Energy
Communities
What is an Energy Community
Energy communities are local exclusive-purpose civil cooperatives through which primarily citizens, and secondarily municipalities or business enterprises, can participate in the energy sector by exploiting clean energy sources. The new institutional framework offers favorable terms for establishing and operating energy communities with the aim of supporting local entrepreneurship, a solidarity economy and the advancement of an energy democracy.
The energy community model has already been well established and is successfully functioning in European countries. The European Union itself supports their operation, as stated in Article 22 of the directive on renewable energy sources.
Specifically, there were 869 energy communities in Germany at the start of 2019, with 183,000 members, investments in RES amounting to €1.7 billion and holding approximately 31.5% of the overall installed RES power. Aside from generating, allocating and providing energy, they were also expanding into the operation and holding of electrical grids.
In Denmark, wind farms were developed alongside energy cooperatives, proving that social participation can work in tandem and strengthen innovation and a shift to RES.
Belgium’s Ecopower, an energy cooperative active since the 1990s, now has 57,000 members and enjoys a 1.5% market share. Through targeted energy efficiency actions, it has offered its members a savings in electricity of up to 50% over the last 10 years.
Since 2019, special government funding has been set aside in the Netherlands to support energy communities, at a time when that country’s climate policy has set a non-binding target to cover at least 50% of new wind and solar projects through energy communities.
In Spain, the SOM ENERGIA energy community has exceeded 68,000 members and generates 18 GWH of power, which is allocated to its members.
Functions of energy communities
The purposes and activities of energy communities include:
- Operating a solar photovoltaic system on a building or as a park for virtual self-generation by community members.
- Leasing energy conservation systems, such as heat pumps for heating/cooling.
- Operating RES installations with an energy storage system.
- Operating a solar PV park by a local government authority or power supplier for solar social policy.
- Operating a biomass or biogas plant for energy generation by an agricultural community and managing the supply chain.
- Operating a greenhouse with an energy co-generation facility.
The benefits of energy communities
The institutional framework ensures favorable terms for setting up and operating energy communities, such as:
Fast-track permit process for installing RES projects.
Lower letter of guarantee amounts when enrolling in the register of participants (50%).
Special provisions for energy communities that obtain permits for thermal energy plants for teleheating (district heating).
Use of virtual net metering.
Exemption from special 1.7% fee when a local government authority participates.
Incentives for participating in the purchase-supply of electricity.
Exemption from requirement to pay annual fee to retain the permit rights to generate electricity.
Special favorable terms for teleheating or managing electric vehicle charging infrastructure by the energy community.
Special terms are set, such as favorable charges and longer use duration for the use of Aggregator of Last Resort (ALR) services by RES and High-Efficiency Cogeneration Heat and Power plants held by energy communities.