Download - Essentials Of Energy Tesc 5 29 08
NW Cooperative Development Center
Essentials of Energy
May 29th, 2008
Eric Bowman; Cooperative Development [email protected]
1063 S Capitol Way # 211Olympia, WA 98501
360.943.4241
Presentation Overview
1. Introduction; the Center
2. Co-ops 101 & Benefits of Cooperation
3. Why Ownership Matters
4. Brief Case Studies
5. Co-ops in renewables
6. Policy
7. Q&A
The role of co-ops in local renewable energy development
NW Co-op Development Center
The Centera 501(c)3 nonprofit which provides development services for new and existing co-ops
Our mission to foster community economic development through the cooperative business model
We’rea team of co-op developers with skills specific to start-up and organizational business development
Co-op 101A co-op is any corporation, that’s member:
Owned Benefited Controlled
Top 100 co-ops’ 2007 revenues = $150 Billion! Ag & Grocery Energy/Communications Finance Hardware/Lumber
Why Cooperate?
Co-ops are a proven strategy to access economic resources which may not be individually achievable
Marketable Co-op Benefits; “Goodwill” Local = accountable Trusted Social and economic bottom lines
Unique Characteristics of Co-ops
Owned/controlled by members, not outside investors
Exist solely to serve members Motivated by service, not profit Return surplus based on use, not investment No pass-through taxation
Co-op v. Investor (50MMgpy EtOH)
56% greater impact on local economy Why? = Local sourcing
General services & accounting = $1.5MM more Debt interest = $2.4MM more Supply inputs
Farmer dividends = profit distribution spent locally
…we’ve been waiting all our lives for a way to increase the value of our ag commodities. I’d hate to turn loose this opportunity to leave something for the kids…
- Marvin Oerke, 66, MME Board
They are out of their minds…
- Peter C. Fusaro, Energy Hedge Fund Center
“As Investors Covet Ethanol Plant, Farmers Resist.” NY Times. Nov. 2 2006
Project Lifecycle
Co-op Development Stages
Identify a need a co-op could meet
Form Steering Committee Research Feasibility Review Findings (Go/No Go) Membership Drive Planning and Financing Begin Operations (Go/No Go)
How We Can Help
Facilitate identifying mission and goals
Train founding Board members Market and feasibility research Assist with organizing Professional, 3rd party perspective General business consulting
Our Economy
Post-industrial Service-based "High value-added” Complex Globalized Privatized Liberalized Diffused capital
Uncharted territory Time for a new vision
To This:
From This:
Distributed Energy Production
Distributed Resources = Distributed Opportunity Many small sources Diseconomy of scale Rethinking
infrastructure
Consumer-owned Co-ops:Rural Electrics and Public PowerRECs
900 co-ops in US 40MM people Serve ~75% of US land mass Maintains local control
What next? Chambers and Assns’ energy buying pools Nat. Renewables Co-op Organization Start up RE co-op within incumbent IOU territory?
Co-ops in Biofuels
Biodiesel Production/marketing
Pendleton Grain Growers Joint-ventures
Inland Empire Oilseeds, LLC (Odessa Union Warehouse Co-op, Reardon Grain Growers, Reardon Seed Company)
Consumer-owned Bend Biofuels Co-op
On-farm consumption/co-op production
Co-ops in Anaerobic Digestion
AD = Harnessing decomposition Ownership
Co-op ownership dominates E.U. Small-scale in the developing world Investors or municipalities
Benefits diverse stakeholders Farm – manure & nutrient Environmental – GHG & odor Energy
Increasing power costs = feasible
Co-ops in Renewables; the HorizonWoody Biomass and/or cellulosic EtOH
Aggregate producers for biorefinery Grass or wheat straw, etc. Non-industrial private forests
Aggregate Attributes Green tags
Our Wind Co-op Carbon credits
Direct Seed Assn
Industry Ownership at a Crossroads
Until recently, ag/biofuels = value in local communities With VC and equity/hedge funds, now decupled Absentee-owned, investor projects
Pros = fast, efficient, legitimized, well-capitalized, connected Cons = more of same for rural economy; farmers as passive input
providers; profitably crises, over-production, out migration
Co-op, farmer-owned projects Pros = deeper rural development, consider multiple factors,
accountability, more permanent, won’t “cut and run” Cons = more risk-exposed, group dynamics, less flexible
Strategies to Develop a Co-operative Bioenergy Industry
Ownership-based incentives; federal & state Capitalization; accessible and sizable:
Investment equity Grants Debt availability & loan guarantees
Education and advocacy about the benefits of local ownership
We need a Project-Apollo-scaled program
In Conclusion
Co-ops Economically cluster owners Empower communities Create assets and jobs Re-invigorate local economies Keep control local Inherent advantages
We must define our vision for our future energy production, and then build it
Thank You!
Eric Bowman
Northwest Cooperative Development Center
1063 Capitol Way S # 211 | Olympia, WA 98501
360.943.4241
[email protected] | www.nwcdc.coop
Fostering community economic development through the cooperative business model