Colourful pins on a paper by MetsikGarden on Pixabay
As the world becomes more conscious of the ramifications of environmental pollution, the need for a greener and more sustainable energy system has never been more obvious. As a result, communities across the globe have started exploring alternative energy solutions to reduce their carbon footprint while saving costs on energy bills. One practical solution to achieving this is setting up an energy community. An energy community is a group of people, small businesses, and organizations that collaborate to generate, buy, and manage energy from renewable sources. The benefits of setting up an energy community are vast. Here are some reasons why it makes sense to take the initiative.
1. Cost savings
One of the most significant benefits of setting up an energy community is cost savings. By pooling resources, energy consumers can reduce the cost of installing and maintaining renewable energy infrastructure, and this translates to reduced energy costs for its members.
2. Decreased dependence on traditional energy sources
The world’s reliance on fossil fuels for energy generation is rapidly depleting as resources diminish, and the costs associated with conventional energy sources increase. Energy communities enable communities to generate their energy from renewable sources while reducing dependency on traditional energy sources.
3. Economic benefits
Energy communities create new jobs, generate revenue, promote local investment, and keep energy money within the community. Also, energy communities decrease multiple dependencies addressing key resources. This contributes to a location’s long-term attractiveness in the global competition between cities and regions.
4. Strengthened communities
Energy communities require collaboration and the active participation of their members, leading to improved community involvement and unparalleled community development. Some of the best methods for participation start from simply advising citizens. Others start from municipalities that already gain the citizens’ trust. Whatever approach they follow, energy communities result in enhanced knowledge exchange and a more resilient social texture.
In conclusion, setting up an energy community is a smart sustainable solution tackling the challenges of today’s world. It provides numerous benefits, including cost savings, decreased dependence on traditional energy sources and energy providers, environmental benefits, promotes community involvement, and economic benefits. With a collaborative effort and proper planning, energy communities can successfully achieve their sustainability goals. By doing so they lead the path to a decentralised green future.
An interview with Justin Pagden from AGEM introducing the TANDEMS pilot.
Hello, please introduce yourself and AGEM. What have you been working on?
My name is Justin Pagden. I’m a business developer at Agem. Our company comprises of a team of professional energy enthusiasts. Together, we develop and provide services for energy communities and municipalities in the Achterhoek region of the Netherlands. Agem helps households and businesses to use energy in an efficient, sustainable and local manner. This ultimately results in lower (social) costs.
We have been working specifically with energy communities. Agem enables them to consume their own collectively produces energy at a cost price. We call this the cost price model.
How and why did you choose the location of your pilot?
We have been working on the cost price model for the municipalities for over 5 years now. We were eager to also implement this model in the context of a citizen energy community.
The first pilot, where we introduced the cost price model was the energy community of BioZon, Zelhem. This citizen energy community collectively owns and operates a small electric generator running on biogas from an old landfill. The energy was sold in a PPA (Power Purchase Agreement) to the municipality at a fixed price for a 5 year contract. The citizens that had invested in the installation received a reasonable return on investment.
The installation was producing more electricity than expected and agreed in the PPA contract with the municipality, so when energy prices soared, the question arose if it was possible to allocate this surplus of electricity to the citizens directly at a cost price. This would benefit the citizens immensely on their energy bill.
So we set out together to investigate the possibilities.
What models of collaboration do you use (how do you collaborate with the municipality and other actors? How do you share the work load? Who is responsible for what?)
Eight municipalities in Achterhoek initiated the funding of Agem in 2013. The municipalities created a cooperative company of which they were the shareholders and invested start up capital so the company could develop and provide products and services to accelerate the energy transition. In the last ten years, this has led, among many other things, to the development of up to 15 citizen energy communities in the region. BioZon in Zelhem being one of them. These energy communities have also taken a share in the Agem Cooperative, and therefore have become co-owners of the company.
Therefore, you could say that the main collaboration model is through co-ownership. Agem is the professional organization that provides the services to it’s shareholders, being the energy communities and the municipalities. They provide the governance, done by aldermen from the municipalities or citizens volunteering as board members of an energy community.
What were and are the main challenges that you are facing when implementing this pilot?
