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Energy communities are groups of individuals, businesses, and organizations that join together to produce, distribute, and use energy in a more sustainable and efficient manner. In the European Union (EU), energy communities are about to play a vital role in the transition to a low-carbon energy system and are supported by various policies and initiatives at the EU and national levels.
One of the main benefits of energy communities is to increase the share of renewable energy in the energy mix and reduce reliance on fossil fuels. This is achieved through the development of local renewable energy sources, such as solar panels, wind turbines, and biogas plants, and the implementation of energy-saving measures, such as insulation, LED lighting, and smart appliances.
Obviously, optimization brings financial profits to the members, but it is not all just about money, the primary purpose is rather to provide environmental, economic, or social benefits for its community or members and for the local area where it operates.
Having a variety of different energy consumption patterns among members of a community can help them support each other better. For this reason, the perfect energy community would comprise not only active households, but also buildings for public use such as schools, government buildings, and community areas, as well as, small businesses. It would even out low energy use in households during the daytime, and balance it with higher energy demand from workplaces and public institutions during peak hours.
“In our vision solar energy installations in households by the end of the decade will be as common as today washing machines are in European households, leading to a major shift in the way consumers turned into prosumers think about the energy they consume” – explains György Folk, co-founder in charge of communication at rising.eco a Hungarian startup with the ambitions to become the go-to platform for accounting, metering, and settlement of renewable energy communities, participant of the .wave program.
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Energy communities can take various forms and can operate at different scales, from small villages to entire regions. They can also involve different actors. In the European Union there are two definitions of energy communities:
In this article, we would focus on the latter one in which the local communities ‘must be in the vicinity’ and work with only renewable energy projects owned/developed by that community.
The EU has recognized the potential of energy communities to contribute to the achievement of its energy and climate goals and has put in place a number of initiatives to support their development.
In addition to EU-level initiatives, many member states have also established national frameworks to support the development of energy communities. For example, in Germany, the Energy Community Act allows energy communities to sell excess renewable energy back to the grid and receive a fair price for it, while in France, the Loi de Transition Energétique pour la Croissance Verte establishes a legal framework for energy communities and provides financial incentives for the development of renewable energy projects.
Overall, energy communities in the EU play a crucial role in the transition to a low-carbon energy system and are supported by a range of policies and initiatives at the EU and national levels. Through the development of local renewable energy sources and the implementation of energy-saving measures, energy communities are helping to reduce reliance on fossil fuels and contribute to the achievement of the EU’s energy and climate goals. As György Folk warns the road ahead of the mass realization of energy communities won’t be a smooth one given the challenges ranging from the public resistance against climate change transition measures, through financing and local and national regulatory hurdles to technology standardization.
Still the perspectives of renewable energy communities given the unique legal framework they operate in since 2021 across the EU and the efforts made by governments and communities are holding the promise of a green future where communities and households rely on locally sourced renewable energy. Resulting in more social justice, economic fairness, and empowering local democracies and cooperations – explains the co-founder of rising.eco.
The number of energy communities in the European Union (EU) has been growing rapidly, with many new initiatives being launched and existing ones expanding.
Due to different definitions of energy communities, their number varies in the literature. According to the European Commission’s estimation, in 2022 there were over 9,000 energy communities in the EU, representing a significant increase from previous years. These energy communities involve a wide range of actors, including local authorities, utilities, energy service providers, and individual citizens, and operate at different scales, from small villages to entire regions.
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One interesting case study of energy communities in the European Union (EU) is the community of Güssing in Austria. Located in the southeast of the country, near the Hungarian border, Güssing is a small town with a population of around 5,000 people that has undergone a remarkable transformation in recent years.
In the 1990s, Güssing was heavily reliant on fossil fuels, with high levels of unemployment and a declining population. However, in the early 2000s, the town began to focus on the development of renewable energy sources and the implementation of energy-saving measures, with the goal of becoming self-sufficient in terms of energy.
To achieve this goal, Güssing established a number of initiatives, including the establishment of a local energy agency, the promotion of energy-efficient buildings and appliances, and the development of renewable energy sources, such as solar panels, wind turbines, and biogas plants.
The efforts of Güssing have been successful, and the town has now become a model for energy communities in the EU. Today, Güssing generates more than 90% of its electricity from renewable energy sources and has reduced its greenhouse gas emissions by more than 90%. The town has also attracted new businesses and residents and has significantly reduced its dependence on fossil fuels.
In recognition of its achievements, Güssing has received a number of awards, including the European Commission’s REGIOSTARS award for innovation in regional development. The success of Güssing serves as an example of what can be achieved through the development of energy communities and the transition to a low-carbon energy system.
Some additional facts for you on energy communities: