Community Renewable Energy Projects: The Future of the Sustainable Energy Transition?

ABSTRACT

The Energy Union and the European Green Deal advocate the participation of citizens and communities in the energy transition, which encourages a bottom-up approach in the implementation of sustainable energy initiatives. Both are in tune with the United Nations’ Sustainable Development Goals, which attempt to involve all members of society in the sustainability path. The reality in EU member states, however, is that community energy still lacks the necessary regulatory framework to compete with large utility companies. This may indicate that the governance framework is lagging behind, still not ready to include communities (collective citizens) as full participants in the energy transition.

KEYWORDS:

• citizens’ ownership
• community renewable energy
• co-operatives
• energy citizenship
• sustainable energy transition

The European Green Deal (EGD) claims to be “for the E[uropean] U[nion] and its citizens”, as well as a “transition” that should be “just and inclusive” (EC 2019a, 2). This wording is important, as it is trying to address, in a post-Brexit and Eurosceptic context, the issues related to the democratic deficit, legitimacy and citizenship in the EU, which the Treaty of Lisbon attempted to correct in 2007, but still have been widely highlighted in the literature for many years (for example Katz 2001).

An important element of the sustainable transition is that of energy systems. In the EU, environmental protection, sustainability or climate change are approached in a more integrative manner, since they are generally accepted as issues that need to be globally addressed, and enjoy wide (and increasing) public support (EC 2019b). These topics have been on the political agenda of the EU for decades: environmental policies have been in place since the 1960s, with diverse attempts to integrate said policies with energy-related ones (see, for example, Dupont and Primova 2011). Energy policy, however, has traditionally been a very complex area for the EU (Herranz-Surrallés et al. 2020; IEA 2020). Numerous regulatory changes have failed to achieve enough market integration and liberalisation to bring down the cost of energy for consumers.

The purpose of this article is to address the question: What are the drivers and barriers for the implementation and success of community renewable energy projects in the EU? It aims to inform the debate about the role of these actors in a sustainable energy transition as part of an overall sustainable transition in Europe. In this sense, the article aims at contributing to this Special Issue by addressing the overarching question of which is the role of different actors and instruments in the EU governance system (for a sustainable transition).

So far, there is no agreed definition of “community renewable energy” (REN21 2016; Roberts 2020; Tosun et al. 2019). Terms such as “community renewable energy” (REN21 2016), “community power” (Roberts et al. 2014), “energy democracy”, “prosumer” (Szulecki 2018) or “energy citizenship” (Ryghaug et al. 2018) are used throughout, sometimes without proper distinction. Studies tend to focus on specific cases applicable to one type of project, such as co-operatives (Bauwens et al. 2016) or single countries. Other studies give more importance to the motivations for being part of these projects from a sociological or psychological point of view (Hicks and Ison 2018). There is little and only very recent work on the potential and role of these projects to contribute to the sustainable transition path or the barriers to their success.

The article tries to ascertain if citizens integrated into energy communities can play an active transformational role. It makes the assumption that citizens’ participation is necessary and positive for the energy transition, as already discussed by several authors (Future Energy Leaders, Active Citizenship Taskforce 2019). The use of electric cars, installation of smart meters or solar panels in private homes by individual citizens (Ryghaug et al. 2018) are all part of that positive contribution. This article focuses on the participation of citizens through collective action in the form of community renewable energy projects, which has only been partly addressed by the existing literature.

To contribute to this gap, this article looks at the impact that different levels of governance (local, national, international) may play in the success of community renewable energy projects (understood as projects being implemented and creating benefits for their local communities – economic, social and/or environmental). It aims at identifying the underlying factors that act as drivers or deterrents in the implementation of said projects. In that regard, the article will analyse if the latest developments on energy policy under the umbrella of the EGD (or those that are prior to but fully embraced by it) enable a positive contribution of community renewable projects to the sustainable energy transition in the EU. As such, the literature on sustainability transitions (Köhler et al. 2019; Meadowcroft 2011; Turnheim et al. 2015) and participatory governance (for example, Gustafson and Hertting 2017) will underpin the analysis.

The article is organised as follows. First, the methodology is briefly explained. Then a literature review is conducted to introduce the basic concepts and theoretical background on which the article draws, also providing an overview of the evolution of the European context. Then the trajectory of community renewable energy projects is analysed through case studies from a sample of countries, to finish with a discussion and conclusions.

