Worldwide, advocates of these projects work for a renewable energy transition powered by people – where citizens invest in locally based, collectively owned renewable energy projects such as rooftop solar, local wind turbines and hydropower plants. Energy produced by these projects can be used to power everything from homes and schools to businesses and public buildings.

Projects vary in how they function, who they serve, and their relationship to main electricity grids. But by enabling people to be both energy producers and consumers – or “prosumers” – community energy has the potential to accelerate a just transition and create resilient energy systems.

An Introduction

The concept of community-led energy projects is not new – in the 19th and early 20th centuries, energy cooperatives in the US and Europe electrified rural areas. Community energy projects for the renewable energy transition, however, are a recent phenomenon.

Europe’s early efforts to transition to renewable energy in the 1980s were driven by community-owned wind farms, notably in Germany and Denmark. Initiatives increased with environmental awareness. A 2023 study revealed a rise in community energy in Europe over the past two decades in line with “collective action for the low carbon transition.” As of 2020-21, there were around 2 million people involved in 23,000 community energy projects across 30 European countries.

The European Union (EU) sees it as a key part of Europe’s energy future. In 2019 an EU directive defined and enabled “citizen energy communities”, while a 2020 report by the European Commission anticipates that 45% of Europe’s renewable energy will be community-owned by 2050.

While Europe leads the community energy revolution, examples of citizen-led renewable energy projects can be found across the world; from Revolu Solar, a non-profit installing community-owned solar in Brazil’s favelas, to the Barr River Hydro Scheme, which delivers 100% community-owned hydropower to 1,000 homes in Scotland.

Working for a Just Transition

From enforced blackouts and runaway energy bills to wildfires and explosions caused by faulty transmission lines – global energy markets and the utility-led energy model have historically prioritised profit over people. Community energy offers an alternative energy system that serves and supports citizens in the transition to renewables.

As community-owned energy projects are protected from volatile global energy markets, prosumers are not held to market prices and can receive lower energy bills. During the recent Europe-wide energy crisis, it was reported that some European community energy users paid half the amount in energy bills as customers who received their electricity from commercial utilities.

And many projects choose to reinvest their profits back into the communities they serve, creating a regenerative energy economy. For example, UK-based organisation Energy Garden uses revenue from their community-owned solar projects in London to run environmental internships and youth education programmes.

Community energy organisations serve as powerful community advocates when corporation-led renewable energy projects come into a neighbourhood. The community organisation UPROSE established the first cooperatively owned solar project in New York City, Sunset Park Solar. As the Norwegian energy company Equinor sites an offshore wind facility near Sunset Park, UPROSE is working to ensure the community is not left behind and has a stake in the future renewable energy economy through providing education and jobs training in offshore wind.

Projects can also be a tool to encourage local support for the energy transition. A report by the Institute for Local Self-Reliance references a 2011 study that found “45% of residents of a German town home to community-owned wind turbines had a positive opinion of future local wind development, compared to only 16% in another town with a wind project owned largely by outside entities.”

By fostering citizen support, community energy accelerates the switch to renewables while paving the way toward an energy future that everyone is on board with.

Resilient Energy Systems 

These community-led projects offer a solution to one of the biggest roadblocks on the path to net-zero – electricity grids.

Last year, an analysis by the International Energy Agency (IEA) found that global electricity grids are in urgent need of upgrades to support the transition. According to the study, 80 million kilometres of electricity grids will need to be added or refurbished by 2040 – the equivalent of doubling the global grid. This will be a long and costly process with investments in grid infrastructure required to double to more than US$600 billion a year.

More on the topic: Current World Electricity Grids Too Weak to Sustain Energy Transition, IEA Warns

Many citizen-led energy projects operate on decentralised, local energy generation models that do not require vast networks of transmission lines. Distributed Energy Resources (DERs) such as rooftop solar allow citizens to generate energy near the site of use. Multiple DERs can be aggregated to form a community microgrid, which can operate in “island mode”, enabling communities to access renewable energy without the need to wait for grid upgrades.

An additional benefit of community-based energy generation is a safer and more reliable energy system. Adding more local, decentralised projects into the mix takes pressure off electricity grids, helping to prevent power outages, wildfires, and other challenges faced by overloaded grids.

Lastly, community energy can provide an alternative source of power when disaster strikes.

