[p2p-research] p2p energy article

[Michel Bauwens]

Peer to Peer energy production and the social conflicts in the era of “green
development”
This article by George Papanikolaou appeared in a special issue of the Greek
bi-lingual Re-Public magazine, Issue on P2P Energy, 2009
The same issue has articles by Erik Hunting and myself, as well as many
others, and they are consistenly interesting.
Abstract
“Since the direct production process is the one that defines distribution,
the single most important innate advantage of P2P production is that it
ensures, on a long term and on a stable basis, a fairer and more equal
distribution of wealth. In distributed production, argues George
Papanikolaou, the largest part of the energy produced is intended for
individual consumption, limiting the field of the market to exchanges of
energy. A network that allows, without the mandatory intervention of a third
party, the reversal of energy flows between peers, delimitates even more the
sphere of the market and the official monetary circulation.”
P2P production and energy production
“In the heart of developed capitalist economies, in the sphere of production
of immaterial commodities, we are becoming witnesses of a very deep
transformation characterized by the emergence of a new form of production.
P2P production (or just peer production) overthrows the established notion
of economic thinking that humans tackle their production processes either as
employees, following the orders of their superiors, or as individual
producers in markets. In P2P production, the production procedures are
organized usually from the bottom up, and are based on the free choice of
individuals-agents of production, to cooperate -without financial reward
being their basic motive- for the accomplishment of common goals or projects
and with the aid of distributed networks. Since the product of their labor
does not have an exchange value, but a use value for a community of users,
it is characterized by the production and distribution of the product of
labor outside the market sphere (a post-capitalist form of the organization
of production).
If the detachment of the means of production and their accumulation by a
class of owners was the necessary condition for the creation of the labour
market and the development of relations of capitalist exploitation, the
reunion of the means of production with individual producers is the most
fundamental condition for the genesis of P2P production. Besides the access
to distributed capital, the creation of a directly accessible infrastructure
that allows for the voluntary and autonomous (without the need to extort the
license of a commissioner) cooperation of the producers. In the sphere of
immaterial production, this transformation took place mainly through the
reduction of the costs of computers and the development of the internet.
The nature of the current technological infrastructure, which makes the
production and distribution of energy possible, does not permit us to talk
about P2P production in the same way as in the sphere of immaterial
production. Technological restrictions, such as limited diminution in
relation to performance, the relatively high costs for the acquisition of
energy producing equipment, as well as the presence of a hierarchical
distribution network of one–way energy flows from big producers to small or
bigger consumers, create barriers. Although the horizon for the
transgression of these barriers is starting to become visible, it is not
imminent: today, it is necessary to plan and effectuate transitional and
applicable solutions. Thus, with contemporary limitations, P2P energy
production can be described as the organization of distributed production
systems that are interconnected with a network:
- that permits energy flows from many to many, - that is based on the
voluntary participation of independent individual producers, households or
communities, - who ideally use renewable sources safeguarding this way a
long term sustainability and ecological balance.
Distributed energy production is characterized by multiple advantages. From
a strategic point of view, it ensures security (the destruction or
malfunction of centralised infrastructures paralyses economical activity)
but is also more effective in facing the strategic dangers posed by climate
change. First, because it creates a geographically distributed backbone of
production activity that deters the depopulation of the countryside, and
then because it is friendlier to the environment. The distributed
architecture creates multiple and geographically dispersed positions of
dependent work and self–employment in comparison with the concentrative one.
Individual producers and communities of producers adopt a more responsible
attitude towards the environment in respect to energy consumption and
saving, when they are self-producers and partner managers of their energy
sources; it is to their own interest to adopt softer technologies
environmentally wise, since they suffer directly by the environmental
impacts of their choices.
