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What is an Energy Community?
Energy communities have emerged as a collective and effective response to the challenges of self-consumption and renewable energy management. In 2022, Spain adapted a European regulation that distinguishes between Citizen Energy Communities (CEC) and Renewable Energy Communities (REC). However, in practice, the Spanish model of energy community is based on a single concept where all must be renewable in nature. These communities are made up of legal entities characterized by the open and voluntary participation of their members, essentially functioning as a collective and participatory self-consumption system.
QUIXOTIC's mission is to facilitate the creation and management of these communities by providing tools that maximize the environmental and economic benefits for all participants. This is achieved through the use of distributed generation and the efficient management of energy surpluses. Being part of an energy community is not only an opportunity to reduce the carbon footprint but also to create a space for dialogue around the sustainable use of natural resources and to design a more just and equitable energy future for our communities.
Reasons to Establish an Energy Community
Joining an energy community offers a broad range of benefits, both individually and collectively:
- Decarbonization of the Local Environment: These communities enable 100% green consumption, encouraging the use of sustainable technologies such as electric vehicles and aerothermal systems, which significantly contribute to reducing carbon emissions.
- Fostering a Sense of Community: By sharing energy surpluses among neighbors, reliance on large energy providers is reduced, strengthening local social and economic fabric.
- Economic Efficiency: Being part of an energy community is often more economical than individual self-consumption installations. Fixed project costs are distributed among all members, reducing initial investment and increasing shared benefits.
- Savings on Electricity Bills: Beyond the savings from self-consumption, the community can negotiate more competitive rates by aggregating the demand of all its members, resulting in significant negotiating power with energy suppliers.
Advantages of an Energy Community
Being part of an energy community provides significant advantages beyond simple access to multiple sources of renewable energy. Members not only share common goals but also have the opportunity to achieve more ambitious targets more effectively.
- Sense of Belonging: One of the most notable benefits is the strong sense of belonging generated among members. These communities are not just about producing and exchanging energy; they also promote collaboration and social interaction, creating emotional bonds and a shared sense of responsibility among participants.
- Community Feeling: Constant interaction among members helps build a deep sense of community. Through discussions on energy management and other topics, participants not only share technical knowledge but also get to know each other personally, which strengthens ties and fosters greater social cohesion.
- Energy Savings: Energy communities are designed to optimize energy use, leading to significant savings on electricity costs. By reducing reliance on fossil fuels and the general distribution grid, these communities promote more responsible and efficient energy consumption.
- Use of Renewable Energy: A distinctive feature of energy communities is their commitment to renewable energy sources. By relying exclusively on clean and sustainable sources, communities advance the decarbonization process, directly contributing to climate change mitigation and improved air quality.
- Boosting Decarbonization: With their exclusive use of renewable energy, energy communities do not contribute to environmental pollution, as their carbon dioxide emissions are virtually zero. This environmental sustainability is a fundamental pillar of these communities.
- Sustainability: Sustainability is a priority for energy communities, whose members are deeply aware of their environmental impact. This awareness translates into the adoption of energy-saving technologies, careful planning, and smart resource management, reinforcing their commitment to a more sustainable lifestyle.
Additionally, in recent years, various grants have been established to support the development of energy communities. Programs like CE Implementa, part of the Recovery, Transformation, and Resilience Plan, have provided crucial resources for the establishment and development of these communities. While some calls have concluded, future renewals are likely, presenting an excellent opportunity for those interested in moving towards a more sustainable world.
Steps to Create an Energy Community
Creating an energy community may seem complex, but it can be carried out effectively by following a series of well-defined steps:
- Discovery Session: In this initial stage, we meet with you to clarify any doubts and ensure that the value proposition is completely clear. A detailed analysis proposal is provided, including timelines and specialized partners for each area.
- Project Analysis: We collaborate with our partners to analyze the specifics of the project, considering the involved parties, current legislation in the relevant autonomous community, and other key factors. The result is a joint ecosystem document detailing every aspect of the energy community and its scope.
- Project Execution: Once the plan is approved, we proceed with technical implementation, covering everything from installation and certification to generating interest among neighbors, defining sharing models, and training community members.
- Ongoing Maintenance: QUIXOTIC offers a SaaS operational system that allows the community to manage all its operations from any internet-connected device. We can also participate in the daily management of the community according to the specific needs of each group.
Additionally, we have a Top-Tier Partner Network that facilitates the complete execution of the project. While our specialty is management software, we work together with experts in solar installations, permits, certifications, contracts, hardware, and more, to offer a comprehensive and transparent solution from start to finish.
