Enabling Community Flexibility & Resilience through Advanced Energy Communities
EPRI Insight | June 2024
What is an Energy Community?
Energy Communities (ECs) are groups of citizens, local authorities, or small businesses that come together to produce, manage, and consume their own energy.
They usually prioritize the use of clean and efficient technologies and the provision of benefits to their members.
Because energy communities are given the opportunity to drive their local energy transition, the citizens feel empowered.
As a direct result those communities may achieve higher energy efficiencies, more green job opportunities, as well as reduced energy poverty and lower energy bills.
Community-owned generation:
Refers to the joint utilization or ownership of energy-producing assets, such as solar panels, wind turbines, hydroelectric plants, and biogas facilities.
What Could an Energy Community Look Like?
Energy Retail and Aggregation:
Involves selling and reselling gas, electricity, or associated products such as ancillary services to users or utilities.
Consumption and sharing:
Refers to energy produced by the energy community that is utilized and distributed within the energy community.
Community Energy Infrastructure:
Refers to the ownership and management of community-operated distribution networks, including local electricity grids and small-scale district heating and (bio)gas networks.
Energy Optimization and Services:
The enhancement of energy efficiency in buildings through renovations, energy audits, monitoring and assessment of energy usage.
Electro-mobility:
Refers to the adoption of EVs and the associated infrastructure in an energy community.
Training, education, awareness & consultation:
Organizing campaigns to increase awareness, encourage local participation, train installers/maintainers, and provide consultation services.
Key Concepts
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Energy Sharing
Energy Resilience
Power System Flexibility
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financial constraints
Renewable energy infrastructure such as solar arrays, wind turbines, and battery storage is associated with high capital costs. For example, wind turbine operational and maintenance costs (O&M) can be 20-25% of the lifetime levelized cost per kWh.
These issues are compounded in low-income communities, which gain the most from access to cheaper and more reliable energy and enhanced social cohesion but are often financially unable to access this model due to a lack of monetary support.
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infrastructure
Grid limitations can arise from infrastructure capacity, general transmission constraints, and managing fluctuations in renewable energy generation.
There are also difficulties with scaling up within the community context. These challenges can arise in the form of grid upgrades, robust storage solutions, establishing a way to tackle the intermittency of renewable sources, and ensuring a compatible and seamless integration with the broader energy system.
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technical complexities
For energy communities to be implemented successfully, various technical complexities must be overcome. These can include difficulties with grid integration, complying with technical standards and regulations, and managing the intermittent and variable nature of renewable energy sources.
Financial considerations and concerns for stability also need to be addressed. Interdisciplinary collaboration, with innovation, knowledge sharing, and transparency at the center of its focus, will be needed.
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System Flexibility
& Resilience
Microgrid
Collective
Self-Consumption
Decarbonization
Energy Community: Value
Resiliency Objectives
Diversification of energy supply (local resources).
Community resilience design to ensure continuous supply to residents and critical infrastructure during system events.
Management of demand both as a flexibility service and for microgrid operation.
Flexibility
Dynamic allocation of energy throughout the day can cater to varying demands and can provide a backup to store energy during service interruptions.
Local residents and businesses can generate, store, and share renewable energy, reducing peak-time strains on the grid.
Enhances community ownership of energy and governance of projects.
Microgrids & Energy Communities
Microgrids focus on physical infrastructure for energy generation, distribution, and storage. Local Energy Communities (LECs) emphasize the community aspect, including governance, participation, and local energy generation's social and economic benefits.
The two concepts can overlap and complement each other: Technical Facilitation (Microgrids can serve as the technical backbone for LECs); Community Engagement (LECs can drive the development and operation of microgrids).
While microgrids and local energy communities have distinct focuses—technical versus social and economic—they share common goals related to sustainability, resilience, and decentralization.
Collective Self-consumption (CSC)
Allows locally produced electricity to be shared locally, linking energy consumers and producers in an area to engage in bill compensation or peer-to-peer selling.
