* Grassroots activists want power grids back in public hands
* Some 80 new public utilities set up locally
* Thousands of concessions up for grabs as licences expire
* Yet another headache for Germany's long-suffering
By Vera Eckert
FRANKFURT, Jan 19 The southern German town of
Goeppingen, set in the Alpine foothills, is a magnet for
tourists and famous for being the home of toy train maker
For activists in the German "Rekommunalisierung" movement
that wants to take local electricity networks away from the big
utilities and put them back in public hands, picturesque
Goeppingen now has another reason to be proud.
Last spring, the town of 60,000 paid 23 million euros ($32
million) to buy back its power network from utility EnBW
, in the biggest remunicipalisation in the southern
state of Baden Wuerttemberg to date.
"We wanted to make our essential supply line free from
speculation and to keep the local infrastructure in our
ownership for a long time," mayor Guido Till, who has ruled
Goeppingen for nine years, told Reuters from his town hall.
"We will keep more jobs in Goeppingen than EnBW would have
secured in the long term," Till, 59, said. Prices have also come
down as a result of the move.
The mayor, a former Social Democrat who now thinks the party
is too left wing, enjoys cross party support and this was
reflected in the move to take the town's power grid into local
Goeppingen's decision also reflects the mood in Germany,
where opinion polls show two thirds of voters back green energy
policies and would also prefer power networks to be managed by
EnBW said it had accepted Goeppingen's decision and
successfully handed over the network to its new owners. But it
said the fragmentation of German network ownership would not
necessarily help the expansion of renewable energy.
The president of the German Federal Cartel Office, Andreas
Mundt, has also spoken critically about buying back grids.
"It is important that these local companies do not shun the
competitive market. We also believe that too much fragmentation
of networks bears the risk of becoming inefficient," he said.
Nevertheless, since 2007, some 80 new local utilities have
been set up to supply electricity, gas, water, and heat,
according to their business lobby, the VKU, which represents
1,400 such companies.
There could be many more to come.
Some 8,000 out of 14,000 land concession contracts, mostly
granted on a 15 or 20 year basis to private interests in the
1990s, are up for renewal between 2010 and 2015.
In a backlash against Germany's liberalised energy market,
where power production and distribution are in the hands of a
few large German and international groups, activists around the
country are trying to claw back network assets into the public
sector and are doing this with highly visible campaigns.
The movement is part of a Europe-wide trend of creeping
renationalisation of the utilities industry.
With energy production more and more localised via countless
solar panels and thousands of windmills dotting the German
landscape, remunicipalisation enthusiasts want power grids to
have the same local flavour.
"A bottom-up energy shift is to everyone's benefit," reads a
Friends of the Earth Germany (BUND) brochure.
But not all municipalities are motivated by environmental or
ideological concerns. Local power transport networks yield
steady fees for their public owners, while the local management
gives their services a measure of proximity to boot.
Mayor Till said his approach was based on economics rather
As a private concern, his city's grid would have to make a
profit for investors, but as a public operation he can run it
with a modest margin and keep tariffs low, he said.
The activists' biggest catch so far is Hamburg, Germany's
second-biggest city, where Vattenfall has just sold
back the remainder of the power grid it had operated for over a
The city in 2012 bought 25 percent of the power and heat
distribution grids from Vattenfall and wants to run them alone.
It also bought 25.1 percent of E.ON's gas grid.
Vattenfall chief executive Oystein Loseth said last year he
was not convinced the new trend makes sense.
"Clearly we see a political trend where the municipalities
want to take over operation of the grids. My question is why,"
"Cities can spend their money on other things and not on
buying back the grids because we are running those grids safely
and smoothly and have done so for many years," he said.
In December, a remunicipalisation referendum in Berlin -
also operated by Vattenfall - failed because not enough people
Germany's utilities - already facing overcapacity, falling
demand, the country's exit from nuclear power, and competition
from subsidised renewable energy - are fighting back, stressing
their expertise and financial strength.
RWE chief executive Peter Terium said his company did not
see ownership changes as a threat, as his firm's stretched
finances could actually benefit from outside capital.
But distribution grids that revert to public hands would
soon find, like their previous private owners, "they will face
the same challenges as everyone else," Terium said.