Imagine a city council promoting the installation of 100 kW solar panels the roof of the municipal sports centre with a capacity for generating 140 MWh / year.
This is a joint project by 99 neighbours who contribute, in this case, a share capital of 100 euros each. The equivalent participation for each partner is 1 kW and they will receive the energy generated by this power (1,400 kWh / year) as a self-consumption discount on their bill.
The cost of installation and implementation is 100 thousand euros, but the installation can be financed. The simplest thing is for the community to go to an Energy Services Company to finance the operation and manage it.
The city council makes an extra contribution, the roof of the sports centre, which needs to be transferred to the electricity community for at least 15 years. This assignment can be translated into a monetary amount which will increase the participation of the city council in the generation of the project, although in the case of the local administration, they are usually assignments without economic return.
This is just one example of how a local energy community, also known as a local renewable energy community, can be formed. A phenomenon that is not new but that has been gaining importance in recent years.
Citizen participation in the energy sector
An energy community makes it easier for a group of neighbours to jointly benefit from the same local electricity or thermal generation installations. This joint venture not only means making better use of this generation but also provides environmental and social benefits, such as improved energy efficiency and the development of sustainable mobility systems.
Energy communities may include ordinary citizens, businesses, public administrations and small and medium-sized enterprises. They are the result of a model for citizen participation in the energy system and their main function is to generate renewable energy through collective generation plants for shared self-consumption. These communities can undertake multiple activities that include producing, consuming, storing and sharing energy.
Who can be part of an energy community?
Any natural or legal person and, in general, any public or private entity, may be a member of a renewable energy community.
To create one, the members need to identify the area where the production plant will be established. As this is a local feature, it will need to be close to consumers and meet the requirements for size, location and use.
According to EU data, energy communities are becoming more common. In 2019 there were already about 1,800 in Germany, 700 in Denmark and 500 in the Netherlands. These are the countries with the highest number. In the case of Spain, these communities are much less common than in other European countries: In that same year only 33 were registered.
However, this trend is expected to increase, as energy communities not only promote the circular economy, they also support the growth of small and medium-sized enterprises, enabling them to be part of the development of renewable plants.
Benefits: From environmental to economic
The benefits derived from the activity and development of local energy communities include greater use of electricity or thermal generation capacity, improved energy efficiency, the development of sustainable mobility systems and even economic savings for some families. However, these are not the only ones. There are many other environmental, social and economic benefits.