An interview with Justin Pagden from AGEM introducing the TANDEMS pilot.
Hello, please introduce yourself and AGEM. What have you been working on?
My name is Justin Pagden. I’m a business developer at Agem. Our company comprises of a team of professional energy enthusiasts. Together, we develop and provide services for energy communities and municipalities in the Achterhoek region of the Netherlands. Agem helps households and businesses to use energy in an efficient, sustainable and local manner. This ultimately results in lower (social) costs.
We have been working specifically with energy communities. Agem enables them to consume their own collectively produces energy at a cost price. We call this the cost price model.
How and why did you choose the location of your pilot?
We have been working on the cost price model for the municipalities for over 5 years now. We were eager to also implement this model in the context of a citizen energy community.
The first pilot, where we introduced the cost price model was the energy community of BioZon, Zelhem. This citizen energy community collectively owns and operates a small electric generator running on biogas from an old landfill. The energy was sold in a PPA (Power Purchase Agreement) to the municipality at a fixed price for a 5 year contract. The citizens that had invested in the installation received a reasonable return on investment.
The installation was producing more electricity than expected and agreed in the PPA contract with the municipality, so when energy prices soared, the question arose if it was possible to allocate this surplus of electricity to the citizens directly at a cost price. This would benefit the citizens immensely on their energy bill.
So we set out together to investigate the possibilities.
What models of collaboration do you use (how do you collaborate with the municipality and other actors? How do you share the work load? Who is responsible for what?)
Eight municipalities in Achterhoek initiated the funding of Agem in 2013. The municipalities created a cooperative company of which they were the shareholders and invested start up capital so the company could develop and provide products and services to accelerate the energy transition. In the last ten years, this has led, among many other things, to the development of up to 15 citizen energy communities in the region. BioZon in Zelhem being one of them. These energy communities have also taken a share in the Agem Cooperative, and therefore have become co-owners of the company.
Therefore, you could say that the main collaboration model is through co-ownership. Agem is the professional organization that provides the services to it’s shareholders, being the energy communities and the municipalities. They provide the governance, done by aldermen from the municipalities or citizens volunteering as board members of an energy community.
What were and are the main challenges that you are facing when implementing this pilot?
We had all the pieces of the puzzle necessary to make the first cost price model available for citizens. Now all we had to do was to organize them in such a way that it would create the picture we had in mind. This involved getting all the different partners on the same page so that everyone could play their part. This took a considerable amount of deliberation and eventually trust to move forward. But in the end we were able to move fast and went live on the 1st of January 2023.
Everything worked as planned on the administrative end and the data was coming in perfectly, showing clearly the benefits of the cost price model, as apposed to the market model. Ironically, the engine broke down and had to be fixed which took several weeks. This forced us back to the energy market which shows clearly in the data and energy price paid by the consumers. Thankfully everything is up and running again and the energy community members can ones again profit from their own electricity at a cost price.
What feedback do you receive from citizens and how do you communicate with citizens about this pilot?
The Energy Experts at Agem work very closely on the project with the board members of BioZon. All the communications to the community members is coordinated or co-created with the board members of BioZon. We have used presentations at member meetings, video explainers and of course webpages and emails. Also, a new contract had te be signed by the members that wanted to participate.
The feedback from the members has been overwhelmingly positive. This is mainly because the communication has been clear, the members did not have to do much themselves and of course, because they benefit from the new situation.
What is next for this pilot?
When the PPA with the municipality has ended there will be more electricity available. The cost price model can then be expanded to include more citizens from the region. Also, the energy community of BioZon wants to invest in solar panels on the old landfill (hence the name BioSun).
For Agem, this pilot is a proof of concept, and shows clearly that the cost price model for citizens is possible. As happens in industry, the first prototype model is not made the same way as the large scare production model. That is also the case for this pilot.
The next step is to scale up and expand the model to other energy communities that also want to benefit from this model. As we write this we are working hard with our partners to be ready for this next phase of the implementation of the cost price model.
