Energy Communities in the Clean Energy Package COBEN

Energy Communities in the Clean Energy Package COBEN Oldenburg 18 September 2019

Objectives of European Energy Policy Solidarity and energy An integrated market security Energy efficiency Research and innovation Decarbonisation

Outline Ø European energy policy and the Clean Energy Package Ø Why we include energy communities Ø What does the Renewable Energy Directive say about energy communities Ø Next steps and questions

European climate and energy targets 2020 2030 -20 % GHG emissions -40 % GHG emissions 20% renewables 32 % renewables 20 % energy efficiency 32. 5% energy efficiency

Target for renewables 202 0 20% RES share overall National binding targets for RES 203 0 At least 32% RES share Binding at EU level

The Clean Energy Package Inter-connected Innovative Enabling Framework Energy Union Governance Inclusive Energy Efficiency Socially fair Energy Efficiency Directive, Energy Performance of Buildings Directive Electricity Market Design Renewables Revised Renewable Energy Directive Regulation and Directive on internal electricity market; Regulation on riskpreparedness, ACER regulation Safe for all Digital Investment-friendly

What is in the Clean Energy Package Inter-connected Innovative Enabling Framework Energy Union Governance Inclusive Energy Efficiency Socially fair 32. 5% Electricity Market Design Renewables 32% Regulation and Directive on internal electricity market; Regulation on riskpreparedness, ACER regulation Safe for all Digital Investment-friendly

Why empower consumers Empowering citizens • A regulatory principle • Mobilising private capital for the energy transition • Increasing public acceptance • Increasing flexibility of the market

Why consumer empowerment • Mobilising private capital, LCOE of renewable energy communities comparable to utility generation because citizens expect lower return on investment • Increase flexibility in the electricity system, by empowering consumers to engage with the electricity market • Increase local acceptance of RES projects, especially to reduce opposition to wind farms • Recognise new actors, expected in the next decade (e. g. block chain) prepare for emergence of new technologies is

Citizen Energy Communities & Renewable Energy Communities - objectives of regulation - Level playing field - New market actor - Support for renewable generation - Incentives

Definition of Energy Communities E- Directive and RES Directive Common Features Legal Entity Specific Governance Voluntary and Open Membership Collective Action in the Energy Field Value Driven

Definition of Energy Communities Citizen Energy Community Renewable Energy Community Specific Governance, but Broad Membership Limited Membership & Specific Governance No geographical limitation Proximity to Generation Electricity only All sources of RES Technology neutral 100 % RES

Citizen Energy Communities & Renewable Energy Communities - sources of energy Electricity 100 % RES-E Other sources of energy

Citizen Energy Communities & Renewable Energy Communities - in electricity context CECs RECs - 100 % RES-E - Stricter Participation Criteria - Geographical Proximity

CECs and RECs – common features of regulatory framework Activities of energy communiti es Level playing field • Producing, consuming, storing and selling energy (also through PPA) • Optional cross-border participation • Non-discrimination • Market Access • Imbalance responsibility • Consumer protection Electricit y sharing Baseline support • Right to electricity sharing, as alternative to one-side supply • Fair, proportionate and transparent procedures • Include low income households, access to finance and capacity building

CECs and RECs – differences Participati on and Governanc e • Participation is open to all kinds of entities, but control remains with non-professional actors Charges, taxes and fees • Respect for the Member States’ autonomy • Member States may allow the DSO status • Possibility of “closed DSO” status Participatio • Participation is open only to non-professional actors, n and while the control remains Governanc with members located in e proximity of the project Active policy Role in support schemes • Promote and facilitate the development of RECs • Elimination of barriers • Member States to take specificities of RECs into account when designing support schemes

Citizen Energy Communities – possible architectures Courtesy of the Energy Department / Energy markets Ministry of Economic Affairs and Employment of Finland

Different types of groups © Thinkstock © REScoop. eu

Implementation How to share en ergy among commun ity members? ve ecti f f e s i What l? contro Ho w the to fra ena impl me bli em en wo ng t rk? cal hi p a r g geo ‘ s i t Wha ty’ i m i x pro

RECs in REDII (Renewable Energy Communities in the revised Renewable Energy Directive) Article 22 Renewable energy communities Who can participate 1. Member States shall ensure that final customers, in particular household customers, are entitled to participate in a renewable energy community while maintaining their rights or obligations as final customers, and without being subject to unjustified or discriminatory conditions or procedures that would prevent their participation in a renewable energy community, provided that for private undertakings, their participation does not constitute their primary commercial or professional activity. What energy communities can do 2. Member States shall ensure that renewable energy communities are entitled to: a) produce, consume, store and sell renewable energy, including through renewable power purchase agreements; b) share, within the renewable energy community, renewable energy that is produced by the production units owned by that renewable energy community, subject to the other requirements laid down in this Article and to maintaining the rights and obligations of the renewable energy community members as customers; c) access all suitable energy markets both directly or through aggregation in a non-discriminatory manner. Assessment of barriers 3. Member States shall carry out an assessment of the existing barriers and potential of development of renewable energy communities in their territories.

So-called “enabling framework” 4. Member States shall provide an enabling framework to promote and facilitate the development of renewable energy communities. The framework shall ensure, inter alia, that: a) unjustified regulatory and administrative barriers to renewable energy communities are removed; b) renewable energy communities that supply energy or provide aggregation or other commercial energy services are subject to the provisions relevant for such activities; c) the relevant distribution system operator cooperates with renewable energy communities to facilitate energy transfers within renewable energy communities; d) renewable energy communities are subject to fair, proportionate and transparent procedures, including registration and licensing, and cost reflective network charges, as well as relevant charges, levies and taxes, ensuring that they contribute, in an adequate, fair and balanced way, to the overall cost sharing of the system in line with a transparent cost-benefit analysis of distributed energy sources developed by the national competent authorities; e) renewable energy communities are not subject to a discriminatory treatment with regard to their activities, rights and obligations as final customers, producers, suppliers, distribution system operators, or as other market participants; f) the participation in the renewable energy communities is accessible to all consumers, including those in lowincome or vulnerable households; g) tools to facilitate access to finance and information are available; h) regulatory and capacity-building support is provided to public authorities in enabling and setting up renewable energy communities, and in helping authorities to participate directly; i) rules to secure the equal and non-discriminatory treatment of consumers that participate in the renewable energy community.

Inclusion of enabling framework in reporting 5. The main elements of the enabling framework referred to in paragraph 4, and of its implementation, shall be part of the updates of the Member States’ integrated national energy and climate plans and progress reports pursuant to (Governance Regulation) Voluntary cross-border participation 6. Member States may provide for renewable energy communities to be open to cross-border participation. Taking their characteristics into account when designing support schemes 7. Without prejudice to Articles 107 and 108 TFEU, Member States shall take into account specificities of renewable energy communities when designing support schemes, in order to allow them to compete for support on an equal footing with other market participants. Definition (16) ‘renewable energy community’ means 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

Next steps • Adoption end of the year • Transposition into law of the Member States Questions • Regulatory challenges for implementation? • Role of new technologies?