Generation kWh is a new way to easily and collectively generate your own renewable energy. The model paves the way for a future based on 100% renewables where energy generation is owned by the people – a future of “energy sovereignty” and “energy democracy”.

Whereas the profitability of renewable energy projects is typically based on feed-in-tariffs set up by national governments, Spain’s rapidly changing political situation has made investments in renewable energy very risky. The Generation kWh model was thus created by the Spanish energy cooperative Som Energia in the wake of the elimination of incentives and subsidies for renewables in Spain as well as the introduction of government-imposed barriers to individual self-consumption.

At Som Energia, Spain’s first renewable energy cooperative, any member of the cooperative can participate via generation kWh by purchasing energy shares, each worth €100, in line with their annual electricity consumption. As an example, for a household with an average annual electricity consumption of 2,400 kilowatt hours to generate 70% of its own electricity for 25 years, 9 energy shares are required amounting to an investment of €900. This comes as a special loan to the cooperative at zero interest.

For each €100 in participation, investors get an estimated 170 – 200 kWh at the cost of generation per energy share compensated annually on their electricity bill with Som Energia. A household with 10 shares would thus expect to get 1700 to 2000kWh/yr at cost, which is roughly 3.5 – 4 cents per kWh as compared to a current market price for electricity of 4.5 – 5 cents per kWh (the cost of generation of course fluctuates along with market prices). After 25 years, the entire sum originally invested is then returned to the investor, who has all the while been saving on his or her energy bills through the scheme. Participants keep paying taxes, grid access fees, etc., but the cost of generation is more stable since the main component, the amortisation of the installation and other components such as maintenance, rent, insurance, etc., are covered by long term contracts. Each project is owned by Som Energia’s limited company, and its production is sold via a bilateral contract to the cooperative, which in turn redistributes the kWh to each participant.

One photovoltaic project being used with the generation kWh model at Som Energia has already built and has been producing electricity since May 2016; two more projects are expected to be completed in 2016-2017. As soon as all three projects are running, the yearly energy generation will be around 12 GWh, enough to supply around 4,000 households and avoid 3,240 tonnes of CO2. As of August 2016, some 2,188 Som Energia members have participated in the generation kWh model, contributing a total of €2,048,000. The first project has already been completely funded in this way. Once all projects are running, a total of five million euros will have been invested by citizens.

Generation kWh is thus already proving itself in Spain, where there was a need for innovative business models like generation kWh to overcome existing barriers. Generation kWh can, however, be replicated by interested cooperatives and organisations worldwide.

By Nuria Palmada, RES power generation project manager of Som Energia

More information available on www.generationkwh.org