Can a historic people’s alliance stop the privatisation of a Dutch green energy giant?

Can a historic people's alliance stop the privatisation of a Dutch green energy giant?

Renewable energy cooperative De Windvogel supplies clean energy to 1200 households south of Amsterdam. A pan-European federation of co-ops just like this one is hoping to take over the Dutch utility giant, Eneco.

(Bryan Miranda)

The last green, publicly-owned utility giant in the Netherlands might be facing a corporate takeover, but a unique pan-European alliance of energy cooperatives could help keep the company in the hands of the people.

It would take an estimated €3 billion (US$3.5 billion) to buy Eneco, and a new sustainable energy cooperative called EneCoöperatie hopes to do just that.
Dozens of local authorities decided to sell their shares in Eneco after company restructuring earlier this year. As a result, it is facing privatisation.

The idea of ordinary citizens raising such a massive amount of capital to buy a public energy company might sound like a pipe dream. But for Siward Zomer, director of renewable energy cooperative De Windvogel and one of the masterminds behind the crowdfunding initiative, it is definitely possible.

“Of course, first and foremost we don’t want municipalities to sell [at all],” says Zomer as the giant blades of a windmill he co-owns generate clean, renewable energy for 1200 households in the south of Amsterdam. “But if they do, then we want them to sell their stake to us. And as soon as we can, we will make our bid.”

The municipality of Rotterdam, which is Eneco’s biggest shareholder with a 31 per cent stake in the company, was the first to announce its intention to sell up in March this year after a new law forced the company to break from its public grid operations arm, Stedin.

This split, some of the local authorities argued, makes it a risky investment. Other municipalities agreed with this assessment, bringing the total share of the company on sale to nearly 75 per cent.

“These politicians believe that markets will solve everything, but if everything’s privatised then all will be in the hands of anonymous capital, which has profit-making as only interest, not serving people,” Zomer says. “Eneco has to remain in public hands. As ordinary citizens we must reclaim democratic ownership of our own energy supply.”

Cooperatives empowering local citizens

With the specific purpose of buying Eneco, Zomer helped set up EneCoöperatie to draw membership and capital from ordinary citizens, climate activists, pensions and banks, as well as local and European energy cooperatives.

Current membership fees stand as low as €15 (US$17) and unlike corporations, which extend decision-making power based on the number of shares, cooperatives have a democratic ‘one-member, one-vote’ structure. This maximizes citizen participation in the decision-making process while granting members equal leverage regardless of how much they have invested.

Cooperatives further ensure that any profits made return to local communities, rather than to the pockets of faraway companies and CEOs, according to EneCoöperatie organisers.

But is the involvement of banks – a historic Goliath in the people’s struggle for greater self-determination – not a contradiction? Felix Olthuis, the new director of EneCoöperatie, doesn’t think so. “At the end of the day, banks are just interested in investing and we need them to raise our capital,” he explains.

There is another less traditional channel that Olthuis is tapping into for funding and that’s the solidarity network between local renewable energy cooperatives that’s been growing across western Europe over the past six years.

Known as Rescoop (Renewable Energy Sources Cooperatives), this network now includes 1250 cooperatives representing over half a million members in countries such as Denmark, Germany, Belgium, Spain, Italy, the Netherlands and the United Kingdom.

“Over the past years we have exchanged a lot of knowledge, shared experiences and learned to trust one another,” says Olthuis, who also chairs Rescoop in the Netherlands. “Now you can make a phone call to a co-op in Spain or Italy and ask for a loan, and you’ll get it. We have grown a lot in supporting each other both in terms of content and finance.”

Their international effort to take over a utility giant makes the initiative a historic first, demonstrating the growing force of citizens taking on the fossil fuel industry.

Stopping the sale

Eneco employs over 3500 people and has been ranked as the country’s most sustainable energy giant by local climate groups for its supply of predominantly wind, solar and biomass energy. This has made the looming sale not just an issue about climate but also a fight to save public sector jobs.

Energy cooperatives, local politicians, trade unions, Eneco employees, climate activists and advocacy groups such as Greenpeace Netherlands have formed a strategic alliance to persuade municipalities not to sell their shares.

Their efforts have been partly successful. In October, the municipal council of The Hague voted to retain its16 per cent share in Eneco, thereby cancelling its earlier decision to sell.

