Germany's Bioenergy Villages point way to distributed energy

When Thomas Edison invented electricity, he envisioned a system whereby electricity would be generated wherever it was to be consumed. In the USA, State-wide energy monopolies ended all that, as businessman accepted price controls (eg guaranteed profits) in exchange for becoming a monopoly power provider.

Germany is spinning the wheel and pointing to a decentralized, distributed energy future. this Wall Street Journal article has lessons for many small towns and villages across North America and the main one is: Work Together!

In Germany's Biofuel Villages, Power to the People rules

By MARY M. LANE, WSJ

OBERROSPHE, Germany—On Friday nights, villagers here pile into the town's only bar to play "Nail and Wood," a beer-fueled quest to pound a nail into an upright log with the most speed and accuracy. Later, they return home to warm cottages, fully heated by a wood-chip plant they built in 2008.

"We don't need fancy bar games, we've got wood," says 51-year-old Hans-Jochen Henkel, a spokesman for the 850-person town in western Germany and a member of the committee that helped raise funding for the plant. "And we don't need energy from large corporations. We've also got wood for that."

Long before the German government announced plans to phase out atomic power in the wake of the recent nuclear meltdown in Japan, dozens of villages across Germany, distrustful of mainstream energy sources, began generating their own heat and electricity from biofuels. Their goal was to free themselves from potential nuclear disaster and dependence on foreign oil, while uniting their communities through a greater sense of purpose.

"We don't want to be getting 3,050 liters of oil off some ship from Saudi Arabia," says Hans Bertram, a 72-year-old retiree living in Oberrosphe. This way, "the money stays here in the community."

Indeed, a desire to stimulate local economies, coupled with the security that comes from steady energy prices, are the main economic factors behind the movement, says Uwe Fritsche, a researcher at the Öko Institut, an ecology research center in Darmstadt.

The first of Germany's so-called bioenergy villages, the 750-person town of Jühnde in the central part of the country began as a large-scale experiment by scientists from the nearby University of Göttingen. The village started producing heat and electricity from liquid manure and locally grown energy crops in 2005.

Since then, about 70 other towns in Germany have become full-fledged "biovillages," meaning they use fuel derived from substances such as wood chips, crops and manure to heat their homes and generate electricity that they then sell to the local power grid. Some 14 other towns and villages are in the process of converting to other renewable-energy sources, such as wind and solar power, according to the Ministry of Agriculture.

Although these communities account for a small fraction of Germany's overall energy demand, and larger cities remain hesitant to convert fully to biofuels, the green villages "remain inspirational forerunners," says Mr. Fritsche.

Shaped like a thin rectangle with timber-framed houses built along a lush, sloping valley, Oberrosphe had to install more than 7,000 meters, or about 4½ miles, of heating pipes in order to convert to biofuel heat. The village voted that residents would pay a flat rate of €6,000, or about $8,650, to link to the new heating grid, regardless of their proximity to the wood-chip plant.

"We didn't want one family bearing a higher cost burden just because of where in the village they lived," says local resident Otto Krebs.

Oberrosphe built a wood-chip burner to produce heat for the 55% of households that initially joined the network and installed solar panels on top of the plant to generate power to sell to the local electric utility. The village plans to install a biogas plant in November to ensure it can meet the energy needs of all of its households. Many families hesitant about joining the co-op three years ago are in the process of joining now, despite having to pay €2,000 in back fees, says Mr. Henkel, the spokesman.

While the German government provides some funding for these projects—Oberrosphe received €1 million in government subsidies toward the €4.2 million in total capital it needed—the bulk of the financing falls to the local communities themselves.

Many residents say the investment has been well worth it.

Villagers in Oberrosphe estimate they save around €400-€500 annually on heating costs and even more when savings in maintenance costs to oil heaters are factored in. Jühnde residents, meanwhile, save as much as €900 per year in heating and maintenance costs, and the town makes about €1.1 million annually from selling electricity into the local power grid, says Eckhard Fangmeier, a town spokesman.

By contrast, German heating prices have gone up an average of 19% for gas and 94% for oil nationwide since January 2005, according to March statistics from Verivox.

Mr. Fritsche, the researcher, sees a revival of Germany's rural spirit in the proliferation of renewable-energy villages. "One of the drivers has been and continues to be involvement of the local people. It gives them a new identity and a new social interaction," he says.