A new role for municipalities

With pressure on local governments to meet challenging carbon reduction targets, municipalities are increasingly working in partnership with local people, citizen groups, SMEs, social housing providers and local associations to develop low carbon services and own and operate energy system infrastructure.

Energy Communities are mission-led participatory bodies that can become part of a city’s energy system. They can take many active roles including generators, distributors, aggregators, suppliers or retailers. They can also act as service companies offering low carbon transport or energy efficiency services. Energy communities can raise money directly from the community, for example by offering community shares or establishing a cooperative. This approach brings in both valuable finance, and equally valuable community engagement.

This guide explores Energy Community examples from across Europe and offers inspiration and ideas for replication to anyone with a role in a municipality. All of them are renewable energy based communities – these are the most common today. National energy regulations may affect which models will be most suitable in different places. But we hope that among these varying case studies, useful insights can be found and adapted.

Energy Community

This guide focuses on how European municipalities can support and collaborate with Energy Communities (ECs). ECs have no specific definition under EU policy, so our definition is loosely based on that of Renewable Energy Communities (REC) taken from the Renewable Energy Directive. It sets out the right to citizens and renewable energy communities to produce, store, consume and sell renewable energy without being subject to disproportionate burden and discriminatory procedures.

The directive sets out key principles for a RE community, namely:

  • Autonomy and and proximity An REC is an entity based on open and voluntary participation, that has the autonomy to govern and control its own affairs. Connection to a geographic locality is a fundamental organising principle. Citizens living or working within proximity of new community-owned power developments become owners and decision-makers.
  • Local authorities as eligible shareholders RECs can be formed around shared goals and values held by all shareholders. Local authorities can either be a member of an EC or act to support a renewable energy community that operates independently.
  • Community benefit RECs primary aim is to act within and for the benefit of their shareholders, members and community. As organisations that are mission and value-led, rather than profit-driven, profits are often re-invested for the community’s social or environmental benefit.

We would add to this definition the need to adopt one-member-one-vote policies and a democratic process of defining leadership, vision and direction. Incorporation of Energy Communities as cooperatives may, in our view, be the best way to achieve this. However this is not the only model. The legal and organisational forms of Energy Communities will vary depending on the local context, regulation and how the REC definition has been transposed nationally.

Our conception of Energy Communities is broader than RECs, taking in the provision of energy and low carbon transport services as well as renewable energy generation.

Finding common ground

ECs and municipalities share ample common ground. They are mission-driven rather than profit-oriented, often operating at the same geographic scale, tending to share the same long-term objectives and accountable to the same communities.

By cooperating with ECs, municipalities can generate economic benefits. Sizable citizen investment can be raised via ECs, accompanied by democratic control and enhanced and inclusive decision making involvement. Revenues generated by local renewables can be used to meet local needs, diverted into services, or used to address fuel poverty. ECs can activate local economies and supply chains, with money recirculating within a municipality, creating a multiplier effect and new local jobs.

Social benefits are equally notable. Greater collaboration between citizens and local authorities can encourage trust. Increased citizen participation in carbon saving activities creates local advocates and buy-in, and can also help avoid resistance to new developments or renewable energy projects.

Collaborators and initiators

Municipalities are well placed to support ECs to flourish. In developing this guide, we have identified examples of cities acting as initiators of new Energy Community activity at city and neighbourhood scales. In other cases, municipalities have created favourable conditions that allow ECs to grow, through policy changes, information and advice, offering access to municipal land, enlightened procurement practices and the use of incentives.

mPower – by municipalities for municipalities

Running between 2018 and 2022, mPOWER is a Horizon 2020 project facilitating a peer-to-peer learning programme among more than a hundred European local public authorities. The programme is designed to replicate innovative best practices in municipal energy and to develop ambitious energy transition plans.

This guide was developed in collaboration with municipal officers participating in the mPower Exchange programme and is relevant for anyone with a role within a municipality.

In 2019–2020, twenty cities from across Europe took part in mPower Exchange. Structured around city visits, it enabled local authorities to spend face-to-face time exploring, understanding and developing new and existing energy projects. This highly participatory learning programme was focused on exchanging practical knowledge and expertise. The themes were domestic energy efficiency, Energy Communities and renewables expansion.

This guide shares the knowledge and expertise of those city innovators. Whilst no single project can be replicated in full elsewhere, we believe other cities can draw inspiration from these experiences to create solutions suited to local context and conditions.

1. Initiators

In this section we explore stories of municipalities that have established innovative new Energy Communities.

‘Top down, bottom up’: Wolfhagen, Germany

Photo Credit: Dirk Schmidt on wikimedia commons

In instances where no existing Energy Community is present, municipalities can act as the initiator for new EC organisations.

In the small city of Wolfhagen, in Northern Hesse, Germany, the city council backed the creation of a citizen cooperative that now owns a 25% stake in the municipal energy company. As a result of the partnership 6MW of new renewable energy generation has been financed and an energy-saving foundation has been created.

The city began taking an active role in local energy matters in the era of energy market liberalisation in the 1990s. They took the decision to retain, rather than sell, the Stadwerke (municipal owned energy company), and re-municipalise the local grid.

By the early 2000s the priority was to increase the renewable energy supply, as the next step in improving energy provision and tackling climate change. Local renewable generation was an opportunity for city-led climate action that could build local economic opportunities and build citizen participation at the same time.

The idea of setting up an Energy Community came from the Stadtwerke Energy Manager, who saw a chance to advance citizen participation and raise much needed capital to invest in new wind and solar projects.

The manager took the idea to the council, which supported the plan. This began a two year long process of council debates, public events, film showings and discussions. The cooperative, BEG Wolfhagen, was formed, with 264 Wolfhagen citizens making up the cooperative’s first members.

