EU Energy Communities legislation 2.0: an upwards trend

Author: Dirk Vansintjan, President of REScoop.eu, EUSEW digital ambassador, and Stavroula Pappa and Felix Kriedemann, both Policy Advisors at REScoop.eu

REScoop.eu is the European federation of citizen energy cooperatives. REScoop.eu represents over 2250 energy cooperatives and 1.500,000 European citizens. It could be said that the collaborative societal model that this network defends is an embodiment of the potential that Jean Monnet saw in Union. REScoop.eu has been promoting citizen ownership of the green energy transition since 2013.

REScoop.eu played a vital role in the introduction of two definitions for energy communities in the context of the Clean Energy Package. While some Member States are still dragging their feet when it comes to citizen empowerment, the EU has put in place a second generation of legislation recognizing the role energy communities play in different activities.

1st vs 2nd generation of EU legislation for energy communities

The EU’s Clean Energy for All Europeans Package (CEP, 2019) introduced provisions for ‘renewable energy communities’ (RECs), and ‘citizens energy communities’ (CECs), empowering citizens to take ownership of renewables instead of exclusively depending on corporations. While energy communities have come a long way since 2019, several barriers still exist, including issues with accessing the grid, lack of funding opportunities, and complex administrative and regulatory procedures.

Most Member States have yet to develop an enabling framework allowing energy communities to participate in the market without discrimination

As indicated by REScoop.EU’s Transposition Tracker, several Member States have made considerable progress in transposing these provisions into national legislation. However, most Member States have yet to develop an enabling framework allowing energy communities to participate in the market without discrimination compared to other market actors.

Since the CEP, Europe has experienced a global pandemic, the biggest war at our door since WWII, and an energy and related cost-of-living crisis that exposed our dependency on much-too-expensive fossil fuels. Many European policymakers have worked very hard to soften the blow of these crises.

Among these solutions were the REPowerEU the Fit for 55 Packages, and the revision of the Electricity Market Design. Crucially though, these laws reinforced the model of energy communities, further acknowledging that citizens no longer need to depend on corporate power for their renewable electricity, heating, or renovations. We can now collaborate and take part in the local energy transition.

What can energy communities do?

There is a common misconception that energy communities only develop renewable projects at the local level. Positively, the second-generation EU legislation for energy communities clarifies that citizen-led initiatives actively contribute to other activities, including renovations, the alleviation of energy poverty, energy efficiency, offshore wind, and heating and cooling.

Community Heating and Cooling (CH&C) initiatives, where citizens own their local renewable heating infrastructure, are emerging all over Europe. In Belgium, the energy community Beauvent raised €1 million from their members in 30 minutes, and as a result, now supplies citizen-owned renewable heat to the municipality, 500 citizens, 25 Small and Medium Enterprises, and 2 hospitals in Ostend. Similar projects are succeeding in Greece, Italy, Denmark, France and the Netherlands.

Member States may include RECs in cooperation projects on offshore renewable energy

The role of energy communities in the development of larger projects is recognized by the revised Renewable Directive to improve public acceptance of the transition. To this end, Member States may include RECs in cooperation projects on offshore renewable energy.

Belgium stands out as an example. In 2019, the Royal Decree on new offshore zones included citizen participation as one of the tender criteria. By 2022, the government published a law that transposed provisions for RECs at the federal level, solidifying citizen involvement as a key selection criterion for offshore wind projects.

A minimum of 1% of the capital raised for the entire project should be opened to citizens. The tender criteria will allocate 10% of the points to citizen participation, and the RECs are entitled to contract 25% of the energy through a citizen purchase power agreement (PPA). This groundbreaking approach ensures that wind energy profits can directly benefit citizens, communities, and small businesses.

The way forward: practice what you preach

Direct citizen ownership of renewable energy projects is an essential safeguard for ensuring social acceptance and accelerating the transition. The potential of community energy is enormous: by 2050, around 45 % of renewable energy production in the EU could come from citizens.

Moving forward, the Commission needs to ensure full and effective transposition, implementation, and enforcement of EU rules to create robust regulatory and enabling frameworks that remove obstacles for citizens, and level the playing field for energy communities in the energy market. The next step could be the development of an EU-level strategy for how different EU and national actions can support the development of energy communities across the different areas of EU policy.

We must now live by the words of Jean Monnet, and make citizens work together to show them that beyond their differences and geographical boundaries, lies a common interest.