If, however, Eneco does get privatised, campaigners fear it will suffer a similar fate to Nuon and Essent. In 2009, these two energy firms – which along with Eneco, command nearly 75 per cent of the energy market share in the Netherlands – were bought by state-owned companies Vattenfall (Sweden) and RWE (Germany) respectively, which rank amongst Europe’s top polluters. More than 4,500 jobs were lost, and as owners of three out of five coal stations in the Netherlands, Nuon and Essent currently rank at the bottom of the Dutch sustainable energy charter.

For Patrick Fey, the public affairs chairperson of CNV, a major Dutch labour union helping in the fight to save Eneco, the tide is turning against the privatisation of public services.

“If Eneco gets privatised, the government will lose its grip on the country’s environmental sustainability, and that’s not smart. So, the issue of opposing privatisation is becoming less of right versus left wing divide, but a matter of common interest. We expect that, in part thanks to our campaign, the social dimensions of protecting both people’s jobs and the environment will play an important role when deciding on Eneco’s future.”

The loss of Eneco could signify a major setback for the Netherlands, which has been lagging dramatically behind green vanguards like Germany and Denmark in meeting global and European climate goals, like cutting carbon emission by 40 per cent and increase green energy to 27 per cent by 2030.

In 2016, the Netherlands had only reduced 11 per cent of its C02 emissions from 1990 levels and less than 6 per cent of its total energy use came from renewable sources. This is in spite a historic 2016 court order for the government to slash its carbon footprint by a quarter by 2020.

While carbon emissions have only risen under the conservative government of Prime Minister Mark Rutte, his current cabinet claims to have the “greenest coalition agreement ever.” Its ambition to cut 49 per cent of its C02 levels by 2030 includes some eyebrow-raising measures such as subsidising industries to store emissions underground and raising energy prices for consumers.

“In essence this is a corporate climate agenda but coming from the government,” says Donald Pols, director at the Dutch environment NGO Milieudefensie, which sued the Dutch state over air pollution earlier this year.

“To achieve European climate targets the costs are transferred entirely onto average households, which will pay 80 per cent of climate taxes, while 80 per cent of subsidies will go to [the energy] industry.”

Onto a greener course?

The political unwillingness to move the Dutch economy onto a greener course is partly to do with its heavy interdependency on the fossil fuel industry, which accounts for at least 11 per cent of Dutch GDP. As the world’s second largest exporter of food (after the US) as well as being home to Europe’s biggest port (Rotterdam) and one of the world’s busiest airports (Schiphol), the Netherlands is one of the most fossil fuel and C02-intensive economies in the International Energy Association (IEA). The Dutch government sustains this with US$9.5 billion in annual subsidies to the energy sector, according to a 2015 International Monetary Fund report.

The extent of the intimacy between the Dutch state and the energy sector was further revealed in 2010 when Wikileaks revealed that Shell directly employs senior Dutch and British civil servants for its international business activities in politically-sensitive areas like Iran and Iraq.

The revolving door between high-profile public service and the corporate world is also no secret. Former Prime Minister Wim Kok, former economy minister Hans Wijers and former foreign minister Wouter Bos were all supervisory board members at Shell either after or before their political posts. Even the new minister of the freshly-created Ministry of Economy and Climate, Eric Wiebes started his career working for Shell.

Given the highly-vulnerable geographic location of the Netherlands, a sinking delta country lying mostly below sea level, the political reluctance to shift the economy in line with the demands of climate change might be startling. But the Dutch governmental position has long been one of adaptation rather than prevention.

Damns, dikes and polders have historically protected the country from rising sea tides and river overflows. When this didn’t stop disastrous floods from displacing thousands of people in the 1990s, the Dutch government turned to further resiliency technologies rather than structural policies to reduce the industrial impact on climate change. Public parks and parking lots now work as drainage systems, and human-made islands and floating homes are being built to better co-exist with water.

When it comes to climate change resiliency, the Netherlands might be at the cutting-edge of innovation, but when walking the talk on actually limiting the devastating industrial impact on global warming, the Dutch might have to stop relying on politicians to make a change and start looking at the organising power and ideas of ordinary people.

“With the new climate policy you see, once again, that the lobbies of big business, of the gas and oil industries, really works,” Zomer says. “So you can have an elected official in office, but they won’t stop this. What we need to do now is organise ourselves through cooperatives because power no longer lies in politics, it lies in the economy.”