‘In the recent years Energy Communities (EC‘s) became a unique type of actor, which operates based on not for profit principles and democratic way of organising people. Due to the fact that this does not mesh with the existing way of doing things, which focuses on commercial entities and maximisation of profits, energy communities are considered to be a new and uncertain future for the energy market.’
Josh Roberts, Senior Policy Advisor at REScoop.eu
The reorganisation of the energy market involves legislative changes and the disruption of the current energy flow. Many countries still organise policies in a way that lacks a direct link between energy producers and consumers. Energy providers have, therefore, control over pricing. The restructuring of this system is strategic in providing citizens with stable energy prices. It also supports sustainable and renewable energy transition. What do energy communities need to become vehicles of this reorganisation? This article explores this concept by focusing on infrastructure, business models and energy flow.
The Middle Man
In the current energy market decentralized and distributed energy production and consumption is still often legislatively and municipally unsupported. Sharing of energy with through a middle man called energy provider causes a lack of direct link between energy consumers and producers. These providers buy energy at market price from current energy communities, but sell it at higher rates. As an energy consumer, you participate financially in an energy community, but through an energy provider. The only way of consumers to know where their energy comes from is thanks to the GOO (Guarantee of Origin). The GOO is an ‘EU guarantee that any given amount of power is produced at a particular power plant. It is a voluntary certification allowing consumers to choose a source of production. Typically the choice being between renewable and non-renewable electricity’.
Independence from the current energy market consists of producing and consuming your own energy without the involvement of energy providers, who influence the price. Consuming your own sustainable energy at a cost price decreases the cost of energy as a whole. It also decreases the risk of rising energy prices in the future. It can also increase the acceptance of wind and solar farms because of the direct benefits for local communities.
Best practice example
In one of TANDEMS partner regions, Achterhoek (NL), this model is already in place for the municipalities (Agem Gemeentelijke Energy). This is an organisation, which started in 2017. It uses landfill gas and solar panels to supply energy to eight municipalities at a cost price. It also does not involve commercial parties. The Achterhoek municipalities are the first in the Netherlands to have introduced the ‘Self-delivery model’. This is where municipalities simply use the energy they generate. This is a unique model that other regions in the Netherlands and other EU regions can adapt and recreate.
Access to appropriate infrastructure and technological advancement is another milestone in being able to administratively and legally consume your own energy. This access if often hindered by a lack of appropriate business models or financial support. Novel tools, which allow for the decentralization of energy production and consumption on a big scale, require economic commitment. This is unavailable for some energy communities, which are mainly made up of local citizens. This is why in TANDEMS we understand that sharing of new technological solutions along with lists of best practices is so crutial. Alongside creating a network of information exchange TANDEMS forms new business models and tests them on pilot sites, paving the way for normalization of independent energy production and consumption.
Independence from commercial market players requires appropriate infrastructure, which is already present in certain countries such as the Netherlands. Legal frameworks should give more freedom to the consumer, which is currently lacking in many EU countries. The objective is to make this model accessible to consumers and businesses. The processes/models developed in this TANDEMS will inspire replication in Belgium, Bulgaria (TANDEMS partners) and in the future other European states.