Once formed, Wolfhagen’s energy cooperative was invited to purchase a 25% stake in the Stadtwerke, handing over direct ownership to local citizens. In their first community share offer (valued at €500 a share, with a maximum of five per member), the cooperative raised €1.47 million. This provided citizens with the opportunity to invest in a new energy scheme in return for equity.  Although the raise fell short of the money required to purchase the 25% stake, the city council offered a loan to cover the remaining finance, which was repaid within 12 months. Regular communication between the two organisations is kept up-to-date with supervisory board meetings, and voting rights on all issues concerning electricity production and supply in the region.

The combined effort of the cooperative and Stadtwerke has produced impressive results. Their 6MW wind farm and solar plants are the main energy generators in Wolfhagen. The company makes a profit every year, and shareholders in the cooperative receive an annual dividend (around 4 per cent in 2016), whilst the remaining funds flow into the cooperative’s energy-saving foundation. At the end of 2016, BEG Wolfhagen had 814 members with a cooperative wealth of more than €3.9 million. Now established, the cooperative gives any new members a two year period to pay for their initial share in €20 instalments, helping to broaden access to the cooperative to include lower-income households.

Beyond the financial incentives, the collaboration allows for easy sharing of expertise and information about new municipal and national government energy incentives with the members of the cooperative. With 7 percent of Wolfhagen’s population being members of the cooperative this provides an easy route to engaging with large numbers of local citizens.

Given the technical knowledge needed to transform homes and travel systems, having a clear and trusted route to communicate with local people is all the more important.

Adapted from mPower interview on Wolfhagen’s energy transition journey

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Championing the local: Plymouth, UK

Photo Credit: Inspired Images on Pixabay

In 2012 Plymouth City Council’s (PCC) Low Carbon Team developed an ambitious idea to transform how energy is bought, used and generated in Plymouth by setting up an Energy Community.

Plymouth is a city of 260,000 inhabitants in the county of Devon, Southwest England. Located on a large natural harbour, the city has long been one of the country’s most important ports. Its manufacturing sector and the harbour – once a transit port for migration to the Americas – still dominate the city’s economy and landscape. In recent decades, the city has faced a number of challenges: declining productivity, falling wages, and increasing poverty and inequality. The dockyard that once employed tens of thousands of people now only employs 2,500.

Citizens have experienced an erosion of economic stability, exacerbated by severe cuts in government spending on social support.  In some areas the child poverty rate is 40%. There are districts where 35% or residents live in fuel poverty, which in turn impacts mental and physical health and worsens stress. Mental health in the city is poor and there is a high suicide rate, possibly linked to the high levels of indebtedness.

Plymouth’s climate change strategy takes on the breadth of challenges facing the city. It focuses on nurturing community efforts to improve energy efficiency, and address social issues alongside carbon reduction.

Establishing an energy community

Photo Credit: Plymouth Energy Community

A Energy Community in the form of a community energy organisation was seen as an opportunity for citizens and local businesses to collaborate with the council in tackling climate change and fuel poverty. Growing public frustration with the UK’s larger energy suppliers added to the sense in the council of the need for change. One councillor in particular championed the idea of an energy-focused, member-led organisation. If local people could be invited in as co-producers of new energy services, it could help build a fairer and trusted alternative.

With the political administration supporting the idea, the council began taking steps to enable the process of setting up an Energy Community. Municipal staff time was released to recruit one hundred founding members and volunteer directors, develop a business plan and run  studies to locate potential sites for a community-owned solar energy project.

The result of these combined efforts saw the establishment of Plymouth Energy Community (PEC) in 2014 as a community benefit society and cooperative. The organisation is owned by its members and runs for the benefit of the community. Its mission is to increase local ownership of energy infrastructure, and undertake projects to support households excluded from the energy system through fuel poverty.

Between the combined efforts of the 12 staff, 200 members with one hundred active volunteers, the cooperative plays a vital role in encouraging residents to take charge of energy matters. Membership is open to any individual or organisation that supports PEC’s aims. Members are invited to participate in the day-to-day running of PEC through a regular events programme, such as their weekly energy advice drop in, and the opportunity to be elected as one of the organisation’s eight non-executive directors. Voting takes place on a one-member-one-vote basis. The relationship between the council, the PEC staff team and members are cemented through ongoing municipal staff time offered to PEC via a service level agreement.

Solar powered communities

PEC has now successfully installed 6MW of solar generation, enough to provide electricity for 2,000 homes. A local community land trust receives an annual land rent from the ground-mounted array, and this income is used for local projects such as creating a community allotment garden. Surplus profits, expected to accumulate to around £1.5 million, will support PEC further in its carbon and fuel poverty reduction projects.

To read more about the formation of the land trust and the financing of the solar installation, see below.

Adapted from blog Justin Bear, Plymouth Energy Community and mPower study visit notes by Laura William (mPower).

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Seeding renewable energy communities: Strasbourg, France

Strasbourg Council uses municipal resources to initiate and support community-led action.
Participation level: Collaborate

Photo Credit: Jorge Franganillo on Flickr

Strasbourg is the capital and largest city of the Grand Est region of France. Located at the border with Germany in the historic region of Alsace, it is the capital of the Bas-Rhin department. There are 785,839 living within the Strasbourg metropolitan area, including the City of Strasbourg and the Eurometropole area, providing a home to 13% of the region’s population. As a centre of manufacturing, engineering and a transport hub the city hosts a variety of high carbon activities, each needing to be tackled before the city can reach carbon neutrality. That’s why the city has set itself ambitious energy goals, to draw 40% of the area’s energy needs from renewables, with an ultimate goal of a 100% renewable energy system by 2050.

Initiating a renewable energy community

When the city of Strasbourg began to address its commitment to renewable energy  the council officer knew they had a lot of work in front of them: there was only a sprinkling of renewable energy generators located within the city. Doing it alone was not seen to be a viable option. Motivated by a political commitment to energy democracy and citizen participation, the city decided to bring local people into the discussion and investigate what kind of role they could play within the energy transition.