Methodology

The research conducted in this article is qualitative in nature and consists of a comparative analysis of the situation of community renewable energy projects across EU member states. A comprehensive literature review has taken place, using a constructivist approach (Klotz and Lunch 2015; Adom et al. 2016), combining information obtained from official communications and reports of relevant institutions with academic papers focused on specific case studies related to citizens or communities’ participation. This is complemented with data obtained from websites covering a sample of community renewable energy projects, initiatives and institutions in a number of European countries. The search involved looking into the treatment of the terms: ‘citizenship’, ‘citizens’ participation’, ‘communities’, and ‘community renewable energy’, associated with ‘motivation’, ‘barriers’ and ‘drivers’. In addition, systematic analysis of academic papers on the concepts of ‘sustainability transitions’ and ‘participatory governance’ completed the research. The period covered goes from the 1990s (when the first Gas and Electricity directives were approved) up to the present time (2021).

The comparative analysis of the case studies aims to ascertain which approach has been taken for the development of community renewable energy projects in each country (top-down or bottom-up); which actors have been the main drivers for this development (citizens, non-governmental organisations [NGOs], private sector, governments); what the role of authorities has been at the local, national or international level; and what the barriers and drivers for success (or lack of thereof) are. A key instrument for the selection of cases has been the countries’ presence in REScoop.eu, the European federation of renewable energy co-operatives, since co-operatives are one of the most popular forms of community renewable energy projects (Table 1). The sample of countries analysed includes Denmark and Germany, as pioneers in community energy projects; Austria, as a newcomer with a very limited presence in REScoop.eu; and Spain and Ireland, as two countries (although not the only ones) whose presence in REScoop.eu is increasing. Brief mention of examples from other European countries will be made to present a more comprehensive picture of the situation across Europe.

Table 1. Membership in REScoop.eu (2019-2021)

Country represented	Membership (2019)			Membership (2021)
	Federations	Individual members	Associate members	Federations	Individual members	Associate members
Spain	Union Renovables (17 members)	7		Union Renovables (17 members)	10	eKiwi movilidad Ecoserveis Association
Italy	SEV (20 members) Confcooperative Consumo e Utenza (661 members)	2		SEV (20 members) Confcooperative Consumo e Utenza (661 members)	3
Belgium	REScoop Vlaanderen (13 members) REScoop Wallonie (12 members)	7	EMES	REScoop Vlaanderen (13 members) REScoop Wallonie (12 members)	7	EMES
Germany	DGRV (850 members)	5	BBEn	DGRV (850 members)	5	BBEn
Netherlands	Energy Samen (600 members)	2		Energy Samen (600 members)	3
United Kingdom	Community Energy England (198 members) Energy4all (23 members)	1 (+1Wales)	ALIenergy	Community Energy England (198 members) Energy4all (23 members) Awel Aman Tawe (2 members) Community Energy Wales (26 members)	4 (+1Wales)	ALIenergy
Austria					1	Nobilegroup
Romania					1
Croatia		1			2
Denmark		1	EBO Consult		1	EBO Consult
France	Energie Partagee (153 members)	3		Energie Partagee (153 members)	4
Greece		2	Good Energy		5
Ireland		3			4
Slovenia		1			1
Switzerland		1	VESE	ASEC (13 members)	1	VESE
Turkey		1			1
Luxembourg					1
Portugal		1			1

Source: REScoop.eu Annual Report (2019) and website: https://www.rescoop.eu/ (accessed 1 July 2021).

Note: Federations group individual co-operatives. They are classified by the number of members as ‘small’ (less than 25 members), ‘large’ (more than 25 members) or ‘supportive’ (large with substantial personnel and budget). Individual co-operatives are classified as ‘start-up’, ‘growing’, ‘established’, ‘large’ or ‘supportive’, depending on the number of members, personnel and profitability (or lack thereof). Depending on their type, each member will pay a different amount as membership fee. Associate members pay reduced fees and do not enjoy the advantages of full membership.

Table 1 represents the number of members of REScoop.eu by type (federations, individual co-operatives and associate members). The comparison between 2019 and 2021 confirms the entry of three additional individual members and two associate members from Spain, one more from France, Croatia, Italy, the Netherlands and Ireland, and the first ones from Luxembourg, Austria and Romania (REScoop.eu 2021).

The inclusion of information about different European countries allows for an analysis of the evolution of community renewable energy projects over time, in order to appreciate if changes observed in pioneer countries are appearing elsewhere and, if so, to help identify the drivers of change. As the following sections will show, support for community renewable energy projects has decreased in so-called pioneer member states, which may compromise the role of these initiatives in the transition to low-carbon economies. Other countries, however, seem to be using the framework created by the European climate initiatives to promote these citizen-led movements. The variety of situations warrants an assessment of the recent trends.

