Energy Communities: Fighting Poverty and Energy Injustices

Energy Communities: Fighting Poverty and Energy Injustices

Energy Poverty

 

In recent years, the energy transition is bringing on a significant shift in energy sources and technologies once used to meet the energy needs of global societies. Usually, the energy transition involves a change from traditional energy sources, often based on fossil fuels such as coal, oil, and natural gas, towards more sustainable and environmentally friendly energy sources, such as solar, wind, hydropower, and nuclear energy, along with specific measures to increase its efficiency. However, while the energy transition makes it possible to tackle the fight against climate change, it could also have a negative impact on energy poverty, defined as the condition in which people cannot afford to cover the essential energy costs to meet their daily needs. This situation can be caused by a number of different factors such as insufficient income, high energy prices, low energy efficiency of homes or infrastructures. Among the negative impact that energy transition can generate on energy poverty, we can find: on the one hand, the increase in upfront energy costs, such as the need of installing sustainable energy technologies such as solar panels, wind farms or more efficient heating systems which may require significant upfront investments. Therefore, low-income households may not be able to cover these upfront costs and might remain excluded from access to the most efficient technologies. On the other hand, we could see, for example, a rise in energy costs, necessary to invest in more advanced or sustainable electricity grid infrastructures, or higher tariffs, which may be applied to finance renewable energy production. These cost increases could disproportionately affect low-income households, consequently increasing their level of energy poverty. Another impact could be the creation of higher unemployment rates in the fossil fuel sector: the energy transition often leads to a decrease in dependence on fossil fuels, which can have a negative impact on communities that are economically dependent on these industries. Job losses in fossil fuel related sectors can increase poverty in the affected areas and surroundings. In order to mitigate these potentially negative effects, it is crucial to embrace the topic of energy justice that assesses where injustices emerge and which parts of our society are affected the most and, despite that, are not being heard, and what processes exist to identify and reduce those injustices.

 

 

Energy Poverty and European Legislation

 

The way energy poverty is perceived and conceptualised varies around the world. More specifically, in the Global North, it involves the impossibility of economic access to energy sources that are also available at the national level. The European Commission argues that energy poverty results from a combination of factors which include low personal income, high disposable income expenditure on energy and poor energy efficiency, especially with regards to the energy performance of buildings. In fact, people living in energy inefficient buildings are more vulnerable to heat waves, cold waves, and other effects of climate change. In 2020, according to a European survey, 8% of EU citizens were unable to heat enough their home. As a result, energy poverty continues to be a significant problem, and the EU and its members must take immediate action to help vulnerable populations escaping from it. The EU has developed several policies and initiatives to promote energy justice within its overall energy legislation and strategy. This includes the adoption of renewable energy targets, measures to improve the energy efficiency of buildings, and programmes to support the transition to a more sustainable and equitable energy system. These actions include: the European Green Deal, a plan to achieve the EU’s climate neutrality by 2050, and a set of interim targets, including a significant reduction in greenhouse gas emissions by 2030. The deal focuses on the promotion of renewable energy, energy efficiency, and a cleaner and more sustainable energy system. The EU has also demanded to all Member States to draw up national action plans to combat energy poverty, as well as criteria for defining energy poverty and assessing how many households do not have the necessary energy services. It is also worth mentioning the Clean Energy Package for a new regulation of the energy market, energy efficiency of buildings and the promotion of renewable energy, through the adoption of Regulation (EU) 2019/943 on the topic of regulation of the internal electricity market; the Energy Performance of Buildings Directive (2018/844/EU) and, above all, the introduction, for the first time in Europe, of the legislation on energy communities with the Directive 2018/2001/EU (RED II) for ‘renewable energy communities’ (RECs) and Directive 2019/944/EU (IEMD) for ‘citizens energy communities (CECs)’ . In Europe, energy communities are a central aspect of energy transition strategies. It is estimated that by 2050, 264 million Europeans will enter the energy market as prosumers and generate 45% of the total renewable electricity on the market. Renewable Energy Communities (RECs) are defined as an autonomous legal entity that, in accordance with national legislation, has a democratic structure and in which the participation is open and on a voluntary basis. Its members or shareholders may be public entities (local authorities, including municipal administrations) or private entities such as individuals and small and medium-sized enterprises, for the latter their participation may not constitute the main commercial or professional activity and must be located in proximity of renewable energy production installations. The renewable energy community may produce, consume, store and sell energy produced exclusively from renewable sources, including through renewable power purchase agreements, be the distribution system operator, and exchange, within the renewable energy community, the renewable energy produced by the generation units owned by that community as a producer or consumer of renewable energy. The CER must be able to carry out its activities without being subject to discriminatory treatment and in addition to providing energy or aggregation services, it can also provide other commercial energy services to which the relevant European and national regulations apply. In Europe, energy communities are becoming an essential way to participate in the energy transition process. It is estimated that by 2050, 264 million Europeans will enter the energy market as prosumers and generate 45% of the total renewable electricity on the market. The pioneer countries, often enabled by national investments, are Germany (1750 active energy communities in 2020), Denmark (700 in 2020), the Netherlands (500 in 2020, over 600 in 2023), the United Kingdom (431 in 2020) and Sweden (200 in 2020).

