Designing Collaborative Energy Communities

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1		Martina Massari	+ 3105 word(s)	3105	2021-12-10 08:57:48	\|
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This entry is adapted from the peer-reviewed paper 10.3390/en14248226

Renewable energy has a crucial role in facing climate change. One promising strategy is the creation of energy communities that require active involvement from a bottom-up perspective. Their implementation is difficult, as they currently rely on local policies, community readiness, and technological availability.

energy Communities European

1. Introduction

Energy communities are increasingly being recognized by European institutions—kicked off by the well-known Clean Energy Package—as strategic assets contributing to reaching the decarbonisation goals set by the EU Green Deal, as well as fundamental examples of local awareness around energy. Indeed, the emergence of forms of activism in this domain is called to meet the 2050 goals of resource consumption and efficiency ^[1]^[2]^[3].

Despite suggesting the implementation of actions at the European level, the Clean Energy Package leaves the responsibility of defining operating instruments and paths to the national governments ^[4]. These governments are embedding their strategies in their own policies in asymmetric ways. For instance, the current Italian legislation sees a limited possibility to create energy communities, introducing them in the Decreto-legge 30 December 2019 n. 162, named Milleproroghe, where article 42bis sets forth the possibility to create collective energy self-consumption with a precise definition of conditions (i.e., total power under 200 kW, involvement of only low and medium tension). However, the restriction of this legislation is expected to be extended in the future, giving access to the broader public to join ^[5]^[6].

Despite the steps undertaken in normative terms, the concept of an energy community, and, in particular, its implementation, is still not fully clear ^[1]^[2]^[3]^[7]^[8]. Recently, it has been divided into two main categories by the European Commission—as detailed in the next paragraph—but some taxonomy research is still ongoing ^[2]. Furthermore, among various aspects, the perimeter of action within the living context is not explicit. One issue lies in the difficult relationship between communities, energy providers, and institutions that prevents the participation of specific demographic categories (e.g., entrepreneurs, companies’ staff), often generating conflicts and injustices. A second issue lies in the same definition of “energy community” from a taxonomical perspective. According with Moroni and colleagues ^[2], the concept should better consider the modalities in which people decide to be part of a “chosen community” built around a common goal or value. This social dimension of the energy community becomes relevant in order to understand the best strategies and steps to build and maintain these practices in time. The practical steps and their definition are the third issues in the implementation of energy communities. A shift lies among: (1) the willingness of people to group around the energy topic; (2) the path that needs to be taken for the creation of the community; and (3) the external factors that frame the broader context, such as existing policies, the availability of technology, access to funding, and even basic knowledge on energy-related issues ^[9]^[10]^[11]^[12]^[13].

These open questions have been taken into consideration in two first experiments taking place in Bologna, Italy: the GECO project (Green Energy Communities, EIT Climate KIC TC_2.2.15_190736_P125-1) and the GRETA project (GReen Energy Transition Actions, H2020 GA101022317). These projects will be examined as examples of the attempt to overcome limits and create opportunities emerging from the establishment of a district-scale energy community in a specific neighbourhood. The experimental strategies and steps exist at several levels: social, technological, and operational.

The modalities within which people decide to be part of a community have been investigated in several previous research contributions—also from an energy justice perspective ^[14]^[15]^[16]^[17]—but little research is present providing a deep overview of currently available and most commonly used key steps and actions for the growth and maintenance of an energy community from the long-term perspective. This point is covered by this paper, as explained in the next paragraph.

2. Overview of Energy Communities: Definitions and Key Aspects

Energy communities can generally be defined as an organized group of users (private, public, or mixed) actively cooperating in developing innovative forms of energy sharing ^[4]. They can be intended as examples of citizens’ participation that directly empower people in acting on climate change issues, especially on the energy topic. They are based on the expectation that, by 2050, almost half of EU households should produce renewable energy ^[4].