Concepts, context and theoretical background

The characteristics of sustainability transitions have been widely debated in the literature, only to agree on the complexity of the problems ahead, bearing in mind that the required transformations affect multiple dimensions (technologies, markets, user practices, infrastructures, policies, etc.) and actors (Köhler et al. 2019).

As already mentioned, the transition of the energy systems is recognised as one of the most important socio-technical transformations on the path towards a sustainable, low-carbon economy (Jacobsson and Bergek 2011). There are multiple angles from which to look into collective citizens’ participation, with some authors focusing on the possible motivations behind community engagement (Gustafson and Hertting 2017) and others highlighting the need to account for geographical/spatial factors and limitations (Coenen et al. 2012) or the specific materialisation of the participation (Ryghaug et al. 2018).

Since the focus of the article is on citizens’ collective participation, it is important to clarify how such participation may happen. Energy democracy becomes a conceptual frame for action, a policy goal and a process, characterised by popular sovereignty (citizens as recipients, stakeholders and accountholders), participatory governance and civic ownership (Szulecki 2018). In this context, energy citizenship would become part of that democratic governance framework, expected to receive a boost with the latest EGD initiatives, in which both prosumer (individual citizens as producers and consumers of energy) and community (citizens organised as collectives) energy come together, particularly reinforcing the aspect of citizens’ ownership or operation of energy distribution grids (Roberts et al. 2014). Community renewable energy, as part of community energy, is included in the framework as part of energy citizenship.

This article follows the approach of Gill Seyfang et al. (2013), who developed the definition coined by Gordon Walker and Patrick Devine-Wright (2008). They understand community renewable energy as “those projects where communities (of place or interest) exhibit a high degree of ownership and control, as well as benefit[ing] collectively from the outcomes” (Seyfang et al. 2013, 978).

Common features of these community energy projects tend to be the fact that said projects are run by anonymous citizens (bottom-up approach) through organised communities, such as co-operatives or development trusts, but also through non-profit customer-owned enterprises or housing associations, with a non-corporate (non-managerial) structure, as well as democratic participation in the decision-making process, and with profits returning to the local community (REN21 2016). All these features, however, are characteristic of direct involvement, while, in some cases, participation takes place in a more indirect way, through the ownership of shares/participations in projects run by utility companies (Walker and Devine-Wright 2008). The level (direct/indirect) and way (ownership/operation/shareholder) of involvement depends in many cases on the particular needs and interests of the community, and the applicable regulatory framework (Meadowcroft 2011).

In energy policy, multi-level governance and multi-level perspective analysis seem to be taken as given (Meadowcroft 2011; Turnheim et al. 2015). We need to see to which extent the current governance framework allows for full participation of communities as active agents in the sustainable transition process. In this context, it is important to recognise that community renewable energy projects operate at the local level, and as such, they are constrained by the regulations, needs and interests of the local area, whilst at the same time policies related to energy or climate are mostly decided at the national level (Wade et al. 2013) or even at the international level, if we include EU policies or United Nations (UN) climate-related agreements.

From its level of governance, the EU has supported the development of renewable energies for decades (Kitzing et al. 2012), not only as part of different strategies towards more sustainable futures, but also to reduce energy dependency on third countries (EC 2019c). Integration of policies to achieve sustainability-related targets has not been an easy endeavour (Table 2). The discourse of European institutions with regard to their priorities in energy policy has also changed. It could be argued that contradictory policies have been in place, and member states’ national interests have lately taken the lead over European integration or convergence plans (for details and examples, see Fernandez 2018a).

Table 2. EU energy, environment, climate and sustainability integration efforts from the 1990s

Timeline	Policy area
	Environment	Climate	Energy	Sustainability
1990s	4^th and 5^th EAPs (Environmental Action Plans) – integration of environment into other policy areas	Air Quality Framework Directive; Integrated Pollution Prevention Control Directive	Electricity (1996) and Gas (1998) Directives [First Energy Package]	Cardiff process; Treaty of Amsterdam (1997)
2000s	6^th EAP (Environmental Action Programme)	EU Emissions Trading System (ETS) Directive (2003, 2009)	Second and Third Energy Packages
	EU Sustainable Development Strategy (2001, 2006, 2009)
	Lisbon Treaty (2007)
		Climate and Energy Package 2020 (2008)
2010s	7^th EAP	ETS amendment (2018)	Energy Efficiency Directive (2012, 2018) Energy Union Package (2015) – Clean Energy for All Europeans (2016/2019) [Fourth Energy Package]	Europe 2020 Strategy (2010)
		Climate and Energy Package 2030 (2014)
		Climate-neutral Europe 2050 (2018)
	European Green Deal (2019)

Source: Author’s own elaboration based on documents from the European Commission.

