Developing Support Mechanisms for Energy Communities

This topic aims to support actions that foster the collaboration between local and regional authorities and energy communities and/or actions that develop integrated services to facilitate the emergence and growth of community energy projects.

Energy communities can help citizens and local authorities invest in renewables and energy efficiency. Community-owned projects can allow citizens to finance sustainable energy investments that deliver local economic benefits, social cohesion, and other priorities such as improving the energy efficiency of housing or reducing energy poverty. The participation of citizens in renewable energy projects may also facilitate social acceptance at the local level. The role of energy communities in the EU energy systems is expected as well to grow in line with the REPowerEU plan^[1] to phase out EU dependence on fossil fuels imports.

An increasing number of local authorities wish to make sure that more citizens and local communities benefit from the energy transition and play an active role in it. In fact, local government is uniquely well-placed to support, partner and invest, and to provide a positive planning and policy environment to help drive community energy.

Designing adequate public interventions at the local level is key but there is no one-size-fits-all solution to trigger the creation of energy communities locally. The level of public participation and the type of actions required vary significantly depending on the specific context of each city and town. Building on initiatives such as the Covenant of Mayors, there is also a need to strengthen the technical and financial capacities of local actors to support citizen-led initiatives in the field of energy (particularly in Member States with low levels of community energy activity).

Taking sustainable energy projects off the ground can be complex due to the regulatory and policy context (e.g. changing national support schemes for renewables, burdensome licensing, heavy administrative procedures, difficulties in coordinating project implementation in atomised markets, etc.). For relatively small and citizen-led actors like energy communities, there are some additional practical challenges such as lack of information, limited access to finance, difficulties in aggregating small interventions, difficulties in managing the public participation and engagement, and establishing effective governance and decision-making structures. These hurdles prevent energy communities around Europe from developing their potential. An effective way of tacking this complexity, is supplying integrated services to help energy communities develop sustainable energy projects.

Proposals are expected to address one of the two scopes below. The scope addressed should be clearly specified in the proposal's introduction.

Scope A - Local authorities collaborating with citizen-led-initiatives

Under this scope, proposals should foster the collaboration between local and regional authorities (including energy agencies) and energy communities. This could be done in many ways, but all proposals should include at least three of the actions below:

• Participation in and/or set up of municipal energy initiatives and energy communities including diverse and hybrid forms of collective ownership with participation from municipal authorities and citizens aimed at supporting the achievement of local and regional energy policy objectives.
• Support to the emergence of citizen energy initiatives that empower local actors to collectively address energy transition targets through use of public resources, funds and capacity. The role of local and regional authorities could include helping community projects access citizen finance and bank loans (e.g. through guarantees, seed funding for revolving funds, technical support for the early stages of project development) and facilitating procurement of locally generated renewable energy from community energy projects.
• Creation of a supportive local policy framework for the development of community energy projects (e.g. through community participation or investment quotas, more streamlined and simplified environmental permit procedures) and facilitation of a dialogue among different actors involved in community projects (e.g. community members, relevant economic players, national regulators, the local authority and other societal, environmental or energy actors in the area). Where necessary, projects may also develop legal templates that enable the participation of municipal authorities in their potential different roles, acknowledging the regulatory differences that apply to these actors as members, as sponsors or as facilitators in the different Member States.
• Training and capacity building on community energy development (for local and regional authority officials, local communities and other relevant local actors) and promotion of citizen participation in energy communities.

Scope B - Developing integrated services to support community energy

Under this scope, proposals should support actions that improve market conditions and develop integrated services aimed at reducing complexity, simplifying decision making and stimulating the creation of community energy projects. These services may be implemented by public or private actors in close coordination with local and/or regional authorities in targeted territories. The integrated services designed should lead to local community energy investment pipelines and could cover:

• Capacity building and facilitating access of local energy communities and cooperatives to information and guidance about setting up, financing and operating community projects (e.g. licencing, public procurement of community energy, business models, legal aspects).
• Connecting different actors in the value chain (e.g. technology providers, financiers, public actors in charge of licensing, aggregators).
• Aggregation of small sustainable energy projects including (where relevant) support for energy commercialisation and participation in flexibility markets.
• Development of financial tools to facilitate the emergence of community energy projects and their access to citizen finance and bank loans (e.g. through guarantees, seed funding for revolving funds, technical support for the early stages of project development).

For scopes A and B (where relevant):

Proposals should justify how selected pilots fit either the definition of “renewable energy community” according to the revised Renewable Energy Directive ((EU) 2018/2001)^[2] and/or the definition of “citizen energy community” according to the Directive on common rules for the internal electricity market ((EU) 2019/944)^[3].

Proposals could cover any area related to sustainable energy (renewable energy generation, transmission, distribution, citizen-led renovation, energy efficiency, e-mobility, district heating, etc.). Project proponents may choose to focus on one or more areas.

Proposed activities can also promote (if they wish to) inter-consumers and/or inter-communities trading/sharing of sustainable energy virtual-net-metering, (collective) energy storage solutions, or peer to peer trading.

Proposals should demonstrate the support of the stakeholders which are necessary to ensure the success of the action (in particular, local or regional authorities).

Proposals should explain how their activities complement national enabling frameworks for energy communities (where relevant) and build on the work of the European Energy Communities Repository and the Rural Energy Communities Advisory Hub.

Activities should make use of existing initiatives, networks and platforms as relevant (e.g. Covenant of Mayors, Smart Cities Marketplace).

The development of tools and platforms is not expected to be the core activity of proposals.

Proposals should demonstrate a high degree of replicability and include a clear action plan to communicate experiences and results towards potential replicators across the EU.

Proposals replicating existing innovative organisational solutions should justify their choice and show how they will adapt solutions to their local context.

Projects should provide policy feedback to improve public policies, legal and regulatory environments in the field of community energy across Europe including the transposition of relevant directives.

The Commission considers that proposals requesting a contribution from the EU of up to EUR 1.5 million would allow the specific objectives to be addressed appropriately. Nonetheless, this does not preclude submission and selection of proposals requesting other amounts.

Proposals should result in the emergence and growth of energy communities in different areas related to energy efficiency and sustainable energy.

Proposals should quantify their impacts using the indicators listed below, where relevant, as well as other project-specific performance indicators:

• Number of citizen-led initiatives supported or created as a result of the project.
• Number of citizens taking part in energy communities as a result of the project.
• Number of actors with increased skills in the area of community energy (local and regional authority officials or other relevant actors).
• Number of local and regional authorities committed to replicate best practice experiences.
• Primary energy savings triggered by the project (in GWh/year).
• Renewable energy generation triggered by the project (in GWh/year).
• Investments in sustainable energy renovation triggered by the project (cumulative, in million Euro).
• Number of operational integrated service hubs at the end of the project, although investment and upscale may happen after project completion (scope B).
• Development of local community energy investment pipelines (in million Euro of investments within the first 5 years) (scope B).

The impacts of the proposals should be demonstrated during the project and within 5 years after the project lifetime.

[1]Communication from the Commission of 8.3.2022 to the European Parliament, the European Council, the European Economic and Social Committee and the Committee of the Regions, REPowerEU: Joint European Action for more affordable, secure and sustainable energy, COM(2022) 108 final

[2]Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources

[3]Directive (EU) 2019/944 of the European Parliament and of the Council of 5 June 2019 on common rules for the internal market for electricity and amending Directive 2012/27/EU