Renewable & Citizen Energy Communities – Benefits and Perspectives
Energy communities are considered as vehicles for citizens to collectively engage in the generation, consumption, storage, trading, and distribution of energy, marking a shift towards a decentralized, sustainable, and inclusive energy framework. EU has been at the forefront of championing the energy community initiative, while citizen engagement in energy communities is an essential tool towards energy transition. Across the European Union (EU), more than 9,000 energy communities are actively addressing energy poverty. “Renewable Energy Communities” (RECs) and “Citizen Energy Communities” (CECs) are concepts already defined in EU legislation, granting these groups a recognized presence in the energy sector focused on local engagement and community benefit over profit. In addition, the 2019 European Green Deal emphasized that citizens are and should remain a driving force of the transition to sustainability. Legislative strides tied to the “Fit for 55” initiative and the “RePowerEU” plan show the EU’s drive to foster community-scale, participatory renewable energy systems.
Energy communities are distinct from traditional market actors. They are characterized by their primary goals to deliver community benefits in social, economic, or environmental forms, not just financial gains. The value of energy communities extends beyond energy production, as they can boost local economies, foster social bonds, and contribute profits or energy savings to help vulnerable community members. There are several reasons and ways through which citizen engagement is vital for the success and expansion of energy communities:
- Grassroots Initiatives: Citizen engagement is often the driving force behind the creation of local energy communities. By collectively investing in renewable energy projects such as solar panels, wind turbines, or community batteries, citizens can contribute to local sustainability initiatives, reduce dependencies on fossil fuels, and foster local economic growth.
- Democratic Participation: Energy communities provide a platform for democratic participation where members can have a say in decision-making processes. This can help align the energy projects with community values and needs, ensuring that everyone benefits fairly from the investment and the energy produced.
- Education and Awareness: When citizens are involved in energy communities, there is a greater opportunity for education about energy efficiency, renewable energy technologies, and the importance of reducing carbon footprints. This knowledge can spread within the community, leading to more sustainable practices at the individual level.
- Energy Independence: Engagement in energy communities can contribute to the self-sufficiency of a region by reducing its dependence on external energy suppliers. This is particularly relevant in remote or underserved areas where the main grid may not be reliable or accessible.
- Economic Benefits: Energy communities can generate local jobs and keep energy spending within the community. Also, under certain incentive schemes, citizens can receive financial benefits from the energy they produce, such as reductions in their energy bills or even earning income through selling back excess energy to the grid.
- Policy Influence: By actively participating in energy communities, citizens can have a stronger voice in policy dialogue. They can advocate for regulatory changes that support community energy initiatives, such as simplified legal frameworks, financial incentives, and supportive grid access policies.
- Social Cohesion: Working together on a common goal, like that of an energy community, can strengthen bonds within the local area. It can bring people together, fostering a sense of community and shared purpose.
- Technological Innovation: Citizen engagement can lead to innovation as individuals and communities seek out or develop new solutions tailored to their specific energy needs. The collaboration between citizens and technology providers can spur advancements in smart grids, energy storage, and energy management systems.
Simultaneously, it is crucial for energy communities to:
- Clearly communicate the benefits and responsibilities of involvement.
- Ensure transparency in how the energy community is planned, operated, and governed.
- Provide education and training to members about how they can contribute to and benefit from the community.
- Use digital tools for smart energy management that can provide real-time data on energy production and consumption, making it easier for citizens to engage with and understand their energy use.
- Strategic partnerships with local authorities, businesses, and NGOs can further enhance the impact and reach of energy communities. By working together, citizens can play a pivotal role in transitioning towards a more sustainable and resilient energy system.