P2P production can overcome the problem of the absence of social approval
for energy investments by local societies, a result of the justified
distrust with which the plans of the would-be “green energy squires” are
treated. In distributed production the main bulk of energy flows is achieved
in the interior of local networks by saving the energy that is lost during
transmission and by reducing the needs for investments on upgrading the
networks’ capacity. The interconnection of the electrical network with the
internet permits the formation of smart local networks, where energy demands
can be adapted to production, minimizing thus the needs for storing that
ultimately reduce energy performance.
The defenders of the current architecture invoke techno-economic arguments
such as the high (today) financial performance of concentrative system of
electricity production. In these estimates the real cost is obscured, while
the negative impacts on society, on the environment, and on future
generations are not counted in and remain “external” to the capital
performance. We, therefore, have to invent new indexes that will incorporate
the real costs for the society and the environment. For the next years the
production of energy will remain an important field of economic activity in
the context of the market, so that cost issues will continue to have an
incumbent influence on the transition strategies. In the medium term, the
two architectures will develop coinstantaneously, repudiating and, at the
same time, complementing each other.
The conditions of transition
Although the genesis of relations of P2P production in the spheres of free
software and cultural production was a bottom up process and was established
through legal forms embracing universal property as the Creative Commons,
for example), this was made possible because the fundamental prerequisite of
the existence of distributed stable capital was already accomplished, via
the use of distributed computational power and of a medium (internet)
through which, at a low cost, producers could self-organize. On the
contrary, the current cost of technological equipment, technical skills, and
the existence, in most cases, of small private properties, make P2P energy
production today mainly a business for the middle class. In addition, the
current architecture of the electricity network deters a similar “from the
bottom up” emergence of P2P energy production. Although the slow, from the
bottom up development, cannot be ruled out, it is most likely that it will
be a parallel “bottom-up” and “top-down” process.
The principal technologies that will prevail in the transitional era
(without exhausting the whole picture) are photovoltaic energy production,
wind power, and combined heat and power (CHP). The first two use renewable
sources, whereas the latter requires raw material that can be differentiated
(oil, natural gas, biomass, etc.). The performance of these technologies is
greatly dependent on geo-spacial conditions. Since, the access to renewable
sources as well as the spatial distribution of human activity is subject to
geographical differentiations, we will have to keep an open mind to any
technology or mixtures of technologies that can efficiently utilise local
wealth and local social conditions. For example, the cogeneration is more
suited to dense urban areas where the installation of wind turbines is
practically impossible and the use of photovoltaics impinges on the
complexity of administrative barriers, especially when it involves the
presence of multiple small properties.
The use of photovoltaics is favoured by appropriate architectural design of
isolated houses in areas of long sunshine duration, whereas the wind
potential is richer in island areas of the country. It may sound trivial,
but it actually isn’t: policies have to allow for the biggest possible
freedom of choice to the producers as to what modes of production will be
used and what types of institutional form the cooperation will take, whereas
central planning might be proven catastrophic. In reality, central planning
will have to be limited to the formation of a loose regulatory framework of
participation that will mainly aim at safeguarding ecological
sustainability. The production potential of individuals and local societies
will have to be set free in order to organize -using the inventiveness that
characterizes collective participation- local networks of energy production
and distribution.
Policy measures like subsidizing the Kwh generation/consumption are simple
to implement and might be quite effective in a transition period, helping
the quick return on investments; enhancing thus the necessary distribution
of stable capital. We ought to be cautious, however, because these types of
policies can disproportionally burden the economically weaker, disrupting in
this way the necessary political and economical alliances that constitute
the middle class. In the cases of medium sized installations that primarily
serve the needs of a geographic community, various patterns of cooperation
amongst producers can be developed. The creation of stock companies with
transferable shares should not be subsidized and the property rights, which
will be strictly confined to the inhabitants of the local society, must be
universal and non transferable.
