Mainstreaming Community Energy: Is the Renewable Energy Directive a Driver for Renewable Energy Communities in Germany and Italy?
1.2. Purpose and Stucture
2. Decentralisation and Bottom-Up Pathways as Key Elements of the Energy Transition: A Theoretical Approach
3. Materials and Methods
4. The RED II and Its Provisions for Renewable Energy Communities
5.1. The Development of Community Energy in Germany and the Transposition of RED II
5.1.1. Historical Development, Barriers and Drivers of Community Energy
5.1.2. Transposition of RED II to Date
5.2. The Development of Community Energy in Italy and the Transposition of RED II
5.2.1. Historical Development, Barriers and Drivers of Community Energy
- Location: quite widespread, in many Italian regions from North to South;
- Status: only a few of them are operative, most are in a planning stage;
- Initiators: mainly municipalities, in some cases SMEs and private companies that are technical partners of the project;
- Number of members: this is indirectly limited by current legal constraints, in the order of few tens, generally not exceeding one hundred members;
- Type of RES technology: PV is the far most common choice, due to the limits imposed by the current legislation, the economics of the investment and the favourable incentives for this technology. Only for larger projects other RES technologies are relevant: hydro, biomass, or, less frequently, wind and biogas;
- Storage: some of the projects foresee the integration of battery storage facilities (so far, in the order of few kilowatt-hours).
5.2.2. Transposition of RED II to Date
6.1. Comparing the Context: Technology Assets, Type of Initiators and Legal Forms
6.2. Comparing RED II Transposition and Development of Enabling Frameworks
6.3. Comparing Support Schemes for Renewable Energy and Their Consideration of RECs
6.4. Comparing Policy Instruments and Vertical Policy Coordination
7.1. Lessons Learned
- Both countries have deep roots and traditions of energy cooperatives which played a key role in the rural electrification in the beginning of the 20th century.
- Both countries have a federal or quasi-federal political system which requires intensive vertical and horizontal policy coordination efforts.
- Regions/municipalities enjoy political and a certain financial autonomy. These actors have partly taken up a pioneer role regarding the promotion of RECs.
- The development of CE initiatives in both countries has been facilitated by supportive policies based on a wide range of incentives and a remarkable reduction in technology costs. However, the discontinuation of price-based support schemes led to a slump in new RES installed capacity and investments .
- The sectoral focus of RECs and corresponding political support in Italy is mainly on PV. RECs are primarily organised around the legal form of nonrecognised associations. In Germany, by contrast, cooperatives dominate in the PV sector, whereas hybrids of limited companies and partnerships are the preferred form for community wind farms.
- Germany experienced a highly dynamic development of modern CE initiatives including energy cooperatives, particularly between 2006 and 2013 due to a supportive legal and policy framework. However, due to the instrumental shift characterised by auctions for large PV, wind and biogas and the phase-out of feed-in tariffs/premiums for the development of CE lost momentum. On top of that, there have been policy design failures that led to misuse by commercial developers and ended up discrediting the concept of CE. RECs have been increasingly “kept in quarantine” .
- Whilst in Italy the combination of pro-active regional governments with strong political commitment and a partly pro-active national government led to the design of support schemes that created a wide interest in developing RECs, in Germany there has been hardly a strategic and coherent planning approach towards RECs in the recent years, and the levels of “transformative vision” and “directionality”  have been poor. The governments under Angela Merkel showed low political commitment to advance CE, and policy development was guided by a market-based rationale rather than by the energy related and socio-economic benefits of CE. In Italy instead, elements of an effective enabling framework have started to take shape two years ago, before the full transposition of RED II.
- RED II has delivered new stimuli to the development of RECs, but the transposition dynamics and their effects are different in the two countries analysed. Although the previous federal government in Germany took measures to consider the specificities of community wind energy initiatives in support scheme design, these measures were not effective in compensating for the structural disadvantages RECs are facing in auctions. Moreover, the past government has been reluctant to facilitate collective self-consumption and energy sharing as required by the RED II. On the other side, there have been several promising and innovative initiatives from the subnational level. The RED II transposition has been distinctly more dynamic than in Germany where the negligent transposition hindered a new lease of life for REC development. However, there are clear indications that the creation of an enabling framework is gaining momentum under the new federal government.