The head  of the Strasbourg renewable energy department Gerard Pol Gill was involved in the process from the start. His department’s analysis showed  the important role that solar would need to play in the city’s future energy mix. Gerard commissioned a local company to lead on a stakeholder mapping process, and find supportive citizens interested in building locally owned solar energy.

On-going support

After a year of late night meetings, a group of like minded people emerged, who would go on to form a small yet solid core group of eleven. With the group starting to take shape, the municipal energy team continued to provide on-going support throughout the cooperative’s early days. The renewable energy department convened a series of public meetings with energy experts on the basics of solar energy and establishing an energy coop. Speakers from groups that had initiated similar projects nearby were invited to attend and share their first hand experiences of the basics of solar energy and establishing an energy coop. The idea of setting up a group that could continue to work in its own right was then proposed.

With the group deciding to take on the task, the municipality continued to support the cooperative throughout its set-up phase, through a regular presence at the coop meetings, offers of advice and support, and work building relationships with the wider municipal administration.

The coop was interested in finding suitable municipal roofs to build a solar installation. The municipal energy team led on engaging with the right people in the legal, procurement and administration teams to assess the terms on which the roofs could be leased to the cooperative, and how the municipality could act as a stakeholder within the project. Even though there was good will for the project both by the electoral and municipal staff, it was still a real learning process for everyone involved and one that they continue to work through.

Coop member Jacqui Cullen commented on how important municipal support had been: ‘I had known of citizens in the last city I worked with [that had tried to set up a renewable energy project]. They really struggled to find roofs, finance and support.” It was only when she saw that the city was encouraging groups to come together and work on the issues, that she herself had decided to join the process in Strasbourg. “Having the city as a supporting element from the very beginning has made it much more fluid than what I can see in other groups.”

The cooperative has now completed all of the background work of creating a new company and business model. They estimate that this process has taken up to 63 hours of volunteering, meeting twice weekly for a year, and a lot of learning. The coop is now ready to begin installations, aiming for three solar installations in 2021, in order to make the project viable.

The municipality has already committed to an equity stake in the solar coop, but there remain some challenges around how purchasing such a stake can work in line with local government procurement regulation, that remain to be resolved. None-the-less new opportunities have presented themselves. Cooperative members’ contacts with local businesses, apartment block committees and industry have presented new roof space opportunities, which they are currently exploring.

From the municipality’s perspective, the Strasbourg energy team is now working with satellite administrations to share their experience and support for setting up something similar within their area.

Adapted from mPower podcast interview with Jacqui Cullen (cooperative member) and Gerard Pol Gili (Strasburg Metropolitan Municipality)

2. Creating favourable conditions

Municipalities can act as enablers, creating the conditions for Energy Community to establish themselves and the sector to grow and professionalise.

By adopting long-term policies and objectives as part of broader strategic frameworks municipalities can channel resources and efforts towards Energy Communities.

The Right to Energy: Valencia, Spain

Photo Credit: AG-Pics on Pixabay

In May 2021, the Valencia Climate and Energy Foundation announced a new policy goal: to establish one hundred Energy Communities within the city by 2030.

Located on the east coast of Spain, Valencia is the third-largest city in the country and capital of the Valencian region. After signing the Covenant of Mayors declaration in 2009, the city council established the Valencia Climate and Energy Foundation to develop and deliver strategies, actions and tools to help achieve its targets. A focus on fuel poverty prevention and the ‘Right to Energy’ has been a cornerstone of their work, with efforts to improve the living situation of citizens embedded within programmes.

In Valencia, an Energy Community is a not-for-profit organisation at the heart of its neighbourhood. Open participation allows citizens, small businesses and municipal representatives to produce, share and consume renewable energy collectively. The aim is to establish Energy Communities in each neighbourhood.

The foundations for the policy grew from the city’s previous success in working in collaboration with local stakeholders to establish the local climate strategy, supported by the political leadership. The city council had formed an external group with 20 representatives from civil society, private businesses, academia, public entities and the media to coordinate and create a road map for the energy transition by 2050. Having found the collaboration useful in defining the road map, the Valencian administration wanted to find a way to embed city-citizen collaboration over the long term. Energy communities offer a way to engage citizens with energy matters and encourage ownership of future energy systems.

Information and advice

To seed new Energy Communities, municipalities are setting up events and support mechanisms to share opportunities around which a new community could form.

In Valencia, two new Energy Communities have been seeded from an Energy Office set up by the city,  to provide direct support to citizens within a neighbourhood setting. This citizen assistance space is based in the Ayora area of the city, where one in four people live in fuel poverty. An old shop was transformed to create a place where any individual wishing to find support can meet with trained staff and discuss energy issues. An environmental educator, social worker, architect and engineer all work in this space, advising on small scale measures that citizens can do to improve household energy, information about subsidies, and energy bill advice.

To promote Energy Community, the team has been running workshops on renewable energy technologies, opportunities and possible organisational forms within the community. The office plays an important role in bringing together like-minded local people to discuss ideas, form relationships and plan actions. Anyone wishing to start an energy community can receive ongoing direct support from the office to get their project off the ground.

Out of this work, two new energy communities have formed in Ayora and Algirós neighbourhoods. Fernando Gonzales, Secretary of the Association who manages one of the communities, reflected that municipal support has been crucial in bringing to life the solar PV aspirations that local citizens already had. The municipal office helped them understand how self-managed energy communities can work and provided the right support to help the energy community find its feet.

Adapted from mPower podcast interview featuring Carmen Castells, Valencia Energy Office, Indertec-Imedes and Fernando González

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Data-led local action: Barcelona, Spain

Photo Credit: EvgeniT on Pixabay

Barcelona City Council has been experimenting with data-driven approaches to inspiring a new solar focused Energy Community.

With only 1% of Barcelona’s energy produced locally, boosting renewable energy generation is a priority for reducing the city’s reliance on greenhouse gas-intensive power supplied via the national grid.

Municipal-led research demonstrated how important rooftops could be in the city’s energy transition. The research showed that solar PV on rooftops could provide 60% of the electricity consumed within Barcelona’s homes.