When Puerto Rico was hit by Hurricane Maria in 2017 and Hurricane Fiona in 2022, the electricity grid failed, leaving millions without power. But a few homes and businesses in the Castañer region were able to keep their lights on, powered by a micro-grid set up by The Cooperativa Hidroeléctrica de la Montaña, Puerto Rico’s first renewable energy cooperative.

Following the devastating hurricanes, Puerto Ricans began working to bring more decentralised, community-owned energy into the mix. Last year, Adjuntas, a town in the mountains of Puerto Rico, completed a cooperatively-owned solar microgrid with the capacity to power the community of 17,600 – an example of how these projects can be a powerful tool for creating both resilient communities and energy systems.

Obstacles to Community Energy

Despite the benefits these initiatives are showing in the transition to renewables, many obstacles stand in the way.

Worldwide, government approaches to the energy transition prioritise the build-out of utility-scale renewable energy projects. But support of community energy does not always translate into action.

For instance, while the UK’s Net Zero Strategy outlines the benefits of these projects, the organisation Community Energy England criticised the strategy for failing to provide practical measures supporting citizen-led renewable energy initiatives.

In an energy market dominated by corporations working on a top-down, centralised energy system, community energy projects also struggle with everything from accessing finance to invest in initiatives, to navigating the complex legal and bureaucratic processes involved in setting up projects and connecting them to the grid.

Even Europe’s energy market has become less favourable to such projects in recent years, with the removal of policies and subsidies incentivising them.

A 2020 report by Trade Unions for Energy Democracy found that the end of the Feed-in Tariff (FiT) subsidy has led community energy projects across Europe into “a pattern of decline.”

What’s more, these projects can face direct opposition from utilities seeking to protect their profit and dominant position in the market. Recent plans for a community solar program in California, a leader in solar in the US, have been opposed by the state’s three main energy utilities. Activists say this is just the most recent development in a decade-long campaign waged by utilities to block community energy in the state.

Community energy also faces social obstacles. Most people encounter energy as a service delivered by utilities, rather than something they are actively involved in, and awareness of community energy schemes is generally low. For example, a 2023 poll commissioned by the Bristol Energy Cooperative found that only 1% of respondents feel well informed on community energy. For these projects to play an impactful role in the energy transition, there needs to be more education and awareness so people can identify and set up initiatives to bring local, renewable energy into their communities.

Towards Energy Democracy

Energy Democracy, a grassroots movement working for equitable, community owned energy to play a central role in the transition, has emerged as a response to these obstacles.

The Climate Justice Alliance defines the movement’s goal as a “shift from the corporate, centralised fossil fuel economy to one that is governed by communities, is designed on the principle of no harm to the environment, supports local economies, and contributes to the health and well-being for all peoples.”

Energy Democracy activists work toward this goal through advocating for policy enabling citizen-owned renewable energy and have so far achieved some impressive wins.

The California Environmental Justice Alliance, a coalition of grassroots organisations working for Energy Democracy, set up the Solar on Multifamily Affordable Housing Program, which provides up to US$1 billion for rooftop solar on low-income households in the state. Similarly, the UK Energy Democracy campaign group Power for People successfully lobbied for a £10 million (US$12.7 million) fund to set up community energy projects across the country.

The Energy Democracy movement also works to increase awareness about these projects. In 2022, the Energy Democracy Project, more than 30 Energy Democracy organisations across the US launched the Reimagined Energy For Our Communities (REFOCUS) campaign to share stories of everyday citizens taking control of their energy systems. By showing the possibilities of citizen-led energy initiatives, the REFOCUS campaign empowers communities to take the energy transition into their own hands.

Conclusion

The ways in which the energy transition impacts people are increasingly being recognised. A chapter of the IEA’s World Energy Outlook 2023 report was dedicated to “[s]ecure and people-centred energy transitions”, addressing the need for energy access, affordability, and employment in the transition to renewables.

As the social challenges associated with energy transition are considered, community energy must stay part of the conversation and recognised for the solutions it provides. Despite the manifold obstacles these projects face, there are also encouraging signs – last year, the IEA hosted a webinar with global leaders in the community energy space and published an article outlining its benefits.

To harness these benefits, governments and markets need to support and facilitate community energy initiatives and organisations through policy and investment. Simultaneously, society needs to recognise and amplify the voices and actions of Energy Democracy activists and similar movements to bring about a clean and equitable energy future.

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