Support System Aspect
About this Aspect
Effective support systems are vital for the success and sustainability of energy communities. In this chapter, we will explore various resources available to assist these communities in their development and day-to-day operations. Understanding these support mechanisms will enable you to identify and utilise the tools needed to overcome challenges and optimise performance. This knowledge is essential for anyone involved in energy communities, as it highlights pathways to long-term resilience, growth, and efficiency.
Legal Forms of Community Engagement and Energy Communities
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Cooperatives
Description
Cooperatives are a traditional collective form of business ownership that has been successfully used for centuries and are currently the most popular legal form for community energy projects, where local residents, businesses, or organisations, collectively own and manage an energy project. Each member has an equal vote, regardless of his/her financial contribution and number of shares owned. This is one of the most important, among the 7 cooperative principles outlined by the International Cooperative Alliance, which make cooperatives the governance model that best fills all forms of community ownership: legal, economic, technical and procedural ownership.
Examples
Energy cooperatives managing wind, solar, or biomass projects for shared community benefit. Have a look at some examples here.
Advantages
Cooperatives are a well-established governance model worldwide that have historically demonstrated more resilience to economic crises than traditional business models. Being a business means that when a cooperative delivers a profit this should be reinvested in its social and environmental mission. Cooperatives promote democratic governance, transparency, and local control. Members share both the benefits and risks of the project. Check out the 7 cooperative principles here.
Community Benefit Societies (CBS)
Description
A CBS is a legal form specifically designed for enterprises that benefit a wider community. This type of structure is often used for renewable energy projects that aim to reinvest profits into local communities.
Examples
Solar panel projects on community buildings where any surplus income supports local community development.
Advantages
Focuses on community benefit over profit, and is eligible for certain types of social investment funding.
Limited Companies (by Guarantee or Shares)
Description
Community energy projects can also be formed as limited companies. A company limited by guarantee (CLG) typically reinvests its profits into the community, whereas a company limited by shares (CLS) can distribute profits to shareholders.
Examples
Community-owned solar farms or wind turbine projects.
Advantages
More flexible than cooperatives and CBSs, allowing for a wider range of financial structures and external investment.
Trusts
Description
Trusts are used to hold assets (such as land or energy infrastructure) for the benefit of a local community. They often focus on preserving assets for future generations.
Examples
Trusts that manage community-owned wind turbines or solar farms, where profits are reinvested into local projects.
Advantages
Long-term security for community assets and a legal framework for ensuring that community benefits are preserved.
Partnerships (e.g., Public-Private Partnerships – PPPs)
Description
Partnerships between public authorities (local councils) and private companies can be used to finance and manage community energy projects. These arrangements often allow for shared investment, expertise, and risk management. Sometimes the community can take part in PPPs.
Examples
Local authorities partnering with private developers to build solar parks with shared ownership or benefit.
Advantages
Access to resources and expertise from both public and private sectors.
Energy Service Companies (ESCOs)
Description
An ESCO is a business model that provides energy solutions to local communities. While not always community-owned, some ESCOs operate under community-led or cooperative models, where profits are reinvested into the community.
Examples
ESCOs installing energy-efficient technologies or renewable energy systems for local communities.
Advantages
Tailored solutions for energy generation and efficiency, potential for community benefit in ownership models.
Barriers to Community Engagement and Energy Communities
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Legal and Regulatory Barriers
The legal systems in many countries do not provide clear frameworks for community energy projects, leading to regulatory uncertainty. Permitting, grid connection processes and energy sharing among members, for example, can be complex, particularly for small-scale community projects.
How to Overcome
Governments can simplify permitting processes and provide clear, supportive legal frameworks for community energy projects. Policies such as feed-in tariffs, and guaranteed access to the grid can encourage participation. Providing local technical support and community energy help-desks are also important measures to level the playing field and ensure citizens can compete with large energy players and corporations.
Financial Barriers
Access to funding and capital can be a significant challenge, particularly for projects that require substantial upfront investment. Small communities may also lack the financial expertise to manage large energy projects.
How to Overcome
Governments, local authorities, and financial institutions can offer grants, low-interest loans, and community bond schemes. Capacity building for community groups to increase financial literacy can also help improve management and sustainability of citizen-led RE projects.
Lack of Expertise and Capacity
Communities may lack the technical, legal, and business expertise needed to develop and manage energy projects.
How to Overcome
Providing access to technical assistance, training, and support through local energy hubs, non-profit organisations, or government programmes can help build capacity.
Grid Access and Energy Market Challenges
Gaining access to the national grid and dealing with utility companies can be challenging for small community energy projects, especially with regard to pricing, technical requirements, and negotiations.
How to Overcome
Policymakers can establish clear regulations that facilitate grid access for community projects, including priority grid access for renewables and simplified connection processes.
Social and Community Barriers
Not all communities are equally engaged in renewable energy projects, either due to a lack of awareness, trust, or cohesion within the community. Resistance can also come from individuals with differing priorities or concerns about the impact of projects.
How to Overcome
Fostering community involvement early on and ensuring transparent communication about the benefits and risks can build trust. Holding public consultations and giving the community a real say in project decisions can also improve participation. Showcasing success stories can also contribute to foster motivation and perceived capacity among communities.
Policy Uncertainty
Changing government policies, particularly around subsidies and incentives, can destabilise community energy projects that rely on long-term revenue projections. Ambiguity around the requirements needed to establish a community RE project is often a barrier.
How to Overcome
Stable and long-term policy commitments from governments are needed. This can include locking in subsidies or tax benefits for community energy projects for extended periods to ensure financial security. Pressure governments to be clear when transposing EU mandates into national legislation.
