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Common Power – Social Enterprises and Renewable Energy Common Power - Social Enterprises and Renewable Energy Common Power 1st edition Place of publication: Saarijärven Offset Oy, Saarijärvi 2014 Social Enterprises and Renewable Energy Publisher: Karelia University of Applied Sciences Publications of Karelia University of Applied Sciences B:19 ISBN 978-952-275-111-9 (Printed) ISBN 978-952-275-112-6 (Online publication) ISSN-L 2323-6876 ISSN 2323-6876 Editor responsible for publication series: Kari Tiainen Authors: Riku Tapio, Ilari Havukainen, Ville Kuittinen Photos: Jussi Ratilainen Graphic design and lay-out: Ville Kuittinen and Anastasia Kaicheva www.karelia.fi © Authors and Karelia University of Applied Sciences 2014 Reproduction of this publication without express permission, either in whole or in part, is prohibited by Copyright Law. TABLE OF CONTENTS INTRODUCTION 7 RENEWABLE ENERGY – WHY DO WE NEED IT? 8 RESPONSIVENESS TO MARKET FLUCTUATIONS 35 THE CONCEPT OF SOCIAL ENTERPRISE – WHAT DOES SE MEAN? 12 CONCLUSION 35 SOCIAL ENTERPRISE – WHY SHOULD WE WORK THROUGH THEM? 16 RENEWABLE ENERGY IN RURAL COMMUNITIES – SUITABLE OR NOT? 36 JOB CREATION 19 COMMUNITY RENEWABLE ENERGY – WHAT DOES IT MEAN? 40 SOCIAL ENTERPRISES AND COMMUNITY INVOLVEMENT 20 COMMUNITY RE PROJECTS – WHAT ARE THE SOCIOECONOMIC BENEFITS? 46 TAX INCOMES AND MULTIPLIED ECONOMIC EFFECT 22 EMPLOYMENT GENERATION – QUANTITATIVE AND QUALITATIVE 49 OPTION FOR CONSUMERS AND MARKETS 25 DEMOGRAPHIC IMPACT 49 SOCIAL ENTERPRISES ARE EFFICIENT 27 ENERGY IMPACT 49 INNOVATIVENESS 28 PRODUCTIVE DISTRIBUTION 49 BUSINESS OPPORTUNITIES FOR OTHERS 29 INCOME DISTRIBUTION 50 RISK-TAKING BENEFITS THE ECONOMY 30 OTHER IMPACTS 50 MARKET DECENTRALIZATION 30 CONCLUSION 50 INVESTMENT OPPORTUNITY WITH DOUBLE BENEFITS 30 PERFECT COMBO – WHY IT DOES NOT WORK? 53 DELIVERING HIGHER CUSTOMER SATISFACTION 32 RENEWABLE ENERGY INCENTIVES 54 CREATING SUSTAINABLE RURAL COMMUNITIES 33 FINAL CONCLUSION 59 DELIVERING SERVICES TO THOSE THAT DO NOT HAVE OPTIONS 33 REFERENCES 62 4 5 INTRODUCTION A key issue in many OECD countries is how drastic changes when it comes to our energy same time changes in consumer interests to improve the standard of living of the rural solutions. We will become more and more and behaviour has speeded up the discussion population. People living in rural areas are dependent on energy, while the whole industry around renewable energy diffusion. The highly dependent on the declining agricultural sector is facing challenges when it comes to European Union is driving adoption and sector, high unemployment rates and scarcity production. We are in need of new solutions diffusion by defi ning the international goals of regional development alternatives. In this in order to be able to keep up our living for renewable energy (e.g. EU 2020 directive, paper, we try to provide insights into rural standards. Renewable energy sources will gain which will be introduced later). On a national communities as a ground for establishing more foothold in future. This change in the level, the goals may differ and they can even social enterprises in the fi eld of energy. entire sector offers different opportunities for be higher than international goals. A great different areas. We will discuss how certain example of this is Sweden. In Sweden the Dependence on the agricultural sector is a communities and rural areas are especially target for renewable energy is high, as they challenge for many rural societies. The sector in need of these changes, and how they may aim for 50% of national supply before 2020. is declining fast and new ways have to be be able to benefi t from the opportunities that (sweden.se) fi gured out in order to keep up the standard renewable energy can provide. of living. Renewable energy may offer a new While the interest is rising, unfortunately business era for farmers. Not only may it offer Changes in international attitudes towards adoption, diffusion and changes have been a possibility for new incomes, but it may also energy production drive changes. Germany’s relatively slow, but some progress has been offer lower energy costs, which may lead to decision to run down their nuclear power made already. In the future there will be better profi tability and competitive advantage. before 2022 has raised the discussion about barriers to surpass before renewable energy renewable energy solutions, and has woke solutions can meet energy consumption needs. Helga and Björn, a happy farmer couple from the very rural Iceland have an own small-scale hydro plant. By using the As we will discuss later, our society will face up decision makers around the world. At the power from the mountain stream they produce their own energy. Safe, clean and sustainable energy means a lot for the farming “it is the reason we can look together to the bright future”. – Botn in Súgandaörður, rural Westords, Iceland 7 The Eno Heating Cooperative has