New provisions in the Electricity Market Design allow energy communities (ECs) to adopt the emerging practice of ‘energy sharing’.
The underlying principle of energy sharing is that energy producers or suppliers agree to deliver some share of their supply for free to energy poor households.
Article 2(10a) and Article 15a of the Electricity Market Design include provisions for Member States to facilitate energy sharing, which the Directive defines as:
“self-consumption by active customers of renewable energy either:
- generated or stored offsite or on sites between them by a facility they own, lease, or rent in whole or in part; or
- the right to which has been transferred to them by another active customer whether free of charge or for a price.”
The Directive reform encourages energy sharing schemes with a special focus on energy poor and vulnerable households. In fact, it requires Member States to ensure such households can access energy sharing schemes (e.g. through financial support measures or production allocation quotas). It also states that projects owned by public authorities could make shared electricity available to vulnerable or energy poor households (accounting for at least 10%, on average, of energy shared).
From EU Directive to national support
Such provisions will have to be transposed at the national level, which is expected to bring changes and additions to existing national laws that regulate the activities of self-consumption and collective self-consumption. It is likely to also affect aspects such as virtual net metering, virtual net billing, peer-to-peer trading, and so on.
A fundamental change related to the potential of energy sharing is that it becomes possible to self-consume jointly produced energy without having to acquire a supply licence. This substantially reduces administrative burdens and associated costs. The Inspiring Practice of Hyperion demonstrates how ECs can design self-consumption schemes to benefit vulnerable households.
Current obstacles to energy sharing
Currently, however, ECs that engage in energy sharing face multiple obstacles that are diverse in nature. Two overarching barriers include: a) a lack of information and low awareness about energy sharing; and b) conceptual confusion between ECs as an organisational concept and energy sharing as an activity. On the more technical side, main challenges include (among others): difficulty in obtaining grid access; a lack of clarity and transparency regarding the duties and roles of network operators; a lack of necessary IT infrastructure to handle data; and the ongoing need to organise energy sharing with a supplier.1
A key role of the European Commission is to provide guidance on how to ensure a level playing field for ECs that want to engage in both self-consumption and energy sharing. The guidance document is also
expected to resolve confusion as to the various terms being applied in the evolving frameworks
and market structures.
In the Inspiring Practice of La Tonenca Sccl (Spain), partnering with the municipality enables the EC to more effectively combine energy sharing and energy efficiency, and thereby reduce reliance on social services.
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