The ownership, the management, in a few words the architecture of the
relations that the distribution network defines, form the meeting and
conflict point of different social interests. It becomes, thus, the central
focal point of policy making. Its public (and not necessarily state)
character will have to be secured, its absolute independence from
governmental and large corporations, as well as the priority of its use by
small producers against big ones. Local societies must have the right to
install and manage their own networks. The technological equipment of the
devices interconnecting producers-consumers should have an open design and
operate via open protocol standards communication. This way, the
establishment of strategic monopoly control in the operations of the network
by the state and by large corporations (similar to the current established
standard that controls telecommunication infrastructures) will be prevented
and innovation will be able to develop. At the same time, an opportunity for
development will be offered to many medium–small businesses of intensive
knowledges having small needs for venture capital. The collective
participation of the users (producers–consumers) through the open
architectures will accelerate the maturation of its services.
Open planning can be supported by the research partnerships of universities,
research institutes and private companies. Their research results, at least
to the extent that tax payers’ money is used, must necessarily and directly
fall under the public sphere in the shape of licenses of non exclusive
property. In this way, research results could be diffused directly and
little businesses that lack the potential to finance research and
development can also utilise them.
The current organization of the network tends towards the establishment of
an obligatory intermediary, who will intermediate in all exchanges. As
favourable as this deal may seam (mainly due to the temporarily high and
guaranteed benefits for Renewable Sources of Energy) the intervention of an
obligatory intermediary in energy flows introduces a hierarchical element
that poses arbitration risks. The sale prices for small producers will
finally have to shaped freely and the consumers themselves should be the
direct buyers in a smart, emancipated and P2P informed energy market. Such a
network must permit the direct interconnection and negotiation of many among
many, a fact that requires a different topology and technology of
interconnection than the one imposed today.
P2P production and the political conflicts in the era of “green development”
Technological choices are not socially neutral. The dominant public
discourse tends to underestimate this aspect and displaces public dialogue
in ostensibly technocratic controversies. Behind energy choices and the
arguments their defenders evoke, we must detect the interweaving net of
corporation interests, social classes, social groups and expressions of
political power. We find ourselves in the middle of a crossroads of
renegotiation of almost all of the up to date “constants” of our social and
political system, under the weight of a systemic crisis and the
unprecedented threat of an ecological disaster. The political powers that
aspire to rule in this historical period must prove that they can face and
manage, in the name of society as a whole, the problem of sustainable
development. In this way, the so-called “green development” will be a common
appeal of the entire political spectrum. Its focal point is the architecture
of the energy–electricity production process. This is where social and class
interests meet and clash and the different strategies unfold.
The first strategy is already being implemented, articulated in a clear
manner in president Obama’s neo-Keynesian plan. Corporations supported by
state expenditure (taxpayers money that is), will assume the task of
restructuring the energy mix towards a more sustainable direction, opening a
new market of enormous size, capable, as they hope, of driving the
capitalist economy to an orbit of development. It is extremely interesting
to observe how the, until recently, free market supporters “make a virtue of
necessity”. The main bulk of liquidity will be absorbed by huge business
interests that will build “green” infrastructures of energy production,
whereas with the introduction of new regulatory frameworks consumers will be
required to renew their domestic equipment with smart and environmentally
friendly appliances. The poorer citizens will subsidize the restructuring
and profitability of business groups, and then they will then obligingly
consume their products. The reasonable extension of the project leads to a
society divided between monopoly producers who will be accumulating economic
and political power and energy serfs–consumers of energy. The USA believes
that its superiority in know-how will ensure the continuation of their
economic leadership. This ambitious plan attempts to salvage the existing
system, conserving, at the same time, the social inequalities it reproduces.
Regardless of its final outcome, one cannot write off the positive effects,
on an international level: the reinforcement of productive capital against
parasitic financial capital, the emergence of sustainable development on the
top of international political priorities and the boost to develop new,
environmentally friendly technologies. A part of these innovations will
enhance the potential for low-scale production, unavoidably promoting the
development of distributed production.