 

 

Energy Communities: Governing Energy as a Common Good

 

The literature suggests bridging the gap by governing energy as a commons, arguing that the commons could provide an umbrella framework for building a holistic and sustainable alternative to the current socio-economic configuration that permeates virtually all aspects of human activity, i.e., profit-maximizing market relations. The framework can be applied to the theoretical analysis of the energy transition, the design of climate and energy policies, and the experiment of energy cooperatives as a tool for a commons-oriented governance approach and resource management in the energy production sector. The main purpose of an energy community is to realise environmental, social, and economic benefits, rather than financial profits. Energy communities are an example where energy is managed as a common good that can improve the environment by producing energy through renewable sources such as solar and wind energy and reduce energy poverty. Energy communities take a holistic approach to tackling energy poverty by integrating sustainable energy sources, promoting energy efficiency and actively involving community members in energy management and production. These initiatives not only improve access to energy but also contribute to environmental sustainability and the resilience of communities. Therefore, it is crucial to promote energy communities because it represents an important step towards a sustainable future while improving, at the same time, access to energy, environmental quality, community participation and energy resilience. Nevertheless, the regulatory framework alone is not sufficient and must be matched by ways that raise awareness among urban actors, especially citizens, to make them take an interest in energy communities. In fact, the energy transition cannot take place without a connected transformation of the organisation of cities through the involvement of their citizens, local communities and territories.

 

 

References

 

Barroco et al. (2020) Le comunità energetiche in Italia: Una guida per orientare i cittadini nel nuovo mercato dell’energia. Green Energy Community: EIT Climate-KIC, Agenzia per l’energia e lo sviluppo sostenibile, ENEA, Università di Bologna.

  1. Aquili, Comunità energetiche: l’evoluzione del quadro regolatorio europeo e italiano, in Diritto e Società, 2022, n. 4, pp. 799-842.

 

Giotitsas, C., Nardelli, P. H., Williamson, S., Roos, A., Pournaras, E., & Kostakis, V. (2022). Energy governance as a commons: Engineering alternative socio-technical configurations. Energy Research & Social Science, 84, 102354. Quote at page 3.

 

Ferster, B. Macht, G.A. Brownson, J.R.S. (2020) Catalyzing community-led solar development by enabling cooperative behavior: Insights from an experimental game in the United States, Energy Res. Soc. Sci. 2020, 63,

Foster, S., Iaione, C. (2019) Ostrom in the City, in Blake Hudson, Jonathan Rosenbloom & Dan Cole, Routledge Handbook on the study of the commons, New York, Routledge

Foster, S., Iaione, C. (2022) Co-cities: Innovative Transitions Toward Just and Self-sustaining Communities. MIT Press.

Straver, K., Mulder, P., Hesselman, M., Tirado Herrero, S., Middlemiss, L., and Feenstra, M. (2020). Energy Poverty and the Energy Transition. TNO.

Iaione, C. et al. (2021) Energy Communities: prototipazione sperimentale del modello giuridico-economico delle comunità energetiche. RdS/PTR(2021)/053. ENEA.

Iaione, C. et al. (2018) La cooperativa di quartiere come strumento di cooperazione delle comunità urbane. Report RdS/PAR2018/036. Available here.

Day, R., G. Walker, and N. Simcock. 2016. “Conceptualising Energy Use and Energy Poverty Using a Capabilities Framework.” Energy Policy 93: 255–264.

ENERGY COMMUNITIES: THE EVOLUTION OF THE EUROPEAN AND ITALIAN REGULATORY FRAMEWORKS

 

Background: climate emergency and energy transition

 

Climate change plagues the earth system, the anthropogenic activity of the inordinate use of fossil fuels in industrial supply chains, commercial activities and the energy sector is the main cause of the current climate crisis. The resulting concentration of greenhouse gases in the atmosphere has reached the highest level in recent years. As a result, the earth’s temperature rise is increasing, causing environmental damage and climate quality impacts such as melting glaciers, rising sea and ocean levels,[1] biodiversity loss, water acidification, and continuous catastrophic climate events worldwide.

