Energy communities in Europe – opportunity to increase system efficiency

Energy communities can make an enormous contribution to climate goals but their efficiency and effectiveness can be boosted, smartEn advises.

In a new paper, the European smart energy business association investigates the growing engagement of energy communities in participating in the grid and finds that various supporting services could contribute to their further development and scaling up across the region.

Quoting the EU’s 2021 State of the Energy Union report, smartEn notes that at least 2 million people are involved with more than 7,700 energy communities and they have contributed up to 7% of nationally installed renewable capacities estimated at 6.3GW.

The development of energy communities, either as ‘citizen energy communities’ or ‘renewable energy communities’, is encouraged in the EU, with their definition as legal entities in the energy directives.

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Such communities also can be virtual or require geographic proximity and offer an additional route to that of prosumer for individuals to participate in the energy system through a range of different activities.

The study finds that the main opportunities for energy communities revolve around the savings from collective self-consumption and the avoidance of transmission network charges as well as the selling of flexibility to avoid grid expansion. Other benefits include increased local resilience and improved social inclusion through the ownership in the community.

Barriers and recommendations

However, despite their potential, there are barriers to their further development. For example, in Spain there are both geographic limitations of 500m and local plant limitations of 100kW and such limitations should be removed, smartEn recommends.

Indeed, member states should complete full implementation of the Clean Energy Package to enable bringing more renewables into the mix and access to all the energy markets, as well as removing the local barriers.

They also should encourage the involvement of small businesses and C&I sites in participating in energy communities due to their different load profile opportunities.

At the Commission level, smartEn recommends harmonising of the rules and regulations on energy communities and improving the transparency of DSO data such as the locational data of substations, timely metering data and information on real time greenhouse gas content.

“Energy communities have a very important role to play in the energy transition,” comments Michael Villa, smartEn Executive Director.

“Although they can provide many different kinds of services to their members, as smartEn, we are particularly interested in how they can contribute to integrating more renewables while using the local grid as efficiently as possible.”

smartEn suggests enabling services that could help to scale up these communities include financing, flexibility aggregation, facilitation and consulting and information analysis.

As examples of the latter, smartEn cite the Grid Singularity Exchange, which provides software tools to enable the creation of local energy markets – tools that communities otherwise might not be able to easily create or access – and Australian blockchain company Powerledger’s ‘peer-to-beer’ trading scheme – reaching people that might otherwise not be engaged.