Energy communities are spreading around the world: some states have already been integrating them as an energy-management model for some time, whilst others such as Italy have just discovered them, and others still are yet to do so. However, it will soon be evident to everybody that energy communities are the natural choice to achieve the United Nations sustainable energy goals, involving the collaboration of all.
Energy communities have arrived in Italy, thanks to the Milleproroghe Decree, introduced ahead of complete transposition of the 2018 European Renewable Energy Directive, which must be adopted by June 2021. Yet interest in renewables at the global level began with the goals defined by the 2030 Agenda of the United Nations, a document signed by Heads of State from all around the world in 2015, and continues alongside the spread of smart grids. Let’s take a look at global developments in the field of energy communities.
Smart communities in Europe
The Sustainable Development Goals established by the Summit have been integrated as a priority for the EU with the 2016 Clean Energy Package, extended in subsequent years with new directives. Specifically, the goal of clean and accessible energy for all outlines a significant increase in generation from renewable sources, as set out in Directive 2018/2001. This establishes that green energy must account for at least 32% of EU gross total energy by 2030, with each member state reaching its specific target by 1 January 2021. Italy’s target has been set at 17%, which was met by our country back in 2014 and surpassed with 20.12 GW generated in 2018 according to IRENA (International Renewable Energy Agency) data.
Back in 2014, the European Council spoke of the importance of interconnection in the energy market in its conclusions on the “2030 climate and energy policy framework”. Directive 2018/2001 also defines collective self-consumption as a solution for increasing production of green energy and meeting Agenda 2030 goals.
Following approval of European Directive 2018/2001, Spain was the first country to introduce the possibility of collective self-consumption, in the same year, with royal decree law 15/2018. This was followed by energy-community legislation in Greece (Law 4513/2018). This opened up the possibility of sharing energy without the need for a private distribution grid.
Meanwhile, in Northern Europe there have long been positive examples of community energy: shared energy projects that are entirely or partially owned or managed by community groups, including energy co-operatives. Members of these communities can have different levels of involvement in the project (from production to storage and management of energy). One common feature of these projects is the involvement of utility companies for utilisation of distribution-grid infrastructure.
Shared renewable energy in Denmark
Denmark has been a shining example of collective investment in renewables since 1970. Its foresight allowed the country to reach 40% of wind turbines installed under community ownership by 2002, and this figure had risen to 80% by 2013: the renewable energy capacity of Denmark has thus become one of the highest in the world. The federal government deals with matters associated with energy and definition of agreements with utility companies for connection to the grid. However, these companies are not just partners, but rather co-owners of the projects. Since 2009, the Danish Renewable Energy Act has reduced the portion reserved to co-operatives to 20% of new wind-power generation projects.
Since 2012, Denmark has also made significant progress in the photovoltaic sector, which in 2018 met 2.8% of energy demand with expectations for 1000 MW to be reached this year.
The solar boom in Germany due to introduction of energy communities
Germany has focused on various community-owned solar energy projects since the beginning of the ’90s, achieving 50% community-ownership of photovoltaic production in 2014.
One widely discussed case outlined in the German Renewable Energy Sources Act is apartment-block self-consumption, where the energy produced and consumed within the building does not pass through the national grid, avoiding system charges from the operator.
In 2015, the estimated number of renewable energy co-operatives was 973, largely using photovoltaic systems. In this case too, the federal government mediates and governs agreements for collaboration between producers and service companies. In 2018, 45.9 GW of energy was generated, placing the Germany not only amongst European leaders but also in the top five globally.
The rise of energy communities in the UK
In 2018, the UK had a solar-energy production capacity of 13.1 GW, making it one of the leading producers in the renewables sector, both in Europe and internationally. Management of this clean energy was connected to shared energy initiatives dating back to the end of the 20th century. In the new millennium, estimates set the number of active renewable-energy communities at around 300. In 2009, energy communities owned 4% of solar panels installed and currently 80% of shared energy projects use photovoltaic technology. In 2017, the UK generated more renewable energy than that from gas and coal, representing 33% of total energy generated, compared to 29% the previous year. Changes to legislation and regulations are altering the future of many projects that will have to find a new business model, business and supporters in order to survive.
The whole of Europe is moving towards collective self-consumption
Other European states are also increasing consumption of renewable energy, and this is thanks to energy-community legislation.
The French Network Code defines “collective self-consumption” as a group of consumers and producers that organise themselves into a single legal person for the purpose of self-consumption within the same MV/LV transformer substation. The head of the consumption group communicates the division of energy to the operator.
In Switzerland, federal law has established the possibility of collective self-consumption via groupings referred to as “RCPs”. These communities are formed of prosumers and consumers that join forces to share self-generated energy without using the national grid. The RCP is responsible for maintenance of private grids, distribution and metering of energy.
Solar communities in the USA
Solar energy continues its growth also in America: in 2018, the USA generated 51.45 GW, placing it at the top of the leaderboard. In 2019, its renewable capacity represented 40% of the total, the highest annual value in the history of the sector.
In the US, energy regulation is largely in the hands of individual states. The positive side of this is that the system is already decentralised. States at the forefront apply CCA – Community Choice Aggregation legislation, also known as municipal aggregation. This offers the possibility for individual cities or counties to decide who to rely on for energy supplies. These forward-looking states, including California, New York and Minnesota, have been experiencing a boom in solar communities or solar gardens since 2019. There are communities of this type in around 42 states but only 20 of these have legislation that allows them to achieve economies of scale.
This solar-energy sharing model is aimed at allowing all members to share the benefits of photovoltaic energy at the local level, including those who cannot or prefer not to install systems on their property, whether due to a lack of space or for economic reasons.
Australia: the expansion of smart communities
In Australia too, renewable energy is spreading and the country recorded generation capacity of 10.3 GW in 2018. Community energy projects have spread as they did in the UK, particularly along the coast and in areas poorly served by the national grid. In 2006, this was a largely unknown concept but in less than ten years 19 projects were launched, with around another 59 in the development phase. Today, there are more than 100 energy communities across the country. Currently, ARENA (Australian Renewable Energy Agency) has assigned funds of $ 330,000 to support shared-energy programmes nationally. These programmes will be even more valuable for their contribution to identifying a solution for supply stability, which has seen a crisis in recent years after events such as the 2016 tornadoes.
The whole world is therefore making the move towards digital energy communities, with the history and culture of each country determining different legislation and infrastructure, and above all different implementation models. But differences disappear when we consider the common goal of transition to a small-scale, distributed approach that characterises this energy revolution.
REGALGRID OPINION
Regalgrid is a pioneer in this sector, active in management and support of energy communities since its establishment in 2012, when the community-energy concept was still to be defined, let alone legislated for.
We would like to highlight the origin of the name Regalgrid®, which is simply an acronym of Renewable Energy Generated and Accumulated in Local GRID: a name that fully encapsulates the meaning, purpose and approach of the energy community!
The advantages of transition of the energy model from large-scale, concentrated electricity generation to small-scale, distributed generation with storage capacity are unquestionable and have been clearly demonstrated. Regalgrid offers a series of services and user licenses that cover the full range of needs of users taking a role in this new world of opportunities, whether stand alone, one-to-many (e.g. apartment blocks) or many-to-many (e.g. energy communities), and for individual citizens, companies and public authorities alike.