produced nearly 15 years local wood chip heating. It is said that, key factors for success in Eno have been the involvement of community members, like farmers, forest and property owners. Willingness to cooperate for common goal to save the environment, infl uence the energy price and quality are very highly appreciated values in Eno. – Joensuu, Finland. RENEWABLE ENERGY – WHY DO WE NEED IT? In this chapter we will go through the concept of renewable energy (RE), explain main sources of electricity, as Norway is one of what we mean by the term. We will briefl y the world’s largest hydropower producers and discuss why we need renewable energy. We exporters . (IEA 2008). Hydropower has spread will also go through the main international all over Northern Europe and small-scale agreement made in order to increase the hydro solutions are indeed quite common. amount of renewable energy in production and Biomass means the material is derived from consumption. After the chapter you should originally living organisms. Typical biomass understand, what renewable energy is and why is bio waste or by-products from agricultural we need it. source. Biomass is usually available locally, which helps the diffusion. Especially when we First of all, the defi nition for renewable consider rural areas in Northern Europe, where energy is basically very simple. As long as the biomass can be derived from the unlimited energy comes from a source that naturally sources of wood from the forests. Solar power replenishes, it can be called renewable energy. (power derived from the sun) has gained a lot Common renewable energy sources are wind, of interest, but it is quite challenging especially sun, water (rain, tides, waves), biomass and in Nordic areas. Geothermal energy offers a geothermal heat. Wind power has become the solution for small-scale energy production, but most commercialized of all. When we look at especially in Iceland. Geothermal energy does the Nordic scale, hydropower offers one of the not exist signifi cantly in other areas. 8 The rapid growth of climate change, the new technological innovations. If we want to increasing cost of the energy and the desire for be able to achieve the goals that we have set sustainable growth have created more interest for our emissions, we will need to work on our towards renewable energy solutions. Climate energy production and change it. Lowering change has reinforced the discussion on how the level of emissions is not an intrinsic value we should be producing the energy we use. itself, but rather a prerequisite for securing the This topic has been given special attention on diversity on our planet. a national level, especially in Western societies, but it has also received a lot of global interest. In 2009 the European Union accepted the At the same time while we are in need of more directive 20-20-20 (offi cially 2009/28/EY). energy, we are struggling against the higher According to this, by the year 2020, 20% of prices of energy from traditional sources. Oil energy consumption should be covered by and other non-renewable sources of fossil renewable energy, greenhouse gas emissions energy will not last forever, and to fi ght climate should be reduced by 20% and energy change we will need new solutions. Using effi ciency should be improved by 20%. If we bottom-up strategies might offer solutions to want to reach these goals, we need intensive the adoption and diffusion of renewable energy work in the fi eld of renewable energy. One technologies; and will be discussed throughout must bear in mind that the directive is not this paper. governed without reason. This was a signal from European decision makers that they want Renewable energy is not a new topic. The to be prepared for the fi ght against climate discussion has culminated around the issue change. of climate change in recent decades, and especially in recent years. Anecdotal evidence We must agree that the present situation in would suggest that this discussion has not energy usage and production is not optimal been absolutely determined. There has even or even close to it. Climate change and the been discussion on whether we are going decline of traditional energy sources have through the climate change at all. If we are challenged our society. This review will open to accept that climate change is happening up the discussion on how we can provide then this has not been offset by a growth renewable energy using bottom-up way as in the adoption and diffusion of alternative opposed to top-down solutions. Rural areas renewable energy technologies, which has and renewable energy solutions offer us an although been quiteremains quite low. This, opportunity for that. however, is not rare, when it comes to totally 11 Community of Upperlands is run by strong will to fi ght against urbanization. Local energy production, own cafeteria and other community activities are good ways to stay lively.

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