Netherlands

In the Netherlands there is no single definition of citizen energy communities or renewable energy communities. Most energy communities fit in the definition of the EU Commissions RECs. In the Netherlands, it is recognised by many governmental and civil society organisations that energy communities could be an important actor in the energy transition in the Netherlands, and this shows in the large number of energy communities, which the Netherlands has. However, it is also recognised that communities as of yet still face quite some regulatory and practical barriers to set up their energy communities. This need is recognised and there are new laws in the process of being made that lower barriers and improve opportunities for energy communities.

In the Netherlands, the first local energy communities emerged in the late 1980s. These first communities often owned one or more wind turbines together, and their aim was to live an independent and environmentally friendly lifestyle. These communities were made possible by the 1989 Electricity Act Experiments Scheme. This was a scheme that explicitly made space for experiments like energy communities in the legislative framework. The scheme gave these communities grid access and guaranteed a standard price (Oteman, Kooij & Wiering 2017).

Oteman, M., Kooij, H.-J. and Wiering, M. (2017) ‘Pioneering renewable energy in an economic energy policy system: The history and development of Dutch grassroots initiatives’, Sustainability, 9(4), p. 550. doi:10.3390/su9040550.

In the early 1990s, the number of communities grew to 25. The complete liberalisation of the energy market in 2004 increased the opportunities for local initiatives, and their establishment has accelerated since 2010 (Kooji et al 2018).

Kooij, H.-J. et al. (2018) ‘Between grassroots and Treetops: Community Power and institutional dependence in the renewable energy sector in Denmark, Sweden and the Netherlands’, Energy Research & Social Science, 37, pp. 52–64. doi:10.1016/j.erss.2017.09.019.

In the 2010s, the main stimuli for renewable energy were the SDE+ subsidy programme (successor of the SDE, Stimulation of Sustainable Energy production) and the two schemes that made experimentation possible again: The new Electricity Act Experiments Scheme (which ran from 2015 to 2018), and the Dutch Green Deals. The SDE+ was only available for companies and organisations.

In 2013, the Energy Agreement (Energie Akkoord) was signed, in which a small part was dedicated to community energy, specifically the ‘zip code rose project’. Through this project, energy consumers receive an energy tax deduction for energy produced within a collective renewable energy project situated in their zip code area. This stimulated the realisation of more local energy communities (Oteman, Kooij & Wiering 2017).

Oteman, M., Kooij, H.-J. and Wiering, M. (2017) ‘Pioneering renewable energy in an economic energy policy system: The history and development of Dutch grassroots initiatives’, Sustainability, 9(4), p. 550. doi:10.3390/su9040550.

The new Electricity Act Experiments Scheme is an example of experimental regulation. It was opened annually from 2015 to 2018, each time for one year. It specified which articles of the earlier Electricity Law specifically were to be experimented with, and cooperatives could apply for these specific exemptions. The Electricity Law did not have a set ending, but it is being updated: the follow-up Energy Law is currently being written, mainly because of changes to the energy system due to the energy transition. For the Green Deals, projects can apply and get support from the governments to eliminate barriers that are specific to their projects; these can include regulatory, market and social network barriers. Currently, there are almost 700 cooperatives and more than 110,000 people are member of local energy cooperatives (HIER, 2022).

HIER (2022). Local Energy Monitor 2021. Available at: https://www.hieropgewekt.nl/uploads/inline/Lokale%20Energie%20Monitor%202021_def_digitaal.pdf

Energy communities in the Netherlands can organize themselves in various ways. The main forms of organisations are: a cooperative, a foundation, an association of owners (Vereniging van Eigenaren), and sometimes a company. For the main available subsidies for energy communities, often the requirement is in place that the community needs to be organised as a cooperative or a foundation.

A cooperative is currently seen as a private company, which limits its possibilities for action on the energy market. CECs are currently not implemented in the Dutch law. As this is not in line with the EU Commissions definition of CECs and RECs, these regulations will change when the new Energy Law is approved.

Historically, energy communities in the Netherlands have mainly been centred around the concept of sharing electricity supply and batteries. Lately, communities that integrate heat supply are increasingly common as well. This is encouraged, as communities with district heating could use that as an alternative to gas.

Currently a new law is developed in the Netherlands that will replace the Electricity Act as well as the Gas Act. It is called the Energy Law and will encompass all energy carriers. Currently, this law does not include an experimentation clause like the one in the Electricity Law, which allowed for Experimentation Schemes to be implemented in the future. It was left out partially because the ministry of Economic Affairs and Climate is in doubt whether it has added value, especially since the room for experimentation under the Electricity Act Experiments Scheme was not always necessary for innovative projects to reach their goal.