We had all the pieces of the puzzle necessary to make the first cost price model available for citizens. Now all we had to do was to organize them in such a way that it would create the picture we had in mind. This involved getting all the different partners on the same page so that everyone could play their part. This took a considerable amount of deliberation and eventually trust to move forward. But in the end we were able to move fast and went live on the 1st of January 2023.
Everything worked as planned on the administrative end and the data was coming in perfectly, showing clearly the benefits of the cost price model, as apposed to the market model. Ironically, the engine broke down and had to be fixed which took several weeks. This forced us back to the energy market which shows clearly in the data and energy price paid by the consumers. Thankfully everything is up and running again and the energy community members can ones again profit from their own electricity at a cost price.
What feedback do you receive from citizens and how do you communicate with citizens about this pilot?
The Energy Experts at Agem work very closely on the project with the board members of BioZon. All the communications to the community members is coordinated or co-created with the board members of BioZon. We have used presentations at member meetings, video explainers and of course webpages and emails. Also, a new contract had te be signed by the members that wanted to participate.
The feedback from the members has been overwhelmingly positive. This is mainly because the communication has been clear, the members did not have to do much themselves and of course, because they benefit from the new situation.
What is next for this pilot?
When the PPA with the municipality has ended there will be more electricity available. The cost price model can then be expanded to include more citizens from the region. Also, the energy community of BioZon wants to invest in solar panels on the old landfill (hence the name BioSun).
For Agem, this pilot is a proof of concept, and shows clearly that the cost price model for citizens is possible. As happens in industry, the first prototype model is not made the same way as the large scare production model. That is also the case for this pilot.
The next step is to scale up and expand the model to other energy communities that also want to benefit from this model. As we write this we are working hard with our partners to be ready for this next phase of the implementation of the cost price model.
Considering the recent energy crisis and rising energy prices, the topic of affordable energy has become more prevalent than ever. Companies, governments, and individuals explore actions to reduce energy consumption. They took up the challenge of driving the energy transition, and the search for alternative sources of energy could comprise. Although the media presents a well-rounded and balanced debate, still too little space is given to energy communities (EC) and the role of governments and policies in enabling the creation of ECs in Europe.
Why are community-led projects important?
Within the complex and nowadays uncertain world of energy production concepts such as citizen-led, collective, or equal citizen participation can sound intimidating and daunting. Considering that the process of normalizing energy communities is still quite new, these reactions are understandable. This paper, by students from business management and environmental studies, shines a light on the concept of energy communities, which are based on a collaboration between citizens, governments, and businesses for a clean energy transition. Even though these initiatives are not so popularized, they are, as pointed out by Sara Giovanni from Energy Cities a European learning community for future-proof cities, making a great contribution to fight climate change.
Prominent issues within the process of promotion of energy communities are first the lack of easy access to information, which means a need for an active search, which is difficult without having any prior knowledge. Another problem, as pointed out by Wahlund and Palm from Lund University, is the bias towards a decentralized energy model and an underrepresentation of energy communities within the mainstream media. What follows, as presented by the results of this study from two Universities in the Netherlands, is the lack of trust of the wider public towards EC’s and thus an indifference towards taking an active role in the energy transition.
Additionally, as claimed by Feinberg et al, energy communities require social cohesion, trust, and clear communication, which can sometimes prove difficult in a globalised world. With masses of people continuously changing their place of living, cooperative action must have better organisation, more proactivity, and increased attentiveness. Knowledge exchange and knowledge distribution, as believed by John S. Edwards from Aston University in Birmingham, are also factors that urgently need development. The way information circulated among communities, as maintained by William King in his Ph.D research at Coventry University, should take into consideration theoretical frameworks, type of language used, and more approachable glossary, which can inspire citizen science.
What are some of the existing enabling frameworks?
On the brighter side, however, for those who already have sprouts of interest in EC’s there are various sources including this repository from European Federation for Agencies and Regions for Energy and Environment. The repository aims to give an insight into not only the examples but also various publications and updates related to Energy Communities. Another, more general example of an informative database is the Projects for Public Spaces website, which brings together a wide array of community-led projects from all over the world.
Furthermore, considering the participative aspect of ECs, members of energy communities themselves are actors, who hold the biggest levers of change. Citizens with an in-depth understanding of the circumstances of their networks and neighbors are often involved in energy community projects already. This has resulted, as presented by this research paper from the University of Bologna, in quite a large number of attempts being made in order to create EC’s and improve communication between them. Many studies, like this one, have also been conducted in order to analyse new methods of knowledge sharing within the energy industry and changes, which can be made to adjust the sector to 21st-century standards.
