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What does the future hold for energy communities? My story from the Citizens' Energy Forum in Budapest
By Goran Čačić, Senior Project Manager and President of the Assembly, ZEZ Green Energy Cooperative, Croatia, December 2024
I was invited as a guest-speaker at the Forum organized by the European Commission in collaboration with the Hungarian Energy and Public Utilities Regulatory Authority. The topic is just my cup of coffee - ‘Towards a Citizens Energy Package: Empowering citizens for a just energy transition’ and I was thrilled to take part in the discussions of various consumer issues across the EU, as well as to identify potential solutions.
This year's Forum was specifically looking for opportunities, solutions and inputs from real life, to start Commission’s work on the “Citizens Energy Package”, which aims to increase citizen participation in the energy transition and to strengthen the social dimension of the Energy Union.
I was glad that the Commission wanted to listen to us, the citizens and the representatives of energy communities, directly. I felt positive, because the topic of the Forum perfectly aligns with what we are trying to push for in Croatia and neighboring countries, through our work at the Green Energy Cooperative (ZEZ). It also aligns with the work of hundreds of energy communities and energy cooperatives across the EU gathered in REScoop.eu association. Hence our hopes are high for the new Energy and Housing Commissioner Dan Jørgensen. We expect him to bring new positive energy and a momentum that will give a powerful boost to community energy across Europe.
“What have been the main drivers for the kick-starting energy community movement in East European countries?”
This was the question I was given to prepare for the plenary and to start the discussion. So in trying to answer, let me share some findings of our joint work with partners on the Life COMET project that is establishing coalitions for energy communities catalyzation in Eastern Europe.
The analysis shows us that there are multiple main drivers for citizens to join energy communities. In most cases, these are pioneering initiatives driven by a group of motivated individuals gathered in an association or a cooperative. Those are inherently democratic legal forms that secure direct participation of citizens through the “one member - one vote” principle. This was our case in Croatia as well, where the Green Energy Cooperative was formed 11 years ago. Our main goal was to test in practice the models of producing energy from renewable sources through direct participation of citizens as cooperative members.
Our goal was, and still is, to bring the energy back into the hands of citizens. The individuals who are joining the early stages of community energy initiatives, are usually motivated by the need to do something concrete to reduce their negative impact on the environment and to act in the fight against climate change.
The secondary motivation is direct ownership over the local renewable energy production and increasing our resilience, reducing dependency on external factors that are defining the price of energy we must pay, out of our control. Through our own energy production, we can generate income or achieve financial savings, either through our own energy consumption reduction, or through selling surplus energy on the market.
Finally, the energy crisis and increase of energy prices on the market are a strong motivator as well. In some cases, the motivator is a strong desire to become a member of an open and democratic energy production system, which is way more appealing than a centralized big system, often perceived negatively. These are the basic motivators that can spark the growth of community energy in any country.
The spark is not enough
To increase and fully benefit from community energy impacts, we need to grow a flame. For that, we need more like-minded individuals and organizations. We need “the whole village” to succeed. In the case of south-east Europe, the needed support came in the form of EU policies that set the goals and identified the path towards energy transition, coupled with EU funds. The emergence of new projects led to easier access to knowledge and technical assistance for initiatives on the ground. This led to many more initiatives and institutions working on community energy.
But the story is not all “sunshine and roses”. There are significant obstacles that energy communities face on their way from an idea to fully formed communities generating benefits for their members, citizens and neighborhoods.
From our direct experience, the biggest problem is the incomplete, complex and unclear local regulatory framework that hampers and complicates the foundation of energy communities. Secondly, there is limited, or in some cases NO financial (or technical) support for founding and growth of energy communities. And the third and maybe the most dangerous issue is that there is currently no clear market-based business model that will enable economic sustainability for energy communities.
What are my proposals to grow that spark
I concluded my plenary speech with three clear proposals for actions that the European Commission could do to help energy communities:
Enforce the implementation of existing provisions of EU regulations that are not properly transposed by the member states (MS). In particular, insist on a clear and simple process of foundation and registration of energy communities.
- If the process is too complicated, citizens will not join the communities. This is our main pain point in Croatia.Set concrete targets for energy communities (eg. number of communities, number of kWh of produced energy, number of citizens in communities and similar) that are based on national potential assessment, which MS are required to do.
- It must be made sure that MS assess the potential and adjust the targets in accordance to the potential.Provide clarity of concept – What are the energy communities and what is their purpose
- It must be clearly defined that energy communities are specific organizations. They are a new organizational concept, a social economy actor and fully inclusive organizations that have regular and ordinary citizens at their heart.
- The specific legal form makes energy communities disadvantaged compared to Limited Liability Companies and other profit oriented legal forms. An energy community can include hundreds of members in decision making and operations, rather than keeping decision making within a small and closed group of selected individuals (profit-oriented owners/shareholders).
The above proposals are aligned with the 5 principles for a fair, sustainable Citizens’ Energy package, that have been prepared by the Community Power Coalition. The principles reflect the Coalition’s vision for an energy transition that prioritizes people and local communities to build a fairer, more sustainable energy system. The intention of these principles is to provide additional guidelines to the European Commission in shaping the Citizens’ Energy Package.
Missed opportunity
Throughout the rest of the day at the Forum, several parallel multi-stakeholder breakout sessions were held to provide a more practical environment aimed to gather feedback and information from participants. The intention was great, but the realization picked the wrong format needed for interaction. Two-way communication and participation was difficult in the chosen format of holding presentations towards the audience rather than the other way around.
The opportunity to gather valuable information directly from community actors, municipalities and actual members of energy communities was missed. I hope it will be improved for the next Forum, because the wealth of knowledge and experiences lies in people, not in Powerpoints.
A level playing field
My post-Forum feeling is positive. It was a great opportunity to meet other partners and friends who work in the field, and to develop relationships with the representatives of the European Commission, offer our help and share the practical knowledge we have.
Energy communities have come from the people’s will to change the current energy system that was not designed by them and for them. We are on the way to achieve this. We can, and will change the current energy system, so that the people become a central part of it, but we cannot do it without a level playing field.
We need to create a separate road where we can compete with the likes of our own, rather than profit oriented legal entities.
If we consider ourselves bicycle drivers, it is not possible to compete with cars and trucks on the regular roads and highways. We need a dedicated bicycle highway to drive safely and reach the final goal in a more inclusive and sustainable way. We all drive towards a low-carbon society, and let’s not forget that there will be no energy transition without direct involvement of ordinary citizens, people like us.
The simplest way to achieve this is through energy communities. For the energy communities to flourish, we need to secure unreserved support from national (and local) institutions and enable business models that will, at minimum, create a level playing field for us.
We need business models that will enable energy communities to live on the energy market. Only then, will we be able to help those in need, the vulnerable groups of our society, those in risk of poverty or energy poor, the ones that must not be left behind. Without the economic sustainability of energy communities, we cannot help others. Building community energy is a journey, and we are calling everybody to join us!