The purpose of RECs and CECs is to create a legal status for a new type of energy market actors that operate more locally and beyond profit-making. Both types of communities represent a way to organize the production, consumption, storage, sharing and selling of energy in a decentralized way. However, contrary to traditional energy actors, energy communities are subject to some restrictions regarding who can participate and make decisions. Overall, energy communities offer numerous benefits to their local communities, including enhanced social cohesion, technical innovation, progress in the energy transition, relief from local grid congestion, and reduced energy costs. However, they also face obstacles to their establishment, including the need for high upfront investments and sound technical and regulatory knowledge. (1)
Energy Communities & The Aarhus Convention
Public participation as a right-based approach has been established by the principles and procedural rules of the 1998 Aarhus Convention and, since then, it has been increasingly recognized a matter of justice, democracy and practical necessity towards energy transition and sustainability. In regard to energy communities, it represents an increasing trend where individuals and groups actively engage in the energy landscape at a local or community level. It can take several forms – from being involved in decision-making processes about local energy projects to physically investing in, owning, and operating renewable energy installations. Here are some key aspects of how energy communities can be shaped via public participation:
- Collective Action: Public participation creates an opportunity for collective action in developing and managing renewable energy projects. It can lead to the creation and success of energy cooperatives where community members share ownership and the benefits of local energy resources.
- Empowerment: Through participating in energy communities, the public gains greater control over their energy supply, prices, and the sustainability of their energy systems. This empowerment can lead to more resilient communities that can better manage energy supply issues or cost fluctuations.
- Stakeholder Engagement: By involving various stakeholders – including homeowners, businesses, local governments, and NGOs – energy communities can ensure that the projects meet the broader needs of the community and share benefits more equally among participants.
- Policy Development: Active public participation can influence local and national policies related to renewable energy. By voicing their collective interests, communities can advocate for supportive policies that facilitate the growth of local renewable projects and fair access to the energy market.
- Education and Capacity Building: Public participation usually goes hand in hand with initiatives aimed at educating the community about the benefits of renewable energy and how to implement it. This not only builds capacity within the community to undertake more projects but also spreads awareness, leading to broader societal shifts towards sustainability.
- Resource Mobilization: Active community participation can also be effective in mobilizing resources – both financial and human – for initiating and sustaining energy projects. This can involve crowd-funding campaigns, grants, volunteer work, and collaborative partnerships with other organizations.
- Social Innovation: Energy communities often serve as hubs for social innovation, integrating new technologies, business models, and social practices related to energy production, distribution, and consumption.
- Local Economic Development: Energy projects that are facilitated by public participation can stimulate local economic development by creating jobs, fostering local business opportunities, and keeping energy expenditures within the community.
- Technology Adoption: Communities that are actively involved in the energy sector may be more willing to adopt new technologies, such as smart grids, demand response tools, and electric vehicles, thus, leading the market towards new, clean technologies.
- Transparency and Trust: Public participation helps to build transparency and trust within a community. When community members are actively involved in the planning and decision-making process, there is often higher trust in the outcomes, leading to more sustainable and accepted projects.
In order for public participation to be effective, certain conditions need to be met: facilitation of open dialogue, access to necessary information for making informed decisions, fair representation of various sectors of the community, and mechanisms to address conflicts. Furthermore, the support of local governments and policy-makers can greatly enhance the effectiveness of public participation in energy communities, while digital tools play an important role in facilitating public participation by simplifying the sharing of information, enabling remote collaboration and providing platforms for crowd-funding, and monitoring and optimizing energy use.
Energy communities are linked to the Aarhus Convention through its three main pillars, which are designed to enhance citizen’s rights in environmental matters, and can be identified as follows:
- Access to Information: Aarhus Convention gives the public the right to obtain environmental information from public authorities. This includes information about energy production, consumption, and its environmental impact. Energy communities need to ensure transparency and provide their members as well as general public with necessary information concerning energy projects and their environmental implications.
- Public Participation in Decision-making: Aarhus Convention requires that public is allowed to participate in decision-making in environmental matters, which includes decisions about energy projects. Energy communities structurally involve their members and sometimes the broader public in decision-making processes regarding the planning, implementation, and operation of community-based energy initiatives, aligning with this principle.
- Access to Justice: Aarhus Convention allows the public to challenge public decisions that have been made without respecting the two aforementioned rights or environmental law in general. Members of energy communities, like any member of the public, have the right to seek legal redress if they believe their rights have been violated in the context of an energy project.
Therefore, the Aarhus Convention system enhances the operation of energy communities by ensuring that environmental information is made available, facilitating participation in decision-making processes, and providing access to justice in environmental matters, all of which contribute to the development and governance of sustainable energy projects. By adhering to the principles of the Aarhus Convention, energy communities can help to ensure that their activities are transparent, inclusive, accountable, and that they maintain environmental integrity.
