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What are local energy communities?

Panlel solar instalado para abastecer comunidades locales

New European guidelines about energy transition incorporate the term "local energy communities", which is becoming more and more relevant in the energy topicality. In some countries, these cooperative associations are very common; however, in Spain there is still ignorance regarding the topic. This is why we are writing this post in order to shed some light on the issue: "what are local energy communities?"

Energy communities are getting more and more popular. In Europe there are many countries, like Germany, in which thousands of these organizations exist to supply energy to its associates. Nevertheless, in Spain its implementation is a little slower despite having more solar hours than the rest of European countries. This is perhaps caused by misinformation, the lack of experience of electric marketers and the complexity of its management.

But then, ¿what are local energy communities and why are they key to the energy transition and the fight against climate change? A local energy community is, according to the Institute for Diversification and Energy Saving, a legal entity constituted by associates in the form of a cooperative which establishes a series of objectives of energy obtaining for themselves. Its role is to facilitate the proactive participation of various sectors of society about energy generation.

These communities were born in the European norm aiming to achieve sustainable development objectives, carrying out actions to promote a cooperative system of more energy efficiency. European legislation contains multiple definitions for what local energy communities are; however, it is still being developed in the spanish normative.

The National Plan of Energy and Climate (PNIEC) 2021-2030 in Spain, which is still pending definitive approval, encompasses two concepts: renewable energy communities and civilian communities of energy. The last includes every project of sorts in the energy sector. It is, in fact, a definition that was transfered from European Guideline 2019/944.

The structure of these communities varies from small communities to large scale projects and the most common generation methods are solar panels and wind turbines. In order to be considered as a Local Energy Community it has to be autonomous and destinate economic surplus to cost reductions of energy production. It is neither permitted to commercialize the energy produced.

So, what are the benefits of local energy communities?One of them is the environmental protection that it causes to abandon fossil fuels and to reduce the local carbon footprint of energy generation. Thanks to that it is expected that by 2050 half of europeas¡ns will produce its own energy.

Also, local energy communities contribute to a better coordination and efficient use of resources; operating as an economically profitable alternative to traditional investment to traditional energy grids, which translates in positive economic repercussions. In addition, it reduces distribution costs and transportation and enables more innovation.

Finally, thanks to the sharing of energy at the local level, economic viability increases and associates have more influence over decision making. Not only that, it also reinforces community ties and can be a solution to energetic poverty.

In conclusion, beyond its necessary development in legislation, the implementation of these movements towards energy can be very positive. Because of that it seems like an excellent opportunity to accelerate energy transition. Now you know what are local energy communities.

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