People power? EU gets low marks on ‘energy communities’

Energy cooperatives reinvest the benefits of renewable energy locally whereas a big power utility will repatriate profits to the company headquarters. [100% Campaign / Flickr]

When the European Commission tabled its Winter Package of clean energy laws in November 2016, there was a smell of revolution in the air, with Brussels pitching a future where citizens would be empowered to generate their own electricity, consume it locally and sell it back to the grid.

More than a year later, however, this vision has been dramatically scaled back.

As they gathered in Brussels for a Council meeting on 18 December, the EU’s 28 energy ministers seemed to pay little attention to the Commission’s grand plans.

“Very few countries were vocal in supporting community energy, unfortunately, and most were simply indifferent,” says Sebastian Mang, climate and energy policy adviser with Greenpeace EU.

“Greece was probably the only country which raised the issue,” Mang told EURACTIV.com. And when they weren’t indifferent, EU countries were either opposed to the idea of electricity self-generation – like Spain – or busy trying to limit its scope, like Germany.

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Two pioneering solar PV projects in Greece that enable renewable electricity benefits to be shared across local communities are coming under threat from draft EU rules on renewable energy “self-generation”, Greenpeace has warned.

Greenpeace is not alone in raising the issue. SolarPower Europe, a trade association which spearheads the recently-launched “Small Is Beautiful” campaign, was also disappointed.

The group of 13 trade associations – representing industries ranging from wind power to biomass, ocean energy, heat pumps and cogeneration – had called for small-scale installations to be exempted from grid balancing responsibilities. They also asked for “priority dispatch” to feed excess electricity to the grid, in line with the Commission’s original proposal.

But the Council watered down those provisions, making such exemptions a unilateral decision by the member states, said Aurélie Beauvais, policy director at SolarPower Europe.

If the Council’s stance is maintained in upcoming talks with the European Parliament, it will “expose small consumers and SME’s willing to produce their own energy to huge uncertainties, as well as disproportionate administrative and financial burdens”, Beauvais warned.

“We urge European institutions to strengthen provisions protecting small-scale renewables and high-efficiency cogeneration installations,” she said in a statement released after the meeting.

EU blessing for Spanish “sun tax”

While support from the European Parliament appears likely, SolarPower Europe and its allies in the “Small Is Beautiful” campaign will have a harder time convincing sceptical EU countries.

“The most critical ones were Spain and Germany,” said Sebastian Mang of Greenpeace, explaining that one of the key decisions made at the December Council was to allow the continuation of the so-called Spanish “sun tax”, a fee consumers have to pay for placing solar panels on their roof.

The charge is due whether or not consumers sell the electricity back to the grid, Mang remarked, insisting on the contrary that consumers “shouldn’t have to pay a penny” for the electricity they generate and consume locally.

“That would be like paying a charge if you grow tomatoes on your windowsill and then eat them yourself,” he claimed. As a further deterrent, Spanish consumers who don’t register their solar panels face a hefty fine – up to 60 million euros –, or twice the maximum amount for illegally dumping nuclear waste, Mang points out.

For Greenpeace, the end result is an absurdity: “In one of the sunniest countries of Europe, it is currently not economical to invest in solar.”

On the German side, the line of argument is more subtle. Berlin has been pushing to make sure small-scale renewable electricity can only be consumed where it is generated. Households that place solar panels on their rooftops currently do not pay charges related to the ‘Energiewende’ and grid maintenance, an EU source explained, saying this is why the energy producer and consumer “must be the same” in Germany.

Greenpeace doesn’t reject this argument, but warns it may be used as a smokescreen to protect the interests of national energy champions, some of which are still majority state-owned.

“For the electricity you’re feeding into the grid, you should pay your fair share,” Mang agrees. “But the fee should reflect the costs and benefits that decentralised power generation bring to the system”. And according to Mang, “These costs are often exaggerated by incumbent energy providers, the big utilities.”

