What future for renewable energy communities?Comment by Giuseppe Milano

Italy is focusing, 2 years late, on renewable energy communities.At the moment there are less than 100 but by 2027 there could be over 20 thousand.

With the decree of the Ministry of the Environment and Energy Security of 24 January 2024, Italy has finally decided to stimulate the birth and development throughout the territory of renewable energy communities and self-consumption, the Cers, i.e. those experiences involving groups of people, companies or local entities who collaborate to generate, share and distribute renewable energy in a more efficient and fair way.

Giuseppe Milano, engineer and environmental journalist, general secretary of Greenaccord non-profit organization since 2019, lives and works between Rome and Bari.He has just published a volume dedicated to energy communities:is called Energy communities.Social and environmental generativity experiments (Pacini editore, 2024).This is the first book on the topic updated to the new community and national regulatory framework of reference, with reference also to the new European RED III directive on renewables, not yet implemented by Italy which requires 42.5 percent of energy produced from renewable sources .We interviewed him to understand what will change with the new decree and where we are with the spread of energy communities in Italy.

When did the topic of energy communities begin to assert itself?
The first thing to highlight is that the project of renewable energy communities and widespread self-consumption was born from a European plan from 2015-2016, following a photovoltaic system project rejected by the then Spanish governor Mariano Rajoy.The European Commission responded to that attempt, which clashed with the nascent Green Deal, by also including the concept of democratization of energy through polycentric systems in the RED II directive on renewables.There were already virtuous examples of collective self-consumption in neighborhoods of various European cities, from Spain itself to the Netherlands to Germany.However, the directive gave impetus to the first energy community projects.Fortunately, Italy implemented the directive quickly enough, in 2019, while waiting for a legislative framework of reference.In that context, the installed power was dictated by the "secondary substation", which limited the production of the systems to 200 kilowatts.Therefore the rule adopted was partial, but it certainly had the merit of stimulating debate.

Until the approval of the Italian decree of 24 January 2024.What changes?
The decree is certainly good news, even if it arrives two years late.On the one hand we are a country that is not totally renewable (just think that we spend more than 20 billion a year in environmentally harmful subsidies that support the fossil fuel market) but we have finally moved on to the recognition of the "primary cabin", which today becomes the evaluation deadline for liberalizing energy communities.The decree comes after approval by the European Commission, which accepted Italy's proposal to provide 5.7 billion euros in state aid, of which 2.2 are non-repayable in the amount of 40 percent towards municipalities with fewer than 5000 inhabitants, to be used for new plants and revamping (strengthening of existing structures, ed), and 3.5 billion destined for large cities, metropolitan cities and so on.The power limit has been extended to 1 megawatt:these are projects that usually require investments of 1 million euros, a figure that local authorities are unlikely to be able to anticipate.For this reason, state aid can have a useful multiplier effect.

Speaking of state aid, if the same conditions were aimed at large companies, would this risk generating distortions?
Yes, the only doubt remains that related to businesses, especially large ones.These can constitute the Cers but cannot receive the incentives.Or at least, this is a doubt that will be resolved by the guidelines that will soon be published by the GSE.The rationale for this measure lies in the fact that large companies already have the technical know-how to carry out the Cers as well as the economic structure.If large companies received state incentives, an inequality would be created towards citizens.It must be said that today, with the decree, a construction site has opened and like all construction sites we don't know exactly how things will go.The first experiences that apply the law will tell us.

So far, however, some experiences of renewable energy communities have already been created.How did they go?
There have been many experiences of widespread self-consumption that improperly use the term "energy communities":I'm talking, for example, about condominiums that install photovoltaic panels on their roofs and share energy with the various condominiums.It is certainly a collective approach but with the Cer we are talking about a widespread community, whose geographical perimeter is identified by the primary substation.The difference between these new aggregations is that different subjects can participate:public buildings, private businesses, citizens, parishes and so on.Another fundamental difference lies in the legal unity:the Cer is constituted with a deed from the notary, since there are greater responsibilities.In short, not only the technology changes but also the level of governance.And this governance model is entirely new:there is no standard recipe that works for all projects and territories.There will be experiences that require the formation of a cooperative, or a participatory foundation, or even a non-profit organization.The legal figure depends on the type of member members and the benefits they wish to pursue.To give an example, the diocese certainly has a social interest rather than an economic one, while a company pursues an economic objective first and foremost.

How many energy communities proper have been started so far?Can you give us some examples of the most virtuous?
So far, fewer than 100 energy communities have been connected to the primary substation.These are low numbers compared to the potential:a study conducted by the Polytechnic of Milan speaks of 20 thousand Cers that can be established by 2027.So there are huge margins.Among the virtuous experiences, we can certainly mention those of Piedmont, those of internal areas such as the Dauni Mountains, in the Foggia area, and in Abruzzo in territories hit by earthquakes.And then there are virtuous cities like Parma, the province of Lecce and above all Rome:here, the public works department has started a census of public assets with the main aim of knowing all the surfaces that could host the Cers, starting from schools.Another experience that really struck me from a multidisciplinary perspective is that of a Cer started by a company in the Rimini area that created a community to reward its employees and share the proceeds with them.A very interesting example of corporate welfare which demonstrates how CERs lend themselves to satisfying different needs.

And now a more “classic” question:What are the future scenarios of the Cers?
In the book I decided to address two focuses related to the topic of Cers.The first is that of energy poverty, starting from two studies, one drawn up by the Diversity Inequalities Forum, the other by the Oipe (Italian Energy Poverty Observatory) which photographs the phenomenon and its growth in recent years, due to inflationary problems of a different nature.And then there is the issue ofagrivoltaic, because it represents a pool of innovation that migrates from the urban to the agricultural reality and is capable of responding in a virtuous manner to the dispute represented by the installation of ground-mounted photovoltaic panels.