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11 June 2018 | Maria Rosaria DiNucci, Michael Krug (FFU, FUB)

Renewable Energy Communities in the Clean Energy Package

This blog article is an excerpt of the 1.Policy Brief >> read the full brief

 

On 30 November 2016, the European Commission launched the Clean Energy Package, a comprehensive set of legislative proposals, including a recast of the Directive on the Promotion of Renewable Energy Sources (European Commission 2016a). The Commission proposal for a revised Renewable Energy Directive contains a binding target of a 27% EU share of RES in final energy consumption by 2030. The proposal

 

  • provides guiding principles on financial support schemes for RES;
  • enhances mechanisms for cross-border cooperation;
  • simplifies administrative procedures;
  • outlines measures to mainstream the use of RES in the transport and heating and cooling sector;
  • contains detailed provisions to improve the sustainability and greenhouse gas (GHG) emissions-saving criteria for biofuels, bioliquids and biomass.

 

Including community participation - a novel approach

 

The proposed directive also addresses renewable energy communities (REC), particularly in Article 22, which includes definitions, criteria and guidance for their realization. This is a novel approach as REC including community participation in wind energy projects have not been mentioned by the actual Renewable Energy Directive. With the Clean Energy Package, the Commission acknowledges that the specific characteristics of REC in terms of size, ownership structure and number of projects can hamper their competition on equal footing with large-scale players. Measures to offset those disadvantages include enabling renewable energy communities to operate in the energy system and easing their market integration.

 

Article 22 of the proposed Recast Directive sets forth new provisions on REC to empower them to participate in the market. It defines REC as entities through which citizens and/or local authorities own or participate in the production and/or use of renewable energy.  A REC shall be an SME or a not-for-profit organization of which the shareholders or members cooperate in the generation, distribution, storage or supply of energy from RES, fulfilling at least four of the following five criteria:

 

  1. shareholders or members are natural persons, local authorities, including municipalities, or SMEs operating in the fields or renewable energy;
  2. at least 51% of the shareholders or members with voting rights of the entity are natural persons;
  3. at least 51% of the shares or participation rights of the entity are owned by local members, i.e. representatives of local public and local private socio-economic interests or citizen having a direct interest in the community activity and its impacts;
  4. at least 51% of the seats in the board of directors or managing bodies of the entity are reserved to local members, i.e. representatives of local public and local private socioeconomic interests or citizens having a direct interest in the community activity and its impacts;
  5. the community has not installed more than 18 MW of renewable capacity for electricity, heating and cooling and transport as a yearly average in the previous five years.

The proposal also stipulates that Member States shall take into account the specificities of REC when designing support schemes.

 

In its Impact Assessment of the Recast Directive (European Commission 2016b), the Commission acknowledged that with more than 2,500 initiatives EU-wide, REC have been key in triggering the energy transition in Europe. The local anchorage and ownership of such initiatives have brought substantial benefits in terms of social acceptance for renewable energy projects, especially for wind energy. They have contributed not only to increasing renewable shares and to reaching the targets, but also to lowering the cost of renewable energy deployment by making available the most adequate sites and providing access to cheap capital.

 

However, the Commission proposal does not contain any further provisions regarding an enabling framework supporting REC and, in this respect, lags behind the position of the European Parliament.

 

Positions of the Council of Ministers and the European Parliament

 

The Council supported the Commission’s proposal for an overall 27% binding target by 2030, to be achieved without additional binding national targets. In its General Approach, the Council also proposed clearer rights and obligations for REC. The General Approach envisages that Member States will provide an “enabling regulatory framework” for REC. However, the respective provisions lag behind the corresponding proposals by the European Parliament.

 

The plenary position supports a binding EU target of a 35% RES share in final energy consumption by 2030, including a 12% RES share in transport for each Member State. Member States would be required to carry out an assessment of the existing barriers and potential of development of REC in their territories in order to put in place an enabling framework to promote and facilitate their participation in the generation, consumption, storage and sale of renewable energy.

 

The proposed enabling framework shall include:

 

  1. objectives and specific measures to help public authorities enable the development of renewable energy communities, and to participate directly;
  2. specific measures to ensure that participation in renewable energy communities is accessible to all consumers, including those in low-income or vulnerable households or in social housing or who are tenants;
  3. tools to facilitate access to finance and information;
  4. regulatory and capacity-building support to public authorities in setting up renewable energy communities;
  5. the removal of unjustified regulatory and administrative barriers to renewable energy communities;
  6. rules to secure the equal and non-discriminatory treatment of consumers that participate in the energy community, ensuring consumer protection equivalent to that of those connected to the distribution grids.

 

The enabling framework shall be part of the integrated national energy and climate plans.

 

Outlook

 

Article 22 of the proposed Renewable Energy Directive sets forth new provisions on REC to empower them to participate in the market on a level playing field. This can be regarded an innovative and promising step. However, the fulfilment of four out of five special criteria for REC as proposed in the European Commission might lead to control and enforcement problems. Regarding the creation of an enabling framework for RECs, the Commission proposal lacks clearly behind the ambitions of the Parliament which, inter alia, proposes to make the enabling framework for REC an integral part of the future national integrated energy and climate plans. Although the Parliament (and partly also the Council) proposed to create an enabling framework for REC, it is still not clear to what extent elements of such a framework will feed into the final compromise. Hence, the perspectives for REC to benefit from accompanying support measures on the European level are still unclear. The same applies for the overall binding EU target for renewable energy in final energy consumption, although there are recent signals from the Council to move to an overall target for renewable energy between 30% and 33%.

 

References

 

Council of the European Union (2018): Interinstitutional File: 2016/0382 (COD) Note From: General Secretariat of the Council To: Permanent Representatives Committee/Council No. Cion doc.: 15120/1/16 REV 1 + ADD 1 REV 1 Subject: Proposal for a Directive of the European Parliament and of the Council on the promotion of the use of energy from renewable sources (recast). Brussels, 3 May 2018 (OR. en) 8392/18. Available at http://data.consilium.europa.eu/doc/document/ST-8392-2018-INIT/en/pdf

 

Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC.

 

EPRS (European Parliamentary Research Service) (2018): Briefing. EU Legislation in Progress. Promoting renewable energy sources in the EU after 2020. 16 March 2018 Author: Alex Benjamin Wilson. Members’ Research Service PE 599.278. Available at http://www.europarl.europa.eu/RegData/etudes/BRIE/2017/599278/EPRS_BRI(2017)599278_EN.pdf

 

European Commission (2016a): Proposal for a Directive of the European Parliament and of the Council on the promotion of the use of energy from renewable sources (recast). COM/2016/0767 final

 

European Commission (2016b): Commission Staff Working Document. Impact Assessment. Accompanying the document Proposal for a Directive of the European Parliament and of the Council on the promotion of the use of energy from renewable sources (recast). Brussels, 30.11.2016  SWD(2016) 418 final. Part 1/4.

 

European Commission (2018): Non paper on complementary economic modelling undertaken by DG ENER regarding different energy policy scenarios. Available at https://www.euractiv.com/section/energy/news/leaked-eu-analysis-makes-case-for-higher-renewables-energy-saving-goals/

 

IRENA (International Renewable Energy Agency) (2018): Renewable Energy Prospects for the European Union. February 2018. Available at https://www.irena.org/publications/2018/Feb/Renewable-energy-prospects-for-the-EU

 

 

 

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