7.2. Implications and Fields for Further Research
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Conflicts of Interest
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PV (Ground Mounted)
|Community Storage||Integrated Concepts|
|Limited partnerships or limited companies or hybrid forms||+++||+||+++||+||++|
|Civil law partnership||+||+||+||−||−|
|Other legal forms||+||+||+||+||+|
PV (Ground Mounted)
|Community Storage||Integrated Concepts|
|Limited partnerships or limited companies or hybrid forms||+||+||−||−||++|
|Civil law partnership||+||++||−||+||++|
|Other legal forms||−||+||−||−||+|
|Legal definition of RECs fully in compliance with RED II||No||Yes|
|Final customers, in particular household customers, entitled to participate in a REC||In principle, yes, but so far RECs have been insufficiently legally codified||Yes, further provisions are expected in future decrees.|
|RECs legally entitled to produce, consume, store and sell renewable energy and share, within the REC, renewable energy that is produced by the REC||Theoretically, but there is no regulatory framework for energy sharing||Yes|
|Assessment of barriers and drivers of RECs carried out by national or any regional government||No||Partly|
|Removal of unjustified regulatory and administrative barriers to RECs||Partly||Partly, further provisions are expected in future decrees.|
|Cooperation of relevant DSO with RECs to facilitate energy transfers within RECs||No specific provisions||Provisions are expected in future decrees.|
|Fair, proportionate and transparent procedures; cost-reflective network charges; relevant charges, levies and taxes to contribute in an adequate, fair and balanced way, to the overall cost sharing of the system (in line with a transparent cost–benefit analysis developed by the national competent authorities)||Partly, no cost benefit analysis existing||Partly|
|Nondiscriminatory treatment of RECs with regard to activities, rights and obligations as final customers, producers, suppliers, DSOs, or as other market participants||Mostly||Yes, in principle, detailed provisions are expected in future decrees.|
|Accessibility of RECs to all consumers, including those in low-income or vulnerable households||In principle yes, but no specific provisions or incentives; conflicts with social welfare legislation||Yes|
|Availability of tools to facilitate access to finance and information||Access to finance available (e.g., low interest loans provided by the publicly owned development bank KfW); access to information available but should be improved; need of risk capital/start up finance.||Partly (at regional level)|
|Regulatory and capacity-building support provided to public authorities in enabling and setting up RECs, and in helping authorities to participate directly||Only few federal states (e.g., North Rhine Westphalia).||Partly|
|Rules to secure equal and non-discriminatory treatment of consumers that participate in the REC in place||No specific provisions||No specific provisions|
|Consideration of RECs in support scheme designs||Partly (see below)||Yes|
|Quantitative policy targets for RES in general||Yes, both on federal and state level. The coalition agreement of the new federal government sets a target of 80% RES-based electricity and 50% RES based heating for 2030.||Yes, National Integrated Energy-Climate Plan (PNIEC): 30% RES coverage of final gross energy consumption for 2030|
|Key support schemes for RES based electricity||Market premium based on auctions for PV and wind energy plants >750 kW, biomass/biogas plants >150 kW; feed in premiums for small scale PV; low-interest loans and investment grants provided by public banks (e.g., KfW, Landwirtschaftliche Rentenbank)||Auctions for big RES plants (exceeding 1 MW), direct incentives (subscription to registers) for RES plants below 1 MW, investment grants, fiscal incentives, favourable VAT regime, tax credits for PV installation costs, net metering scheme.|
|Consideration of RECs in key support schemes for RES based electricity||Reduced security deposits and uniform pricing rule for citizens’ energy companies under the auctions in the field of wind energy||Investment grants, incentive of 110 €/MWh feed-in premium for shared energy in RECs, reimbursement of part of network charges in the bill, tax deductions (for residential members)|
|Quantitative policy targets for RECs||No||Yes, the Recovery Plan (PNRR) envisages 2 GW of RES capacity to be installed by RECs by 2026 in municipalities below 5000 inhabitants.|
|Qualitative policy targets for RECs||No explicit target, but pursuant to §2 of the RESA the “diversity of actors in electricity generation from RES should be preserved”. Few federal states formulated qualitative targets in their energy strategies.||RECs are included in the National Integrated Energy and Climate Plan among the initiatives that contribute to the 30% RES coverage target on the final gross energy consumption for 2030.|
