Beyond the energy price shock, towards China’s low-carbon transition
Traditional energy production in advanced economies involves importing large quantities of oil and gas from a small number of suppliers. Renewable energy systems under new community ownership structures are being developed across Europe. The objective is to develop cheap, clean and safe energy by bringing the production of electricity closer to the people who will use it.
Caught between the war in Ukraine, the pandemic and climate change, the European energy system is going through an unprecedented crisis. Bill payers are facing steep increases in energy prices that show no signs of abating. In the second half of 2021, average electricity (and gas) prices jumped by more than 11% in the EU, compared to the same period in 2020, according to Eurostat statistics on electricity prices. That was before the geopolitical crisis resulting from Russia’s invasion of Ukraine in late February led to sanctions that further squeeze energy supplies.
The European Green Deal Strategy which plans to decarbonize energy production in the European Union has been reinforced by the REPowerEU plan reduce dependence on Russian fossil fuels. This combination will accelerate the green transition. “In this regard, the Ukrainian crisis can be seen as a catalyst for transitions to renewable energy,” said Nicolien van der Grijp of the NEW ARRIVALS project.
A response to the global energy challenge is being developed locally and regionally through clean energy communities. These are groups of people who voluntarily pool their resources to produce energy together. NEWCOMERS’ goal is to identify successful and sustainable business models in emerging clean communities. A senior researcher at VU Amsterdam’s Department of Environmental Policy Analysis (EPA), van der Grijp says energy communities “help to make citizens more aware of energy issues and give them a perspective to take action themselves.”
Heating and cooling alone account for 30% of Europe’s energy consumption. To meet this demand, around 60% of EU energy needs are met by imports and more than 66% of EU energy imports in 2020 were petroleum products, followed by gas and coal. Instead of importing fossil fuels from afar, the growth of renewables allows energy to be produced closer to where it is consumed.
The main renewables produced in energy communities are solar, wind and hydro, but other sources such as hydrogen, geothermal and district heating are increasingly being tested and deployed. Members of the energy community generally consume the electricity generated and, depending on local conditions, they may also adopt other activities such as carpooling, community gardens and green roofs.
NEWCOMERS highlights the types of political environments in which energy communities thrive, how players are organized, the technologies used, and how business models work. It also analyzes the value created by the energy community for its members and society at large, as well as the effects of membership on energy-related behavior.
“In addition to helping to tackle the climate crisis, energy communities also provide economic and social value,” van der Grijp said. “They can create local jobs and strengthen social cohesion.” The benefits of this approach go beyond independence from polluting sources to include tangible social transformation.
NEWCOMERS research results show that awareness levels differ significantly across European countries. According to van der Grijp, this presents challenges related to creating supportive policies and laws in EU member states. It also complicates grant schemes that support a good business case and services to help people build and operate energy communities.
“We hope our findings will contribute to several policy changes that are urgently needed,” said van der Grijp, who made a series of policy recommendations and a policy brief for European policy makers with similar projects.
Dr. Maria Rosaria Di Nucci coordinates the COME RES project that aims to facilitate the spread of Renewable Energy Communities (RECs) in nine EU countries and support the implementation of a regulatory framework for RECs. In doing so, the project will initiate processes of learning and exchange between regions with advanced development in the RECs and regions with potential for expansion. Each country has a target and a learning region.
“Renewable energy communities are important vehicles for reducing greenhouse gas emissions and for delivering positive social, environmental and economic impacts,” Di Nucci said. “They also promote regional and rural development.”
“The vision is the evolution of an energy system based on large centralized power plants towards a citizen model of distributed energy production based on renewable energy sources, which still represents a socio-political and regulatory challenge in most European countries,” said Di Nucci. .
The sole selling point of COME RES and the operational arm of the project are the nine so-called country offices. These can be seen as informal dialogue forums involving national project partners, community energy organizations, other key players and market players from specific target regions and beyond. They organize thematic dialogues and policy roundtables to create solutions to overcome existing barriers to community energy growth.
COME RES also provides policy input through policy labs, action plan proposals, policy recommendations and engagement with stakeholders. Fundamental changes are necessary “so that the energy transition continues to be implemented locally and democratically”. Di Nucci mentioned the simplification of financing, the reduction of bureaucratic barriers and the reform of the auction model for renewable energy projects.
Most energy communities adopt the legal form of a cooperative, but they can also take the form of associations or foundations. Some have developed specific approaches to include marginalized groups and people in fuel poverty.
For energy communities to succeed, civic engagement is essential. W4RES works to increase women’s involvement in supporting and accelerating market adoption of renewable energy sources. A total of 50-60 renewable heating and cooling projects and initiatives in eight countries are expected to be supported by the end of the project.
The perspective of W4RES is that women as agents of change can make a difference in the energy transition,” said W4RES Coordinator Ioannis Konstas. Energy communities should involve more women in their organizational structures and provide leadership.
“To be truly transformative, energy access and the energy sector must be linked to an agenda that challenges stereotypes of women,” Konstas said, “and also advances their rights, their dignity and visibility in their various roles as consumers, producers, investors, experts and agents of change.’
Although a relatively new innovation, renewable energy communities hold enormous potential. Their development will have a profound impact on the energy transition and the daily life of European citizens.
The research in this article was funded by the EU. This article was originally publishedin Skylinethe European magazine for research and innovation.