Note: The list of documents is not comprehensive (there are too many to include them all). The classification in columns is based on the name of the policy, but there are overlaps: the latest EAPs have widely covered issues related to climate change and energy, and the Energy Union Package (EC 2015), while dedicated to the energy sector, links its development to climate actions.

This article pays attention to the governance issues of the Energy Union Package (and related strategies) and the EGD (EC 2019a), as they both mention the need to better integrate the supranational with the national (EC 2015) and the local level (EC 2019a) respectively. With the Energy Union Package, it was recognised that the existing governance system was inadequate (EC 2016), so it is interesting to see how each of them addresses citizens and communities’ participation.

The Energy Union Package (EC 2015, 2) initiated a momentum for the participation of individual citizens, but not so much energy communities, in the sustainability transition; though energy communities require participation at the local level, the priority was given to the national level. Communities are only mentioned once, in the context of smart cities (13). Under the same umbrella, the Clean Energy for All Europeans Package outlines how citizens can have real influence over their energy footprint through market efficiency and reinforced consumer rights, including “investing to produce their own renewable energy” (EC 2019c, 1). Importantly, it also mentions the need to include the participation of the local level and acknowledges that, as part of the energy transition, the energy system will become more decentralised (10). The Clean Energy for All Europeans Package specifically mentions “energy communities” with a more active role of consumers allowing for “more democracy” (13), and develops the rules governing said communities through the Recast Renewables Directive (OJEU 2018). The Directive, which entered into force in June 2021, emphasises the role of local authorities together with local citizens, taking part in renewable energy communities, as the reason for increasing levels of acceptance of renewable energy and the attraction of investment capital (Ibid.).

On the whole, the Clean Energy for All Package rephrased the message with the inclusion of communities, the local level and democracy. The EGD, however, depicts citizens’ participation very briefly and in a more diffused manner (EC 2019a, 6). It mentions local communities and energy communities, but only in the context of the Climate Pact (23) and as part of a “dialogue”, not active participation in projects. Little progress has been achieved in terms of implementation of concrete actions for community participation, bearing in mind the more than five years elapsed since the approval of the Energy Union Package. Several initiatives have been launched within the EGD in the area of climate change. The European Climate Law, proposed in March 2020 (EC 2020a), addresses specifically public participation. According to its preliminary statements, the Commission is set to launch the “European Climate Pact” to facilitate citizens and communities’ engagement and empowerment towards climate neutrality (13). A public consultation on the Climate Pact took place between April and June 2020, open to all stakeholders. The initial documentation on the Pact itself was reduced to two pages almost empty of content (EC 2020b), with questions instead of answers. Since then, an official communication has taken place, but it has led only to the nomination of climate ambassadors, with limited practical action (EC 2020c).

In summary, official documentation from EU institutions (EC 2015; OJEU 2018; EC 2019c), that is, at the international level of governance, seems to indicate limited high-level commitment to collectives’ or communities’ participation in the sustainable transition of the energy system, with the EGD somehow indicating a step backwards. Additionally, reality confirms that commitment at EU level does not always translate into member states’ action. Even though it is not the purpose of this article to explore this aspect, it could also be the case that the discourse at EU level is driven by specific member states, whose track record in this area is historically more positive. An example would be the Netherlands, in favour of the 55 per cent emissions reduction for 2030 (Government of Netherlands 2021), as opposed to Poland or Hungary, where issues of national democracy have been part of the climate negotiations (Farand 2020). This tension between the national and international levels of governance, however, could also be counteracted by the fact that the EGD aims to address international commitments together with domestic targets, namely the Paris Agreement and the UN Agenda for 2030, and all member states are signatories of both, which brings the international level to the front.

Policymakers tend to limit community engagement considerations to the planning stage of projects (for example, Wagenet and Pfeffer 2007). But community renewable energy projects call for a hands-on approach. Households acting as collectives are now understood to have a more direct contribution, not just to policy production or regulation, but also to research, technology development and innovation (Jacobsson and Bergek 2011). These perceptions seem to be in line with the arguments on the need to integrate top-down and bottom-up approaches in order to improve policy outcomes, particularly when it comes to environmental and climate policy, but also to empower communities (Fraser et al. 2006).

In the following section, we will analyse to which extent the existing practices in Europe align with the latest discourses on community participation.

