REPORT
Despite still not being the dominant mode of electricity generation and consumption, following the publication of the Internal Energy Market and Renewable Energy Directives, energy communities have grown in number all across Europe over the past few years. But even though they claim an increasing share of the market, this development does not take the same form everywhere. In some countries, energy communities have still not been legislated and simply constitute associations operating as companies; in others, the institutional framework is so advanced that it can act as a road map for their proliferation, even though there is hardly any country to be found where their growth has been completely obstacle-free.
The recent energy crisis that followed Covid-19 and the Russian invasion of Ukraine sparked an intense debate of wide public interest, which exceeded the limits of the experts immediately involved in energy policy. Self-generation through energy communities became an interesting perspective for many EU residents who found the vast increases in electricity bills impossible to bear. While the energy crisis was reaching its peak, European authorities officially recognized that energy communities “are well-equipped to ensure access to affordable clean energy for consumers” and can create “economic resilience through local revenue streams, reinvesting benefits into the community and reinforcing solidarity among their members”.
The comparative study of the different stages of community energy development in four European countries was the subject of a lively and insightful conversation jointly organized in Athens early in May by the Heinrich Böll Stiftung Offices of Thessaloniki, Warsaw and Belgrade. Titled “Community energy law in Greece, Serbia, Poland and Bulgaria; Stock taking and bottlenecks”, the event was part of the three-day Community Energy Spring Gathering organized by REScoop.eu, the European federation of citizen energy cooperatives, as well as Electra, an energy cooperative based in Greece.
Featuring representatives from three EU countries (Greece, Poland, Bulgaria) as well as a non-EU country that is heading towards integration, Serbia, the discussion aimed to provide a deeper look into the different legislative frameworks among countries. As noted by Kyriaki Metaxa, Programme Coordinator at Heinrich Böll Stiftung Thessaloniki, who welcomed interested participants in the event, the point of discussing country specifics on the spread of community energy is that “the Directives might be European, but the legal framework is part of the national context”.
European framework transposition at slow pace
Data gathered and monitored by REScoop.eu shows that despite the joint Directives, the common needs prosumers share as well as the explicit deadlines set by the European Commission, progress on establishing a solid institutional framework for community energy is still greatly varying. The Transposition Tracker tool, recently launched by RESCoop.eu to monitor legislative progress on implementing the RED II directive shows that only a few EU member-states have managed to establish a functional and concise ground that can facilitate citizens interested in forming energy communities, while there are still five countries that have not even managed to integrate definitions of energy communities into national law.
“A lot more work is needed”, said REScoop.eu Policy Advisor Stavroula Pappa in the first presentation of the event. “In some countries, transposition is simply a box to check. Some things are in law but they don’t work. It is a constant fight but we can learn from it”.
The discussion, temporarily split into two panels between Serbia and Poland on the ground floor and Greece and Bulgaria on Impact Hub’s basement space, confirmed both the problems and the silver linings highlighted in Ms. Pappa’s presentation.
Serbia: Positive examples despite legal framework
Despite a series of problems, Serbia stands as a partially optimistic example, since, despite not being an EU member-state, it has implemented the transposition of the EU’s community energy Directives through a 2021 law that was amended in April 2023. Following a successful crowdfunding campaign, Elektropionir, a Serbian Energy Cooperative that is now attempting to build the country’s first cooperative solar power plant in the Staroplanin region, has both been enabled and hindered by these legal changes.
Elektropionir has managed to overcome many of the obstacles, aiming for the rooftop solar power plant “Solarna Stara” to be operational by the end of 2023, by joining forces with the municipality of the town of Pirot and the villages Dojkinci and Temska. This partnership allowed them to clear out the hardships they faced on establishing an independent power producer instead of an energy community and is mutually beneficial, since the Memorandum signed with the municipality of Pirot states that for the next 25 years all profits from the project will be given to the local community. The ingenuity of cooperating with local authorities has led Solarna Stara to become an example for future efforts. “We are not experts, we reacted on our own reason”, commented Ana Džokić from Elektropionir at the end of the presentation.
Poland: Energy communities for a just transition in coal regions
As an EU member state, Poland has created a draft for a law on community energy with a single definition for a citizen energy community (CEC). The draft includes some provisions that would clarify who can be a member and in its current form it would only allow small businesses to participate in CECs, which would fall into the general spirit of the EU’s directives.
Poland’s framework for energy communities is especially urgent, since the country is faced with the challenge of phasing out its vast coal production which requires a “Just Transition” in Polish coal regions that would secure the economic stability and survival of its communities. People in Poland’s coal regions have expressed an interest in forming or participating in such energy communities, since it is commonly viewed as a measure that would assist with the transition. But even when the law finally comes into effect, financing energy community projects is expected to be a challenge.
While Serbia and Poland were exchanging notes on shared and similar problems, the juxtaposition of energy community frameworks in Greece and Bulgaria, two neighboring countries that are connected on the grid, exemplified the gaps and variations among EU member-states.
