On September 22nd, citizens in Hamburg, Germany’s second biggest city, not only re-elected Angela Merkel as chancellor but also gave their electoral mandate to the city authority to buy back the energy grid in their Hanseatic city. Why? Because they concluded that the private sector cannot be trusted with public services – and that community ownership and participatory governance is the way to go, notes Anna Leidreiter.

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Re-communalization, not privatization

The Hamburg-based civil society-led alliance “Our Hamburg – Our Grid” reminded citizens of a German federal law stipulating that municipal authorities invite bids from new companies, including communities, who wish to run the local grid once the contract term of 20 years ends. This alliance not only reminded citizens but actually called for action and campaigned for years for the buyback of the energy grid in the city.

And success: 50.9% of the population voted to re-communalize electricity, gas and district heating networks which are currently in the hands of multinational energy companies Vattenfall and Eon.

The motivation for Hamburg citizens? That energy supply is a basic public service that should not serve profit motives. They concluded that Vattenfall and Eon – the current grid operators – don’t act in the best interest of the people and are delaying Germany’s shift to renewable energy.

After the decision last Sunday, the Hamburg Senate and Parliament are required to implement the electoral mandate. They must ask Vattenfall and Eon for approval to increase the city’s share from the current 25.1% to 100%. If the companies oppose the sale – as is expected – the city must establish a municipal utility and express their interest by mid-January 2014 to operate the energy grid.

Hamburg is not alone

Other initiatives similar to the one in Hamburg have stepped forward, e.g. in Berlin where the referendum takes place this November. Indeed, since 2007 there have been about 170 municipalities which bought back the grid from private companies. Cities that have chosen to not privatize  – like Frankfurt and Munich –are now showing that it’s worth keeping energy supply in municipal hands. Both major German cities have a 100% renewable energy target.

Generally, we are seeing a re-municipalization trend across Germany as the idea that private is superior to state has not lived up to its promises.

This marks a clear reversal to the neoliberal policies of the 1990s, when large numbers of German municipalities sold their public services to large corporations as money was needed to prop up city budgets. The result was that consumer power prices increased by 68% compared to 1998, forcing Germans to pay more for their power than any other nation in the European Union except Cyprus and Denmark according to EU data.

Giving the power to the people

Hamburg’s Social Democrat Mayor Olaf Scholz opposed a 100% buyback, arguing that this would overburden the city and not necessarily lead to cheaper energy prices. However, Sunday evening he stated: “People are voting for decisions on matters of substance, and in this matter the people have decided differently than the Senate and Parliament. The Senate will now take the will of the citizens into account and not let the referendum go into space.”

Referendums like this give the steering wheel for government to the people. It literally hands over power to the people. It leads us to the heart of democracy: empowering citizens by enabling them to exercise control over their own lives and act together  to change the direction they are going in. Citizens in Hamburg reminded their elected politicians to act on behalf of the voters and be accountable for their decisions – essentially, that they are representatives of the public and not of private companies. Participation, then, is understood in its true sense: citizen empowerment instead of passive consultation or unilateral information.

People drive the energy transition in Germany

This understanding of community participation has been key in the German energy transition. More than 50% of total investments in renewable energy come from private individuals and farmers. 650 energy cooperatives have become drivers for renewable energy projects across the country.

It was the right policy framework that unleashed this development. With the feed-in tariff every citizen, community and region is able to profit from investments in renewable energy. The energy transition thus adds local value in terms of socio-economic development on the local level. This form of true participation leads to acceptance – and acceptance leads to investments.

The citizens of Hamburg were also driven by the motivation to spur local development. As the current energy grid operators are multinational companies, profits were leaking out of the northern Germany. Under democratic control, citizens will have greater powers to keep the socio-economic value in the region.

This article by Anna Leidreiter is reposted with permission and was first published at World Future Council.