Negotiating the redistribution of value within territories

Negotiating the redistribution of value within territories
Published by Yannick Régnier on 04.11.2013

Territories are at the forefront of energy transitions. Various structural factors justify their increasing involvement: sustainable energy deposits and those for energy savings are, in essence, local; responsibilities entrusted to territories through law have regularly increased over thirty years [1]; energy is now established as a major society issue for citizens –, particularly as concerns instability of energy supplies, environmental risks -, and therefore for local representatives.

A new circular economy

Every year, household expenditure for energy (essentially fossil fuels), amounts to an average of €1,600 per inhabitant [2] and most of this amount disappears from the territory, and also, from France. However, "the cheapest energy is that which we do not deplete", and renewable resources are present on all territories, at different levels: to each his energy source. The possibilities of reducing this financial hemorrhage within a territory can therefore be assessed according to the measure of the territory’s ability to reduce its energy consumption and to produce energy from local resources. “Money kept at home rather than thrown out of the window”: Such should be the leitmotiv.

Several valuable deposits

Valuable deposits linked to an energy project correspond to its direct and indirect economic value [3] (job creation, development of industry clusters, research and training centers, creation of industrial sectors), and to its image value and global attractiveness - preservation of the environment, economic dynamism, improvement of the quality of life. The town of Güssing in Austria has proved the extent to which this last deposit can augment the socio-economic benefits, as its energy-autonomy policy has led to the birth of 'energy tourism' (300 visitors per week), to the creation of a hotel chain and the hosting of a 120-employee company that makes wooden floors, attracted to the way in which the development of wood energy complements the stability of the price of energy.

Negotiating the distribution of value

Today, energy projects can no longer be separated from local administration strategies, clearly summarized by the following phrase: “Stop having projects on the territories and start having territory projects.” These projects require a large group of stakeholders representing and promoting the different goals among whom a negotiation must begin concerning the distribution of value. The concretization of these local interest projects has to face the hurdle of a threefold complexity: technical, legal and financial. This power struggle between the various “intelligences” in place will determine the result of the negotiation. The allocation of human capacities within a territory does not imply imposing additional costs, but seizing the opportunity to access new resources.

Illustration through example

What does a better negotiation of the distribution of value mean in concrete terms? In Poitou-Charentes, the ESTER model associates the creation of an energy production public-private company (65% regional, 35% Direct Solar), investing in the legal means for creating solar power stations and for the sale of electricity through a long-term contract (30 years) with the local distribution companies Sorégies and Séolis. Results: the generation of new, guaranteed, sustainable income, support of the economy and the labor market within the territory, consumer protection against the long-term inflation of the price of electricity, etc. In the Lot, the Fermes de Figeac cooperative has seized the opportunity of the high price of photovoltaic in 2009 to cover 188 farm buildings belonging to 109 farmers (a total power supply of 6.9 MW) via the SAS Ségala Agriculture et Energie Solaire. The consequent return on investment for this project has since strengthened the development of local agriculture and has also enabled the launching of new projects in all serenity: participative wind turbines, micro wood heating plants, etc. Local authorities (Montdidier, Lambesc...), companies (Valorem...) and local stakeholders (SyDEV, SIEL, Enercoop in the regions...) are innovating everywhere.

The benefits of these partnership packages seem so obvious for the territories that we tend to forget that they are still an exception to the rule. So, companies, territories and local stakeholders: Are you ready to start the negotiations?

[1] Town and country planning, strategic planning on energy, economic coordination, etc.

[2] Source: Energy mediator (France). Home consumption excluding mobility.

[3] Productive assets, generated turnover, overall net income, cost of controlled energy.

Note: this opinion concerns the French context, but key ideas are valid in all countries.