The city developed a tool to help citizens and other stakeholders understand this potential for solar power. The online map uses a colour-coded system to highlight buildings with the highest energy yield potential, predicted energy generation and greenhouse gas savings. This sits alongside a map detailing the locations of existing municipal-owned solar systems. The council hopes that making this information public will help to inspire new energy communities.

Photo Credit: Municipality of Barcelona

To date, the tool has proved useful for groups thinking of creating a new Local Energy Community, to understand where existing PV installations are, and how these relate to new sites.

The council is in the process of setting up a new collaboration with Som Energia, a 55,000 strong Spanish energy cooperative, to form a Local Energy Community solar energy project on a municipal-owned rooftop, with the council as a member. The council will continue to explore how data can be used to support Energy Communities in the upcoming DataCity project, exploring how surplus electricity generation from solar installations could be redistributed to vulnerable groups.

Adapted from mPower research by Laura Williams (mPower)

Land is power: Plymouth, UK

Photo Credit: Inspired Images on Pixabay

In some places, municipalities can offer Energy Communities direct access to land via long-term leases or asset transfers. In Plymouth, UK, the city council transferred ownership of municipal land to a community land trust, so  a new Energy Community project could be sited there.

The story began in 2015, when Plymouth Energy Community (PEC), a local energy cooperative (see above), identified a piece of derelict land owned by the council as a potential asset for a community-owned solar project and approached the council to discuss options. The area, in the suburb of Ernesettle, is located next to a wastewater treatment plant and a munitions storage facility and is classified as a blast zone, making it unsuitable for many productive land uses.

Photo Credit: Carbon Coop

The council and PEC have a long-standing relationship, with the council having played a role in the cooperative’s formation. The council granted the Ernesettle project planning permission and issued a low-cost loan to cover part of the installation. Keen to maximise the social impact of the project, the Ernesettle site was transferred to Four Green Land Trust (FGLT), a local community land trust. When PEC developed the solar array on the site, FGCT generated income by charging PEC a ground rent of over €20,000 a year, creating a valuable income stream.

FGCT played a vital role in the project, organising a series of promotional activities, including social media, street stalls, local media and community discussion events to allow the local people to find out more about the project, map potential community value and provide feedback. Previous experiences of solar installations in the area had created a climate of distrust in new developments. A developer-led solar project had promised to share community benefits on the hill overlooking the farm, yet years on, none had materialised. But when PEC offered shares, governing rights and a clear route to local community benefit, attitudes began to change.

Once the site was secured, Plymouth Energy Community set up Plymouth Energy Community Renewables, a Community Benefit Society, to raise money from private investors to fund the installation of community renewables including at Ernesettle.

Low-cost loans from the municipality and a bridging loan supported the process. PECR worked with ethical investment platform Ethex to establish a community equity share offer, to raise the capital for the long term. Ethex provides the tools, expertise and resources needed to establish, run and oversee relationships with citizen investors.

Anyone aged 18 years or over could purchase a share ranging from £50 to £100,000. PEC took the lead on advertising the share offer locally, sharing the opportunity with existing cooperative members and running a series of local community events to grow their reach. By 2017, 520 investors had raised a total of £2.4 million in community shares, with £1m retrospectively assigned to the Ernesettle solar project. Shareholders will be paid back over the lifetime of the scheme and earn a target interest rate of 5-6%.

Plymouth Energy Community Renewables now supplies 6MW of clean energy, enough to provide electricity for 2,000 homes, saving 72,500 tons of CO2 over the 20 years of the project’s lifetime. Host organisations have already saved over £450,000 from solar roofs. FGCT uses its annual land rent for local projects in the area. Surplus profits, expected to accumulate to around £1.5 million, will support PEC further in its carbon and fuel poverty reduction projects, such as financing PEC’s advisory service, the creation of new jobs, and biodiversity enhancement projects such as wildflower meadows and beehives.

Adapted from text by Justin Bear (Plymouth City Council) and mPower study visit notes by Laura Williams (mPower)

Further information

From football to turbines: Eeklo, Belgium

Photo Credit: Japplemedia on Wikimedia

Municipalities can create a more level playing field for Energy Communities to participate in public tenders by tailoring the bidding criteria to include local social value and citizen participation. The small Belgian city of Eeklo, in Flanders, has  around twenty thousand residents in a  district that covers approximately 30 square kilometres. It uses around 4GW hours of energy per year, mostly from mains gas and oil, and costing around €40m per year.

The city began making plans for a local energy transition over 20 years ago. In 2018 Eeklo’s Sustainable Energy Action Plan committed the city to emitting at least 63% less CO2 by 2030.

The city has built a reputation as a ‘climate city’ for its innovative work. They believe only collectively owned solutions are fair and viable because the energy sources that they draw on, like the wind and sun, are for everyone. They see advancing citizen participation and ownership as an opportunity for local people to engage in discussions, learn about climate issues and become a co-producer of the solutions. The municipality is also striving to find ways to keep the large sums of money currently spent on energy from leaking out of their local economy.

With these three guiding ideas, they hope to achieve their sustainability targets in a way that allows for greater local involvement in the energy transition.

Photo Credit: Carbon Coop

The city’s Local Energy Community journey began with football. In the 1990s, the local club asked the municipality for financial support to buy new players. With no budget to spare, the city started looking for alternative routes to generate funds locally. A colleague, who had recently been on a trip to Germany, had seen how the country was using wind turbine projects to generate funds for local expenditure.

Inspired by this idea, Eeklo’s energy team reviewed municipal-owned sites to find suitable locations for renewable energy generation. They selected a few places and drew up a public tender. To ensure that commitments to local ownership and citizen participation were part of the work, they included specific citizen participation criteria. Ecopower, one of only two cooperatives established in Belgium at the time, responded to the tender with a promise of 100% citizen ownership of the new wind project. Eeklo Council awarded the contract to Ecopower. At the time, Ecopower only had ten active volunteers working for them but with a regular financial return, the organisation could expand and employ new staff members.