Although energy transition is a well-established and urgent matter, it is still in many aspects in its early stages. This is why projects like TANDEMS focuses on establishing methods of mainstreaming this niche market and focuses on increasing the speed with which current traditional and centralized energy systems are transformed into a community-led, collaborative effort.
Energy communities are groups of people that come together to collectively generate, store, and manage energy. Often, they are formed with the aim of increasing access to renewable energy sources such as solar panels, wind turbines, and biogas generators, lowering energy costs, and finally reducing a neighbourhood’s impact on the environment.By pooling their resources, knowledge, and experience, energy communities create more sustainable and resilient energy systems than would be possible at the individual level. They may also invest in energy storage technologies such as batteries, which allow them to capture excess energy and use it later when demand is higher. By doing so, energy communities reduce their reliance on traditional energy sources and lower their carbon footprint.
Here are five reasons why energy communities allow people to take back control of their energy sources and become independent energy providers and consumers.
1. Energy communities decrease energy costs
In an energy market dominated by large-scale players, energy communities building on renewable energy sources have a great potential to significantly reduce the members’ energy bills. Building on the collective rather than the individual, the prices for both, energy production and purchase are lower. Some energy communities produce and sell to customers at wholesale prices. For example, Helsingin Energia, an energy community in Helsinki, Finland, offers electricity tariffs up to 25% cheaper than traditional local energy providers. That’s as if you would get electricity but without paying VAT.
2. Energy communities allow members to have a say in how their energy is produced and distributed
With the gas and electricity shortage expected for winter 2022/2023, an increasing amount of people have become aware of the fact, that they do not really have a say about their electricity. Indeed, many have experienced a maximum of dependency. This is less true for people engaged in energy communities. As members they can actively participate in decision-making processes – the very basis for ‘controlling’ or ‘being in power’ of their own energy usage. To pick yet another example from outside the TANDEMs project, the Samso Energy Academy in Denmark empowers community members to own and operate wind turbines, solar panels, and district heating systems. Have a look at their website; they have an inspiring collection of talks on sustainable energy and energy communities!
3. Energy communities encourage the use of renewable energy sources such as solar, wind, and hydropower
It is untrue to assume that we will have to wait for years until we have something to gain from cutting CO2 emissions. As a matter of fact, every reduction of the reliance on non-renewable sources for energy production that contributes to a cleaner planet today gives a little more autonomy for other decisions that will be pressing in the upcoming years. Surely, power to the people might be a quite general claim at this stake. It is not said that the newly evolved scope for action plays out in your energy community. To those arguing reducing here is nonsense while Asian countries increase air pollution: Do you really believe atmosphere, air, and pollution stop at the border?
4. Energy communities encourage energy efficiency by providing members with advice and support to reduce their energy consumption
Knowledge is power and luckily there are many advisors and organisations, which navigate citizens through setting up energy communities. For instance, French Energies POSIT’IF offers free energy audits to its community members and provides personalised recommendations on how to reduce energy usage. Other projects, such as Newcomer – Exploring New Energy Communities, assess the regulatory, institutional, and social conditions to facilitate learnings on a meta, or more precisely, supra-local level.
5. Energy Communities create jobs
We’ve started with economy. We end with economy. Hovering over the EU Centres for Development of Vocational Training map of occupation needs in Europe, you’ll quickly find out that the only country in Europe where mining personnel is still hired is Bulgaria. For Czechia and the Northwest region, a 2021 published study of the European Greens (that are obviously not the representatives of coal mining industries) expect 10,000 jobs in the mining sector to be soon replaced by more than 20,000 jobs in renewable energy. The reason: decentral energy harvesting. Indeed, energy communities provide job opportunities for residents in various areas such as installation, maintenance, and customer service.
Overall, energy communities empower citizens by giving them control over their energy usage. It seems almost ridiculous to assume, they have the potential to empower people. Instead, they do so on an everyday basis already. Energy communities create jobs and decrease the cost of energy. They allow for a minimum scope of action and open windows of opportunity to fight climate change. Finally, they give communities a voice and reduce dependency. The latter is the very essence of empowerment.
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