In a world of sharing economy models, renewable energy sharing communities are gaining popularity and are on their way to becoming the mainstream model for the future of residential distribution. With Spain and Italy launching their first demonstration community projects, this sharing concept is rapidly gaining popularity in Europe. The industry sees this as a step forward in distributed energy, helping to accelerate the decentralization of the electricity system while also expanding public participation in renewable energy.
Demonstration Communities Emerge One After Another
Italy's first shared renewable energy community is located in a small city called Magliano Alpi in the northwestern Piedmont region. The shared community, which uses solar energy as its primary mode of power generation, relies on public funding to build a solar power network to meet the energy needs of half of its residents, with the ultimate goal of covering the entire city with clean electricity.
Because of the city's small size, few residents, and low building density, Magliano Alpi is the preferred demonstration site for renewable energy shared communities in Italy. Magliano Alpi Mayor Marco Bailo said the solar power network will soon cover 13 substations throughout the city, starting with the one at City Hall, so as to better manage and monitor the city's electricity consumption. In addition, smart meters and option management systems will be installed in buildings throughout the city, and a flow management platform will be created to monitor the energy consumption of buildings.
According to the Italian Solar Energy Industry Association, the trial operation of the Renewable Energy Shared Community in Magliano Alpi will end in June 2021, when data and information will be analyzed to understand the overall operation and to explore the additional potential of the Renewable Energy Shared Community.
Solmatch, Spain's first shared renewable energy community, launches in June 2020. This community, created by Spanish energy giant Repsol, is dedicated to providing customers with 100% clean electricity through solar power, thus providing more practical experience in distributed energy generation in Spain.
The Solmatch community is known to have solar panels on the roofs of its buildings, allowing residents of the entire community to "share the sun" and making the monthly electricity bills of the buildings in the community nearly half as cheap as if they were powered by the grid.
Goal: Europe-wide rollout
Italy proposed the Renewable Energy Shared Communities program in February 2020, and then announced incentives in June, including an increase in subsidies for PV installations and storage systems from 50% to 110%, tax breaks for private sector buildings, and special tariffs within communities to drive more businesses and households with renewable energy facilities to participate. In addition, cities with a population of less than 5,000 will receive an additional 100,000 euros in construction funds from the Italian government until 2024 if they express interest.
The reason Italy is pursuing renewable energy shared communities so aggressively is to pave the way for the Citizen Energy Communities program (CEC). The program aims to create larger "smart cities" through the design, creation and management of multiple shared renewable energy communities, providing more experience in the more rational and efficient use of energy, with the ultimate goal of expanding to the whole of Europe.
The Italian government says it is awaiting an EU review of the Magliano Alpi Renewable Energy Shared Community, which will be upgraded to a CEC community once the EU legal form of support is obtained. At that point, Magliano Alpi will work with five neighboring towns to create a larger "clean power sharing society.
In fact, CEC is just the beginning of a multi-city renewable energy generation sharing partnership that will revolutionize distributed energy generation, involving and benefiting municipalities, businesses, and people alike.
Redefine clean power
Industry insiders point out that renewable energy generation sharing is a transformative energy model that provides a new view of self-consumption and gives energy consumption end-groups more autonomy. This new urban energy model not only promotes local economic development, but also contributes to local sustainability without any investment by stakeholders.
If we define Renewable Energy Shared Communities as a market segment, it certainly has several attributes of a market with growth potential, namely large customer demand, potential for growth at scale, long-term sustainability, and a good return on capital. It is clear that renewable energy sharing communities are redefining clean power and that businesses and individuals alike can play a key role in improving climate change.
However, no country in the world has yet introduced laws and regulations regarding the formation and composition of renewable energy sharing communities, but this will not prevent their development toward the most popular and efficient residential distribution model. With the introduction of future standards and legislation, Renewable Energy Shared Communities will make a big difference. It is also worth noting that the advent of shared renewable energy communities has put significant pressure on large utilities as customers have more autonomy over their energy use, forcing them to transition in order to survive.
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