Since this first example, the council has used a similar approach to tendering subsequent energy projects. There are now three cooperatively owned wind turbines within the city and it continues to experiment with progressive procurement criteria. In a recent commission to develop a district heating network, the city included these criteria as part of the tender:

  • The price of the renewable heat should not exceed that of individual heating with a gas boiler, including purchase, installation, consumption and maintenance
  • Local citizens should own at least 30% of the grid
  • The project developer must commit to taking initiatives to tackle fuel poverty in the city

Ecopower was awarded the contract in partnership with the French transnational company Veolia.

Eeklo Council believes that working in partnership with Ecopower has enabled it to put social value ahead of profits. The three wind turbines generate 7,400,000 kWh per year, providing power for 6,700 homes, creating a saving of 2,900 tonnes of CO2 per year. The cooperative has invested over €50m in local energy infrastructure projects, is able to provide clean energy for its members and uses its returns to invest in less profitable energy reduction measures like insulation for households and electric bike charging stations.

To support the most vulnerable families, the council is considering pre-financing shares to Ecopower so that they can purchase cheaper energy. Research into the energy costs for people in the 750 most vulnerable households found that their current energy costs are around €300 more than if they purchased from Ecopower.

Eeklo Council is investigating how they can use their regulatory and advocacy powers to support this approach. A new legal framework is being investigated to allow cooperatives to install solar panels on the homes of those that can’t afford to invest themselves. And at the regional state level, the council is pushing for a new Flemish Law that ensures that any new project that generates renewable energy must also invest in the local community.

Adapted from mPower expert witness session with (Jan de Pauw, Eeklo Energy Consultant/Ecopower)

Financial innovation: Devon, UK

Photo Credit: PxHere

Devon County Council has co-designed a ‘Synthetic Power Purchase Agreement’ that would enable them to buy locally produced renewable energy, providing Energy Community with a long term ‘off-taker’ customer and guaranteed price. This is particularly relevant in countries where feed-in tariff incentives have been phased out.

Devon is a large rural county in Southwest England. In February 2019, the council declared a Climate Emergency, committing to facilitate a reduction in the county’s carbon emissions to net-zero by 2050. The council has established a Special Task Force to investigate what is needed, in an evidence-led approach. The interim results have been brought together into an eight point plan including commitments to ending the use of fossil fuels, reducing the need for energy and placing citizens at the centre of change across the county. To address its own carbon footprint, the council aims to meet 30% of its energy needs from renewable energy, whilst taking an active role in supporting the community energy sector.

Devon County Council sees community energy as a way to keep money in the local economy, reduce carbon emissions, increase energy security and help address fuel poverty. With six established and four emergent community energy organisations already based in the county, the council wanted to find a way to support their growth.

European procurement regulations prevent public authorities from specifying community energy as a preferred energy supplier, so the council began to investigate alternative routes to support community energy organisations. The idea of a Synthetic Power Purchase Agreement emerged as a possible solution that could give the organisations enough financial security to make investments in new renewable energy generation.

Under a Synthetic Power Purchase Agreement, the council could work with a community energy organisation to set a guaranteed ‘strike price’ for every kWh of renewable energy that is generated and sign this off in a Renewable Electricity Guarantee of Origination, or REGO.

Each time that the community energy organisation sells their energy to the wholesale market, the council reviews the market price received against the REGO ‘strike price’. When the price for the generator is lower than the guaranteed price, Devon County Council gives money to the generator. Where the price on the market is higher than the strike price, the generator gives money to the council.

With this agreement secured, community energy organisations can approach investors for the capital costs needed to install new energy generation capacity, knowing that they will have a secure income source.

Photo Credit: Doug Eltham

The council is therefore not directly purchasing energy from the community generator and continues to purchase from a standard, regulated energy supplier. The REGO agreement is a financial instrument that would allow the council to act as a long term backer of the generator. Crucially, as it is a ‘financial instrument’ it falls outside of the procurement rules that would have prevented the council from directly purchasing local power.

The council’s research into this new model sets out a number of benefits of Synthetic Power Purchase Agreements from a carbon, financial and social perspective. By providing financial security for local organisations, new renewable energy generation could be built across the county, helping the council to meet its Climate Emergency goals. Within a context of rising energy prices, the agreement could generate a surplus for the council.

Although Devon Council understands the initial ‘strike price’ agreed with a community energy organisation is likely to be higher than a commercial operator, they are confident the long term, local economy benefits would far outweigh the initial investment. A recent socio-economic assessment predicted that having a community owned 100 MW solar PV farm would generate an extra £15m for the local economy compared to one owned by a purely commercial body. This money could continue to support the work that community energy organisations are doing in tackling fuel poverty, running energy efficiency schemes and so on.

Grassroots support

Devon council already supports Energy Community in the county in a range of ways. Support includes grants for start-ups or project feasibility, offering loan finance or revolving loan funds, acting as financial guarantor, or offering business rate relief.

Devon Council created the Devon Community Energy Accelerator Fund, to establish small start-ups. £62,000 of grant funding has been distributed to  Local Energy Community groups through Regen, a not-for-profit energy system research organisation with  experience of working with community energy organisations.

Regen’s SW Community Accelerator programme provided tailored support to eighteen Devon community energy groups. The support included  site finding, rooftop solar assessments and community engagement planning and education sessions on financial modelling, bid writing, website support, community engagement, marketing and skills mapping, to help each group develop their approach. They documented the work through community energy checklists to help other groups navigate the process.

The programme managed to support three organisations to install 412 kWp rooftop solar PV and there is a pipeline of projects at various levels of development. Devon County Council has invested a total of £107,000 in community energy installations. This was matched by £284,000 of Rural and Urban Community Energy Funds (RCEF) funding from the UK government, going directly to community energy organisations in the region.

Edited from mPower expert witness session with Alistair Mumford from Devon County Council

3. Working in partnership

Municipalities can form strategic partnerships with existing energy communities, for example for the development of local energy markets, the roll-out of energy efficiency programmes, or the financing of renewable energy projects on public buildings.