Greece: Confusing legal basis and pseudo-energy communities
Greece’s particularity was noted by Ioanna Theodosiou, Policy Associate of The Green Tank organization: “The first law on community energy that was passed in 2018 preceded the EU’s Directives, but incorporated their spirit”. This head start led to 1.406 energy communities active in Greece today with an installed capacity of 803 MW. In addition to that, the recent energy crisis has led many people to turn towards self-production, with requests for energy communities to be connected to the grid increasing five times in 2022, compared to the previous year.
This does not mean though, that the momentum gained by this early beginning was fully utilized. Only 3 MW of installed capacity corresponds to self-production projects, meaning that energy communities “are primarily used for profit, rather than to meet the needs of members”. Also, in the most recent National Energy and Climate Plan, 2 GW of electrical space is foreseen for self-production, which might prove to be quite limited since it will be distributed among individuals, CECs, SMEs, farmers, municipalities and also larger companies looking to cover all their electricity needs. Also, overlapping laws and activities in the definitions might eventually lead to obstacles and confusion.
Some of the issues might be treatable. A law in March 2023 that implemented the EU’s Directives has repealed the original legislative framework, limiting the share of profits to 20% (thus greatly reducing the profit incentive to form an energy community) and laying the foundations for energy communities in apartment buildings in Greece’s densely populated urban centres.
Despite the problems and pitfalls she highlighted, Ms. Theodosiou stated that she feels optimistic about the future of community energy in Greece. “We have a good legal basis to build on and achieve a simple, stable and coherent legal framework to support further development of energy communities”.
Bulgaria: Political instability hinders energy communities take-off
Bulgaria stands in stark contrast with Greece’s experience of fighting to fix the fine details of the framework. Despite being the country with the highest energy poverty rates in the EU, its prolonged political instability has not allowed any legal action to be taken to institute community energy. Tsvetan Georgiev of Izgrei, an organization currently developing the country’s first energy community project, told participants that the only way they could move forth with the plan was to create a public company since energy communities are non-existent in Bulgarian law.
Even though recent legal changes have allowed for small renewable projects to overcome bureaucratic hurdles, the limitations are strong and apparent. Permits and grid connections are largely dependent on local monopolistic power companies, which, as Mr. Georgiev noted, “are not interested in people being independent because they are clients basically - and there is no business that would like to lose clients”.
The prospect of fixing legal omissions is obstructed by an uniformed and disinterested political personnel and general public. According to Mr. Georgiev, politicians underestimate the potential of energy communities, while subsidies by the Bulgarian government to tackle the energy crisis are failing to incentivize people to look into prosumer options in electricity generation. Izgrei has joined forces with Greenpeace to urge the Bulgarian government to legislate, but even if the institutional problems were resolved, access to funding for such projects would still be limited. “We are far behind from other member-states”, Mr. Georgiev added, “but we can learn from other countries; we just have to look at practices from around the EU”.
Commonalities shared in challenges and solutions alike
Despite national particularities, the experience from the four countries led to a lively discussion on similarities that can be commonly discussed: lack of access to funding seems to constitute the most important obstacle for the proliferation of community energy, the division between for-profit and not-for-profit projects impedes and undermines policy design, the exact terms and conditions for access to the grid are a subject of debate on their own. But the commonality was also located as far as solutions are concerned: joining forces with local authorities has served energy cooperatives both in Serbia and Bulgaria, EU Directives and regulations can inspire legislation even in non-member-states while pan-European initiatives like REScoop.eu are a valuable source for consultations and insights.
“Serbia, but also other three countries and the whole of Europe are faced with the energy crisis which can force the acceleration of the energy transition”, said Tibor Moldvai, Programme Coordinator at the Heinrich Böll Stiftung office in Belgrade. “Despite the barriers, decentralized production is experiencing significant growth and is motivated not only by financial effects, but also by the need to increase security of supply and reduce the risk of future electricity price fluctuations. The discussion showed that citizens' energy represents the most sustainable and effective model of decarbonization of domestic consumption. It seems that this is the only right way to fight against the huge air pollution that comes from old fashioned coal power plants in Serbia.”
“Energy communities can bring multiple social, environmental and economic benefits for their members and the wider communities within which they operate”, notes Kyriaki Metaxa, Ecology Programme Coordinator at the Heinrich Böll Stiftung office in Thessaloniki. “The Clean Energy Package and the European Directives recognize their potential, research and data back this up as well as the many practical examples from across Europe and the Balkan region that were shared during the Community Energy Spring gathering and our workshop. Raising awareness over this and building the capacities of citizens to participate and advocate for enabling policy frameworks is key for their development and a priority for our work”.
For Beata Cymerman, Head of Energy and Climate Programme at the Heinrich Böll Stiftung office in Warsaw, despite their differences, “all four countries face similar problems regarding the legal aspects of implementing various forms of energy communities into national legislation or the lack of education of the public regarding the benefits of participating in energy democracy. However, despite the complexities of the forms, the key point is that in each of the countries presented, there are opportunities for civic energy development that have the potential to shift Europe's energy system towards a greener and more democratic one.”