Energy communities have been officially introduced into the European legislation through the Clean Energy for all Europeans package ^[18]^[19], with the aim to give more options to people for producing and sharing renewables locally or not. The idea lies in the potential to shift from a mainly centralized system to a decentralized one, where people can have the opportunity to make their own decisions on which type of energy they want to use with whom to share it. Two types of energy communities are included within the EU legislation: “citizen energy community” (CEC) and “renewable energy community” (REC). These two definitions are included in the revised Internal Electricity Market Directive (EU) 2019/944 (https://eur-lex.europa.eu/legal-content/IT/TXT/PDF/?uri=CELEX:32019L0944&from=EN, accessed on 3 December 2021) (CEC) and in the revised Renewable Energy Directive (EU) 2018/2001 (https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32018L2001, accessed on 3 December 2021) (REC), as follows: CECs focus on returning the benefits to the groups of people involved in the energy project or to the local areas, thus linking a social dimension to energy, while RECs are bounded to a geographical dimension, hence strongly connecting the community with a proximity relation to the energy source. At the same time, these communities can place themselves at different stages of the energy chain; for example, communities can just focus on the generation of energy, or can expand their focus towards distribution, storage, and electric mobility.

Both definitions show elements in common:

1. They are based on creating a group of people that agree on clear and shared goals. In both cases, these groups can be composed of citizens, but also by local authorities, SMEs, and municipalities;

2. They are based on the voluntary and open participation of people in agreement.

However, there are some differences between CECs and RECs:

3. CECs focus on the return of benefits to the groups of people involved in the energy project or to the local areas, thus including a social dimension;
4. RECs are bounded to a geographical dimension, connecting the community at a proximity level.

As shown by Roberts and colleagues ^[18], both definitions entail the creation of new types of entities that are not oriented to a commercial purpose, but rather to redistribute benefits among participants and that are framed by specific types of governance, structures, and purposes that support people to concretely take actions regarding the energy sector. As described by Caramizaru and Uihlein ^[20], there are several governance and partnership structures that are possible in order to create these types of sharing communities, such as cooperatives, foundations, limited partnership, housing associations, non-profit customer-owned enterprises, public–private partnerships, or public utility companies. At the same time, these types of communities can place themselves at different stages of the energy chain. For example, from just focusing on energy generation, or expanding that focus toward energy distribution and storage, as well as electric mobility. According to Moroni and colleagues ^[2], energy communities are mainly groups of individuals, joined by particular interests and/or ideals who “voluntarily accept certain rules for the purposes of shared common objectives, in particular, energy related ones”.

In conclusion, several factors are relevant to the establishment of this paradigm, including:

