1) What is a Renewable Energy Community (REC)?

Renewable energy communities (REC) organise collective and citizen-driven energy actions that contribute to the establishment of a way for a clean energy transition, while putting citizens first. Renewable energy communities contribute to an increased public acceptance of renewable energy projects, make it easier to attract private investments in the clean energy transition. These communities can provide direct benefits to citizens by increasing energy efficiency, lowering their electricity bills, and creating local job opportunities.

Renewable energy communities are a way of bringing the citizens together and re-define the conventional energy systems, bringing the citizens to an active in the energy transition whilst benefiting from it.

These communities can be set in any form of legal entity, such as an association, cooperative, a non-profit organization or a SME. These broad possibilities facilitate the connection and teaming up of citizens with other market players to establish renewable energy communities leading to a more decarbonised and flexible energy system.

2) What is the difference between collective self-consumption (CSC) and Renewable Energy Communities (REC)?

The term collective self-consumption (CSC) corresponds to “jointly acting renewables self-consumers”, which the REDII defines as: a group of at least two cooperating “renewables self-consumers […] who are located in the same building or multi-apartment block” or, where permitted by a member state, within other premises.

An REC is a legal body constituted under the terms of law, through the open and voluntary adhesion of its members, partners, or shareholders, who may be natural or legal persons, of a public or private nature, namely including SME or local authorities.

3) Which kinds of energy communities exist? What are the differences and similarities?

Energy communities can be divided in Renewable Energy Community and Citizen Energy Community and can be compared as follows:

Renewable Energy Community, as defined in REDIICitizen Energy Communitiy, as defined in EMD

A legal entity:

(a) which, in accordance with the applicable national law, is based on open and voluntary participation, is autonomous, and is effectively controlled by shareholders or members that are located in the proximity of the renewable energy projects that are owned and developed by that legal entity;

(b) the shareholders or members of which are natural persons, SMEs or local authorities, including municipalities;

(c) the primary purpose of which is to provide environmental, economic or social community benefits for its shareholders or members or for the local areas where it operates, rather than financial profits.

The REDII further states that RECs shall be entitled to produce, consume, store and sell renewable energy, including through renewables power purchase agreements.

A legal entity that:

(a) is based on voluntary and open participation and is effectively controlled by members or shareholders that are natural persons, local authorities, including municipalities, or small enterprises;

(b) has for its primary purpose to provide environmental, economic or social community benefits to its members or shareholders or to the local areas where it operates rather than to generate financial profits;

(c) may engage in generation, including from renewable sources, distribution, supply, consumption, aggregation, energy storage, energy efficiency services or charging services for electric vehicles or provide other energy services to its members or shareholders.

Despite the differences between both types of energy communities, there are major commonalities, as they:

  • Require a legal entity as a community umbrella;
  • Must be voluntary and open;
  • Should be primarily value driven rather than focusing on financial profits;
  • Require a specific governance.

Major characteristics differentiating the two concepts:

  • For citizen energy communities:
    • No geographic limitation. Also open to cross-border participation (optionally to be allowed by member states);
    • Large and medium size enterprises excluded from effective control.
    • Electricity only (according to the scope of the EMD);
    • Technology neutral (not necessarily renewable energy);
    • Major purpose of enabling frameworks: create a level playing field for the CECs as a new market actor.
  • For renewable energy communities:
    • Proximity requirement of effective control (to be defined in national law);
    • Limited membership (shareholders or members do not include large companies);
    • Open to all sources of renewable energy (e.g. also heat), but renewable energy only;
    • Major purpose of enabling frameworks: to promote the development and growth of RECs as a way to expand the share of renewable energy at national level.

Nevertheless, such definitions of organizational bodies do not exclude other alternatives, allowing different legal forms of organization as defined in national law.

Adapted from: “Collective self-consumption and energy communities: Trends and challenges in the transposition of the EU framework”, Compile – Integrating Community Power In Energy Islands, December 2020.

4) What are the advantages of participating in a REC?

Main advantages:

  1. Contribute to building the system we need to end the climate crisis;
  2. Help reduce funding and support for fossil fuels;
  3. Contribute to reducing energy poverty in your neighbourhood, village or city;
  4. Opportunity to meet your neighbors and strengthen your community;
    Produce your own renewable energy;
  5. Promote greater clarification on issues related to energy, climate and democracy;
  6. Strengthen the local economy;
  7. Show other communities that it is possible;
  8. Contribute to the creation of a more local and circular economy;
  9. Build the world you want to see;
  10. Energy self-sufficiency;
  11. Conscious consumption;
  12. Local, natural and clean energy;
  13. Greater social cohesion;
  14. Energy as a social good/service;
  15. Employment increase;
  16. Increased environmental awareness;
  17. Reduction of environmental impacts