Renewable energy communities under the Green Deal: Enablers of a socially just transition?

Michael Krug
Senior Researcher
Freie Universität Berlin
Environmental Policy Research Centre

Maria Rosaria Di Nucci
Dr., Senior Researcher
Freie Universität Berlin
Environmental Policy Research Centre

The European Green Deal (EGD) has been presented as “a new growth strategy that aims to transform the EU into a fair and prosperous society, with a modern, resource-efficient and competitive economy where there are no net emissions of greenhouse gases (GHG) in 2050 and where economic growth is decoupled from resource use”. Further, the EGD demands that the transition must be “just and inclusive”, putting “people first” and “paying attention to the regions, industries and workers who will face the greatest challenges”. In its Climate Law, the EU has formulated an interim target of reducing net GHG emissions by 2030 by at least 55% compared to 1990. In 2021, the Commission launched its ‘Fit for 55 package’, a set of proposals whose aim is to revise and re-align EU legislation with the new climate goals.

The energy transition is expected to particularly affect carbon-intensive economies and regions. With a view to making the transition socially just, the EU has established the Just Transition Mechanism supporting the most affected regions. The ‘Fit for 55 package’ proposes further measures to mitigate the social effects of the transition to carbon neutrality including a Social Climate Fund addressing the impacts of a new emissions trading system for road transport and buildings.

Although the concept of Just Transition is deeply rooted in the trade union movement and initially related to jobs, workers and communities mostly affected by environmental and climate policies, it bears also broader connotations. These encompass other groups of society and also include households and consumers in general and addresses inequalities caused by the energy transition across the board.

Energy communities (EC), collective bottom up initiatives of citizens and other local actors who invest in clean energy infrastructures can be considered as potential suitable “vehicles” for a Just Transition in a broader sense. ECs show a variety of organisational models and legal forms, with cooperatives representing the most common form. Besides reducing GHG emissions, ECs offer multiple socio-economic benefits including generation of local profits and jobs, local tax revenues and other financial returns to the communities. Energy sharing may help to reduce individual energy bills and system costs and may also help mitigating energy poverty. Finally, ECs help to promote energy citizenship and democracy enhancing social capital, mutual trust and social cohesion. ECs offer a vast potential to make the energy transition more inclusive and socially just. In the Baltic Sea Region (BSR), Denmark, Germany and Sweden are pioneers with regards to EC, whereas in the three Baltic countries and Poland these communities are still underdeveloped. The reasons are complex and range from socio-cultural and socio-economic factors, lack of political recognition, lack of effective support schemes, to administrative and regulatory barriers, prevailing power asymmetries and powerful incumbents.

The former EU Commission unfolded its vision of an Energy Union “with citizens at its core, where citizens take ownership of the energy transition, benefit from new technologies to reduce their bills, participate actively in the market, and where vulnerable consumers are protected”. In 2019, for the first time, ECs were given legal recognition in the EU Clean Energy Package (CEP). Renewable energy communities (RECs) and citizen energy communities (CECs) were introduced as new market actors entitled to engage in a variety of market activities along the energy supply chain. The recast Renewable Energy Directive (RED II) required Member States to put in place an enabling framework to promote and facilitate the development of RECs. Although the transposition deadline expired in June 2021, this process will likely last for the next few years.

In its Communication on the EGD, the new EU Commission committed itself to a “clean energy transition that involves and benefits consumers”. However, the EC provided rather patchy information on how ECs should be supported. In a later Communication, the EU Commission pledged “to look into capacity building schemes to implement citizen-driven RECs financed by the EU and self-consumption models enabling higher consumer uptake and faster development of decentralised renewable energy technologies”. Taking into account the multiple potential benefits, ECs deserve more attention in the EGD and there should be closer linkages with the CEP. The EGD and derived legislation should pay more attention to the role of ECs as a means to facilitate Just Transition in a broader sense.

The RED II underlines that “the participation in RECs is accessible to all consumers, including those in low-income or vulnerable households”. In most countries, this has been neglected so far. Empirical research shows that mainly older, affluent, well educated, male persons participate in ECs whereas women, young people, migrants, or disabled people are underrepresented. The same applies to vulnerable and low-income households. Only few, yet a growing number of ECs declare to pursue the mitigation of energy poverty.

The Horizon 2020 project COME RES aims to advance the development of RECs in nine European countries. The project´s activities involve a number of target regions, where community energy is in its infancy and model regions where ECs are in an advanced stage of development. The consortium of 16 partners examines barriers, potentials, business models, (socially inclusive) good practices and aims to initiate transfers of good practices. To engage with local stakeholders the project has established stakeholder desks in each partner country and organises solution-oriented dialogues and policy roundtables to co-create solutions to overcome existing barriers for RECs.


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