Energy communities refer to a wide range of collective energy actions that involve citizens’ participation in the energy system. They can be understood as a way to organise collective energy actions around open, democratic participation and governance, and the provision of benefits for the members or the local community.

It is a broad concept, that can refer to collective switching campaigns, collective investments in solar panels, but also the ownership of an energy supply company, or even a distribution network. Depending on their activity and on the national regulatory framework where they operate, energy communities can take different forms and legal entities, like cooperatives, partnerships, companies with a community interest, foundations, non-profit organisations, trusts, and associations. It makes it easier for its citizens, together with other market players, to team up and jointly invest in energy assets. 

Energy communities contribute to increasing public acceptance of renewable energy projects and make it easier to attract private or citizen investments in the clean energy transition. They provide direct benefits to citizens by advancing energy efficiency and lowering their electricity bills, thus contributing to fighting energy poverty. Aligned with local policies for decarbonisation and decentralised energy production, they lead to long-term and trustful partnerships between municipalities and local or regional stakeholders. They are recognised as a fertile ground for social innovation.

The most successful energy community projects in Europe are those where groups collaborate with local authorities. Local or regional governments have everything to gain from promoting the scale-up of energy communities in their area. They can initiate new projects themselves (create an example, like Ollersdorf), take part directly in one or several communities, or indirectly support them, for instance by creating a more favourable local regulatory framework, such as tax discounts or e-platforms to enroll in energy communities or register them. 

Through the Clean energy for all Europeans package adopted in 2019, the EU has introduced the concept of energy communities in its legislation, notably as citizen energy communities and renewable energy communities. There are two European directives that refer to two figures of energy communities: Citizen energy communities (Article 2(11) Recast Electricity Directive) and Renewable energy communities (Article 2(16) Recast Renewable Energy Directive). The main difference is that the former one is purely electrical, while the second one is more restrictive (in terms of who can participate in it and operate it) and involves all energy carriers (e.g. heat and power). Check Q&A of RESCoop for more information