Crowdfunding and energy communities take centre stage

Poorer areas of the EU are exploring funding approaches such as crowdfunding and citizen-driven energy communities for the green transition.

As the European Union advances its green transition, economically disadvantaged regions are concerned that they are not a priority. The fear of being left behind in the face of capital-intensive green investments is particularly pronounced in regions of countries like Romania and Bulgaria, where GDP per capita falls below the EU average.

Dumitru Fornea, a Romanian trade unionist on the EU’s Economic and Social Committee (EESC), highlighted the struggle of these regions to attract funding, a fear shared by regions in Spain, Czechia and Slovakia during a recent Euractiv event. Declining manufacturing industries like coal and steel make these regions less appealing to financial markets since they are perceived as not having “a very attractive profile”, Fornea explained.

Crowdfunding is emerging as a potential solution, in which community members or workers themselves contribute to specific projects. The European Commission is currently experimenting with crowdfunding as part of its innovative financing schemes. Michele Sansoni from the European Commission’s Climate, Infrastructure, and Environment Executive Agency (CINEA) emphasised the potential of crowdfunding in the clean energy transition, with Europe’s LIFE programme supporting local and regional authorities with up to  1.75 million pounds for their switch to clean energies.

Despite its promise on paper, crowdfunding faces challenges in reality, Sansoni stresses.

“Maybe now is not the right time to ask [people] for money,” Sansoni stated, pointing to tough economic times caused by the combination of inflation and recession in some parts of Europe. He cited a lack of interest for an EU-funded solar rooftop project aimed at supermarkets in Spain and Italy.

However, an alternative gaining attention is Energy Communities, or citizen-led green energy projects owned by the local population. These have captured the attention of regional authorities. Adrian Hiel from Energy Cities, a network of local authorities, noted the positive impact of these setups, in which local investment contributes to community-owned green projects.

Energy Communities were introduced in EU law four years ago, but not all member states have implemented the law as intended. Poland, Sweden, Czechia and Bulgaria are cited as having poorly transposed the law, while another ten EU countries show substantial deficiencies in their transposition, according to REScoop, an association dedicated to local energy cooperatives.

There are many successful examples of Energy Communities. This is shown by the Community Power Coalition, a collective of over 50 organisations advocating for community energy across Europe, which marks its 10th anniversary with significant achievements in promoting community-controlled renewables and influencing policy changes.

Originating from a bold “People’s Windmill” performance in November 2013, orchestrated by the organisations Friends of the Earth Europe, Climate Alliance, Climate Action Network Europe, Ecopower, ICLEI Europe, Energent, and REScoop.eu. The coalition has played a pivotal role in shaping Europe’s energy policy landscape.

The collective push for citizen and community-controlled renewables gave great results and in 2016 the European Commission’s Clean Energy for All Europeans package introduced provisions supporting community energy.

Additionally, the coalition’s efforts bore fruit with the incorporation of community energy provisions in the Renewable Energy Directive (RED II) in 2018, providing communities, cooperatives and individuals the right to produce, consume, store and sell their renewable energy without undue charges or administrative barriers. The directive also defined Citizen Energy Communities and Renewable Energy Communities as distinct organisational entities.

Now boasting over 50 member organisations across 20 European countries, the coalition has played a vital role in the increasing uptake of community energy projects, with approximately 9,000 energy communities currently in operation across the EU.

During the event, the coalition launched its manifesto, titled “Empower and Accelerate Energy Communities for a Democratic, Resilient, and Affordable Future”. Looking ahead to the 2024 European elections, the manifesto outlines key demands for the full transposition and implementation of community energy provisions from the Clean Energy Package across EU member states. These demands stress the need for adequate financial support, inclusion in National Energy and Climate Plans (NECPs), and empowerment of municipalities as crucial allies.

Emilia Samuelsson

Based on

Kurmayer 2023 EURACTIV “Poorer EU regios look to citizes to finace the green transition” 16th November 2023 https://www.euractiv.com/section/energy-environment/news/poorer-eu-regio...

Friends of the Earth Europe.  “A decade of empowerment: Celebrating 10 years of advancing community energy”  30th October 2023.

https://friendsoftheearth.eu/news/a-decade-of-empowerment-celebrating-10...