The country studies shed light on the different roles of energy communities in the analysed countries showing that scale of Energy Communities varies. In Norway, the interest and need for Energy Communities is rather low due to a historically robust energy system and low energy prices. Hence, although there are some active Energy Communities and new projects aim at establishing more, the implementation remains at an early stage and is rather small scale. Similarly, Energy Communities in Sweden are at an early stage, and the definition of Energy communities has not yet been included in the national legislation. However, active Energy Communities exist and both political as well as public interest in locally produced energy is growing. The same situation applies to Finland, where around 100 Energy Communities are established, yet the system remains in its infancy. Denmark has a long history of citizen ownership and is one of the EU countries with the highest share of citizen ownership of energy assets. Although Danish legislation discerns between CECs and RECs, in general conversation people refer to Energy Communities (Energifælleskaber).
Energy Communities have a longer history in Germany being established since 1995. There was a strong increase in numbers between 2006 and 2013. Yet, the foundation of new Energy Communities, especially of those focusing on solar power (which constitute the largest part of ECs in Germany), has been decreasing since then. In total, there are around 1,700 Energy Communities in Germany. The Netherlands has around 700 Energy Communities and the numbers are currently increasing. The high interest is also reflected explicitly in the national Energy Law. Austria is the only country that distinguishes between CEC and REC in the general discourse. REC may produce energy from renewable sources and consume, store, or sell self-generated energy, CEC is a legal entity that generates, consumes, stores, or sells electrical energy. Overall, there are around 100 RECs and between 3 and 10 CECs. In general, interest in Energy Communities is increasing and since March 2022 there is a first funding call for energy communities.
4.4. Comparative Analysis of Models for Energy Communities
Due to the high variety of models across the countries, no systematic definition formodels of Energy Communities can be established. Yet, various factors, such as focus on Renewable Energy Communities (REDII) versus Citizen Energy Communities (EMD), technology, legal form and regulations, location, property ownership, and stakeholders, seem to be important when analysing the formats of Energy Communities in the countries. In the following, the role of these factors in the respective countries will be summarised:
In Norway, most projects aiming at implementing energy communities are driven by property owners and real estate companies trying to increase local power production and self-sufficiency of energy for buildings. Further, Distribution System Operators (DSO) are engaging in research projects to strengthen their knowledge of the potential of energy communities. There are also some pilot projects to develop energy communities for production and sharing renewable energy on remote island off the coast of Norway.
In Sweden, the main factors defining the model of implementation are the organisational structure and the model for electricity sharing. Four different models of organisation can be identified: First, wind power cooperatives are organised as incorporated associations. Second, eco-villages with individuals focusing on sustainability and self-sufficiency are established. Third, there are solar power cooperatives within tenant-owned apartment buildings (“Bostadsrättsföreningar”). Fourth, rural communities run small scale heating systems.
In Finland, the Electricity Market Act allows for three types of communities. The single-property communities use the produced energy for the community members. Based on “compensatory calculation” the production is monitored and shared among the members. In case the production exceeds the needs of the residents, the excess is sold to an energy provider. . Cross-property energy communities produce and consume energy on different, but immediately adjacent properties. This way, an energy community can be established when, for instance, the site of consumption is not suitable for production. The energy community is connected to the grid via single connection points instead of a ring connection. Further, there is a possibility to create de-centralised energy communities across the country. This can for example comprise energy production at summer cabins and consumption of the energy at the members' homes. In this model, members pay grid service charges and taxes as usual and currently both sites must have same supplier.
In Denmark, the main difference in energy communities lie in the organisational structure of the different types of communities, type of energy produced (eg. heat or electricity) and model for energy sharing. Energy communities exist as eco-villages, small-scale heating systems in rural communities, and cooperatives focusing on local wind and solar panels on residential buildings.
In Germany, factors such as the technological focus and the legal framework define the different models for energy communities. Traditionally, the largest sector of energy communities are cooperatives focusing on solar power to produce energy. Increasingly, there is a shift to wind energy parks organised as companies with limited liability (GmbH & Co KG). The limited partners "Kommanditisten" are citizens. Moreover, there are alternative legal frameworks such as “Gesellschaft bürgerlichen Rechts” that are more attractive for smaller projects (<€100,000). There are also examples of energy communities, where several municipalities found a public agency to organise energy supply and operate electricity grids (Joint municipal company). This way, all citizens can take part in the community independently of personal investments in the setup. There is also an opt-out option for citizens living in municipalities with municipal energy communities, ensuring that participation is voluntary.
In the Netherlands, models of implementation depend on the national legal framework. The main forms of organisation are cooperatives, foundations, Associations of Owners (Vereniging van Eigenaren), and companies. A requirement for receiving subsidies for energy communities is that the community is organised as a cooperative or a foundation.
In Austria, there are three types of energy communities: (1) in Joint/Communal Communities several people can produce and use electricity together on the same property, using joint infrastructure, (2) Local Energy Communities (REC) are usually implemented by municipalities and SMEs and are connected via a common transformer substation and (3) in Nationwide Energy Communities (CEC) members receive energy from the same DSO and are not geographically bound. Most Energy Communities are mainly organised as cooperatives (often having their own infrastructure), or as associations with the latter often not having any infrastructure of their own but combining the members’ facilities. In terms of technology, focus lies on energy production with solar panels. In the future, wind power and biomass will probably play a more important role.
