The new energy model expands in concentric circles. Responding to the paradigm shift, citizens, organizations, cities, businesses and politicians are redesigning their activities and strategies.

Accelerated decarbonization of economies and the uncertainty of climate change are forcing them to do so. After years of debate, renewable energies have become a viable alternative, due to their lower cost. Photovoltaic and wind energy investments are leading the way, but there is still a long way to go.

The energy consulting company Wood Mackenzie concluded that in 2017, the five biggest oil companies spent three percent of their total income on renewable energy sources. To achieve the same quota of investments currently spent on crude oil and gas, they would need to invest $350 billion over the next 18 years. Oil’s rising prices adds to the urgency. Spain has not escaped the inflationary trend, with significant price increases in both gas and energy last autumn. According to the Spanish energy NGO Enerclub, “the harsh weather conditions of the first quarter of 2018 and an increase in energy demand” mean the upward price trend is likely to continue.

Given this scenario, it makes sense to take action. Consumers are leading the way, shaping demand and even producing energy. So are local corporations, by making use of their urban planning and construction skills. European guidelines specify that the new energy model should be built on distributed generation, self-consumption, smart meters, energy efficient housing, effective networks and electric vehicles, among others. “It would be convenient to have a bottom-up structure, for power to change hands and for new solar parks to have a fresh start,” says Mario Sánchez-Herrero of the Platform for a New Energy Model (PxNME), a Spanish organization made up of NGOs, political parties and companies. “It’s not possible to start building a house from the roof down.”

The new model has given birth to energy distribution cooperatives such as SOM Energía, Goiener and Energética. They resemble their central European counterparts, and hope to produce enough renewable energy to cater to their members’ needs.

Although building a house from the roof downwards is hardly a good idea, building the right rooftop can be key. “A photovoltaic roof panel can provide up to 49 percent more energy in Spain than in Northern European countries; however, only 4,000 MW of potential power can be harvested from the 100,000 panels currently installed, combining all the different types of energy devices,” says the expert.

Madrid’s city council has drafted a roadmap that takes into account roughly 900 public buildings whose upper terraces add up to more than 1.2 million square meters of available space. Nearly 735,000 square meters are suitable for installing photovoltaic panels for self-consumption, with a power capacity of 75 MW – 61 percent of the energy demand expected by 2030. The project is expected to cost 96.5 million euros ($111.2 million)

Sustainable City

Thanks to its transport network and mobility solutions, the Spanish capital was declared a “sustainable city” in the latest study published by the independent market research institute Análisis e Investigación, sponsored by Siemens and checked by international audit company KPMG. The feat is rather relevant as transportation takes up to 42 percent of Spain’s total energy consumption, according to the Spanish Renewables Foundation, which works with Madrid’s city council “because cities are and will always be the motor of energy transition.” Three other Spanish cities – Malaga, Palma de Mallorca and Valencia – are among the 10 most sustainable cities in Europe, and each one of them hope to become the European Capital of Sustainable Tourism in 2019.

According to the PxNME, “If citizens jumped on board, we could turn the system around in roughly a decade. But let us not forget that local companies, from their position of power, need to become catalyzers.”

The wheel is turning. Oil, power and gas companies have diversified their energy offer, trying to keep up with the new scenario. As they reconvert, they are looking at startup companies – 37 major energy groups have invested in 361 entrepreneurial projects over the last decade, according to the consulting company Everis. They are resorting to PPAs (Power Purchase Agreements) for self-regulation purposes and to avoid price volatility. Europe is the second largest PPA market after the United States, with contracts for more than 1GW in 2017. There are currently 10 PPAs in Spain.

All solutions are welcome, and technology is a major asset. The latest trend is trading energy through blockchain, allowing for more efficient transactions. In Germany, the Elblox platform enables customers to create their very own energy mix, and in the EU, Enerchain groups 39 energy companies for decentralized negotiations.