The EU's Clean Energy Package (CEP), finalised in 2019, gave new momentum to the “energy communities” movement as part of an overall strategy for moving to a sustainable, carbon-neutral energy system. Energy communities are organizations, not owned by traditional utilities, that provide energy with the primary purpose of generating environmental, economic or social community benefits for members or the local area. As explained by Barnes and Palm, the EU’s Renewable Energy Directive and the Directive on common rules for the Internal Electricity Market enshrine the rights of individuals and communities to generate, store, and sell energy, and enjoin member states to remove undue barriers to the establishment and success of energy communities. The directives define principles applicable to Renewable Energy Communities, which are local organizations dedicated to the promotion of renewable energy in any form, and to Citizen Energy Communities, which are non-commercial organizations that can engage across the electricity market. Thus, energy communities are given scope to contribute to the energy transition and also envisaged as vehicles for citizen engagement and empowerment. While some energy communities are long-standing, the trend towards de-carbonization, decentralization and digitalization have given them new prominence and, perhaps, new opportunities. However, national experience and attitudes matter. In the UK, favorable feed-in tariffs introduced in 2010 led to the mushrooming of collective electricity generation projects, building on a tradition of bottom-up activism. Groups of citizens were willing to come together in relatively autonomous organizations outside the structures of government or conventional businesses/companies and successfully established (renewable) energy communities. Yet the sector is now in transition, occasioned by the phase-out of favourable feed-in tariffs and increasing regulatory burden, which both push towards greater size and professionalization, even as technology now supports more dispersed systems. Sweden’s path was and is rather different: there, local governments own electricity distribution systems and, in urban areas, centralized heat providers. Moreover, the electricity supply is already almost carbon neutral. Hence, grassroots engagement is not much directed at electricity generation and heating energy so much as at de-carbonizing other parts of the economy.
This diversity is likely to continue into the future. There is considerable uncertainty over how energy systems may evolve. New business models will be needed, and they will probably involve various forms of partnerships among incumbents, new entrants, and communities. More professionalized and commercially-orientated approaches may lead to rapid and large-scale implementation, but a more community-based approach may in the end be more economically and politically resilient. In this context, the transposition of the EU directives into different national legislation needs to be consistent with the embedded principles and strategy, but close harmonization is not essential. Additional experiments are needed, recognizing that what will work in one context may not in another, in part because of differences in conceptions about the role of citizens as more or less active consumers and even producers.
Petrick’s discussion based on experience with “prosumer” (producer-consumer) initiatives was highly complementary. Prosumers, perhaps organized into energy communities, can be envisaged as being at the centre of the future European Energy Union. Petrick argued that, to recognize their importance and increase their reach, policy makers should define ambitious targets for prosumer technologies, and specifically for rooftop solar photovoltaics. Viability will require long-term and balanced contracts between prosumers and counterparts, for example, in terms of fair surplus power tariffs, simplified energy sharing, or power purchase agreements. Viability will also require that administrative and contractual complications be proportionate.
A common theme at the seminar was that distributed energy leads to distributed responsibilities. On the one hand, governments and regulators at all levels, from the EU to municipal authorities, have an interest in engaging more with energy communities as part of the effort to achieve sustainability and carbon-neutrality. Local consultation is valuable not only as a way of improving policy frameworks and designing an efficient, robust energy system, but also in broadening acceptance of the considerable adjustment that will be needed as part of the energy transition.
On the other, citizens will have to accept duties as well as rights. Widespread energy “literacy” will be needed if people are to be more then passive consumers. One component of a next-generation electricity system will be real-time management of demand and storage capacity, rather than relying primarily on adjustment in supply, as is now the case. This involvement will require the consent of the affected consumers-citizens, and the active participation of at least a few. In this way and other, Nicolaidis concluded, the debate over the role and functioning of local energy communities brings together two central challenges facing Europe and the world: how transition to a sustainable economy, and at the same time how to maintain a cohesive, inclusive society.
Daniel C. Hardy (Academic Visitor, St Antony's College, Oxford)
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