5. the structure of the energy system and the distributed generation from renewable sources ^[21] (for example, Italy has a well-spread structure of small–medium sized plants throughout its territory);
6. the political dimension, which includes the overall regulatory framework that enables or hampers the free association of people;
7. the market and the supply of technologies and solutions. ICTs are often leveraged to involve people in setting up an energy community, enabling smart solutions and capitalizing on investments made in renewables;
8. sustainability and economic factors, including the conditions of convenience for the energy system, utilities, and end-users;
9. the social structure of the same community and people’s knowledge that frames the modalities within which energy communities form and grow.
3. Energy Communities for the Green Deal: An Overview from European Policies and Tools of the Italian Legislation Framework 3.1. European Policies Europe has long been at the forefront of research and development of solutions to accelerate and facilitate the energy transition, particularly through the collective engagement of its citizens. Although present in discourse and political claims for decades (see for example the role of consumers in Article 2 (1) of the Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011), energy communities have been formally appearing in European legislation and policy documents since 2019. The Clean energy for all Europeans package marks the milestone for the pervasive deployment of energy communities, no longer as national best practices, but as legal resources for a long-term European strategy. The Package was followed by eight Directives that regulated energy issues, including: energy performance in buildings, efficiency, renewables, and the electricity market. The EU Directives, established by the CEP, seek to put in place appropriate legal frameworks to enable the transition and empower citizens in the energy sector, defining rules for the determination of enabling mechanisms for the participation of citizens in the energy market, how they would share it (collectively and individually), as well as the storage facilities and means. These aspects have been drawn by the Directive on common rules for the internal electricity market (DIRECTIVE (EU) 2018/2001 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 11 December 2018 on the promotion of the use of energy from renewable sources (recast) https://eur-lex.europa.eu/legal-content/IT/TXT/PDF/?uri=CELEX:32018L2001&from=EN, accessed on 3 December 2021), where citizens willing to participate in such communities are granted rights and obligations, fair, equal treatment, and protection under the Union law (Art 16 of the Directive) as distribution system operators. It introduces the concept of renewable energy communities and fosters member states to ensure that renewable energy communities can participate equally in available support programs with other participants. In addition, RECs “have led to significant added value in terms of local acceptance of renewable energy and access to additional private capital resulting in local investment, greater consumer choice, and increased citizen participation in the energy transition” ^[22]. The directive frames these communities as legal entities controlled by local actors in proximity of the energy production facilities ^[7]^[22], tailored to the directives of the national laws. In parallel, the revised Internal Electricity Market Directive (EU) 2019/944 defined the citizens’ energy community as “a legal entity based on voluntary and open participation” ^[23]^[24], also including several actors such as local authorities, municipalities, and small businesses; the main purpose is to provide its members or partners or the territory in which it operates with “environmental, economic or social benefits at the community level, rather than generating financial profits” ^[25]. This also includes the participation of the community in the generation and distribution (in some cases also storage) of renewable energy for the benefit of their members. The two European Directives therefore draw these communities that, in the first case, provide for the sole production of renewable energy and only within the proximity of the legal entity established, with the possibility of participation for SMEs. The others also accept other sources, not necessarily in proximity, and only allow the participation of small companies. These boundaries, drivers, barriers, and principles of energy communities ^[7]^[26] have eventually been strengthened by the Fit for 55 package (Renewable Energy Directive) of July 2021 to comply with the Green Deal objective of Europe climate neutrality by 2050, which foresees a greenhouse emissions reduction of 55% by 2030 and corrects the percentage of necessary renewables produced by 2030 from 30% to 40%. To achieve this collective goal, energy communities need to be fostered as complementary forces able to contribute to a large share of the renewables production. Since the package, in its solidarity policies and carbon pricing revenue distributions, affirms that “100% of revenues from carbon pricing needs to flow back to EU citizens”, energy communities can consider if and how a revenue distribution plan could be useful to overcome economic barriers to their emergence and strengthening ^[25]^[27]. The development of solidarity schemes would help to overcome inequality issues in citizen engagement policies among European countries. 3.2. Italian Policies As already mentioned in the Introduction, in Italy the Decreto-legge 30 December 2019 n. 162, (Milleproroghe), converted in Law n.8 in February 28 2020, contains art.42-bis “Self-consumption from Renewables” which, anticipating the text of transposition of the Renewable Energy Directive 2001/2018, grants the possibility to realize collective self-consumption and renewable energy communities, taking up the parameters defined respectively by art. 21 and art. 22 of the Directive itself, but with few additional restrictions. In Italy, the decree concretizes some of the indications of the European “Renewable Energy Directive” (RED II) and establishes the possibility of creating communities that exchange energy for the purpose of collective self-consumption. In Italy, the topic of collectively produced energy began to be introduced by the National Energy Strategy (SEN) (https://temi.camera.it/leg18/post/la-strategia-energetica-nazionale-sen.html, accessed on 3 December 2021) in 2017, a general policy and planning tool for national energy policy. The SEN 2017 has planned the following general goals: Enhance the competitiveness of the Country in order to reduce the gap between the energy price and