The Ministry of Economic Affairs and Climate organised a public consultation on the new Energy Law last year, which included a question about whether the law should include the explicit space for experiments in the form of an experimentation clause. The majority of the respondents to this consultation responded in favour of adding the space for experimentation. The main reason for this is that innovation is unpredictable, so it might be smart to include some space to divert from the legislation in case the need arises. The main argument against including an experimentation clause is that it was not the Electricity Act that was the limiting factor for the experiments, but other legislation was. So experimentation should (also) be included in other legislation.

Under the old Electricity Law and the old Gas Law, it was practically impossible to share energy with fellow members of an energy community – except if this was made possible through being part of the Experiments Scheme. Currently, members sell their energy to the energy provider and they sell it back to the community. In the new Energy law, there will be more space for selling and buying electricity within a community. However, energy communities remain critical of the fact that communities are subject to the same requirements as any other market parties like energy providers. Energy communities currently also sometimes adopt solutions to take a smaller connection to the electricity grid. Normally, the connection is based on the peak demand from, or peak supply to the grid. With peak shaving, the electricity demand and/or supply is stabilized in the community. This is done through e.g., purchasing a battery as a community, or disabling part of the electricity supply (turning off a wind turbine, shading a solar panel). Another possible solution is to move the solar panels from a South-focused orientation to an East-West orientation.

First of all, there are several financial barriers for energy communities in the Netherlands. It can be challenging for energy communities to secure sufficient upfront investments. The main reason for this is that their business model is highly reliant on energy prices, which can be rather volatile. Finding subsidies for the new Subsidy for Cooperative Energy Supply (Subsidieregeling Coöperatieve Energieopwekking) provides more stability regarding the electricity prices, through establishing an energy price range for energy communities within which the electricity is guaranteed to stay.

Secondly, a barrier for energy communities is their dependence on other actors. Energy communities rely on other actors to help them set up their communities and the infrastructure needed for it: municipalities, DSOs and private companies. As these other actors often have more actual power, knowledge and dedicated time than the volunteers of the communities, there is a power distance between the organisations. This could lead to unequal negotiations, in which communities cannot build their preferred energy systems.

A related barrier is the lack of knowledge among starting communities. A lot of technical, organisational, and regulatory knowledge is required to properly to set up an energy community. Starting communities need to invest large amounts of time, energy and money to achieve their goals. Some energy communities therefore ultimately fail in realizing their envisioned communities. Therefore, not only regulatory barriers need to be reduced for starting communities, but also financial, organizational, and knowledge barriers.

Finally, energy communities require high investment upfront, which can create barriers.  Setting up an energy community currently takes a lot of time from volunteers. According to an interviewee from a DSO, scalability of the energy communities – i.e. to start new communities in other neighbourhoods – remains one of the main challenges in the Netherlands. Even if the communities were allowed legally, before through the experimentation room, and with the new Energy Law there will be space for energy communities in the law, setting up new communities is not sufficiently easy to make it scalable. Therefore, DSOs and representatives of the energy communities are developing simple concepts that neighbourhoods can adopt easily for starting their own community. Energy communities need time to grow as an organisation. A representative of energy communities argued therefore that communities should get a “right to grow up”: a period of time in which they are allowed to learn and grow as a community.

One of the main drivers for the establishment of energy communities in the past years is that the energy prices are currently very high. This makes the business models for local energy supply more attractive.

Another main driver in the Netherlands is the active representative body for Dutch energy communities. Energy communities in the Netherlands are represented by a highly active representative organisation, called Energy Together (Energie Samen)

Energie Samen (n.d) Collaborate on the energy transition. Available at: https://energiesamen.nu/

. Energy Together is a fusion of various representative organisations, representing not only energy communities but also citizens with the aim of making their homes more sustainable, and private wind turbine operators. Energy Together successfully represents the interests of these groups at national and regional level, with the civil servants as well as the parliament. Energy Together is successful in representing the energy communities partially because they have established contact with government officials who are willing to change legislation, or make it more flexible. This way, more innovative initiatives like energy communities are able to start.

