Energy Prosumers Innovate Solar Power

Citizen-led solar power generation is an initiative that generates profit through citizens’ voluntary participation in the fight against global warming while making social contributions. Of energy-related co-ops, Ansan Citizens’ Solar Co-op recorded the greatest increase in the number of power stations and power generation volumes in 2017[1], and is distributing solar power income to its members and contributing to public good including support for energy-deprived vulnerable social classes. Since its founding in December 2012, the number of the Co-op members has grown to 853, and total capital and member funds to around 3 billion 30 million won, with about 18 power stations in operation today[2]. Constructing power stations in idle areas of water and waste water services, the Co-op has set an example in resolving the problem of conflict of interest with residents in selecting station sites. Ansan Citizens’ Solar Co-op was named by the Ministry of Economy and Finance as “Excellent Enterprise with Innovative Growth” in recognition of changing socioeconomic structure and putting people first in economic development.

 

[1] ENERZINE Focus issue 87 (2018), Energy & Climate Policy Institute

[2] As of Dec. 2018

Exemplary governance of energy conversion

Ansan Citizens’ Solar Co-op (hereinafter, “Ansan Solar”) was founded to distribute and increase the utilization of renewable energy and for citizens to participate in tackling climate change as the need arises to convert energy to battle global warming. From the stage of founding, Ansan Solar formed a coalition with the community and collectively discussed solving problems of energy, emerging as a successful model of energy governance. The initiative was taken through collective discussions with local cooperatives, civil societies, energy conservation groups, and labor unions. Multilateral collaborative energy governance was established among the local government, citizens, mandatory power suppliers, and facility constructors in line with the policy goals of Ansan City Government’s “Energy Vision 2030.” Gyeonggi Provincial Government and Ansan City Government provided administrative supports and worked closely with Ansan Solar to secure the lease of idle public sites. This allowed an easy acquirement of sites, which is known to be the most difficult part of building a solar power station.

 

Owned and operated by Co-op members

Ansan Solar, put together by Co-op members, is funded by the members themselves. Paid-in capital and citizens’ funds are used to construct solar power stations, and income from the power generation is distributed back to the members. Any Ansan citizens are entitled to be an Ansan Solar member (membership is also open to non-Ansan citizens), with investment in either individual or corporate capacity. Permitted contributions by members range from 100,000 won per account to 20 million won per 200 accounts per person. The pool of contributed money is a capital for the Co-op projects, and one person cannot invest more than 30% of the total capital. For decisions, one person is given one vote regardless of the size of his/her capital investment.

Dividends, to be distributed to members, will come from net income from the sales of electric power generation excluding legal reserves and income taxes, and are determined at the general assembly meeting. The 2018 general assembly determined a stable 5% dividend to about 800 members. Due to the upper limits of capital investment by one person, citizens’ funds are also raised to secure capital for power station constructions. Three rounds of citizens’ funds were raised. As of December 2018, co-op membership is as large as 853, and total capital and member funds amount to around 3 billion 30 million won.

 

Photovoltaic power station installation and power generation business

Ansan Solar carries out the businesses of photovoltaic power generation and power station installation and maintenance. Ansan Solar is issuing stable dividends to its members by generating income from photovoltaic businesses through required renewable energy supply system (RPS: Renewable Portfolio Standard). It is also contributing to appropriate pricing of photovoltaic power market through trustworthy installation of photovoltaic power stations and assurance of quality and low expenses. By managing and maintaining station modules, it is maximizing power generation efficiency and volumes.

 

▲ The 19th photovoltaic station (Source: Ansan Citizens’ Solar Co-op)

 

Since the completion of its first power station initiated by the citizens in May 2013, 18 stations are in operation today with an installation capacity of about 2.2 MW, generating 2,880,659kWh per year, as of the end of 2018. With additional construction of stations in the future, it plans to build a station with the capacity of 2.8MW. The 19th station completed in September 2018, in particular, was installed on top of Ansan Water Purification Center sedimentation basin at a total cost of 400 million won with an installation capacity of 207kW. 227MWh electricity is expected to be produced per year there, generating an income of 50 million won a year through the sale of the electricity produced and Renewable Energy Certificate (REC)[1]. Given the photovoltaic pane durability of around 20 years, citizens are expected not only to recover their total initial investments in first eight years but also to earn long-term profits afterwards.[2] The Ansan City Government, Korea Western Power Co., Ltd., and Ansan Urban Corporation have also recently signed an MOU to push for “Lake Shihwa On-the-water Photovoltaic Project.”

