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e a successful means for addressing and raising awareness
about environmental issues, as these projects are at a scale
where people can engage, and the projects can be appropriately
adapted to the local context. 37 Ownership in community
energy projects has been shown to shift mindsets from energy
consumption to the balance between consumption and
production. Local ownership builds a constituency for distributed
renewable energy in a way that buying renewable-derived
electricity as a commodity may not. 38
Other social benefits – including improved energy access, security
and reliability of supply, a strengthened sense of community,
and local job creation and related capacity building – also drive
community renewable energy projects. 39 Energy (power or heat)
that a community produces and uses locally is not subject to
the same level of transmission and distribution losses that occur
with more centralised systems. In addition, in some remote, offgrid
areas, the presence of community-owned energy access
initiatives has led to a leapfrogging to renewables. 40
ENABLING ENVIRONMENT
AND OUTLOOK
The main challenges and barriers for community energy initiatives
worldwide include: uncertainty and risk caused by changes
or fluctuations in regulations, support systems and available
financing; continued government support of existing energy
players (including fossil fuels); a lack of local skills, knowledge,
confidence and engagement of local populations; and local
opposition. 41 Community energy projects in Europe, in particular,
have been inhibited by legal and administrative bottlenecks,
rather than by financial barriers. 42
Many of these risks have a greater impact on local community
efforts than on large corporations that can draw from a larger
network and spread risk across numerous projects and regions. 43
In countries with strong, centralised monopolies, the energy
market may not be equipped for, or open to, small bottom-up
initiatives. Even in countries with state support for community
energy initiatives, it can be an enormous challenge for local
communities to access the funding (either through grants, loans
or the sale of shares), necessary skills, time and other resources to
organise and construct a project. For these reasons, community
projects often are slow to come to fruition or may even fail during
the development process. 44
An enabling environment for community energy involves stable
and long-term political support from governments at the local,
regional, national and even supra-national (e.g., EU) levels, as
well as dependable provision of credit and capacity-building
frameworks. 45 The policy framework plays a crucial role in
fostering community renewable energy projects, even more
so than overcoming technical barriers, and regions that have
supporting policies have seen a proliferation of community
energy initiatives. 46
some exceptions) to offer 20% ownership of schemes to local
communities through the country’s Promotion of Renewable
Energy Act. 47 The Scottish Government set a target of 500 MW
by 2020 for community energy, implemented financial support
mechanisms and provided clear guidance on Good Practice
Principles for Shared Ownership of Onshore Renewable Energy
Developments. 48
Stable feed-in tariff schemes (e.g., in Germany) have enabled
and encouraged investments from communities and individual
citizens, supporting the emergence of a variety of business
models based on community energy. Important policy elements
have included the purchase obligation and the guaranteed price
for the electricity produced. Other policy measures – such as tax
credits, net metering or small-scale incentive schemes – have
helped to support community energy initiatives in the United
States, Latin America and Asia.
The movement for 100% renewable energy among local
governments also has enabled community energy projects. City
governments such as Copenhagen, Frankfurt, San Francisco
and Vancouver, and regional governments such as Fukushima
prefecture and Lower Austria, have developed locally appropriate
models for community energy, which support the goals to achieve
a full transition to renewable energy. 49
Micro-credit also has been used as a model for initiating
community energy projects (particularly in Latin America, Africa
and South Asia), while at the same time addressing poverty by
increasing energy access.
Because many projects are led by volunteers or community
members that have limited capabilities compared with
commercial developers, the success of community energy often
relies on the long-term commitment and perseverance of key
individuals. Capacity-building efforts often play an important
role in community energy initiatives. The Belgian co-operative
Ecopower uses some of its profits to provide the local municipality
with an energy expert on staff, building capacity from the bottom
up. 50 New types of energy co-operatives are emerging – such as
Sharenergy (UK), Energy4All (UK) and Bürgerwerke (Germany)
– that work with communities, helping to set up new energy
co-operatives, building capacity of community energy groups
and offering administrative support. 51
Although the number of community energy projects is increasing
worldwide, driven by an ever-diversifying set of possible models,
challenges persist. A coherent and comprehensive policy framework
that integrates community energy across governance levels and
sectors, as well as building capacity and expertise, is needed to
realise the full potential of community renewable energy. 52
07
Several countries (mostly within Europe) and local governments
(e.g., US states) have enacted policies that have either directly
or indirectly supported community energy. Denmark and
Scotland have specific policy frameworks for local participation.
Project developers in Denmark are legally required (with
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