Energy Communities in the Mediterranean Basin
In the Mediterranean region, energy communities are becoming increasingly significant due to the area’s huge potential for renewable energy. For EU member states in the Mediterranean, EU directives provide the framework for establishing energy communities. These directives need to be fully transposed into national legislation, which can lead to the creation of favorable conditions for the development of renewable energy projects at a community level. Non-EU Mediterranean countries may have their own regulations and policies inspired by the EU framework or other international best practices.
EU has recognized the importance of energy communities through Directives and legislative initiatives within the Clean Energy for All Europeans package. This legislative framework aims to facilitate the energy transition and implement the EU’s Paris Agreement commitments. Two key pieces of legislation in relation to energy communities include:
- Renewable Energy Directive (RED III): The 2023/2413 Renewable Energy Directive (RED III) includes revised provisions for the promotion of energy from renewable sources. As defined in the RED II framework (Directive 2018/2001) there are two types of energy communities:
- Renewable Energy Communities (RECs): These entities allow people, local authorities, and businesses to participate directly in producing, consuming, storing, and selling renewable energy. RECs are intended to provide local economic and social benefits to their members or the local areas where they operate.
- Citizen Energy Communities (CECs): The concept of Citizen Energy Communities is introduced to empower citizens, local authorities, and companies to participate in the energy system through community energy initiatives, with an emphasis on social cohesion and local engagement rather than just energy production.
- Electricity Market Directive (EMD): Revised in 2019, as part of the same package, the Electricity Market Directive (EU) 2019/944 includes provisions that reinforce the role of consumers within the energy market, including CECs. It provides rules for non-discriminatory treatment of CECs in the electricity market, ensures the right to establish such communities, and outlines the rights and obligations of participating consumers and businesses.
Both directives provide a legal framework to foster the establishment and growth of energy communities in the Mediterranean, ensuring their fair treatment by national regulations and facilitating innovative and flexible energy services that reflect new market roles for consumers. The overall aim is to support the uptake of renewable energy sources, increase energy efficiency, reduce greenhouse gas emissions, and engage citizens actively in the energy transition through innovative and cooperative approaches.
While there are significant challenges ahead, as well as to fulfill their wider social promises, energy communities require enhanced actions at a national, local and regional level, especially given the increasing prevalence of energy poverty across Europe.
At the national level, the integration of energy communities still needs to be refined. The EU has directed member countries to simplify access to finances and information, create tailored support for RECs, identify and eliminate baseless obstacles, and provide support in the form of regulations and building capacity to public bodies to establish or directly join RECs. National frameworks for RECs should be part of the Member states’ National Energy and Climate Plans. Currently, there is significant diversity on how Member states have transposed these critical legal requirements. As a result, Member states currently remain in an “investigative phase” concerning the regulations of energy communities, while the EU is spurring its members to adopt the concept of energy communities.
However, improvements can be made to better assist these communities in attaining their broad objectives of regional unity, energy democracy and decreasing energy poverty. At the same time, it is Member states responsibility to provide legal clarity and a fertile environment for local projects, starting with revising their legislation, streamlining processes, and offering specific funding options. Stronger EU stipulations for reporting, increased funding, mandatory regulations, and technical aid might bolster Member state efforts. Nevertheless, inaction on their part will hinder the progress of the energy community movement within the EU, shutting down opportunities not just for citizens but for local municipalities willing to take part in a more decentralized energy landscape. (2)
- “The EU framework on energy communities: How to ensure energy communities can contribute to a fairer energy system”, Sun4All D5.5 (1/3), October 2023, https://sunforall.eu/fileadmin/user_upload/Resources/D5.5_Policy_brief_EU_level_part_1_Final.pdf
- Sobhan Dorahaki, Masoud Rashidinejad et als, “An integrated model for citizen energy communities and renewable energy communities based on clean energy package: A two-stage risk-based approach”, Energy, Vol. 277, 2023, https://doi.org/10.1016/j.energy.2023.127727 .
About the author
(LL.M. in International Law, U.C.L.), Energy Expert, Research Fellow of MEPIELAN Centre