Study shows: Citizens are main part of energy transition

Citizens play a key role in a successful energy transition in first world countries. Renewable energies are still largely in the hands of private individuals, according to a new study by the trend:research institute. Almost one-third of the installed capacity of wind, solar, bioenergy, hydropower and geothermal power generation plants is owned by them. If farmers are included, the figure is even more than 40 percent. However, the share of citizen energy is declining compared to previous years. Citizens’ investment and participation opportunities are essential for the acceptance of the further expansion of renewable energies.

Citizen energy is still the central pillar of the energy transition

However, its share in the total installed capacity of renewable energies is becoming smaller. Ten years ago, when the ownership structure of renewables was first studied, more than half of the installed capacity was in the hands of private individuals and farmers. By 2016, the share of citizen energy had dropped to 42 percent, and in 2019 it dropped again slightly to 40.4 percent. In contrast, the share of tradespeople, large companies, energy utilities, and funds and banks has increased. At the beginning of the energy turnaround, it was primarily the citizens in Germany who recognized the economic opportunities of renewable energies. The fact that financially strong investors are now also becoming more involved in climate-friendly energy generation is certainly gratifying. But civic energy must definitely continue to find its place in the progress of the energy transition. After all, opportunities for participation promote acceptance.

The share of citizen energy is above average for onshore wind energy, photovoltaics and biogas. Private individuals and farmers account for 40.6 percent of onshore wind energy. In the case of solar power, they account for as much as 48 percent of installed capacity. This form of power generation is also particularly attractive for commercial users. They are also strongly represented here with around 25 percent. Unsurprisingly, biogas plants are mainly owned by farmers. Three quarters of the plants are owned by farms. Unlike onshore wind energy, offshore wind energy is dominated by utilities as well as funds and banks. The former account for almost two-thirds of offshore capacity, the latter for the remaining third.

The extent to which the ownership structure is shifting away from citizen energy in favor of larger investors is shown by a look at the shares of new construction. For the first time, private individuals no longer formed the largest group in the construction of new plants in 2019, accounting for 18 percent.

Funds and banks took over the top spot with 21 percent. If farmers are included, citizen energy only accounts for about a quarter of new installations. That is about 15 percentage points less than in the portfolio. This reflects the fact that the share of investment-intensive offshore wind energy is rising and demand for photovoltaic systems is only just picking up, while the expansion of onshore wind energy has almost ground to a halt. Energy utilities – especially the large and international utilities – are becoming much more involved. Together, they were responsible for just under one-third of additions in 2019. In 2016, the figure was just 22 percent. Commercial enterprises were able to increase their share from about 12 to 16 percent. Project developers lost the most. Their share fell from about 16 to seven percent, which is due to the weak expansion of onshore wind energy.

Achieving climate protection targets

To achieve the climate protection targets, we need more new capacity in all areas and in all size categories – from small rooftop PV systems on private homes to community wind turbines and offshore wind farms. This requires a willingness to invest on the part of everyone and opportunities for everyone to participate.