Empowering Communities: An Overview of Energy Communities in the European Union

by József Kádár

The transition to renewable energy does not only require technological changes but also a reshaping of the energy landscape to empower communities and promote sustainability. Energy communities, a concept gaining attention across the European Union (EU), demonstrate the shift towards decentralized, community-owned energy systems.

Understanding Energy Communities

Energy communities are initiatives to bring together citizens, households, businesses, or local authorities in order to produce, consume, and manage energy systems from renewable energy resources. These communities typically focus on harnessing solar, wind, hydro, or biomass energy. The fundamental principle underlying energy communities is local ownership and control over energy production and consumption, fostering democratic decision-making and social cohesion.

At the heart of energy communities are renewable energy projects that generate electricity or heat for local consumption. According to, “[an] energy community is a way to ‘organise’ citizens that want to cooperate together in an energy-sector related activity based on open and democratic participation and governance, so that the activity can provide services or other benefits to the members or the local community. In this sense, energy communities represent an alternative type of market actor, and a different way/philosophy to do business, which is now acknowledged by the CEP. The primary purpose of energy communities is to create social innovation – to engage in an economic activity with non-commercial aims”.

Projects include rooftop solar installations, community wind farms, and biomass co-generation facilities, among others. Members of the community contribute financially to the development and operation of these projects, and receive benefits in return, such as reduced energy bills, dividends, or a stake in the ownership of the infrastructure.

Benefits of Energy Communities

Energy communities offer a range of benefits to participants and society as a whole:

  1. Community Development: Energy communities contribute to local economic development by creating jobs, stimulating investment, and retaining revenue within the community. Projects may also support skill development and training opportunities, enhancing local capacity and expertise.
  2. Empowerment: Communities regain agency over their energy future by enabling local ownership and control over energy resources. Individuals become active participants rather than passive consumers, fostering a sense of empowerment and self-reliance.
  3. Environmental Sustainability: Renewable energy projects within energy communities help reduce greenhouse gas emissions and combat climate change. By transitioning from fossil fuels, communities contribute to a cleaner, more sustainable energy system and protect natural ecosystems for future generations.
  4. Financial Savings: Members of energy communities often enjoy financial savings through reduced energy bills or returns on investment. By generating their own electricity locally, communities can lower their dependence on external energy suppliers and mitigate the impact of volatile energy prices.
  5. Social Cohesion: Energy communities foster social cohesion by bringing people together to plan and operate their energy systems. Collaborative decision-making processes promote dialogue, trust, and cooperation, strengthening community and resilience.

EU Policy Support

The European Union has recognized the importance of energy communities in advancing its energy transition objectives. The Clean Energy for All Europeans package adopted in 2019, includes provisions to support the development of energy communities, and facilitate their integration into the energy market. These measures aim to remove regulatory barriers, promote citizen engagement, and ensure a level playing field for community-based energy initiatives across the EU member states.

The EU defines two types of energy communities:

  1. Citizen energy communities
  2. Renewable energy communities
Citizen energy community Renewable energy community
Geographical scope Electricity directive does not bind energy communities to immediate vicinity. Local communities ‘must be in the vicinity’ of renewable energy projects owned/developed by that community.
Activates Operate in electricity sector and are technology-neutral (fossil fuel source or renewable). Broad range of activities related to all forms of renewable energy.
Participants Any actor can participate, but stakeholders involved in large-scale commercial activity where energy is the primary economic activity cannot make decisions. Restricted Membership – Natural persons, local authorities, MSMEs, who’s membership/ participation is not their primary economic activity.
Autonomy “Decision-making powers should be limited to those members or shareholders that are not engaged in large-scale commercial activity in the energy sector.” “Capable of remaining autonomous from individual members or other traditional market actors that participate in the community as members or shareholders.”
Effective control Exclude Medium-sized and large enterprises from being able to exercise effective control. Can be controlled MSMEs that are ‘located in the proximity’ of the renewable energy project.

The European Parliament allocated funding to support three projects aimed at promoting best practices and offering technical assistance for the implementation of energy community initiatives through the EU:

  1. Citizen-Led Renovation
  2. Energy Communities Repository
  3. Rural Energy Community Advisory Hub

Examples of Energy Communities

Energy communities are thriving in several countries across the European Union. For instance, in Germany, citizen energy cooperatives have played a significant role in the expansion of renewable energy capacity, particularly in wind and solar power.
Click here for a map of energy communities in Europe.

“Klimakommune Saerbeck” (Climate Community Saerbeck), a grassroots energy initiative within the Saerbeck community, is an excellent example of an effective organization for local-level energy transitions.

Saerbeck has three flagship projects:

  1. “The Sunny Side of Saerbeck” initiative, launched in 2009, facilitated over 400 photovoltaic installations across private residences, farms, and businesses. Originating as a school project, students from the local comprehensive school conducted surveys to identify suitable roofs for solar panels based on orientation and pitch. Today, these solar cells contribute 9.9 megawatts of additional power to the bioenergy park, enhancing the town’s climate protection efforts.
  2. “Saerbeck Insights – Future Energies Made Transparent” aims to educate the community on energy generation, conservation, and climate protection. The transparent central heating plant serves as a heat source for municipal buildings and an information hub for climate-related inquiries.
  3. “Steinfurt Material Flows” optimises regional material flows and value chains through projects like the Saerbeck Bio Energy Park. This park, which was developed on a former military site, features wind turbines, biogas plants, a bio-waste treatment facility, and a photovoltaic park. Emphasizing the symbiosis of climate protection and nature conservation, a significant portion of the park remains dedicated to natural recuperation. Municipal ownership ensures continued local stewardship, with additional wind turbines operated by the municipality.

In Denmark, community-owned wind farms supply a substantial portion of the country’s electricity demand, demonstrating the scalability and viability of community-led renewable energy projects, such as the Middelgrunden Windmill Cooperative, established in May 1997 in Copenhagen. The wind park includes 20 offshore turbines with a total installed capacity of 40MW. The project was developed jointly by “Københavns Energi,” a subsidiary of Copenhagen Municipality, and “Middelgrunden Vind”. Ownership of the park is split between two entities: 50% belongs to the approximately 8,000 investors in the Middelgrunden Wind Turbine Cooperative, while the municipal utility company owns the remaining 50%. This is the world’s biggest cooperative wind turbine project.


Energy communities represent a paradigm shift in how we produce, consume, and think about energy. By empowering individuals and communities to take control of their energy future, these initiatives contribute to a more democratic, resilient, and sustainable energy system. As the European Union continues its transition towards a carbon-neutral economy, energy communities will play an increasingly important role in shaping the energy landscape and driving positive change at the local, national, and international levels.

In September 2023 the Arava Institute partnered with the Environmental Change Institute of the University of Oxford on a joint project to build resilience to climate change through citizen-led energy transition in Israel and the UK, generously supported by the British Council Wohl Clean Growth Alliance Grants. Click here for more information. 

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