Evolution of community energy initiatives across European countries

This section will cover the evolution of community energy initiatives, divided into two parts. The first part will focus on Denmark and Germany as the pioneers of the movement. The second part will add information about other countries in which the implementation of community renewable projects developed later. In each case, the main drivers, barriers and actors will be discussed, in order to extract lessons about possible ways forward for this type of initiatives.

The pioneers: Denmark and Germany

Community energy initiatives can be traced back to the 19th century (REN21 2016), though their study tends to focus on their development since the 1970s, particularly through the case of Denmark (Roberts et al. 2014; Gorroño-Albizu et al. 2019).

The Danish Wind Turbine Owners’ Association was created in 1978, and Denmark is considered, together with Germany, as a pioneer in renewable energy community engagement. In the development of the Danish system, based on wind co-operatives ownership (local, bottom-up approach), a favourable regime for renewable energy, the feed-in tariff (FIT) system, similar to the one operating in Germany (Bauwens et al. 2016), was key. Its drivers included a strong antinuclear sentiment and the abundance of wind resources (Wierling et al. 2018). However, numerous regulatory changes have led to the decline of community-owned wind co-operatives in the country. A pivotal change was the reduction in financial support, particularly through the replacement of FITs with feed-in premiums (FIPs) in 2004 (Bauwens et al. 2016; IEA-RETD 2016). With FITs, the payment received is independent of the market price and constant over time, while with FIPs, a premium tariff is added to the spot market price (Couture et al. 2010). The FIT system is considered one of the main drivers of community participation in all types of renewable energy projects (Gsänger and Karl 2020; Stefes 2010). Other forms of financial support currently exist (Moroni et al. 2019), but they are not enough to counteract the overarching preference for bigger, more commercially viable projects or for individual investors with available funds, rather than a system of co-operatives that requires public support (Wierling et al. 2018). The policy shift was based on the discourse that renewables had achieved a sufficiently competitive level of development, which was later mirrored by the EU Commission (Fernandez 2018a). In that sense, the Danish system became more market-oriented and less community-driven, limiting the inclusiveness of community projects and their contribution to reducing energy poverty. The Danish Renewable Energy Act requires that new wind projects have to be at least 20 per cent owned by local people (Roberts et al. 2014), but this refers to commercially led projects, which in itself gives an indication of a government preference for market development and financial returns.

One characteristic of the Danish system at its inception was the participation of local authorities as owners or co-owners of the projects (Gorroño-Albizu et al. 2019), with the national regulation making ‘local’ ownership mandatory. This changed with the opening of the wind market to big utility companies in the 1990s, leaving less room for citizens’ ownership. In the initial development of wind co-operatives, there was no proper planning or consideration of where the largest wind potential was. Since 1995, planning zones were established, and local authorities (municipalities) were tasked with deciding where to place wind turbines, which led to the dismantling of a number of sites (Wierling et al. 2018). This indicates pressures from the national level into local governance, creating barriers to the establishment of new wind co-operatives. This is also the reason why many current projects are less local and more ‘distant’ (Gorroño-Albizu et al. 2019). From the perspective of the bottom-up approach, two shifts appear to have occurred almost hand in hand. On the one hand, public opinion towards wind power deteriorated in Denmark, particularly for onshore wind projects, due to their visual impact; at the same time, the type of community involvement has shifted from direct to indirect (IEA-RETD 2016). As a result, while in 2002, wind co-operatives owned almost 40 per cent of the turbines installed in the country, estimates indicate that by 2010, that percentage had declined to 15 per cent (Bauwens et al. 2016). According to a recent study, the percentage of collective ownership is further reduced to 11 per cent, whilst that of individual citizen ownership is more than double, at 23 per cent, and large (commercial) investors own 48 per cent of installed capacity (Gorroño-Albizu et al. 2019). An additional change, this time related to the advancements in technology, took place when offshore wind projects started gaining momentum. The size and investment required for these projects effectively left out onshore wind co-operatives (Wierling et al. 2018), contributing further to the decline of this collective participation in the energy transition.

Not so long ago (2014), Denmark was second (after Germany) in the number of co-operatives (Bauwens et al. 2016), but now its participation in REScoop.eu is almost inexistent (see Table 1 above). As it can be observed, no Danish federation participates, and only one individual co-operative is part of the organisation.