The energy sector plays a key role in the search for a solution to counter the demise of our planet.

Into this tragic historical snapshot comes the European energy crisis caused by the outbreak of the Russian-Ukrainian war. With EU sanctions against Russia, the resulting reduced supply of Russian gas and related price inflation show even more how energy independence of European states and the world is needed[2].

It is therefore essential to orient energy planning toward a sustainable energy system, replacing fossil sources with renewable sources[3]. There is, in fact, an intrinsic relationship between the energy market and sustainable development, the latter first defined by the 1987 Brundtland Report as: “development capable of ensuring the satisfaction of the needs of the present generation without compromising the ability of future generations to realize their needs[4].” That said, in the following pages an attempt will be made to reconstruct the regulatory framework at the international and European level on the sustainable energy transition, which has become a lever for the emergence of energy communities. The discussion continues precisely with an in-depth look at the regulation of renewable energy communities (RECs) and citizen energy communities (CECs) at the European level. It continues, then, with a description of its transposition in Italy, through the presentation of the transition from the transitional regulatory phase to the new regulations introduced with the approval of the Integrated Text on Diffuse Self-consumption. The goal is to provide an overview of the energy community system in order to open a reflection on how this new widespread model of energy production allows to consider energy as a common good, fight energy poverty, create new forms of governance and enhance the figure of the so-called prosumer. Energy communities constitute a new solution resulting from a public-private community partnership in the field of environmental, social and economic innovation, and thus perhaps a real key to addressing climate change and making cities resilient and sustainable[5].

 

For reading the entire article, please refer to:
A. Aquili, Energy communities: the evolution of the European and national regulatory framework, Law and Society Review, Editoriale Scientifica Srl, 4, 2022, pp. 799-842.

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References

[1] P. Caputo, Importanza della risorsa biomassa nella pianificazione energetica e per lo sviluppo locale. Analisi di alcune esperienze in Nord Italia e possibili scenari evolutivi in Archivio di studi urbani e regionali”, 2021, 131, 186 ss.

[2] N. Braga, Progetti per la transizione energetica: caso di studio relativo ad una centrale di teleriscaldamento associata ad impianto fotovoltaico inserito in Comunità Energetica Rinnovabile, in Università degli Studi di Padova – Dipartimento di Agronomia, Animali, Alimenti, Risorse Naturali e Ambiente e Dipartimento Territorio e Sistemi Agro-Forestali, 2021.

[3] La Corte dei conti italiana definisce fonti rinnovabili: «quelle forme di energia generate da fonti, che per la loro caratteristica intrinseca, si generano o non sono esauribili, ed il cui utilizzo non pregiudica le risorse per le generazione future (…) contrapponendosi a quelle che necessitano di lunghi periodi di formazioni, essendo presenti in riserve esauribili nella scala dei tempi umani». Cfr. Relazione della Corte dei conti, Sezione di controllo per gli affari comunitari ed internazionali, delibera 20 gennaio 2012, n. 1 su «Energie rinnovabili, risparmio ed efficienza energetica nell’ambito della politica di coesione socio-economica dell’Unione europea». M. Romeo, Produzione di agroenergie, autoconsumo collettivo e comunità energetiche, in Diritto e giurisprudenza agraria, alimentare e dell’ambiente, 2021, 4. 

Sono considerate energie da fonti rinnovabili: «l’energia eolica, solare (eliotermica e fotovoltaico) e geotermica, da calore ambientale, mareomotrice, del moto ondoso e altre forme di energia marina, energia idroelettrica, energia della biomassa, dei gas di discarica, dei gas residuati dai processi di depurazione e biogas». Cfr. Art. 31 punto 1) direttiva (UE) 2019/944 del Parlamento europeo e del Consiglio del 5 giugno 2019 relativa a norme comuni per il mercato interno dell’energia elettrica e che modifica la direttiva 2012/27/UE. 

[4] F. Vetrò, Sviluppo sostenibile, transizione energetica e neutralità climatica. Profili di governance: efficienza energetica ed energie rinnovabili nel “nuovo ordinamento” dell’energia, in Riv. ital. dir. pubbl. com., 1, 2022, 56 ss.

[5] S.R. Foster, C. Iaione, Co-cities Innovative Transitions toward just and self-sustaining Communities, MIT Press, 2022.