4.5. General and Country/Model Specific Barriers
4.5.1. Knowledge Barriers for Both Community Members and Policy Makers
A barrier that is mentioned by most countries, is the lack of awareness and knowledge among local, regional, and national policy makers and the general public. The lack of awareness among local and regional policymakers prevents municipalities from assigning space for energy communities or allowing communities when they take initiative. In Germany, for example, it can be difficult to convince mayors of the possibility to start an energy community in their municipality. The lack of awareness among national policy makers prevents energy communities to be properly integrated in the national governance framework.
The lack of awareness among the general public creates barriers as this can make it difficult to convince the local citizens to accept an energy community (as the German country case study shows), or to gather a sufficient number of people to start an energy community (as the Norwegian country case study shows).
Furthermore, setting up energy communities requires specific knowledge. In most countries, a barrier is that community members lack the technical and legal knowledge required inthe starting phase of the community. This barrier is present in most countries, including Sweden, the Netherlands, Germany, and Norway. The knowledge deficit creates barriers for the energy communities as it can be difficult and time-consuming for their members to acquire the knowledge. Sometimes this barrier is reinforced through DSOs or network operators that do not provide information to communities, which they would need to start their energy community.
4.5.2. Financial Barriers Related to Large Upfront Investments
Neither RECs nor CECs may have financial profit as a primary purpose. However, savings are often a significant motivator for members to start or join an EC. Starting up an energy community requires large upfront investments. This creates financial barriers for aspiring community members, especially for less affluent citizens. Even when it is clear that the business case for the energy community can be profitable in the long run, the upfront investment can still create a barrier. Especially when subsidies or other types of funding or loans are not easily available, this barrier can prevent energy communities from being initiated.
4.5.3. Legal Barriers Related to Energy Sharing
The Clean Energy for all Europeans package gives energy communities the right to share energy within the community. The package differentiates between energy supply and energy sharing. However, as energy sharing currently is not clearly defined, the practical framework for energy sharing is to a large degree decided by the respective member state.
Energy sharing in the context of energy communities can be performed in numerous ways. It is worth noting that energy sharing is not confined to the activity of direct and physical sharing of energy among community members but can also be defined as administratively sharing of the energy, such as sharing electricity through the collective grid, offsetting energy components, sharing of remunerations and/or tariff adjustments. If a member state allows an energy community to construct a communal grid the energy community would, in accordance with the EU directive, also need to take on the role and responsibilities of a DSO.
In this report we have looked at the various ways in which the respective country has interpreted energy sharing and provided options for energy communities. Hence, the definitions observed are broad and are rather defined by the various objects of the study than by a predefined definition by the study team. It is worth noting that, at the time of authoring the report, the EU commission has proposed a reform of the EU electricity market design, in which rules on sharing renewable energy are being revamped.
Austria is the country that has the most established governance framework among the investigated countries, which allows energy sharing. Even here, though, the administration of energy sharing is rather complicated. In Denmark, regulations on energy sharing permit electricity sharing within a single building such as a housing cooperative, but electricity sharing outside of a building is only possible through the collective grid and is subject to the general tariffs and taxes. In Finland and in the Netherlands, energy sharing is currently only possible when the communities make use of administrative solutions to enable energy sharing on paper. The energy is shared via the grid and is subject to the general tariffs and taxes. In Finland, one administrative solution is to make use of virtual net metering: the DSO is responsible for this, measuring electricity usage of the community’s members and organising internal credit calculation. The other solution is to apply back metering, where the housing company only has one DSO meter (and subsequently only one supply contract) and divide the energy bill among the shareholders either by non-DSO submeters or with fixed proportions, for example based on area of the respective apartment. In Sweden, energy sharing is only possible when a microgrid has been deployed in a building by a company or a DSO. In Norway, it is only possible to share energy produced within a residential building if the community members form a power production company and act as shareholders of this company. In Germany, there is currently no legal framework for energy sharing or landlord-to-tenant electricity, which limits the development of energy communities.
Some ECs wish to build a (micro-)grid for the community with the purpose of electricity sharing among members. The extent to which this is possible varies per country. In line with the IEMD DSOs have a monopoly on deploying regional and local distribution grids. In Finland, only DSOs are by law allowed to build separate electricity grid lines crossing property limits, an exemption in the law allows energy communities to build separate lines of max 2 MW, connecting a small-scale electricity production to its designated point of use and if multiple properties are owned by the same owner, a network between these properties can be constructed. In Sweden, there is also an exemption in the law, however it only applies to small internal networks within an easily defined area. A few pilot projects have been permitted to develop a common energy system for residential areas. In Norway, also only DSOs are permitted to develop distribution grids, limiting the possibilities to form larger communities that can produce and share energy. In Germany, other actors than DSOs can also apply for concessions of local electricity grid. As a result, several energy communities manage their own electricity grid. In Austria, the ownership of a community’s infrastructure depends on the specific model of energy community. Communities established as associations do not own infrastructure but tend to lease infrastructure. On the other hand, communities run by large cooperatives often own their infrastructure.
In the Nordic countries, energy sharing via an internal grid has an extra dimension to take into account: the principle of fairness. The Nordic countries are sparsely populated and inhabitation is more distributed within the countries, with some areas having a very low population density. This means that energy prices are usually distributed among all those connected to the collective grid, independently of how long the lines required to connect them to the grid are. This is to prevent the cost of maintenance of the grid in sparsely populated areas to be way higher than in the cities. If energy communities would create their own micro-grid, this could mean that network operators would lose (a part of) the income from the energy community members in terms of contributions to the collective grid.