increase social acceptance?
4. Three caveats
5. Conclusions

25. 25
Conclusions
– Community ownership of renewable energy assets is a
widespread phenomenon in Germany & Switzerland
– This has been facilitated by (a) strong tradition of community
ownership in infrastructure assets, (b) energy policies that
created a low-risk environment for amateur investors, (c) slow-
moving incumbents provoking citizen action.
– A variety of community finance models exist, including mixed
models between pure grassroots projects and large investor-
owned projects.
– Community ownership tends to correlate with higher levels of
social acceptance, but there are exceptions to the rule.
– TANSTAAFL in social acceptance, but it is quickly becoming a
conditio sine qua non in renewable energy project development.

26. 26
Thank you!
www.es.unisg.ch/rem
GianlucaStricker(RollBrettClubChur)@Haldenstein,05.05.2016,Photo:DanielAmmann

27. 27
Further Reading
– Wüstenhagen, R., Wolsink, M., Bürer, M.J. (2007): Social acceptance of
renewable energy innovation: An introduction to the concept. Energy Policy,
35 (5): 2683-2691.
– Tabi, A., Wüstenhagen, R. (2017): Keep it Local and Fish-Friendly: Social
acceptance of hydropower projects in Switzerland. Renewable and
Sustainable Energy Reviews, 68: 763-773.
– Salm, S., Hille, S., Wüstenhagen, R. (2016): What are retail investors' risk-
return preferences towards renewable energy projects? A choice
experiment in Germany. Energy Policy, 97: 310-320.
– Karneyeva, Y., Wüstenhagen, R. (2017): Solar Feed-in Tariffs in a Post-
Grid Parity World: The Role of Risk, Investor Diversity and Business
Models. (under review)
– Ebers, A., Wüstenhagen R. (2015): 5th Consumer Barometer of Renewable
Energy. Univ. St. Gallen. www.iwoe.unisg.ch/kundenbarometer
– Tabi, A., Wüstenhagen, R. (2015): Befragung der Anwohner von möglichen
Windparks in der Ostschweiz [Determinants of Community Acceptance of
Wind Power in Eastern Switzerland], Project Report, Univ. St. Gallen,
www.iwoe.unisg.ch/ostwind
@wuestenhagen