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EU Paves the Way for CSOPs in the “Clean Energy Package”

Wind mill(c) Ethan Weil / Unsplash

In December 2018, the European Union passed a legal framework for prosumership as part of a recast of the Renewable Energy Directive (RED II). From June 2021 onwards – once the Directive has been transposed into national law – consumers, as prosumers, will have the right to consume, store or sell RE generated on their premises

  • either individually, for example households and small and medium sized enterprises, and collectively, for example in tenant electricity projects (Art. 21 RED II)
  • or as part of Renewable Energy Communities (RECs) organised as independent legal entities (Art. 22 RED II).

RECs require a particular democratic governance model focussing on the local partners. A CSOP is a prototype of this business model and shows how to implement these new rules.

CSOPs allow for the inclusion of municipalities and/or commercial investors like SMEs. Moreover, they offer an opportunity of advancing to economies of scale. At the same time, they retain the benefits of individual consumer participation.

Outlook on Electricity and Energy Sharing

CSOPs can be an important “bridge technology” in financing citizen energy projects because they extend the advantages of RE-cooperatives – particularly in cases where projects involve very different co-investors, or where the cooperative model is not feasible for other reasons. This is especially the case in Eastern Europe, where citizen energy projects are still rare, and where the cooperative model is associated with the socialist past.

This is of particular relevance for “ electricity / energy sharingThe context and aims of the introduction of energy/electricity sharing are probably best reflected in recital 5 IEMR: “In the past, electricity customers were purely passive, often buying electricity at regulated prices which had no direct relation to the market. In the future, custom-ers need to be enabled to fully participate in the market on equal footing with other market participants and be empowered to manage their energy consumption. To integrate growing shares of renewable energy, the future electricity system should make use of all available sources of flexibility, particularly demand side solutions and storage, and of digitalisation through the integration of innovative technologies with the electricity system.” Consequently recital 71 RED II stipulates that “Renewable energy communities should be able to share between themselves energy that is produced by their community-owned installations.” ” as introduced with the new legal European framework (see above). Recital 71 RED II stipulates that “Renewable energy communities should be able to share between themselves energy that is produced by their community-owned installations.”

Especially in energy cluster projects that target sector coupling and that may involve electricity sharing, storage, e-mobility, cogeneration, etc., it will become increasingly important to include professional operators because operation and maintenance of infrastructure can quickly become very complex. In this context, the CSOP provides a standard governance model that safeguards the interests of local partners with regards to their co-investors.