Although it is a relatively new concept in our society and still largely unknown to the general public, energy communities have been envisaged for several years in European Union regulations, specifically in Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources (“Directive 2018/2001”) and Directive (EU) 2019/944 of the European Parliament and of the Council of 5 June 2019 on common rules for the internal market for electricity, amending Directive 2012/27/EU (“Directive 2019/944”).
There are two types of energy communities: renewable energy communities, regulated under Articles 2.16 and 22 of Directive 2018/2001, and citizen energy communities, regulated under Articles 2.11 and 16 of Directive 2019/944. The key difference between the two lies in their focus: the former are aimed at local energy projects, requiring geographic proximity between the members and the common renewable energy project, whereas the latter allow all types of energy projects regardless of the members’ proximity and regardless of whether the energy is renewable or non-renewable.
In Spanish national legislation, energy communities were first mentioned in Royal Decree-Law 23/2020 of 23 June, which sets out measures in the energy sector and other areas for economic recovery (“RDL 23/2020”)—but only with reference to renewable energy communities. The concept of renewable energy community was incorporated into Law 24/2013 of 26 December, on the Electricity Sector, where it is defined as: “legal entities based on open and voluntary participation, autonomous and effectively controlled by members or shareholders located near the renewable energy projects owned and developed by such entities, whose members are natural persons, SMEs or local authorities, including municipalities, and whose primary purpose is to provide environmental, economic or social benefits to their members or to the local areas where they operate, rather than financial profits.”
According to RDL 23/2020, the objective of energy communities is to promote “the participation of citizens and local authorities in renewable energy projects”, thereby “enhancing citizen involvement in the energy transition.”
As stated in RDL 23/2020, renewable energy communities are legal entities, i.e., holders of rights and obligations, and can act as a single entity within the renewable energy market. According to national regulation, their members may be: (i) natural persons, (ii) SMEs, and (iii) local authorities.
Having explained what energy communities are and who may be part of them, it is important, from a practical perspective, to understand the benefits they offer both to their members and to society in general.
The benefits of energy communities can be environmental, economic, and social. Renewable energy communities contribute to reducing CO₂ emissions, decreasing fossil fuel consumption, and improving energy efficiency, which clearly benefits society. For their members, they offer lower energy costs. In addition, community members become less dependent on major electricity providers and market price fluctuations. Any profits generated by the community stay within the community and serve the collective interest.
The most widely used model of a renewable energy community is one where a solar plant is managed by the community, and all members share a photovoltaic solar installation, jointly covering costs and receiving energy from the installation (shared self-consumption). This system enables those who, for physical or financial reasons, are unable to install solar panels on their own property to benefit from the installation located on a third party’s property, which may belong to a local authority that has opted to install panels on public buildings, allowing others to benefit from the energy generated.
Although the most common model of energy communities involves renewable energy, non-renewable energy communities still exist. One example is natural gas microgrids, typically used in very cold areas of the planet where the electricity grid is unreliable, to supply heating and cooking energy. Another more traditional example includes coal-based communities, where the community managed coal extraction for its own use through thermal power plants, providing both electricity and heating.
Today, public policies increasingly prioritize the promotion of renewable energy communities only, with the goal of encouraging broader citizen participation in the energy transition.
To form such a community and implement a common energy project, members may choose from various legal structures such as associations, cooperatives, limited liability companies, or others like foundations, with the first three being the most commonly used.
In conclusion, renewable energy communities constitute a mechanism for integrating citizens into the production, development, and management of renewable energy, in collaboration with local authorities in their area of residence.