Municipalities Supporting Energy Communities
Municipalities can significantly enhance the development of energy communities by offering concrete support such as grants, subsidies, and technical assistance. By actively investing in infrastructure improvements and facilitating community engagement programs, municipalities help energy communities overcome financial and regulatory hurdles, making it easier for them to launch and sustain successful renewable energy initiatives.
Here, we’ll use Barcelona, in Spain, as an example of a supportive municipality.
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Barcelona Municipality
About
Barcelona is one of the leading cities in Europe supporting energy communities and the transition to renewable energy. The city is committed to reducing carbon emissions and fostering citizen-led energy initiatives.
Mission
To promote sustainable urban development by supporting local energy communities and ensuring that citizens have access to affordable, clean energy. Barcelona aims to empower residents and businesses to participate in the transition towards a green, decentralised energy system. For example, Barcelona Climate Plan 2030 includes measures such as increasing green spaces, improving energy efficiency in buildings, and expanding renewable energy sources.
Activities
Providing technical and financial support to energy communities in the city, while offering training and workshops on energy efficiency and community-led energy projects.
Distinctive Good Practice
Launching of program Barcelona Energia – a public energy company that supplies renewable energy and encourages citizen participation.
Benefits to Participating individuals
These initiatives enable access to affordable, locally produced renewable energy. And provide opportunities to engage in city-led sustainability initiatives and decision-making processes On top of that, citizens pay less bills by improving energy efficiency and cost savings for homes and businesses.
Existing Energy Communities
Existing energy communities can be incredibly helpful by serving as practical examples and sources of guidance for new initiatives. They provide valuable insights into overcoming common challenges, such as securing financing, navigating legal frameworks, and managing community engagement. By sharing their experiences and best practices, they help new communities avoid pitfalls and adopt successful strategies. Established energy communities often offer technical expertise and mentorship, fostering a collaborative environment that accelerates the growth and success of emerging energy projects.
For this, check out the example of Zelena Energetska Zadruga’s (ZEZ) distinctive good practices here.
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Associations or NGOs
There are many organizations at national or European level supporting energy communities in various ways, e.g providing information, legal support or supporting the network development.
The Green Tank is an independent, non-profit environmental think tank, focusing on the development of policy solutions for a sustainable future. The organization analyzes all the publicly available data regarding the energy communities and the self-production projects in Greece, in order to provide all the facts needed for promoting the energy communities, as it is the most important tool for citizens to have an active role in the energy transition.
For this purpose an Energy Community Observatory has been developed, including information about the current status, the legislation, institutional framework etc. The observatory can be found here.
Some examples are:
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REScoop.eu
About
REScoop.eu is the European Federation for renewable energy cooperatives. It represents over 1,900 energy cooperatives and one million citizens across Europe who are engaged in renewable energy production and consumption.
Mission
Its mission is to empower citizens to actively participate in the energy transition by supporting the establishment and growth of energy cooperatives. REScoop.eu promotes citizen ownership of renewable energy and advocates for more democratic, decentralised, and sustainable energy systems.
Activities
REScoop.eu provides valuable resources and training for starting and growing energy cooperatives, ensuring that communities have the knowledge and tools to succeed. It fosters networking among cooperatives, enabling them to share experiences and solutions. Additionally, REScoop.eu engages in advocacy at the EU level, influencing energy policy to support community-led initiatives. It also manages projects aimed at accelerating the energy transition, such as the Clean Energy for EU Islands initiative, which promotes renewable energy solutions in isolated regions.
Distinctive Good Practice
Facilitating cross-border knowledge sharing through its extensive network, allowing communities across Europe to exchange insights and best practices. The federation also provides comprehensive support to communities by offering legal, technical, and financial advice to help set up and manage energy projects effectively. Furthermore, REScoop.eu pioneers innovative financial models for energy cooperatives, such as collective ownership structures, enabling citizens to jointly invest in and benefit from renewable energy infrastructure.
Benefits to Participating individuals
Access to resources and guidance on forming energy cooperatives. Opportunities to engage in energy democracy and own renewable energy infrastructure. Networking with like-minded communities across Europe.
Electra Energy
Country: Greece
Contact information:
- 7, Olympionikon Street, Ilioupolis,
Attica, Greece - contact: Dimitris Kitsikopoulos
- dimitris@electraenergy.coop
- info@electraenergy.coop
- (+30) 697 395 70 10
- www.electraenergy.coop
About
Electra Energy is a social enterprise that empowers citizens, small and medium sized businesses and municipalities, to actively participate in the energy transition. Electra has been very active in policy advocacy and has supported a number of energy communities across Greece and South-East Europe.
Mission
Facilitate the transition towards a democratic, inclusive, and sustainable energy system, placing citizens and local communities at the forefront of this movement.
Activities
Electra Coop offers several services on solar and renewable energy, energy efficiency, energy certification of buildings and homes. At the same time, they provide consultancy services to the public sector on community energy investments and innovative PPP collaborations involving the local community.
Electra is also active in research focusing on community energy, encompassing business modelling, financing, governance, social impact, and mitigating energy poverty and knowledge transfer and foster networking with local authorities, organizations, Universities, and energy communities in Greece and abroad focusing on advocacy and monitoring policies, regulations, targets, and strategies related to community energy.
Distinctive Good Practice
So far, Electra has supported over 25 energy communities and citizen-led initiatives, and has executed more than 20 advocacy actions. They have also contributed to a number of publications including the ‘Best Practice Guide for South East Europe’ (2022) and the report on ‘The Social Impact of Energy Communities in Greece’ (2023).