Another driver for the development of energy communities are the Dutch Regional Energy Strategies

Nationaal programma RES (2022). Why have a Regional Energy Strategy (RES)?. Available at: https://www.regionale-energiestrategie.nl/english/default.aspx

(instead of national). The Netherlands has set up Regional Energy Strategy regions, where local governments and local organisations collaborate for the energy transition. Reaching out to regional energy strategists is more convenient for local energy community initiatives. Here, regional culture that isused to local initiatives also play a role in how easily community members decide to start an energy community. When the regional culture is one in which local initiatives are regularly set up for a variety of topics, the local citizens are more likely to start their own energy communities as well (National Programma RES, 2022).

Finally, a supporting factor in the Netherlands for energy communities is that most DSOs see the benefits of energy communities. Many of the energy communities have been enabled or supported by their local DSOs. DSOs are actively involved in driving the transition to more energy communities in the Netherlands.

For members, there are several social, financial and environmental benefits of energy communities.

Social benefits are related to autonomy, democracy, social cohesion, and local profits. The autonomy of an energy community ensures that the ownership of the energy supply is in the hands of the members of the energy community. That means that the energy supply can be adapted precisely for the purposes of the end users of the energy. Furthermore, some interviewees mention that one of the biggest benefits of energy communities is how democratic these communities are. Local citizens are able to join and have a say about the energy community, and what would be a fair and smart allocation of resources within the community. As such, citizens are more likely to be engaged in the local democratic processes as well, because they feel agency and ownership over their neighbourhoods.

Energy communities are also beneficial for the social cohesion of communities and neighbourhoods. The interviewees who are a member of their energy community comment that they value the social cohesion that comes with being part of the energy community. Neighbours who did not have a reason to talk to each other before now get to talk because they are part of the same community. Vulnerable or lonely neighbours can be included in the community and get access to more support and social interaction. Profits of energy communities are often used to invest in the neighbourhood. Multiple interviewees mention that they like that the profits of their energy supply are used to invest in the neighbourhood, rather than to increase the profits of a big (energy) company.

Financial benefits for community members include lower energy prices for locally supplied energy. Also, when their energy community is profitable these profits can be used locally, as described above.

There are also environmental benefits for energy community members. First, members can support the energy transition. Members of energy communities hope to increase the share of renewable energy on the grid, and to minimize the need for grey (back-up) energy supply. Second, they can contribute to the increased acceptance of renewable energy. When a local community exploits renewable energy such as a wind turbine, the acceptance is significantly higher than is the case for commercial wind projects. Lastly, many energy communities report a lower total energy consumption in their communities. Because energy communities plan the energy structure in their community ahead, and because they are more aware of the consequences of their own energy consumption, they are likely to have a lower energy consumption per person.

There are also several benefits for the economy. A technical benefit is that energy communities can help alleviate local grid congestion. Because the energy communities use the locally supplied energy locally as well, the energy communities can play an important role in balancing the local electricity net. Energy communities can also help balance the (local) energy grid. Energy communities can support to balance the energy system through using the own energy as much as possible and decrease the size of their connection to the grid. This decreases peaks of energy supply and demand on the grid.

Energy communities are also seen as an opportunity for innovation. An interviewee from the government side mentioned that they see the energy communities as an excellent opportunity to innovate in collaboration with various actors including citizens. Finally, local energy supply contributes to higher energy independence from other countries.

In the following some real-life examples of energy communities in the Netherlands are presented:

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EXAMPLE 1: COOPERATIVE REPUBLICA PAPAVERWEG

The aim of this Amsterdam-based cooperative is to create a sustainable town within the city of Amsterdam, that includes both rental and owner-occupied houses, business spaces and a hotel. Circularity and renewable energy supply are the basis of the project. There will also be a smart grid with batteries that balances the local energy supply and demand.

Source: www.republica.amsterdam/en/home

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EXAMPLE 2: OWNERS ASSOCIATION SCHOONSHIP

Owners association Schoonship: This association will build 46 water houses in North Amsterdam. The houses use an advances smart grid in order to become self-sufficient in the area of energy. The smart grid will be developed with research and private institutions such as Fraunhofer, Metabolic, Spectral Utilities and CWI.

Source: schoonschipamsterdam.org

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EXAMPLE 3: OWNERS ASSOCIATION EARTH HOUSES (AARDHUIZEN)

Owners association Earth houses consists of 23 earth houses and a communal house that have been built in collaboration between the University of Twente, the network operator Enexis and the owners’ association. Solar panels and a battery should make the Earth houses self-sufficient.

Sources: www.aardehuis.nl/index.php/nl