The Clean Energy for All European Package is supposed to turn consumers into ‘prosumers’, allowing them to participate in energy communities. However, doing that will require a change in perception, starting with national governments, writes Dirk Vansintjan.
Dirk Vansintjan is the president of REScoop.eu, the European federation for renewable energy cooperatives.
Negotiations between the European Parliament and the Council on the Clean Energy Package are in full swing, and citizen energy is taking front stage.
Put simply, the stakes are high. Right now, there are around 3,000 energy communities across Europe. And the potential is there: according to a CE Delft study, by 2050, almost half of all EU households could be involved in producing renewable energy, about 37% of which could come through energy communities.
According to the European Commission, by 2030, more than 50 GW wind and more than 50 GW of solar could be owned by energy communities, representing 17% and 21% of installed capacity, respectively. This represents an immense opportunity for local communities, particularly in rural areas.
Energy communities offer many environmental, social and economic benefits, and it has been shown that local community-owned projects can deliver as much as eight times more local value added compared to international project developers.
This means that revenues from renewables are used to fund local community centres, local football clubs, construction of social housing, energy efficiency renovations in public buildings, and initiatives to fight energy poverty. The list goes on, because the local communities, who know its needs best, prioritise where these resources go.
Energy communities also empower citizens, giving them a voice. Through combining democratic governance with aims to meet social and economic needs of its members and the local community, as opposed to profits, energy communities offer an alternative way of doing business.
That said, for the full potential of citizen energy to be realised, energy communities need proper acknowledgment and an equal chance to operate in Europe’s energy market. Right now, many member states, and even some in the European Parliament, including the Rapporteur on the Market Design files, either fail to recognise – or willfully neglect due to pressure from incumbent interests – this fact. Either way, these attitudes need to change, or else citizen energy will flounder.
Energy Communities need equal opportunity
Energy communities are not like an average energy company. Often they are initiated around a dinner table, driven by committed individuals who may or may not have experience in the energy sector.
They might develop one, two, maybe three projects locally – faithfully waiting out years of complex procedures and fund-raising from local citizens, learning as they go, and proceeding with little outside support or guidance. Committed to democratic and equal decision making, and a purpose that is not for-profit, they face more challenges than the average energy company.
Even after a successful project or two, maybe an energy community gets involved in energy efficiency, or if they have enough momentum and are lucky enough, they become a retail supplier and sell their own renewable energy to their members. But most stay small and local.
It is therefore unfortunate that national governments listen to the dominant energy players and say that moving forward, all market actors should play by the same rules. This means that the small community initiative should play by the same rules as large energy companies such as EON or RWE.
Fundamentally, this goes against one of the EU’s founding legal principles: ‘equality’, which states that similar individuals should be treated similarly and that different individuals should be treated differently.
Treating small actors identically to large actors in the energy market amounts to discrimination. It also goes against the EU’s stated commitment to support small and medium enterprises, the growth of the social economy, and ultimately the push towards a more decentralised and democratic energy system that gives citizens a fair deal.
Energy communities need proper acknowledgment
Because energy communities are different from traditional commercial energy companies, they absolutely need special protections. First, however, energy communities need to be properly defined, because we already see traditional energy companies trying to mimic energy communities for a competitive disadvantage.
This is exactly what happened in Germany when special provisions were made for ‘citizen energy companies’ so they could participate in on-shore wind tenders. The criteria that were established to determine who would benefit from special support were so broad, almost all successful projects were qualified as citizen energy projects. This result neglects the fact that barely any cooperatives were involved in successful bids.
Furthermore, through eight rounds of on-shore solar tenders in Germany, where no support for energy communities exists, only two bids by cooperatives through the first four rounds were successful, and there were zero bids submitted by cooperatives after the third round.
Now the German government proposes to get rid of any special treatment for energy communities, considering their experiment a failure, although they never seriously considered how to ensure a good definition. Now, with their positions in the Trilogue discussions on the Renewables Directive, they risk perpetuating their mistake across Europe.
The EU: a leader in citizen energy?
In the past, energy communities were able to take hold in some countries without EU support – but forward momentum faces significant challenges. The Clean Energy Package has the potential to ensure the role of citizens and communities in Europe’s energy transition.
In doing so, we have an opportunity to show the world how to build a consumer-centric energy system, to support regional growth and development, and ultimately how to empower people in the fight against climate change.
First though, national governments need to get on board with citizen energy – starting with supporting a good definition for renewable energy communities and provisions to ensure energy communities are not excluded from national support schemes.
The EU says it wants to embark on an energy transition. If it wants this energy transition to be successful, it must bring citizens along. Will it?