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Renewable Energy Communities: Will they have room to grow in Portugal?

06 October 2021
Article by Isabel Azevedo, researcher at INEGI in the area of Renewable Energies.


The energy system as we know it is centralized and unidirectional, adapting supply to demand, where consumers are seen as passive participants in the management of the system. But that's concept that can soon change thanks to a new paradigm emerging: the Renewable Energy Communities (CER).

The European Union's clean energy legislative package introduces a different approach to the current system: it puts citizens at the center and promotes the active participation of citizens in the energy system1. Instead of passive consumers of transformed and transported energy to consumption points, these communities are responsible for the production and management of their own energy, sharing costs and benefits.

The new European Directive for Renewable Energy (EU) 2018/2001 provides that small consumers, from local citizens to municipalities, contribute significantly to the goals related to the use of renewable energy sources, and to the active participation of citizens in the energy market2 . A transformation made possible by the advent of microgrids, renewable energy and storage solutions.

Energy decentralization is already a priority for the country

In Portugal, community energy initiatives were relatively common in the early 20th century, associated with small hydropower plants and local electricity distribution networks. However, with the progressive centralization of the electricity production system throughout the 20th century, community solutions lost relevance.

In recent years, with the new commitment to a decentralization of the system and renewable energy sources, there has been a (re)emergence of collective solutions for participation in the system, although the development of communities, in the true sense of the word, is still limited.

The National Plan for Energy and Climate 2021-2030 (PNEC 2030) sets national targets for the use of renewable energy sources for Portugal until 20304. Despite not presenting specific targets for the implementation of renewable energy communities, the plan refers the importance of energy communities for the achievement of national goals for the use of renewable energy sources and for the reduction of greenhouse gas emissions, essentially relevant to the specific goals of photovoltaic solar generation.

The long-term goals presented in the Roadmap for Carbon Neutrality (RNC) are more ambitious with regard to the decentralization and democratization of electricity generation, foreseeing an installed capacity of 12 to 13 GWp of decentralized solar photovoltaic generation in 20505. Furthermore, and according to the different scenarios presented in the roadmap, more than 20% of national electricity should be produced by individual consumers and small and medium-sized companies, with the participation of cooperatives and energy communities.

Legislation traces the path, but there is a lack of concrete initiatives

In Portugal, the legal regime applicable to renewable energy communities is defined by Decree-Law No. 162/2019 of 25 October 20196. In this decree, a Renewable Energy Community is:

"(…) a legal person constituted under the terms of this decree-law, for profit or not, based on an open and voluntary membership of its members, partners or shareholders, which may be natural or legal persons, of a public nature or private, including, in particular, small and medium-sized companies or local authorities, which is autonomous from its members or partners, but effectively controlled by them, provided that and cumulatively:

        i. Members or participants are located in the vicinity of renewable energy projects or carry out activities related to the renewable energy projects of the respective energy community;

       ii. Said projects are held and developed by the said legal person;

      iii. The main objective of the legal person is to provide the members or localities where the community operates with environmental, economic and social benefits rather than financial profits.

But what does the legislation contemplate? Are there gaps? Let's see:
  1. Legal figure – Portuguese legislation does not restrict RECs to any type of legal figure.
  2. Open and voluntary participation – The current definition, referring to open and voluntary membership, provides that any end consumer, including the domestic consumer, has the right to participate in a REC.
  3. Autonomy and effective control – This feature ensures the representation of all members in decision-making processes and limits the participation of traditional market actors10.
  4. Proximity – The legislation does not establish a strict definition of proximity, defining that it must be measured on a case-by-case basis by DGEG, ensuring the physical and geographic continuity of the project and the respective CER participants.
  5. Eligible Participants – The legislation allows the participation of any individual or legal person, of a public or private nature, not imposing restrictions on the size of companies that wish to participate.
  6. Environmental, economic and/or social benefits - According to the decree-law, financial profits should not be the main objective of the RECs, which should contribute to the benefit of the locations where they operate, which may be of an environmental, economic or social.
Generally speaking, the definition complies with the requirements established by the European Commission. The only exception refers to the eligibility of participants, which in the Portuguese case includes (but is not limited to) individuals, small and medium-sized companies and local authorities.