Since the direct production process is the one that defines distribution,
the single most important innate advantage of P2P production is that it
ensures, on a long term and on a stable basis, a fairer and more equal
distribution of wealth. In distributed production the largest part of the
energy produced is intended for individual consumption, limiting the field
of the market to exchanges of energy. A network that allows, without the
mandatory intervention of a third party, the reversal of energy flows
between peers, delimitates even more the sphere of the market and the
official monetary circulation. The quality features of the architecture of
P2P production build a new economy of autonomy and solidarity that is
developed within the capitalist mode of production. P2P energy production
launches a triple redistribution: redistribution from the few and large to
the small and many; from the city to the countryside; and from the older to
the younger generations. The latter not only because younger people as
natural carriers of new technologies will secure more jobs and business
opportunities, but also because it raises their environmental shares.
In an unstable historical period, submerged in economic insecurity, the
middle class senses the opportunity offered by p2p energy production. By
investing in it, the energy safety of households in secured, jobs are
created, a steady income is generated, while it is also beneficial to the
environment. In any case, it is an attractive refuge for the financial
reserve, at least against the alternative of a parasitic financial system,
which is under the threat of collapse. Under conditions of economic crunch,
the tax payers face with hostility the idea to subsidize -in the name of the
environment- the creation of private investments the products of which they
will have the obligation to buy afterwards. More so, when they can become
producers of this commodity. This condition brings political claims for
distributed access to stable capital (means of energy production) much
closer than we imagine today.
These tendencies are, for the moment, organized in a fragmentary manner
through civil society organizations, and civic movements that are often
manifested by their resistance to the political and financial choices of
organized corporate interests and of a state that operates under their
influence. The inevitable progressive awareness will sharpen the political
struggles giving them an increasingly positive object of contention. The
success of a fast p2p transformation in energy production would require a
“partner state”, as Michel Bauwens calls it, i.e. a transformed state that
will move from being a patron of corporate interests to being a supporter
and organizer of the networks’ productive activities.
The Greek choice
In the core of tacit transformations and political imbalance, that
characterizes the contemporary historical period, lies the sharpening of the
basic contrast of the capitalist structure between the social character of
production and the individual ownership of the product of labour. The
emergence of p2p production sharpens this contrast because it points out a
positive, feasible direction of struggle that subjugates both of the
traditional poles of industrial society, the Left and the Right. As long as
this process remains in the sphere of the political unconscious, the powers
of progress will be distributed in the whole of the political spectrum – not
in a uniform manner. That is the main reason why political parties are torn
by internal conflicts and maintain a fluid ideological identity, creating
the impression of being a part of an era of ideological confusion.
Accordingly, their policy on energy production is characterized by
contradictions. For example, the Right-wing implementation of the bill on
photovoltaics that foresaw the possibility of subsidies for medium and large
scale investments with a secure –-guaranteed by the state— electricity
market for decades, led to the known fiasco that trapped investors in the
gears of the party’s corrupt administration. On the other hand, expressing
the contradictions of polylectic representation, just before its political
demise the Right launched favourable regulations for small scale production.
The new government invoked during the election campaign the notion of “green
development”, without clarifying its concrete socio-economic content. Its
practical choices will inevitably clarify soon the real character of this
proclamation. If they adopt, as a strategic choice, the reinforcement of p2p
production and the abatement of large entrenched interests mainly in
investments of domestic production of the necessary technological equipment,
it will have made an important step that will, in the medium term, bear
richer and fairly distributed financial fruit. If it delivers public land
and money of the state to big business groups that are preparing for the
gold- bearing business of electricity production, its policy will face the
risk of being crushed by the emergence of a double movement of the sinking
middle class, that will, on one hand, resist these investment plans, and on
the other, organise towards a positive political direction.
Whatever policy or policy mix is chosen today, p2p production is the
inevitable future of energy production and the sooner societies adopt it the
more empowered and prosperous they will be.”

-- 
Work: http://en.wikipedia.org/wiki/Dhurakij_Pundit_University - Think thank:
http://www.asianforesightinstitute.org/index.php/eng/The-AFI

P2P Foundation: http://p2pfoundation.net  - http://blog.p2pfoundation.net

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