Reframing Urban Sustainability Through Community Owned Energy Assets

By Drew Pierson

I recently reflected on the fact that “urban sustainability” is a term that typically narrows discussions about planning and development on environmental issues, in spite of related factors that may contribute to the general welfare of cities, such as jobs, income, and social well-being. Given that environmental problems often stem from economic processes and the social needs that drive them, one could assume that “urban sustainability” should extend its definition to include relationships among the three spheres of environment, economy, and society. As such, why isn’t “urban sustainability” more readily discussed within this framework and in a way that integrates goals from these three underlying areas at the onset? What opportunities exist that would allow entrepreneurs and planning practitioners to promote a more holistic version of “urban sustainability?”

“Community-owned energy” (i.e. “community energy”) is one such opportunity. Community energy projects are those that are both locally and cooperatively owned by farmers, businesses, schools, utilities, or other public or private entities with an interest in harnessing local resources for energy production. As an increasingly popular economic development tool, particularly in small cities and rural areas, community energy is a form of infrastructure development that allows local owners to purchase shares in a project through equity investments, subscriptions, or third-party leases. In turn, economic benefits accrue to community members as larger portions of project revenue are retained in the form of profits, lease payments, tax revenue, energy savings, and local jobs and wages. The Institute for Local Self Reliance affirms that the economic benefits of this approach are significant, as payments from community-owned projects contribute 150 to 340 percent more in revenue to local owners than do land lease payments from absentee owners[1].

Adopting this approach to urban areas could yield significant sustainability dividends. Given that community energy projects are often designed to (i) harness local renewable sources, (ii) create local jobs, and (iii) improve social welfare by dispersing project benefits among a broader group of people (particularly local owners), it seems to me that urban sustainability proponents could widen their scope of impact by pursuing these types of projects with greater frequency and in areas of social and economic need. I offer this idea because urban planners and entrepreneurs often focus on devising strategies that address multiple issues at once, such as those that straddle between the economy, society, and environment. And despite the obvious benefits that environmentally focused sustainability agendas offer, questions often remain on how communities can successfully build local wealth and social capital over the long-term in addition to environmental quality improvements. As such, community energy assets seem to provide one logical starting point for reframing the urban sustainability approach.

[1] http://www.ilsr.org/ownership-and-money-cure-nimby/

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One thought on “Reframing Urban Sustainability Through Community Owned Energy Assets

  1. Drew,
    I think your core point here–that “sustainability” really isn’t just ecological–is exactly right. Ultimately, one might say, what good is environmental sustainability if an urban population lives in misery, be it social or economic? The core urban question really is that of what makes our lives rich and good–at no cost to our futures to continue doing so. Approaching social and economic sustainability are essential to answering this question wholly.

    You posit “community energy” as one of these strategies. This is an interesting idea, because it moves something that is normally administered by a naturally monopolistic entity (whether it be quasi-government or a large energy company) into an end-user ownership opportunity. The local economic multiplier effect seems to be well-established counter-factual to community capital flight scenarios, and finding a way to do it with energy is definitely innovative.

    What I don’t understand is if this is truly scalable. Intuitively it would seem that the upfront capital costs of building energy facilities–especially less “dollar efficient” alternative energy facilities–would limit the size and impact that a community could have with this sort of strategy in comparison to their needs. Further, in areas such as Iowa and Illinois where independent wind farming is gaining a lot of traction, certain kinds of consultancies dominate the market and have streamlined their business model to intersect with large landowners. Would “community energy” actually be owned by the community, or rather controlled by the “local wealthy” rather than wealthy elsewhere? What kinds of local jobs would this create given the specialized nature of the construction and maintenance–wouldn’t the necessary scale of this be more that a handful of regional jobs be created?

    I really like this idea, because it begins to deconstruct traditional models of participation and finance for larger infrastructure improvements. I think that developing the mechanisms for implementation to hit the social and economic goals of an initiative like this will be key to ensuring this good idea is actually effective on the ground.

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