costs compared to the EU while ensuring that the longer-term transition (2030–2050) does not compromise the Italian and EU industrial system in favour of extra-EU systems; Achieve, in a sustainable way, the environmental and decarbonisation goals (2030) determined at the EU level with a specific regard to the objectives defined by COP21 and in synergy with the National Strategy for Sustainable Development. On a national level, the scenario promises to phase out coal-fuelled thermoelectric plants by 2030; Continue to strengthen the supply security and system and infrastructural flexibility. The SEN formed the programmatic and policy basis for the subsequent adoption of the Integrated National Energy and Climate Plan (PNIEC), which took place in January 2020. The plan is composed by 5 lines of action, intended as integrated and interlinked axis of actions: decarbonisation, efficiency, energy security development of the internal energy market, research, innovation, and competitiveness. The plan sets the objective of a 30% increase in the use of energy from renewables. The plan also implements the European Directives by declaring the will to strengthen the action and the establishment of energy communities, through a prior analysis to identify possible impacts on the system in relation to possible models of implementation of communities and aspects of discipline (e.g., physical and/or virtual configurations, geographical perimeter). The Plan also explores ways in which communities can be an additional tool to support households in energy poverty, particularly where direct interventions (e.g., with self-consumption facilities) are not technically possible. Finally, the plan explores the possibility for these communities, in addition to producing, storing, and consuming energy from renewable sources, to provide additional services such as efficiency services, charging services for electric vehicles, and the provision of other ones. In 2020, the Rilancio Decree Law provided some fiscal measures in the field, which should be oriented to facilitate investment in energy improvement of the building stock. In this framework, tax deductions for expenses incurred (so-called Superbonus 110%) can also benefit energy communities or cooperatives with indivisible ownership for interventions carried out on properties owned by them and assigned for the enjoyment of their members. In this vein, the Italian Recovery Plan (National Recovery and Resilience Plan) (https://www.governo.it/sites/governo.it/files/PNRR.pdf, accessed on 3 December 2021) has allocated 2.2 billion for the 100% financing for photovoltaic systems and configurations of collective self-consumption and energy communities. The recipients, however, will be Public Administrations, as well as families, and small enterprises in municipalities with fewer than 5000 inhabitants. The expected costs amount to 2.2 billion of direct investment, distributed as follows: 1600 million to renewable energy communities and 600 million for collective self-consumption. 3.3. Regional Policies Despite the rich framework, and equally solid perspectives, the Italian administrative configuration compels one to observe the issue from the regional dimension. Before the enactment of the Decreto-legge 30 December 2019 n. 162 (Milleproroghe), there were, in fact, cases of local vanguards in the field of energy communities, such as the case of the Piedmont region, which was the first to adopt a law on the subject: Regional Law n.12 of 3 August 2018 “Promotion of the institution of energy communities”. This was followed by the Puglia region with the Regional Law 9 August 2019, n. 45 “Promotion of the institution of energy communities”. In recent years, the Emilia Romagna Region has implemented EU Directives and national laws through its Regional Energy Plan (PER), the updated version of which is currently being discussed and drafted. The plan adopts the European objectives for 2020, 2030, and 2050, in terms of climate and energy as a driver of development for the regional economy, and, in particular, the reduction of climate-altering emissions, the increase in the share of consumption coverage using renewable sources, and the increase of energy efficiency in buildings, public assets, transport, and production activities. In parallel, the Region has published the Patto per il lavoro e per il Clima (Pact for Work and Climate) (https://www.regione.emilia-romagna.it/pattolavoroeclima, accessed on 3 December 2021), a strategic, choral document of declarations of intent for the ecological transition of the region. The Pact has several axes, including the one on ecology, which sets the goal of achieving carbon neutrality before 2050, in line with the European strategy, and the transition to 100% renewable energy by 2035, which the Region also intends to pursue by formalizing the role of energy communities. The pact mentions the need to draft a Regional Law on Energy Communities to increase the production and use of renewable energy and storage, including in a widespread form. Another regional platform is the smart specialization strategy (S3 2021–2027) that was approved by the Legislative Assembly with resolution no. 45 of 30 June 2021. The Strategy will be an integral part of the Por Fesr 2021–2027. Eight areas of strategic specialization have been identified: agri-food, building and construction, mechatronics and motor engineering, health and wellness industries, cultural and creative ones, innovation in services, digital and logistics, energy and sustainable development, and tourism. Among the axis of intervention, the “Theme 10—Cities and communities of the future” of the Strategy, tackles “Affordable and sustainable technologies and solutions for energy efficiency (including Energy Communities, Positive Energy District/Building and hospitals)”. Hence, the regional framework is the main direct level to discipline energy communities and civic activism towards the topics. However, some local and municipal devices, such as the Sustainable Energy and Climate Action Plan (SECAP), are aimed at implementing and tailoring the local implementation of such objectives. In the same vein, European projects have been experimenting extensively with the possibility to create, organize, and maintain local experiences of energy communities. The following section will explore the lessons learned for these projects and the outcomes on the territory.

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1. Introduction

2. Overview of Energy Communities: Definitions and Key Aspects

3. Energy Communities for the Green Deal: An Overview from European Policies and Tools of the Italian Legislation Framework

3.1. European Policies

3.2. Italian Policies

3.3. Regional Policies

References