Learn about the different definitions of energy communities and take a brief look at their main features – actors, processes, outcomes, motivations, legal forms, and financial models.
Embeded interactive presentation
In this presentation we are going to define energy communities and take a brief look at their main features – actors, processes, outcomes, motivations, legal forms, and financial models.
The information in this presentation is taken from the NEWCOMERS deliverable titled Theoretical framework focusing on learning in polycentric settings.
of dr. Nicolien van der Grijp, Dan Petrovics, MSc from the Institute for Environmental Studies (IVM) at the Vrije Universiteit Amsterdam (VU), the coordinating partner of the NEWCOMERS project.
2. CENTRAL PART – CONTENT
In the times of energy transition, alternative ways of organizing and governing energy systems are emerging. One of these alternative forms of governance are energy communities. They are a new form of energy governance that allows for more participatory and democratic ownership of energy assets and processes.
Energy communities are often defined as initiatives, where communities of places or of interest exhibit a high degree of ownership and control of the energy assets, as well as benefiting collectively from the outcomes – e.g. energy-saving, revenue-generation, carbon-footprint reduction. These projects and communities can emerge in various parts of the energy system, either in energy generation, transmission and distribution, energy storage, etc.
There are a few main features of energy communities - actors, processes, outcomes, motivations, legal forms, and financial models, which help us understand what energy communities are and how we can define them. Let’s take a quick look at these features.
A variety of actors can be involved in energy communities. They vary from private individuals to citizen organisations, civil society groups, businesses, municipalities and government agencies. The variability of the types of actors in terms of technical knowledge, entrepreneurship skills, and access to resources may differ in each context, affecting the activities undertaken and the processes of learning in the communities. Scholars also emphasize the importance of intermediaries, who we can define as individuals, organisations or networks who create spaces and opportunities for others (to learn, share knowledge, access opportunities), who mediate (i.e. work between, make connections) between other actors and technologies, and who broker resources, knowledge and relations. In practice, intermediaries take on roles such as aggregating knowledge, sharing information, capacity building, brokering relationships, developing business opportunities and framing visions as well as advocacy and lobbying.
Processes and outcomes
What sets energy communities apart from other renewable energy projects are the internal processes; who they are developed and run by, who is involved and who benefits from their outcomes. Although traditionally energy communities were local, focused on one single activity - usually power generation - this seems to be changing, with many communities involved in other energy-related activities such as energy storage and energy efficiency. Next to this the variety of involved actors is also changing, with public authorities and private-sector actors joining force with citizens. These processes led to the emergence of new forms of energy communities.
There are various motivations behind every energy community. We can divide them into a few groups. Social motivations of energy communities include community empowerment and building of local ownership. Technological motivations refer to energy security or increased energy efficiency. Environmental motivations can be related to a desire to reduce greenhouse gas emissions or local environmental issues like air quality. Economically, many communities are motivated by cost savings or shareholder income that can be generated as a result of initiatives. Political motivations may include political mobilisation, for example in order to obtain enhanced autonomy, and the desire to create new types of energy actors. There might be more than one category of motivation covered by an energy community and also, the motivations might change over time.
Energy communities can be found in various organizational forms, such as cooperatives, charities and social enterprises, local energy service companies, local government led projects, and non-local co-operative ownership. The form they take is largely determined by the national institutional settings.
If you’re interested in to learn about national settings and business models in more detail, you can take a look at NEWCOMERS deliverables linked below.
Energy community members usually use multiple sources of funding, such as crowd funding, member financing, grant funding, government investment and private investment. Many initiatives are largely dependent on public funding.
There are many different definition of energy communities. EU legislation defines energy communities in two official definitions, established in the context of the EU’s Clean Energy for All European package. These two forms are ‘renewable energy communities’ and ‘citizen energy communities’. These two legal forms are quite similar in that they require open and voluntary participation by members, leave ownership and control in the hand of local stakeholders, and carry the purpose of generating environmental and social benefits.
Within the NEWCOMERS project, we define new forms of such communities. The so-called "newcomers" are defined as association of actors engaged in energy system transformation for reduced environmental impact, through collective, participatory, and engaging processes and seeking collective outcomes. In this same context, 'business models' are sets of assumptions about how actors produce and distribute value and 'new business models' can be considered as emerging models that add additional value to energy service for energy users, energy companies, energy systems and/or wider society. Importantly, the above definition of clean energy communities also provides space for including non-locally bound virtual communities, or issue-based communities, which are expected to become increasingly relevant in the energy sector in the near future.
If you wish to learn more about energy communities, take a look at the deliverable titled Theoretical framework focusing on learning in polycentric settings.
The NEWCOMERS project (New clean energy communities in a changing European energy system) will deliver practical recommendations about how the European Union as well as national and local governments can support new clean energy communities to help them flourish and unfold their potential benefits for citizens and the Energy Union.
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