Challenges of Setting Up an Energy Community
Creating an energy community comes with its own set of challenges. Here are some common obstacles and how to address them:
- Bureaucracy: Bureaucratic hurdles are inevitable in large-scale projects like these. Compliance with a range of laws, regulations, and municipal ordinances is essential. For example, in Navarra, the formation of a core group of four to twelve people to lead the project is required. Additionally, having a governance plan that clearly defines the power dynamics within the community is crucial to prevent the leadership group from having absolute control over other participants.
- Time for Establishment: The process of establishing an energy community can be lengthy due to the review and approval of necessary documents by authorities. Each phase of the project requires completing milestones, such as developing a business plan. Any needed corrections can further delay the process, so precision and proper advisory support are crucial.
- Funding: Securing adequate funding is one of the biggest challenges. The project will require varying amounts of capital at different phases, from development to operation. Options for funding include grants, subsidies, traditional loans, crowdfunding, micro-patronage, or equipment leasing. Adjusting funding amounts to the project's needs is essential for its viability.
- Management: Managing an energy community can be complex, especially when coordinating multiple energy sources and balancing electricity supply and demand. Effective planning for energy distribution is also vital to prevent overloads or supply interruptions.
- Compliance: Meeting municipal, regional, and national regulations is a significant challenge. From obtaining construction permits to maintaining high quality standards, the community must find suitable solutions to ensure regulatory compliance.
Comparison: Energy Communities in Spain vs. France
France has made significant strides in promoting energy communities, expanding the maximum distance for energy sharing among members from 2 to 20 kilometers through an early decree. This measure represents a significant change, allowing collective self-consumption initiatives to extend up to 10 kilometers in peri-urban areas and 20 kilometers in rural areas.
In Spain, the situation has been different. In October 2022, the Spanish government approved a royal decree that initially limited the maximum distance to one kilometer, leading to numerous complaints and a subsequent extension to two kilometers. This modification was part of the Más Seguridad Energética (Plan +SE), aimed at increasing population protection against energy crises, strengthening Spain's strategic autonomy, and fostering solidarity with other EU member states.
This adjustment aims to align Spain with other European countries like France and Portugal, which already permit a distance of two kilometers, facilitating shared self-consumption by combining solar installations from different owners, such as residential communities and businesses.
Self-Consumption vs. Energy Community
Renewable photovoltaic energy can be utilized in various ways, primarily through self-consumption and energy communities. Each mode has its own characteristics and benefits, so understanding what each offers is crucial before making a decision.
- Self-Consumption: This refers to a process where an individual produces their own energy using renewable sources, such as solar panels. In this system, the benefit is direct for the user, who reduces their dependence on the conventional electricity grid. There are different types of self-consumption, including self-consumption without surpluses, with surpluses eligible for compensation, with surpluses without compensation, and remote self-consumption.
- Energy Community: Goes beyond individual consumption by involving a group of users who generate, consume, and manage energy collaboratively. Participants share energy resources and distribute the generated electricity according to established agreements, promoting greater efficiency and diversification of energy sources.
CRM for Energy Communities
A CRM (Customer Relationship Management) system is a crucial tool for effective management of an energy community. It facilitates information centralization, task automation, and improved coordination among members, leading to more efficient and error-free management.
Advantages of a CRM:
- Centralized Management: Allows storage and management of all documents and data in a single database, making access and handling easier while reducing the risk of information loss or duplication.
- Task Automation: Many routine and repetitive tasks can be automated, enabling administrators to focus on more strategic and high-value activities.
- Error Reduction: By centralizing and automating processes, human errors are minimized, improving the accuracy and operational efficiency of the community.
Risks of Not Using a CRM:
- Time and Profitability Loss: Manual management of tasks consumes time and resources, reducing the project's efficiency and profitability.
- Higher Error Margins: Without a CRM, manually handling large amounts of data increases the risk of errors, potentially leading to operational issues and additional review needs.
- Reduced Control and Agility: Lack of a centralized tool makes it difficult to supervise and control information, slowing decision-making and problem resolution.
Conclusion
Energy communities represent a significant evolution in managing and consuming renewable energy, offering economic, environmental, and social benefits. However, establishing and managing an energy community requires careful planning, adequate funding, and the use of technological tools like a CRM to maximize efficiency and success. With support from solutions such as those provided by QUIXOTIC, it is possible to overcome challenges and fully harness the potential of energy communities, contributing to a more sustainable and collaborative future.
Omar Sequera
Technology Consultant specialized in energy
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