In recent years hundreds of cities have adopted 100% renewable energy targets. This has left many with the impression that cities are “taking the lead” in addressing climate change, showing more ambition than most national governments, and taking measures to disrupt energy markets in ways that challenge the dominance of large energy utilities. Cities are believed to be both riding and driving a technological revolution that is reflected in the growth of local-level energy generation and the proliferation of “distributed energy resources” such as rooftop solar panels, battery storage, and digital control systems. Electricity users, on this view, are becoming increasingly active players in electricity markets, turning from “consumers” to “prosumers.” The days of centralized power generation, from this perspective, are thus numbered.
TUED’s Working Paper 14, Beyond Disruption: How Reclaimed Utilities Can Help Cities Meet Their Climate Goals, shows that this image of cities as “climate leaders” is misleading, as is the idea that large energy utilities are becoming obsolete. The paper documents the technical limitations of city-level energy generation (principally solar photovoltaics), and shows that public subsidies, not “active consumers” or competitive markets, are driving many of the changes taking place.
The paper also shows that cities will not be able to reach their renewable energy targets without sourcing energy from large energy companies. This is already happening through power purchase contracts with for-profit entities, producing outcomes that contribute to energy poverty, compromise energy security, and cause technical problems that threaten to put climate targets beyond reach. The real “disruption” in electrical power systems is being felt by working people, while large energy interests continue to reign supreme.
As an alternative, Beyond Disruption proposes a “public-public partnership” approach in which progressive municipalities can partner with utilities to drive energy efficiency, conservation, digitalisation, and a managed growth in distributed generation. For this approach to succeed, however, energy systems must be brought back into public ownership, and utilities still under public ownership (full or partial) must be fully “demarketized,” and issued a “new mandate” that reflects social and ecological goals and operating principles. Rather than being compelled to meet the needs of private investors for “acceptable returns on investment,” reclaimed utilities will be key partners in what will be a decades-long effort to decarbonize the economy.
Just a few years ago, proposals to reclaim energy to public ownership would have been dismissed as “mission impossible,” but today many in the policy mainstream are questioning the current “energy for profit” policy framework. Concerns about climate change, energy security, and unreliable power increasingly demonstrate the need for a public pathway approach to the energy transition.
As many unions today recognise, a public pathway approach will require repealing the neoliberal reforms of the 1980s and 1990s and reversing the drive to further liberalise and privatise the electricity sector (a drive that is currently being pursued in many countries of the Global South). A full-on energy transition must involve a phase-out of so-called competitive electricity markets and the decommodification of electricity, as articulated in the Trade Union Program for a Public, Low-Carbon Energy Future, which is already supported by 50 trade union bodies from two dozen countries and regions around the world.
The reforms articulated by the Trade Union Program would set the stage for strong partnerships between cities around the pursuit of climate targets and economy-wide decarbonisation. Reclaimed companies and municipalities should have full control over prices in order to address energy poverty and discourage the wasteful use of electricity. Progressive cities that aspire to control their energy systems (including distribution grids) can build on what they have already achieved by using their political strength to insist on a full reclaiming of energy to public control.
As the paper argues, “the incumbent energy companies will not be disrupted out of existence; rather, they will remain dominant as market players and, under the current neoliberal framework, they will help perpetuate an energy for profit regime. If this is not changed, then cities will not be able to reach their energy and decarbonization targets.”
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