New thinking: Aspropyrgos, Greece

Aspropyrgos municipal authority is working alongside a local energy cooperative partner to develop a new energy community concept that will provide free energy to 250 vulnerable families whilst meeting the municipality’s energy supply needs.

The Municipality of Aspropyrgos is a Greek city located 20 km from Athens. In the 1960s, industry moved into the area, shifting the main occupations away from their agricultural, historical roots. Since then, the population has grown considerably, with over 30,000 residents now living within the municipal district. The municipality was an early signatory of the Covenant of Mayors, developing their first Action Plan in 2009. The urgency for addressing climate change has increased steadily, with heatwaves and extreme weather striking the area more frequently.

Electra Energy citizen cooperative has been championing the Energy Community in and around Greece since 2016. Over that time, their strategy of word of mouth promotion, social media and frequent public events has allowed them to draw the attention of potential citizen, local SME and municipal founding partners. Having heard about the cooperative’s earlier work setting up a community energy capacity building project for refugees and a virtual net metering project, the municipality of Aspropyrgos contracted Electra to conduct a study into energy poverty in the region. The study found that almost 45% of the families struggled to pay for their electricity bills amidst the backdrop of soaring living and energy price costs.

In response, Electra Energy proposed developing a new self-consumption solar pilot project. Of 1MW(peak) energy generated, 0.5MW would provide free electricity to vulnerable families. The other half would cover some of the electricity needs of the municipality. All of the Local Energy Community members are grouped into one consumer group exempt from grid costs.

The project will cost approximately €800,000, on top of the €20,000 euros initially financed by the city to cover the cooperative’s research. Aspropyrgos City Council supports the proposal, and the municipality has now presented the plan to the regional authority to finance the project.

Edited from expert witness session by Dimitris Kitsikopoulos (Electra Energy)

Neighbourhood power: Ghent, Belgium

Photo Credit: Carbon Coop

In Ghent the municipality has partnered with Energhent, an existing Energy Community organisation, to build and invest in local energy infrastructure.

Ghent is the third-largest city in Belgium, located in the East Flanders province. There are 263,460 people living within the 156km2 municipal area. As a port town Ghent encompasses 169 different nationalities, and the city has a large student population (equal to almost one-third of the population) entering and leaving the city every week.

The city’s climate journey began in 2009 when they signed the Covenant of Mayors Agreement. Their long-term aim of becoming a climate-neutral city by 2050 is broken down into short-term commitments to reduce local carbon emissions by 20% by 2020 and 40% by 2040. Seven core themes underlie their strategy, including energy efficiency in homes and commercial buildings, low carbon transport, sustainable industry, food, circular economy and climate adaptation, with plans for each to guide city-wide activity. On renewable energy, the city has calculated it needs to install 80 MW of solar energy and 100 MW of wind by 2030.

Citizens are seen as essential partners for accelerating the local transition in Ghent. To make this happen the city has initiated a patchwork of projects specific to each district area, making up one central storyline of positive local change. A commitment to an inclusive transition underlies the work. Routes for tackling energy vulnerability are built in, with existing energy community energy advice hubs, and new projects.

Multi-stakeholder cooperation


mPower study visit walking tour of Buurzame Stroom neighbourhood tour

The city initiated a unique collaboration with a number of local partners and launched “Buurzame Stroom” (neighbourhood power in Dutch), a pilot neighbourhood engagement scheme that started operation in 2018 and ran through to 2020. The Daamport district, a densely packed suburban area of the city was selected as the project’s home due to the opportunity it presented for exploring social inclusivity.

The partners included three energy cooperatives, two with energy systems expertise and the other focused on low carbon transport; Ghent University, which acts as a trusted, neutral contributor; a social protection association that is tasked with reaching out to vulnerable households; and the local distribution system operator (DSO).

The role of the city was crucial as it supported overall management, made links with other initiatives in the city, and coordinated between the various partners, including resolving conflicts and issues. The project sat alongside a patchwork of municipal-led interventions all looking to tackle sustainability issues, including a heat network, green spaces and community-owned solar PV church initiatives.

The ambitious consortium was set up to maximise the potential for locally generated energy in the neighbourhood, hoping to equally share the costs and benefits without having to expand the present electricity grid. There was already local interest in exploring how solar panels could be installed on more rooftops and how those with unsuitable roofs might be able to invest in installations hosted on neighbourhood supermarkets or schools, giving the consortium something to work with.

The three cooperatives, each with different missions, were instrumental in facilitating the citizen engagement opportunities. Ecopower, the largest energy cooperative in Belgium, played the role of aggregator, incentivising and empowering households to better control their energy consumption through demand response management, via smart meters and open data applications. The EnerGhent cooperative provided citizens with the opportunity to invest in local solar power production by acquiring photovoltaic panels. An electric car-sharing cooperative called Partago made electric vehicles and charging stations available to allow excess power not consumed directly to be used in or stored by car batteries. To complete the picture, the project also experimented with storing electricity in batteries in homes.

The consortium worked together to build relationships with local people, engaging residents with different backgrounds and types of building ownership to install solar panels. The consortium organised presentations at neighbourhood events and festivals, and a community cafe acted as a meeting place for those wishing to talk about sustainability. Workshops in a community building allowed a free flowing and ongoing conversation between the cooperative groups and citizens. In some cases residents that had attended the workshops went on to host their own informal sessions in their living rooms. Mixing formal and informal opportunities for discussion created a sense of openness to explore perceptions of solar panels as being too expensive or time intensive for people to work with.

Having a clear financial support offer for solar panel installation made it much easier for those that were initially resistant to participating. People were signposted towards Flemish government-backed Energy Loans, enabling households to borrow up to €30,000, interest free, and to the local revolving loan fund where money paid back is recirculated into low carbon activities. These funds allowed more individuals to participate in and benefit from the solar schemes.