|Privileges for RECs in the context of spatial planning||No||No|
|Privileges for RECs in project approval/permitting||No||No|
|(Virtual) net metering||No||Yes|
|Economic and fiscal incentives|
|Specific investment grants||Partly (federal states)||Yes, in some regions (e.g., Lombardia)|
|Funds providing start up finance||In 2018, the state government of Schleswig-Holstein has established a revolving fund providing risk capital for CE initiatives in the start-up phase. The government of Thuringia plans to follow this example. The new federal government plans to set up a similar fund at national level.||Regional funds|
|Low-interest loans specifically for community energy initiatives/RECs (e.g., lower interest rates, longer repayment periods or extended grace periods)||Low interest loans and grants provided by Landwirtschaftliche Rentenbank||Yes, PNRR provides 2.2 billion Euro to support development of RES installations by RECs established in municipalities below 5000 inhabitants (via zero interest loans).|
|Fiscal incentives||No specific provisions||Yes, 50% or 110% personal income tax deductions for the installations of PV plants for residential customers.|
|Financial support for energy sharing||No||Yes, 110 €/MWh feed-in premium for shared energy in RECs|
|Technical assistance, capacity development|
|Information, advice||Few federal states||Advice, guidance, capacity building through key national institutions (e.g., GSE, ENEA, RSE *)|
|Technical assistance||Few federal states|
|Promotion of networks||Few federal states||Few regions|
|Institutional support, competence/coordination centers, one stop shops, etc.||Few federal states (e.g., through energy agencies and other intermediaries)||Yes, coordination centres in some regions|
|Dedicated training for local authorities and/or RECs||Few federal states||Yes|
|Dissemination of good practices||Few federal states||Yes|
|R&D, experimentation, regulatory sandboxes, living labs etc.||Federal government and few federal states||Yes|
|Assessment of barriers and drivers for RECs||Federal government,|
|Foundation/setup of RECs|
|Nondiscriminatory participation of households||Federal government||National government|
|Nondiscriminatory participation of low-income/vulnerable households||Federal government||National government|
|Defining rights and duties of RECs||Federal government||National government|
|Market activities of RECs|
|Access to financing, provision of start-up financing, risk capital, low interest loans etc.||Federal government, state governments, public funds (e.g., community energy funds)||National government, regional governments, private foundations|
|Other economic incentives (fiscal incentives etc.)||Federal government, state governments||National government|
|Spatial planning/siting of RES facilities||Federal government, state governments, regional planning bodies, municipalities||National government, regional government, municipalities|
|Approval/authorization of RES facilities||Federal government, state governments, districts, municipalities||National government|
Regional government, municipalities
|Information provision, advise||State governments, districts, municipalities||National government|
Regional government, municipalities
|Institutional support, REC competence/coordination centers, one stop shops, networking||Federal government, state governments, districts, municipalities||National government|
Regional government, municipalities
|Technical assistance, capacity development for local authorities and RECs||Federal government, state governments, districts, municipalities||National government|
Regional government, municipalities
|R&D, experimentation, regulatory sandboxes, living labs, etc.||Federal government, state governments, districts, municipalities||National government|
Regional government, municipalities
|Consideration of RECs in support schemes for RES (investment support, operational support)||Federal government, state governments||National government|
|Dedicated support schemes for RECs||Federal government, state governments||National government|
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Krug, M.; Di Nucci, M.R.; Caldera, M.; De Luca, E. Mainstreaming Community Energy: Is the Renewable Energy Directive a Driver for Renewable Energy Communities in Germany and Italy? Sustainability 2022, 14, 7181. https://doi.org/10.3390/su14127181
Krug M, Di Nucci MR, Caldera M, De Luca E. Mainstreaming Community Energy: Is the Renewable Energy Directive a Driver for Renewable Energy Communities in Germany and Italy? Sustainability. 2022; 14(12):7181. https://doi.org/10.3390/su14127181Chicago/Turabian Style
Krug, Michael, Maria Rosaria Di Nucci, Matteo Caldera, and Elena De Luca. 2022. "Mainstreaming Community Energy: Is the Renewable Energy Directive a Driver for Renewable Energy Communities in Germany and Italy?" Sustainability 14, no. 12: 7181. https://doi.org/10.3390/su14127181