By Jakob Wiech (Energetyka24.com)
The trip from Berlin to Rehfelde takes about an hour. This town of 5,000 inhabitants is an excellent microcosm of the German energy transformation policy known as Energiewende, and a valuable lesson for anyone interested in discussing the process. This is all because of an initiative by a group of local activists that has exposed the basic problems and challenges of the energy transformation.
The initiative in question aimed to create an energy-self-sufficient town. The concept for Rehfelde’s energy independence was formalised in 2014, when a plan was created to install all available renewable sources in the town. Soon after, the project turned into an organised cooperative. At first, it had 126 members, with all of them working for free.
The first investment was in the instalment of photovoltaic panels on municipal buildings. A project was also initiated to replace the lights in all 799 street lamps with energy-saving alternatives. However, the ambitions of the green activists went much further – they began preparations for investing in wind turbines. There was already a wind farm owned by large corporations near Rehfelde. The residents decided to add two windmills of their own to the farm.
In order to make their dream reality, they restructured the cooperative into a company – Windenergie Rehfelde GmbH & Co. KG. The business plan involved the building of two masts and equipping them each with a Nordex turbine. The value of the enterprise was determined to be 10 million euros. This brought with it the problem of financing sources, which was then resolved in two ways. First, the residents involved in the initiative (which had increased in number to 230) bought shares in the company with their own funds, raising 1 million euros.
The remaining 90% of the costs were obtained as a bank loan, given at a record low rate of only 1.5 percent. When asked whether this is a normal interest rate for German banks, the representatives of the Rehfelde initiative reply with a smile, "For us, yes." They admit that they found the right bank to agree to invest in the venture. The local authorities also joined the project. The municipality bought four shares in the company, at 250 euros each. According to the representatives of the green initiative, the support was more moral than material.
The residents of Rehfelde have finalised the investment – the turbines will be turned on on Friday, September 15. The local authorities will attend the start-up ceremony, a full barrel of beer awaits the guests, and two lucky winners will gain entry to the top of one of the windmills, which – counting the rotor – are 199 metres tall. But can the initiative be trumpeted as a success? Financial issues are the main obstacle to recognising the initiative as an unqualified victory for Energiewende. Windenergie Rehfelde still needs to repay most of its loan. In addition, the investment is hampered with insurance fees and maintenance charges. All this will cost about 300,000 euros annually. Costs are still lower than might have been expected, due mainly to the exceptionally low loan repayments and the fact that the initiative's creators are trained engineers with many years of experience who can do simple maintenance work on their own.
The green initiative should be supported by feed-in tariffs. These have been set for 20 years, with a rate revision midway through this period. However, the Rehfelde company cannot yet effectively compete in the energy market. It sells its current to larger corporations, which then offers it to customers for a price of 30 euro cents per kilowatt-hour. Representatives of the local company are already thinking about purchasing power transmission installations, due to happen in 2026. This will allow the initiative to directly benefit residents by letting them buy cheaper electricity.
What kind of profit does Rehfelde intend to achieve? Its representatives emphasise that the business plan assumes profitability in even the worst weather scenarios. "We expect a net profit of at least 150,000 euros a year," they say. However, so far, their accounts list mostly expenses. The investors expect to break even in twenty years; by this time, the company will have reimbursed its creditors.
What does the Rehfelde initiative say about Germany’s Energiewende? First and foremost, it is clear that energy transformation à la Berlin takes money, money, and more money. In addition, the focus on expanding a renewable-energy utility means spending a significant amount of money over a fairly long period while achieving relatively small profits, or even taking losses. If you take an investor-friendly country, banks and local authorities out of this investment cycle, you might conclude that no business entrepreneur would take on such an unprofitable risk.
The creators of the Rehfelde initiative are however not typical entrepreneurs. They are mainly fans of green energy focused on the idea of transforming into a “clean” energy system. The strong conviction of their views appears to compensate for all the effort and resources they have expended in implementing the investment. Windenergie Rehfelde representatives have made it clear that they wanted their town to become a model , and for this reason were glad that journalists had come from all over Central and Eastern Europe. It seems that the green activists had not considered that the figures they were talking about might fill their guests with more horror than admiration.
It is hard to be surprised at representatives of the press who, with unabashed curiosity, questioned the Rehfelde activists on the funding for their investments. For people from countries far poorer than Germany, for a town of 5,000 to spend 10 million euros on an energy transformation that turned out to have only marginal returns is no small thing. As a comparison, in 2016 the authorities of the 7,000-strong Polish community of Wąchock spent about PLN 18 million, or about 4.5 million Euros, on all their needs. The investment in the Rehfelde initiative may well shock.
The non-financial effects of the transformation in Rehfelde also do not necessarily encourage others to follow in its footsteps. The inhabitants of the town themselves admit that, yes, the plan assumed energy autonomy, but that it is not yet achievable. "However, we are aiming to achieve such a state," they say. Yet it is difficult for them to give a specific date for success. The next key moment will be the purchase of the transmission system in 2026. This will mean being released from having prices dictated to them by large energy companies and incurring further expenses.
Rehfelde is a place that may serve as a round table for the energy transformation debate between Western and Eastern Europe. Representatives of the first group of countries will probably show how the idea of clean energy unites people, how it gives them the strength to make changes, and how it brings them long-term benefits. On the other hand, representatives from Eastern European countries will certainly focus on the costliness of the whole process, on doubts about how the whole system functions and on the investment uncertainty. The green initiative of this small town may well be a valuable lesson for all sides in the discussion on Energiewende.