Some challenges arose during the initiative. Having built relationships with Daamport residents there could have been an opportunity to look beyond solar installations into energy efficiency measures. Many roofs are yet to be insulated but a tangle of offers and finance made it difficult for residents to access support. There were also access issues, where some individuals were not approved for loans by the Flemish scheme. Where language barriers persisted, more time with the support of embedded community organisations would have been needed before trust could be established. Installations on rental homes also proved difficult, with landlords on the whole deciding not to invest in panels even when a solid financial case was presented to them. There was an ambition to link up citizens interested in investing in cooperatively owned solar on other homes, but energy system regulations continue to be a barrier to this.

Whilst these obstacles slowed progress, a few community owned schemes have managed to get started. For example, EnerGhent signed an agreement with supermarket Aldi, local companies and a school, to host community owned solar installations. Any citizen that invested in the solar scheme could become a member of the cooperative and benefit from a financial dividend.

This multi-stakeholder cooperation, with strong citizen involvement, has produced some real tangible results as well as insights into the challenges that citizens face in installing renewable energy generation. A “fair and smart” grid project has helped to make solar profitable and affordable to new residents, optimising energy production at a local level by better matching supply and demand. It has created a sense of community in the targeted neighbourhood thanks to a very collective and participative approach. The initiative proved instrumental in helping the city experiment with new partnerships, frameworks and regulations to help make local green energy production and supply a fair and profitable business model.

Edited from expert witness session by Timo from City of Ghent Municipality

Finance Impact More information & sources
  • Average solar PV installation cost: €3,000
  • Paid for via participant direct finance, energy loans and/or a revolving green fund
  • 253 panels installed on 102 family homes, 2 apartment buildings, 8 rental homes, 2 schools and 8 buildings of companies and organisations.
  • The participants included 8 tenants and 11 vulnerable families, 2 of which had a language barrier.

Municipal involvement: Leuven City Council

Photo Credit: Jos Dierickx on Wikimedia

Leuven is the eighth largest city in Belgium, located in the Flemish Brabant province. In recent years the city has gained a reputation for its award-winning climate work, winning the European Commission’s Green Leaf Award in 2018 and the Capital of Innovation Award in 2020. The city is focussed on maximising green energy generation within its own territory and the surrounding area, and by 2035 it aims to build at least 20 new wind turbines.

Leuven City Council is a member of LICHT Leuven, a partnership between Leuven 2030, citizen energy cooperative Ecopower, European network Rescoop, NGOs, semi public institutions and enterprises that aims to accelerate the local energy transition.

LICHT Leuven was established to help the city achieve its renewable energy goals whilst increasing citizen ownership. During an mPower expert witness session, Dries Vleugel from Leuven local authority explained that the city council sees the sun and wind as commonly owned public assets, so renewable energy generation should be for the benefit of the community as a whole. Working in partnership with local energy cooperatives that can invest in local energy production is seen as an effective way to achieve this. The city sees many potential benefits to this way of thinking. Energy cooperatives are a mechanism for participation through the one-member-one-vote structure, and provide education and community facilitation. The financial returns can reimburse individual investors and used to pursue wider social goals. The commitment to community participation has been embedded through a city council decision that there should be at least 50% direct citizen participation in any renewable energy projects.

The impetus for LICHT Leuven came from the Belgian energy cooperative Ecopower. In 2018, Ecopower won a city tender to act as a strategic partner that could support the city in accelerating the local energy transition. Ecopower teamed up with a consortium of local organisations to help develop a programme of activities that could enable local citizens, authorities and companies to act more efficiently and produce energy from renewable sources.

An essential part of the proposal was that Ecopower would offer local people the chance to participate in the projects by means of joining a Energy Community. LICHT-Leuven, a partnership between the city council, Leuven 2030, Ecopower, Rescoop, other NGOS, semi public institutions and enterprises was founded as the project development unit (PDU) to put the plans in action. With support from the province of Vlaams-Brabant, the PDU is now developing a holistic approach for the entire province, assembling a sound investment portfolio of renewable energy and energy efficiency projects that will be introduced as an ELENA project to the European Investment Bank.

Having run a series of low carbon living workshops, on topics such as heat pumps, ventilation and renewable energy generation, LICHT Leuven has built up its presence within the city. Solar has become a project focus due to the relative ease of set-up. The development unit has been working to identify suitable rooftops to install solar PV, exploring wide ranging opportunities from publicly owned schools to business premises. Out of this, 10 public roofs have emerged as viable projects. For council owned properties, ‘solar PV as a service’ has been procured from two cooperatives, Ecopower and Ecoob. A total of 830kWp system has been installed with 100% citizen finance made available through the cooperative, totalling €650,000. This success has shown the strength of collaboration and the willingness of citizens to contribute their time, local knowledge and finances to support the city’s drive to carbon neutrality.

Dries Vleugel, a member of Leuven City Council’s energy team said that what makes the LICTH cooperation strong is the unique strengths of each partner.

“The city is seen by citizens, local companies and partners as a reliable partner and a good ambassador for these kinds of projects. Cooperatives on the other hand have more power to mobilise groups of citizens,  technical knowledge, and experience in developing energy projects,  experience not found  in the city administration…

“If you can find each other it’s a really good support system.”

The unit is also exploring e-mobility projects, such as EV sharing and e-bikes, linking e-mobility with PV: collaboration between different partners has been helpful for building effective business cases. They also have plans for a new district heating system for a 40 person apartment block that will use water from the river Dyle to generate heat. This new energy source will be combined with an energy efficiency education campaign, to ensure that the low carbon potential for the new system is maximised.

Edited from mPower expert witness session by Dries Vleugel (Leuven City Council)

Crowdsourcing the future: Križevci, Croatia

Cycle in Križevci

Credit: oranges and lemons on Flickr, CC BY-NC-ND 2.0/p>

The Croatian city of Križevci is becoming a pioneer in the fight for clean energy and against energy poverty. Located not far from the capital Zagreb in central Croatia, the municipality is home to about 21,000 people, half of whom live in the city itself and half in the surrounding rural areas. Križevci is the first Croatian city to implement a crowdfunded renewable energy project, an endeavour that has made it a beacon in the country, with many others now looking at how to replicate the success story.

