Context

The legal scene for a paradigm shift in low-carbon community energy prosumerism and energy democracy has been set by the Clean Energy for All Europeans Legislative Package (CEP), which includes the Internal Electricity Market Directive 2019/944 (IEMD) and Renewable Energy Directive 2018/2001 (REDII). IEMD and REDII introduce two new concepts of energy communities referred to as, respectively, citizen energy communities (CECs) and renewable energy communities (RECs). Both types can be established as legal entities, allowing natural persons to team up with each other but also with local authorities and SMEs for a joint investment in energy assets and joint participation in the energy markets. CECs and RECs can assume the form of cooperatives, social enterprises, associations or other types of non-profit legal entities. The difference in both types of energy communities is the underlying legal frameworks, guided by two different policy goals: CECs secure a level-playing field for new market actors in the electricity markets, while RECs are acknowledged as instruments to attain the European renewable energy targets.

Conceptually, RECs and CECs pursue social and territorial inclusiveness, not leaving behind low-income and vulnerable households, regardless of their residential location. The reality in some of the currently observed energy cooperatives across Europe, however, shows that the upfront capital investment remains a significant barrier to membership in and benefits from RECs and CECs, particularly for low-income and vulnerable households and communities. This matter needs attention and timely action in order to prevent unintended consequences of RECs and CECs exacerbating the social and territorial divide amidst growing energy poverty concerns. The role of national and subnational governments in alleviating financial barriers to participation is well acknowledged in the extant literature. However, one of the main expectations towards RECs and CECs is private investment in locally organised prosumerism based on renewable sources. Government-backed revolving financial instruments for upfront capital investment could offer an alternative, but asymmetries in relation to access to finance across European regions need to be considered.

Objectives

The main objective of this European research project is to draw a policy trajectory for the efficient and inclusive uptake of energy communities, taking into account both the facets of different national legislation and the spatially asymmetric developments in key drivers for decentralised energy markets such as telecommunications, energy storage facilities, renewable energy, among others.  In particular, the research is expected to:

1. Identify and map existing energy communities that meet the conditions of CECs/RECs and examine:
   1. their size and degree of social and territorial inclusiveness; 
   2. their legal status;
   3. their pecuniary and social benefits; 
   4. the value of their upfront capital investment and its funding sources, e.g. participating households; public subsidies or revolving financial instruments; (third-party) firm investment (market services); 
   5. policy support environments, national, regional and local  (notably but not limited to investments in renewable energy and their grid constellations; smart grids, telecommunications, advanced metering equipment; energy storage facilities).
2. Estimate the degree of social inclusiveness of energy communities considering a set of relevant parameters and based on a representative sample; 
3. Estimate correlations and causalities between market services that absorb the upfront capital investment and thus facilitate the uptake of  energy communities in European regions and structural conditions and policies observable and relevant in all types of spatial contexts, i.e. renewable energy sources; smart grids, telecommunications; energy storage facilities, etc.;
4. Deriving policy recommendations: 
   1. Advising on alternative formats to facilitate energy communities and resolve issues of social inclusiveness; 
   2. Identifying actions that have a significant effect on the deployment of energy communities while at the same time guarding an inclusive uptake. 
   3. Deriving conclusions on the most favourable spatial setting for both functioning as well as social and environmental benefits of the energy community. 
   4. Examining the role of integrated approaches for territorial development, i.e. ITI and CLLD, on the emergence and inclusiveness of energy communities.

The above research objectives derive from the policy needs and questions described below.

Policy questions

On the existing energy communities with and without market services: 

• How are the energy communities distributed in European cities and regions, and what are their spatial characteristics/contexts (functional areas, predominantly urban, predominantly rural, coastal, etc.)?

• What is their size (energy output, number of members, value of their capital investment, pecuniary and social benefits)?

• What is the degree of their social inclusiveness?

• What are the direct/indirect opportunities and difficulties for energy communities and services to achieve more social inclusiveness? 

• Which policies and public investments are facilitating energy communities, and are there any policy measures (also considering spatial/territorial aspects)  to increase their degree of social inclusiveness, and if so, which measures? 

• Where and what role do market services play in the emergence and social inclusiveness of energy communities?

• Which legislation, policies and public investments (multiscalar approach)  are facilitating the emergence of market services? E.g. public investments and corresponding developments in renewable energy and their grid constellations; smart grids, telecommunications, advanced metering equipment; energy storage facilities.

• Can the non-profit nature of energy communities and the commercial character of market services be reconciled and how? 

On EU/EFTA territories without the practices of energy communities and market services:

What is the potential of EU cities and regions for the emergence of energy communities?

Which policies and structural conditions can stimulate the uptake of energy communities?

What is the role of market services for the uptake of energy communities? Can energy communities and market services form a citizen-market tandem for an efficient and inclusive uptake of energy communities and how?

Is there a potential for a cross-border development of energy communities? 

On the tole of integrated approaches in territorial development on energy communities and energy independence:

The development of energy communities gains in importance in light of the current energy crisis in the EU, which is closely connected to a significant increase in energy prices. Energy communities might be part of the solution in the quest to become independent from fossil fuels from Russia and to fulfil goals formulated by the European Green Deal. In this context, integrated approaches (ITI, CLLD) might be a platform to further increase awareness of energy communities and their benefits and might serve as a tool to disseminate good practices among regional actors. The research thus should answer:

What is the potential of integrated approaches in territorial development to facilitate the emergence of inclusive energy communities in different territorial contexts?

More information:

Contractor: ECORYS Europe EEIG-GEIE (lead tenderer)

Fundacion Tecnalia Research & Innovation (subcontractor)

REScoop.eu (subcontractor)

Energy Cities (subcontractor)

Contact: 

Vassilen Iotzov Research and Policy Manager [email protected] 

• Angela Emidio (Public Procurement Manager) [email protected]