Germany presents many similarities with Denmark. A point of difference is that in Germany more than one technology (wind and solar) blossomed under the FIT system. Some authors point to the financial motivation for German citizens to participate in renewable energy projects (Mergner and Rutz 2014), while in the Danish case, social activism against nuclear energy and the wish to benefit local communities was prevalent (Bauwens et al. 2016). However, there is evidence that community spirit (Holstenkamp and Kahla 2016) was also the motivation in the German case. The local push for renewable energy was tied with antipathy to nuclear power (as in Denmark), which is stronger in Germany than in other European countries (Morris and Jungjohann, 2016). The decentralised production of renewable energy enabled the creation of value at the local level, also with the participation of farmers as actors, to the benefit of rural areas (Mergner and Rutz 2014). The number of renewable energy co-operatives in Germany increased from 67 to 772 between 2008 and 2014. However, it is estimated that, even though 46 per cent of the installed renewable capacity in the country is owned by private individuals (or farmers), there has been a deceleration in the growth of ownership by co-operatives (REN21 2016). Although official figures for co-operatives membership in REScoop.eu haven’t changed yet, there is evidence that individual citizens’ participation in renewable energy projects has also started declining in Germany (Keating 2021). Nonetheless, the co-operative system is just one of many opportunities for citizens’ participation in the German case, as enabled by the country’s legal framework. Community energy companies can also be those created for profit participation of employees or customers, community projects by small groups or individual local investors, or joint local investments by citizens and municipal authorities. The profit motive seems to be more dominant in limited partnerships than in the co-operative system, and more in the wind than in the solar or biomass technology (Holstenkamp and Kahla 2016), which can explain why Germany is not in the same situation as Denmark so far. The participation of local/municipal authorities in the production and distribution of energy is a widespread practice in Germany (Mergner and Rutz 2014), once again, similarly to the Danish case. In both countries, apart from the social motivation, geographical and climatic conditions appear to be critical for the implementation of the projects, as they also depend on the amount of potentially available energy (Holstenkamp and Kahla 2016; Coenen et al. 2012).

Changes in the regulatory system in Germany, similarly to Denmark, meant that, in 2014, the FIT system was phased out, and the auction system was introduced. The tendering process has been blamed for the decline of citizens’ participation in the energy transition (Wierling et al. 2018), as citizens cannot compete with the resources of big utility companies. While the system was designed to facilitate the communities’ participation, big utilities played it, setting up local project companies that would fall under the definition of community energy projects, crowding out the truly locally grounded community projects (AURES II 2019). The larger size of the new projects, their physical impacts on the environment and biodiversity, their proximity to residential areas, and the lack of consultation and involvement of the local communities have contributed to eroding the support for, and acceptance of, renewable energies in Germany (Leiren et al. 2020). This has generated a lack of trust, becoming a barrier to the success of new projects (Maleki-Dizaji et al. 2020). Recently, Germany has again modified its Renewable Energy Act (EEG), aiming to improve the level of acceptance of renewable energy projects by citizens. The changes that entered into force on 1 January 2021 enable not only homeowners, but also tenants to benefit from the installation of solar panels on their rooftops. It is felt, however, that said changes do not reach far enough to fulfil EU targets for 2030 with regard to renewable energy (Appunn 2021). National interests, rather than EU governance (Van de Graaf and Colgan 2016), seem to drive the changes in the country.

In sum, both Denmark and Germany are witnessing how the initial locally based bottom-up approach that drove the thriving of community renewable energy projects in their inception has been replaced by a national top-down dominance of the regulatory framework, where market-based criteria are given priority over social gains. Systems where citizens, communities and local authorities played a determinant role in the deployment of renewable energy projects and their governance, are now dwarfed by large private utility companies aided by the decisions of national governments, impacting negatively on the acceptance of renewable energy projects. The change in the financial support mechanisms has become a barrier to the access of community-led projects to the tendering processes, leaving Denmark and, more recently, Germany with a diminished role for community-led renewable energy participation.

Other European countries

Spain has usually featured in comparative analyses with Germany. In fact, the two countries have enjoyed a decades-long collaboration in the promotion of renewable energy (Held et al. 2010), to the point that it could be argued that the community renewable energy movement in Spain has followed Germany’s steps.