In 2018, Križevci inaugurated a fully crowdfunded solar power plant. Located on the roof of the city’s business centre, it has a capacity of 50 kilowatts and is expected to save around 55 tonnes of carbon dioxide per year. The solar energy it produces will mostly be used to power the business centre, and the surplus will be fed into the municipal grid.

The project started with the energy cooperative Zelena Energetska Zadruga (ZEZ or the Green Energy Cooperative), who had the idea and led the project throughout the process, providing expertise, and leasing the solar equipment to the project.

ZEZ worked closely with Križevci’s municipal administration, who held two public information sessions for residents and spread the word in the local media, making sure citizens were on board. Due to enthusiasm for renewable energy among Križevci’s residents, it took only ten days to crowdfund the necessary €30,000. In total fifty-three citizens invested in the project. The investment is treated as a ten-year loan with 4.5% interest rate paid to the citizens annually. After ten years, the power plant will be fully owned by the municipality.

The project is so successful and popular with residents that it is already inspiring new ideas. In the first half of 2019, Križevci’s municipality built another solar power plant, on the roof of the public library. There is scope for future projects. Križevci has now created its own energy cooperative, KLIK. KLIK was founded on 5 March 2020 and, among other projects, will connect Križevci’s solar roofs to a micro-network based on blockchain technology.

By Lucija Gudić and Danijel Šaško, municipality of Križevci

Further information

Community Bonds: Swindon, UK

Photo Credit: Abundance Finance

Swindon Borough Council raised £4.2 million capital finance and pioneered a new community-municipal model, successfully issuing community bonds to develop a solar park.

Swindon is a large town in South West England. The town sits on the main transport routes between the capital and Bristol, and has a population of 222,000.

In 2021 Swindon’s Net Zero Action Plan outlined how the council hopes to achieve net zero in its own carbon emissions by 2030 and support the wider community to achieve the same by 2050.

As part of their decarbonisation programme, Swindon council had developed the case for two 5MW ground mounted solar installations, at Common Farm and Chapel Farm. The Council were looking for a finance solution that could localise financial benefits and increase public engagement. Whilst the Council had taken steps to tackle the climate emergency, public awareness was low with some feeling excluded from the conversation. The Council approached Abundance, a social investment organisation, to help the two council owned companies leading on the projects to raise the funds needed.

What emerged from this process was the UK’s first council solar bond. Abundance led to marketing and management. The offer was launched ahead of the solar farms build stage, attracting 12000 investments. The offer was popular within the local area, seeing 35% of the total investment coming from in and around Swindon. Keeping the threshold for investment low enabled a variety of local investors to participate, with 2% of investors offering as little as £5. Each investor is predicted to see a 6% return on investment over 20 years, helping to achieve the Council’s aim of keeping the financial benefits of their climate work circulating with Swindon. Swindon Council has also pledged to invest a proportion of the profits generated from the solar farm of new local community projects, furthering this end.

Building on the work done with Swindon, Abundance has established a Community Municipal Investment option to allow other Councils to create bonds that are backed by the Council’s ability to borrow at lower rates. Nearby West Berkshire Council is amongst one of the new users. During an mPower event Bruce Davis from Abundance finance said they felt West Berkshire Council found the experience of using Community Municipal Investment to be energising after 1000 people decided to invest money in a local authority led scheme. This was a shift in local dynamics towards one of collaboration and mutual support. Abundance continues to look for new ways to maximise the social and environmental impact. They recently launched a new feature where investors can donate their interest to council and charitable schemes, with 15% of investors having opted in for this.

Edited from mPower expert witness session with Bruce Davis from Abundance

Enabling access: Lambeth, UK

Photo Credit: Malc McDonald on Geography

In Lambeth, community energy organisation Repowering London has found ways to overcome some of the hurdles that prevent people on low incomes from participating in Energy Community schemes. The council has made the organisation its approved community energy supplier.

Democratic participation, and especially the initial effort to form an energy community is time intensive and often not possible, especially for people on low incomes or with additional caring responsibilities. However, local people can become members of Repowering London for just £1 to gain a democratic ownership stake. For people on benefits or under the age of 25, investment starts at £50 (rather than £100 for other investors).

In Brixton, Repowering London has installed citizen-financed solar PV on social housing.  Profits are reinvested locally, for example into their flagship youth education programme.

Edited from research conducted by Britt Jurgensen (mPower)

4. Further reading

Energy Community podcasts

Energy Cities Soundcloud

Renewable and Energy Community background

Unleashing the power of community renewable energy
Accessible introduction to community energy and the legislation on Energy Communities

Community Energy
A practical guide to reclaiming power

How cities can back Renewable Energy Communities
A report on different enabler and partnership models and specific case studies with guidelines for local and regional policy makers

Mobilising European citizens to invest in sustainable energy
A report on energy communities with case studies on finance, engagement and partnership models

Energy communities under the Clean Energy Package
A report on legal definitions and transposition guidance for European legislation on Energy Communities.

Future business models in the local energy market

USEF white paper on energy and flexibility services for citizens energy communities
A white paper on potential business models in energy and flexibility services for energy communities

Citizen finance

Handbook on citizen finance
Comprehensive introduction to various forms of citizen finance

COVID recovery and local economy

A Green Recovery for Local Economies
Paper on how to adopt a green recovery for local economies after Covid-19, to develop recovery packages centred on social, economic, and environmental justice.

Case studies

Municipality acting as catalyst or initiator of energy community
Coopem Mouscron, Belgium

Plymouth Energy Community

Professional excellence, innovation and scale of energy communities

Ghent, Buurzame Stroom

Joint ventures and partnering with citizen organisations

Middelgrunden Offshore wind