 

Education, policy suggestion, and public service

Apart from direct solar power generation, Ansan Solar is making contributions to public services, including raising public awareness on renewable energy, improving legal and institutional framework, and supporting energies for the underprivileged. It is taking the initiative in educating the citizens on the issues of energy, such as energy conservation, energy efficiency, and renewable energy achieved by energy conversion. Good examples of education programs for citizens are “Local Energy Tour,” where citizens take a tour of the site to learn about circulation of nature and commit themselves to practicing daily environment-friendly activities, and “Energy Prosumer Citizens,” where citizens learn about energy production and consumption in the age of energy conversion. In partnership with National Citizens’ Solar Co-op, Ansan Solar is also engaged in making institutional improvement in energy sector and in public-private cooperation including helping the central government to establish “Renewable Energy 3020 Plan (increasing renewable-energy power generation proportion to 20% by 2030).” Furthermore, Ansan Solar is committed to public services including providing energy welfare and donating scholarships. As part of community service projects, it raises “Solar Fund” for energy welfare subsidy and support for energy independence by donating some of its revenues from the Co-op to the Fund.

 

▲ Locations of photovoltaic power stations established by Ansan Solar (Source: Ansan Solar)

 

Expansion and growth of residents’ participatory renewable energy projects

Ansan Solar, a backbone of executing Ansan’s energy conversion plan, is now expanding its territory of activities to Gyeonggi Province and across the nation, beyond the city of Ansan. It is taking the tour of around thirty solar co-ops managed by citizens across the nation and playing a central role in national co-op association. For two years in a row since 2016, Ansan Solar has been named as energy-independence initiative project in Gyeonggi-do. In 2018, it was recognized by the Ministry of Environment as “Residents’ Participatory Renewable Energy Model Project,” paving the way for the Ansan Solar photovoltaic model to propagate across the nation.

The 19th photovoltaic station at Ansan Water Purification Center is the first fruitful case of Environment Ministry’s residents’ participatory renewable energy expansion program, setting the example for six other local municipalities that are carrying out the program with the Ministry and offering a best-practice scenario of participatory photovoltaic power to other regions as well. Potential photovoltaic generation in 446 water purification centers and 634 sewage treatment centers nationwide is about 750,000 MWh a year (equivalent to consumption by some 200,000 households). If all idle spaces in the nation are filled with photovoltaic panels by benchmarking Ansan’s case, the energy independence of water and waste-water treatment facilities is expected to rise sharply. For example, a potential power generation of 750,000MWh will be able to cover 30% of power consumption needed in all processes of treatment at a sewage treatment plant. 

Ansan Solar was accredited as a Social Enterprise in 2017 by the government. And it was recently selected as a partner for Gyeonggi Province’s “public platform reinforcement project for social economic organizations (also known as Gyeonggi Co-op)” in energy sector. Accordingly, Ansan Solar is providing a comprehensive consulting for 31 cities/counties in Gyeonggi Province on a full range of subjects involving energy co-op founding and operation, including citizens’ participatory co-op founding, business management support, public land acquirement, power station construction, and education for citizens. This raises the hope that Ansan Solar will serve as a catalyst to shaping the “prosumer system” in Korea, where citizens take direct part in producing energy as participatory consumer of renewable energy, departing from the traditional stereotype of “production by large corporations and consumption by individuals.”

 

 

[1] Renewable Energy Certificate (REC): a certificate for the supply of renewable energy granting one REC per 1MWh

[2] Press release, Ministry of Environment (Sep. 21, 2018)

Call for cooperation

  • Articulating needs/interest to learn from other stakeholders in similar situations
  • Distinct invitation to cooperate with other stakeholders
  • Getting feedback and comments on the pursued climate action

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