Spain also early adopted FITs to support renewables. Madrid, however, effectively eliminated this form of support as a result of the economic crisis of 2007-08 (Fernandez 2018b). The regulatory framework changed in such a way that it penalised prosumers (with the ‘sun tax’), and only at the end of 2018 this regulation was repealed (BOE 2018). Individuals installing solar panels on rooftops had become a common sight in prior decades in Spain, but during the crisis, with high levels of unemployment and people struggling to pay energy bills, state support ceased. This was when the main Spanish community renewable energy project came to fruition: a solar farm was built by an NGO, Friends of the Earth, in the village of Sisante (Friends of the Earth 2014). Table 1 shows that the presence of energy co-operatives is continuously increasing, but the national regulatory framework in Spain is still not supportive enough (Hewitt et al. 2019) and has de facto been a barrier. In this case, individual local citizens and NGOs tend to be the promoters, with little support at the local level of authority. A key driver for community renewable energy initiatives is the tackling of energy poverty in local communities (that is, a bottom-up approach). Some local authorities have supported the adoption of renewable energy (by choosing green suppliers), but rarely local projects brought up by their own communities. This is an indication of a system where commercial interests and large suppliers still have the upper hand, without any specific support for citizen-led initiatives. It is worth mentioning that the lack of political stability in the country in recent times has also put the national and regional/local levels of government at odds with each other (Fernandez, 2018b), with the local levels being at times more proactive towards a sustainable energy transition. However, they also have to deal with local opposition to projects, mostly linked to the negative visual impact associated with large-size projects (Leiren et al. 2020). The increase in the membership of REScoop.eu (Table 1) appears to indicate a learning process for the co-operative movement in Spain, where international cooperation and affiliation are perceived as positive (Tosun et al. 2019).

Unlike Spain, the literature has focused only recently on Austria, where there has been a steady increase in the number of renewable energy co-operatives since the 1980s, but at a lower level than in Denmark or Germany (Wierling et al. 2018). The majority of investors are male homeowners with high incomes, which poses questions of inclusiveness (energy democracy). Similarly to Switzerland, in Austria large-scale renewable energy projects do not enjoy grassroots support. However, smaller community renewable energy projects find wider acceptance, despite the lack of financial means being perceived as a barrier to success (Broughel and Hampl 2018). Following the Clean Energy for All Europeans package of the EU, the Austrian government has been among the first to draft legislation to promote the participation of community projects in the energy transition (Gutfleisch and Selenic 2020). A key reason is the recognition that the scale-up of renewable energy will change the landscape of the country. Public acceptance gained through the participation and ownership of local communities is considered paramount (Rajal 2021). However, the shape and form of said projects is still to be defined, with significantly different legal obligations for each format (Gutfleisch and Selenic 2020; Rajal 2021). While there has been a limited bottom-up start of the community movement in Austria, the latest developments show a government-led (top-down) approach in order to fulfil EU requirements. The main barriers to participation are similar to the rest of the countries previously mentioned, linked to the lack of financial resources and a priority given to the economic viability of the projects.

Other countries have seen a surge in the co-operative or community energy movement as a result of the economic crisis of 2007-08, often in opposition to austerity measures. In addition to Spain, Italy is part of this group (Hewitt et al. 2019), with co-operatives representing an attempt to address energy poverty. Table 1 also shows an increase in the case of Greece.

There is hardly any example of community renewable energy in Eastern European countries, which are still heavily dependent on coal, with outdated regulatory frameworks (Bulgaria) and available financial support rapidly disappearing (Hungary). New community projects get funding directly from EU schemes instead of national ones, with regulatory systems that leave little scope for local authorities to get involved in these schemes (Community Power 2020).

A recent addition is Ireland, where there are projects scattered all over the country, although only one is actually generating electricity (Community Power Ireland 2020). The main barriers identified in the Irish case are related to lead time and costs of grid access procedures, which are higher than the EU average. In general, bureaucracy and lack of a fair playing field for small participants hinder the development of community projects. Grid access, lack of support in the initial stages of projects and lack of payment systems once a project is producing electricity are the main barriers observed (Community Power 2014). These regulatory/bureaucratic barriers are becoming common to countries such as Denmark and Germany, as a consequence of their once supportive regulatory frameworks being changed in the opposite direction. Only very recently (September 2020), the Irish government has shown signs of change, supporting seven community renewable energy projects (Gov.ie 2020). In that sense, recent regulation in Ireland is seen as a positive example, as it sets up a special tender envelope that facilitates the participation of energy communities (Keating 2021).

To conclude, the situation of community renewable energy projects across Europe is mixed. The current regulatory framework in many countries has led the role of this type of projects to shrink, with their potential to contribute to the sustainable energy transition not being acknowledged. On a positive note, there are signs in some countries, though, that the changes outlined in the regulations associated with the Energy Union Package, and to a lesser extent (so far) the EGD, are making member states react. Furthermore, there is evidence of a bottom-up approach and generally a preference for direct involvement (ownership) (Leiren et al. 2020). The main drivers of participation in this type of projects are social (Hicks and Ison 2018) and community aspects (with projects becoming common goods, to everyone’s benefit) (Gustafson and Hertting 2017). A common barrier in all the countries, however, is coming also from lack of clarity at the EU level. There has been a misinterpretation of the EU regulation of state-aid, leading national governments to believe that subsidies for community renewable energy projects were not allowed. The Commission has made it clear in the case of Ireland that this is not the case (Keating 2021), which should support such projects in the future.