This flexibility in the construction of community solutions could be beneficial at an early stage, promoting experimentation and the creation of innovative and appropriate solutions for the Portuguese context. However, it may at the same time compromise the broader participation of citizens, given the large number of possibilities and the absence of a set of explicit rules applicable to the implementation and operation of a REC.

In line with this uncertainty, the biggest gap in Portuguese ambition is the lack of concrete programs dedicated to the development of RECs. Equally, the absence of specific targets for implementation does not support its development. Defining quantitative targets, even when voluntary, has a proven effect in promoting new solutions and concepts, as it demonstrates commitment and continuity on the part of policy makers.

For this reason – recognizing both the advantages and the obstacles to the dissemination of this energy model – INEGI joined the COME RES (Community Energy for the Uptake of RES in the Electricity Sector), a European project, co-financed under Horizon 2020, which aims to support the development of renewable energy communities in nine European countries. INEGI represents Portugal in the consortium and plays a crucial role in the development of the initiative at national level.

The concept of community energy has evolved a lot in Portugal and in Europe, and proof of this is the legal framework already in force. Although these progresses are important, the country's commitment is yet to be consolidated, and it is expected that, without new incentives, the training and mobilization of local actors will be, therefore, slow.


References

[1] Comissão Europeia (2019) Clean Energy for all Europeans. Luxembourg: Publications Office of the European Union, 2019.

[2] Comissão Europeia (2019) COM(2019) 640 final Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of the Regions The European Green Deal. Bruxelas, 11-12-2019

[3] Comissão Europeia (2018) Diretiva (EU) 2018/20011 do Parlamento Europeu e do Conselho de 11 de dezembro de 2018 relativa à promoção da utilização de energia de fontes renováveis (reformulação). Jornal Oficial da União Europeia n.º 328/2018, de 21-12-2018

[4] Presidência do Conselho de Ministros (2020) Resolução do Conselho de Ministros n.º 53/2020 – Aprova o Plano Nacional Energia e Clima 2030 (PNEC 2030). Diário da República n.º 133/2020, Série I de 2020-07-10

[5] Presidência do Conselho de Ministros (2019) Resolução do Conselho de Ministros n.º 107/2019 – Aprova o Roteiro para a Neutralidade Carbónica 2050 (RNC). Diário da República n.º 123/2019, Série I de 2019-07-01

[6] Presidência do Conselho de Ministros, Ministério do Ambiente e Transição Energética (2019) Decreto-Lei n.º 162/2019 – Aprova o regime jurídico aplicável ao autoconsumo de energia renovável, transpondo parcialmente a Diretiva 2018/2001. Diário da República n.º 206/2019, Série I de 2019-10-25

[7] Entidade Reguladora dos Serviços Energéticos (ERSE) (2020) Regulamento n.º 266/2020 – Aprova o Regulamento do autoconsumo de energia elétrica. Diário da República n.º 57/2020, Série II de 2020-03-20

[8] Entidade Reguladora dos Serviços Energéticos (ERSE) (2020) Diretiva n.º 5/2020 – Tarifas de Acesso às Redes a aplicar ao autoconsumo de energia elétrica através da RESP em 2020. Diário da República n.º 57/2020, Série II de 2020-03-20

[9] Ministério do Ambiente e Ação Climática, Gabinete do Secretário de Estado Adjunto e da Energia (2020) Despacho n.º 6453/2020. Diário da República n.º 118/2020, Série II de 2020-06-19

[10] REScoop.eu (2020) Energy Communities under the Clean Energy Package. Transposition Guidance. Disponível em:https://www.rescoop.eu/toolbox/how-can-eu-member-states-support-energy-communities




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