Energy communities are revolutionising the way we produce, consume and manage energy. It is no longer just about large electricity companies. Now citizens, businesses and public administrations can come together to generate their own energy and reduce their dependence on the traditional system. So, let us clearly look at what types of energy communities exist to understand how they work and which one may suit you best.
What is an energy community?
An energy community is a group of people, companies or public entities that come together to produce, consume, manage or share energy, usually from renewable sources. The objective, of course, is not only economic, it also seeks to:
- Reduce energy costs
- Promote sustainability
- Democratise access to energy
- Boost local development
Unlike other models, here the participants are not just customers, they are an active part of the energy system.
Types of energy communities
Within this general concept, there are different recognised models, mainly at European level. Each one has its own particular features, although they share the same basis of collective participation and the use of clean energy.
Renewable Energy Communities
Renewable Energy Communities are focused exclusively on the production and use of energy from renewable sources, such as solar or wind power. Their main characteristics are:
- They are based on clean energy.
- They are made up of citizens, SMEs or local entities.
- Their main objective is not economic profit, but environmental and social impact.
This type of community is usually closely linked to the local environment, favouring proximity based projects. A clear example would be a group of neighbours installing solar panels and sharing the energy generated.
Citizen Energy Communities
Citizen Energy Communities have a broader approach, as they are not limited to renewable energy, but can cover energy generation, renewable or not, distribution, commercialisation and storage. They are more flexible structures and can include a wider variety of participants, even large companies. Their objective remains social and environmental, but they allow for a greater diversity of activities within the energy sector.
Local Energy Communities
Local Energy Communities focus on a specific geographical area, so the key here is proximity:
- The members are close to the energy project.
- Energy is produced and consumed locally.
- The economic development of the area is encouraged.
This model is very interesting for municipalities or rural areas, where the aim is to make use of local resources and reduce external energy dependence.
Are there other types of energy communities?
There may be other types of energy community that fall within this concept, because although the previous models are the most recognised at regulatory level, in practice there are other forms that fit within this idea. For example:
- Energy cooperatives: organisations where members are both owners and consumers of the energy.
- Collective self consumption, where several users share an installation, very common in residential buildings.
- Associations or limited companies with community energy purposes and legal structures adapted to specific projects.
What matters is not so much the label, but that they comply with the basic principles of open participation, democratic management and both social and environmental benefit.
How these energy communities work
Collective ownership
Although each model may vary, the operation of energy communities follows a fairly clear logic. The first point is that the members are, to a greater or lesser extent, owners of the energy system, which may be through shares, stakes or fees. In other words, you are not just a consumer, you also have part of the control.
Shared self consumption
The energy generated is distributed among the members. For example, if there is a solar installation, the electricity produced is distributed among the participants according to the established agreement, which allows you to save quite a lot on your electricity bill.
Legal entity
To operate legally, the community must be established as an entity:
- Cooperative
- Association
- Limited company, etc.
This makes it possible to sign contracts, manage investments and operate within the legal framework.
Coverage
Normally, these communities have a local or fairly limited scope, bearing in mind that energy can be shared within a radius of up to 2 km from the production point. As you can see, they are not designed to operate on a large scale, but to cover the specific needs of a group or territory.
Benefits of energy communities
Any of these types of energy communities has clear advantages over a traditional energy system, such as:
- Economic savings. Reducing the electricity bill is one of the main reasons to join an energy community.
- Greater energy independence, as you depend less on large suppliers and market volatility.
- Sustainability. The use of renewable energy is promoted and emissions are reduced.
- Positive local impact: money stays in the community and opportunities are generated in the surrounding area.
- Participation and control. Users have a voice in management and decisions.
- Access to grants, as many projects have public aid to encourage this model.
What type of energy community should you choose?
This depends quite a lot on your situation, your objectives and the context you are in.
If you want something practical, close and easy to understand, a local energy community is usually the best option. It is the most direct model: you share an installation, normally solar, with neighbours or nearby businesses and start noticing savings from the very beginning. It does not require major involvement and is ideal for getting started.
If you are interested in taking part in a more complete project with greater scope, citizen energy communities offer more possibilities. They do not only focus on generating energy, but also on managing it, storing it or even commercialising it. Here you can become more involved and form part of a broader energy system.
If your priority is environmental impact and commitment to renewables, renewable energy communities are the best alternative. They are focused on producing clean energy and generating a positive impact on the environment, beyond economic benefit. That said, beyond the type of community, there are factors that weigh even more heavily in the decision:
- Availability in your area. Many times you do not choose the model, but the project that already exists near you.
- Economic conditions: initial investment, estimated savings and return.
- Level of involvement: some communities are very participatory and others are more passive.
- Transparency and management: who promotes it, how decisions are made and what guarantees it offers.
If you are considering taking the step, our recommendation is clear: find out properly about the options in your area, compare all types of energy communities and take part in projects that truly make sense for you.