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Power utilities claim their share of the renewables cake

Mang’s suspicions are shared by Dirk Vansintjan, the president of REScoop.eu, a federation of 1,500 citizen-owned energy cooperatives scattered across Europe. Asked whether the December Energy Council had helped further the cause of energy communities, he did not hesitate: “According to us it’s a step back”.

“What came out of it is not exactly what the Commission had imagined or dreamed of. The Energy council was very conservative,” Vansintjan told EURACTIV with disappointment.

Part of it is probably a perception issue. “When we were at the One Planet summit in Paris, someone from the French government accused us of seeking to dismantle distribution networks into small entities,” Vansintjan recalls.

But listening to Vansintjan, the story is probably more a familiar tale of corporate interests seizing control of the European policy agenda. “Big utilities are saying it’s their turn to take a bite of the renewable energy cake,” he explains with an air of resignation.

The European Commission had initially defined energy communities as SMEs or not-for-profit organisations, de facto excluding the big power utilities – but this is no longer the case in the Council text, he points out.

Energy communities “are entitled to own, establish, or lease community networks and to autonomously manage them,” the Commission wrote in Article 16 of its proposed directive on the internal market in electricity.

“But in the Council’s version the word autonomous is not there anymore,” Vansintjan pointed out, stressing that “autonomy is one of the basic principles of energy communities” because it ensures they are independent from outside interests.

Co-op chief: People can produce most of their energy themselves

Half of Europeans could have solar panels on their roofs by 2050. And the trend won’t stop as small-scale energy cooperatives bring in eight times more revenue to local authorities than big utilities, argues Dirk Vansintjan.

Citizens’ ownership and autonomy make a huge difference, according to Vansintjan.  When an autonomous cooperative will reinvest the benefits locally – often in energy efficiency – a big power utility will repatriate profits to the company headquarters to reward its shareholders, he points out.

Vansintjan has few illusions about the final outcome. He doesn’t believe for instance that energy communities will ever be able to keep 100% of their benefits to themselves. And he accepts that cooperatives should be charged for connecting to the wider electricity grid. But he insists that a fair share of the benefits should be redistributed locally.

“When the profits of renewables are gone, we have problems financing the energy transition,” Vansintjan argues, stressing that the money is badly needed for municipalities to finance energy efficiency or building renovation programmes. “Many municipalities back us,” he claims, saying REScoop.eu enjoys support from the EU’s Covenants of Mayors.

REScoop.eu now hopes the European Parliament can redress this when the file goes to a plenary vote in January and preserve the Commission’s original definition of energy communities.

EU champions ‘people power’ but devil lies in the detail

The European Commission’s Winter Package of energy proposals, unveiled yesterday (30 November), is set to boost household and local power generation, but obstacles remain.

Meanwhile, other powerful interests are also at play, including those of network operators who manage the electricity grid and are planning to invest billions in IT systems and additional grid capacity to cope with a rising share of intermittent renewable energies.

ENTSO-E, the association the European Network of Transmission System Operators, is adamant that energy communities cannot be seen as isolated islands.

“What we are saying is that those communities should be connected to the main system – the DSO or the TSO depending on their size,” said Laurent Schmitt, the Secretary General of ENTSO-E. “They must also pay their share for grid access because they receive services from their connection to the wider electricity system,” he argued in a recent interview with EURACTIV.

According to Schmitt, energy communities will be able to live on their own 80% of the time, without input from the outside. Communities can also contribute to wider grid stability thanks to their own storage capacity, electric vehicles and demand response technology, Schmitt explains, saying TSOs “see this as a potential win-win situation”.

But for the remaining 20% – when the sun is not shining –, Schmitt says communities will need a kind of insurance that only grid operators can provide.

“And this is where we have to agree on a price and a number of conditions. So the question is not to resist those communities but put a framework in place to integrate them: the connection, the grid tariff, etc.”

“These are new business models that need to be looked at.”

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Digital technologies like blockchain and artificial intelligence bring “total revolution” in the electricity industry, allowing energy communities to proliferate, says Laurent Schmitt. Utilities should not resist the change but embrace it to become “community enablers”, he told EURACTIV in an interview.