How the community started
EWH is a small rural energy community in Germany that has been operating a hydropower plant for nearly 100 years. It is located in the municipality of Bad Hindelang, a village in the mountainous region of the Allgäu Alps, home to around five thousand people.
The citizens of Bad Hindelang wanted to become independent of the larger neighbouring town of Sonthofen and so decided to build their power station. The Mayor was an important factor in the establishment of EWH, he and 47 other citizens, from all societal groups of the municipality, founded the cooperative in 1923. Just three years after this, in 1926 the plant first produced electricity. By 1933 all parts of the municipality were connected to the power grid.
Initially, members had to guarantee their cooperative with a liability capital in addition to their share. The share was at 500 Deutsche Mark between 1929 and 1963 when it was increased to 1000 Deutsche Mark – now 500 €.
Today, EWH’s operations have expanded to two hydroelectric power stations and a photovoltaic system plant. They also have shares in another hydroelectric power plant owned by a consortium of cooperatives. These operations combined have a peak load aggregate of around 2 000 kW.
The cooperative is funded out of the profits from business operations. The majority of the profit generated is kept in the company rather than allocated to the members. The financial situation of the cooperative is comfortable as the production of the electricity in the hydropower plants and the investments that have been made in the past to the grid’s infrastructure are profitable.
The energy produced is first sold to the central grid, because of the legislation in Germany. Fixed feed-in tariffs are guaranteed by the public because the electricity is generated from renewable sources. Previously producing renewable energy had been expensive compared to other methods and EWH therefore had to buy the electricity from the central grid market to offer its clients competitive prices. However, the local community remained loyal to the cooperative and as such, the cooperative can now offer comparatively low prices in 2022 thanks to their business model, which saw the electricity purchased years in advance. The cooperative does not raise the price of electricity to current levels because it is owned by its members and their objective is not just to maximise profits.
Almost four thousand Bad Hindelang citizens are now supplied by the EWH grid. Over 75% of their energy consumption is generated on-site by renewable energy.
The organisational structure
There are currently 319 members of the cooperative, consisting mainly of citizens but also local small businesses such as craftsmen and local hotels, as well as the municipality. Due to the statutes of the cooperatives all members, regardless of their shares, have one vote. Once a year they hold a general assembly where members can vote on major topics.
In the general assembly, the members vote for the advisory board, which is the three people in charge of monitoring the management of EWH. The advisory board vote on the board of management which consists of four members.
Currently, Mr. Andreas Klär, CEO of EWH, oversees the day-to-day running of the business and is the only member of the board that is employed. The chair and the two other members work voluntarily. The CEO is also a member if the management Board.
The benefits of EWH to the local and wider community
- The local community is being supplied with renewable energy that reduces their dependence on fossil fuels and reduces carbon dioxide (CO2) emissions.
- The local community is benefiting from low energy prices in the current high-price environment.
- The cooperative employs 16 people mainly from the municipality. They can offer them a high wage compared to other local roles and a flexible working structure. This enables them to continue to farm, support mountain rescue, or other such activities.
- The profits from the cooperative remain in the municipality.
- The Energy Community pays trade taxes to the municipality, which in Germany is a significant source of tax income at the local level.
- The hydro plant is not disruptive to tourism, which is important to this idyllic mountain village.
- EWH pursues an active and long-term sponsorship policy. They focus on promoting youth in the various areas of sport, education, and awareness-raising of the benefits of renewable energy. They also support various cultural activities and events including skiing, biking, and the local Christmas market.
- The cooperative contributes to the sense of connection in the community, which is generally strong in the village.
Mr. Klär shares some of the factors that he believes have contributed to the success of EWH:
“The cooperative will have been active for 100 years in 2023. It has been a strong sense of community that has been key to its success. The support of the mayor in 1923 and the continuous support from the municipality have been important factors to expand the range of work, for example public lighting provided by the cooperative. The 24/7 emergency hotline, for instance, is only possible because the employees take ownership of the duty and are committed to making it work. The local cooperative culture and strong community feelings also led to citizens remaining loyal to the cooperative even when prices were higher than the competition.
“At the inception of EWH, the grid in the neighbouring town of Sonthofen served as motivation and inspiration to produce electricity locally. It was used as a framework for the grid in the municipality of Bad Hindelang. Local small and medium enterprises (SMEs) were also used as models to create the cooperative's organisational structure and continue to be involved and support it today.
“There have been serious problems in the past with a lack of monetary resources. There was a time when no bank was giving money to the cooperative. EWH however remained resilient, at the time they were able to count on the solidarity and support of other cooperatives. The connection with other energy cooperatives in the region is an advantage, the cooperative in the biggest town in the area supports us by handling the trading of electricity.
“The community has also benefited from some of its previous operative managers’ ability to get creative and be willing to take some risks. Thanks to this the community now has a lot of powerful assets. We estimate that in the event of a blackout, we would be able to supply the valley with electricity to support necessary operations for weeks.
“If I were to offer any advice to other rural energy community initiators and developers it would be to ask for support from other cooperatives, ideally locally to you. Use business structures that your local community, in particular, small businesses, such as craftsmen are familiar with. Facilitate knowledge sharing with local citizens and allow your employees the flexibility to accommodate and adapt to the rural lifestyle. To that, you have to be courageous and willing to take entrepreneurial risks and not be deterred by perceived legal or regulatory obstacles.
“I would recommend to policymakers to promote the advantages of local energy production. The low dependence on outside energy leads to increased energy security. Take advantage of the high sense of community spirit locally to increase the sense of ownership in the energy transition. Finally, to support new rural energy communities with initial investment costs of new projects which are very expensive and can lead to hesitancy in investment by local actors.”