Discussion and conclusion

The preceding sections provided a summary of the situation with regard to community renewable energy projects across the EU. Academic literature seems to agree on an important role for this kind of projects in the sustainable energy transition. Institutionally speaking, the latest steps emanating from the EGD point towards a higher level of recognition and promotion of community energy projects and energy citizenship. However, the reality in member states is that community energy still does not have the necessary regulatory framework to compete with large utility companies, and the existing discourse at EU level still focuses on the passive participation of individual citizens rather than the active engagement of communities. Arguably, this is an indication of the governance framework lagging behind, still not ready to include citizens as full participants in the energy transition, let alone collective initiatives. The high-level commitment from EU institutions takes too long to be transposed into national regulations, and delays are even longer in the implementation of projects. Moreover, some analysts (Roberts 2020) argue that existing EU regulations of the internal energy market and competition rules still fail to recognise the role of energy communities and their unique challenges, creating issues of equality and non-discrimination.

At another level, the participation or support of local authorities is key to enable the empowerment of their communities. Evidence suggests that a good number of local authorities have been actively promoting and part of community renewable energy projects; however, the possibilities of success are limited, if the objectives of said local authorities are at odds with those of national governments (Hewitt et al. 2019). Examples of this negative interaction have been observed in both Spain (Fernandez 2018b) and the UK (Vaughan 2016).

For their part, renewable energy communities have reacted to the unfriendly change of framework (related to the reduction of support instruments such as FITs), and in some cases (for example, the UK), to hostility of those wanting to preserve the traditional landscape or defenders of strict nature protection towards the co-operative movement. Their innovative responses include coordinated actions between different projects across borders, such as the creation of joint electricity supply or trading companies in Denmark, Germany and Belgium (Bauwens et al. 2016). In other instances, the key to addressing local opposition to renewable energy projects was to ensure local ownership of their development, making visible how the local community would benefit from said projects, including through the creation of jobs (Gorroño-Albizu et al. 2015). This reinforces the argument that bottom-up participation, where citizens are involved in all stages of a project, is a more successful approach.

To answer the research question of this article, it becomes clear that the drivers for the implementation of community renewable energy projects in all the countries analysed are linked to socio-economic factors, whether it is antinuclear sentiment, tackling energy poverty or the search for additional income to reinvest in the local communities. At the same time, the barriers are also common, namely the lack of financial resources and the fact that the regulatory regime has always been, or has at some point been changed into, one that favours larger, more economically viable projects, leaving small-size initiatives unable to compete, particularly in tendering processes. Community renewable energy projects are usually based on a bottom-up approach, which in the most successful cases counts on the support and/or direct participation of the local authorities (municipalities). To achieve local acceptance, the involvement of local authorities is sometimes as important as showing social – more than financial – benefits for the local community.

The EGD recognises all these factors (drivers and barriers), which is a first step in the right direction, with even wider recognition of the future role of community renewable energy projects in the energy transition. Nonetheless, evidence seems to indicate that individual citizens and large utility companies are still given priority. In this sense, the governance framework needs to change, or at least to be clarified, to allow communities (that is, collective participation) to be part of the sustainable energy transition. Financial support mechanisms and legal requirements to participate in the energy market are still unfavourable to small-scale projects, which are the ones that most energy communities are trying to implement, as well as the ones that enjoy the widest acceptance. Research has seen that most existing case studies still focus on electricity generation, with little attention given to energy efficiency or transport/mobility (Bessette 2018). Future works should try to address this gap, as well as the limited research.

Acknowledgments

The author would like to thank the editors of the journal and the co-editors of the Special Issue for their constructive comments on earlier drafts of this article. Anonymous peer reviewers helped to strengthen the text. The author acknowledges the UACES Research Network ‘The Role of Europe in Global Challenges: Climate Change and Sustainable Development’ for the organisation of a dedicated online workshop. The Jean Monnet Network ‘Governing the EU’s climate and energy transition in turbulent times’ (GOVTRAN: www.govtran.eu), which is funded by the Erasmus+ programme of the European Union, deserves credit for additional support.

Additional information

Notes on contributors

Rosa Fernandez

Rosa Fernandez is Deputy Head of Department and Programme Leader of Economics at the Department of Social and Political Science of the University of Chester, Chester, United Kingdom.