Tuesday 7 February 2017

Pamplona: How does the city take back control of its energy services?

It is not an easy task to make the transition from a private to a city-run system. The circumstances leading to this move can vary greatly, be it dissatisfaction with the private services, new political priorities of the city council or pressure from civil society.

In Pamplona, a city of 196,000 inhabitants located in north-eastern Spain, the shift to renewable and decentralised energy has become a clear political objective since the elections in 2015.
Armando Cuenca is the Urban Ecology and Mobility Councillor of Pamplona for Aranzadi, a political group supported by PODEMOS. In an interview with Energy Cities he explained the “why” and the “how” of this foresighted decision.

Why is Pamplona City Council pursuing a strategy towards remunicipalisation of the energy supply?
I believe that people and communities should have the right to control their energy future. Our main objective is to strengthen energy democracy through more transparency, more social justice, and empowering people to be more than just passive consumers. Electricity supply should become a public service again, 100% based on renewables, directly connected to local private and public renewable production and contributing to tackling energy poverty.

What is the first step towards locally-managed energy? What measures did Pamplona City Council take after adopting the local strategy?
The first step is to make sure the project is viable. Therefore, it is necessary to launch a feasibility study covering the national energy market regulations and conditions, mapping electricity consumption in the city, estimating investments and operating costs, obtaining economic feedback, laying down the conditions for opening it up to private clients, etc. When the study conclusions are available, it is important to build synergies and collaboration within the City Council to create the local energy supply entity. It is also recommended to carry out an external assessment with energy supply experts. In the case of Pamplona, we engaged in a direct collaboration with green electricity cooperatives to support the development of the locally-owned company.

Re-municipalisation: Everything under (public) control?

Over the last 15 years, 235 cities in 37 countries have brought water services back under public control benefiting 100 million people. Paris, Naples, Berlin, Budapest... the list of European cities running their own water system is getting longer and longer. This may be a model for other services: how about energy, an equally precious natural resource and essential service? Who owns it and who benefits from it most? The movement towards public ownership of urban services is a growing political trend, which reflects the desire to strengthen energy democracy and resilience.
However, establishing a municipal energy company is, in many countries, a pioneering step along a road full of challenges and controversies.

The concept of (re)municipalisation is broadly used to cover:

  • the change from private to whollypublic ownership of assets or companies;
  • the change from outsourcing (or contracting-out) of services to direct provision by a public authority;
  • and the replacement of concessions or lease contracts by public management.

Why roll back privatisation?
There can be both ideological and practical reasons for municipalities and citizens to end private management of urban services: from a general refusal of corporate power to the desire for an entirely new, more local approach to generating and using energy. Many city councils are looking into municipal energy supply as they are frustrated with the downsides of publicprivate partnerships. Profit-oriented, not always transparent management by a private company, poor investments despite high tariffs for customers, priority given to fossil fuels and little or no benefit-sharing with the local community are amongst the reasons why cities want to control the entire energy supply chain.

Decentralised energy, the “new normal” in Europe?
In several European countries (e.g. France, Germany, Switzerland, and Scandinavian countries) a range of municipal companies are operating. In Germany, according to a report by PSIRU in 2013, “between 2007 and mid-2012, over 60 new local public utilities (Stadtwerke) were set up and more than 190 concessions for energy distribution networks – the great majority of them electricity distribution networks - were returned into public hands. About two thirds of all German municipalities are considering buying back both electricity generators and the distribution networks, including private shareholdings in some of the 850 Stadtwerke.”
The country’s federal structure is certainly an advantage in this endeavour.
In the UK, there is a trend for breaking up the “Big Six”- the six major international utilities operating in the country.

©photo : Municipalité de Pampelune, Shutterstock

by Béatrice Karas on 7 February 2017 / 1464 visits

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