In European legislation, the CSC definition is linked to the “a group of at least two cooperating renewables self-consumers that are located within a certain premise." CSC is one of the business models most frequently used by European Energy Communities.
Decarbonization
Increased Energy Efficiency: Many energy communities also focus on improving energy efficiency within their networks.
Promotion of Renewable Energy: By focusing on renewable energy production, such as solar, wind, and hydro, energy communities directly contribute to reducing reliance on fossil fuels.
Social and Economic Benefits: These include job creation, local economic development, and reduced energy costs for participants.
Pilot Projects and Technology Trials: Energy communities can serve as testbeds for pilot projects that experiment with new renewable energy technologies, energy storage solutions, and smart grid applications.
Empowerment and Engagement of Local Populations: Energy communities empower individuals and local populations by involving them directly in energy production and management.
CSC benefits include being easier to understand for users; there is no need to invest or install wires to connect users as sharing is done through the public grid, and it can be used as a first step to incentivize community formation.
Challenges? Requires smart energy meters; rules for energy sharing/compensation must be carefully crafted; resistance to perceived burdens of adapting existing systems.
Energy Community: Benefits
Local Level
Grid Level
Support for grid level decarbonization
Smart grid optimization through community demand response
Enhancing grid efficiency with
local peer-to-peer (P2P) energy trading
Local generation for reduced transmission losses and enhanced
grid efficiency
Affordability
Generating and sharing
electricity locally
Empower Local Residents
Collectively make renewable energy investments
More Local Green Jobs
Renewable energy projects and infrastructure
Environmental Protection
Increased environmental
consciousness
Distributed Demand Response Targeted programs, integrated resources
Energy communities contribute to distributed demand response, supporting the transition to more sustainable, efficient, and resilient
energy systems
Energy Community: Case Studies
RevoluSolar in Brazil supports local communities in building social solar energy models, particularly in historically underserved communities. In 2021, RevoluSolar supported the installation of a 55kW PV (annual savings of approximately $16,500) system that serves 50 families. In 2023 another 50 families were added to the project.
The Western Australian government is running several community battery storage pilots to create a carbon-neutral community. Alkimos Beach in Perth, Australia, is a community of 119 homes with residential solar PVs and a 1.1 MWh community lithium-ion battery. The average size of the PVs is 3.11kW, with a mandatory minimum size of 1.5kW. The community also has an energy-efficient hot water system and smart home package.
REScoopVPP is a program facilitating five pilot projects in different European countries with local energy cooperatives to create a citizen VPP. The aim of the VPP is to test demand-side flexibility with REScoop members and move towards a decentralized energy model. The energy coops involved are Energie ID (Belgium), Carbon coop (UK), Enercoop (France), Som energia (Spain), and Bürgerwerke (Germany). REScoop provides members with open-source software and hardware (COFY-box, the home energy management system).
South Australia’s Virtual Power Plant is developing a network of potentially 50000 PVs and home battery systems with support from Tesla, electricity retailer Energy Locals, and the South Australian (SA) government. Currently, 3000 household solar and Powerwall battery storage systems are being deployed across social housing properties. Assets are owned and maintained by Tesla; installation is free and customers only pay for their electricity usage.
Community Energy Scotland (CES) supports the development of energy communities, particularly in isolated areas. CES supports community-owned generation of heat and electricity, such as a biomass boiler providing 80% of heat to Kirkcudbright or a grid-connected wind farm on the Isla of Gigha. CES is currently supporting the Carbon Neutral Islands project, which aims to facilitate six island communities achieving net zero emissions by 2040.
The Dingle Project implemented several energy projects in the Dingle Peninsula in Kerry, Ireland, to create a smart, resilient, low-carbon electricity network. The project had four objectives: increased network reliability by trialing new technologies to minimize disruptions; increased residential flexibility by enabling low carbon technologies such as EV chargers, BESS, and air-source heat pumps, which can be controlled through home monitoring systems peer-to-peer energy sharing from residential buildings with solar PV; and active energy citizenship where behaviors in energy usage are analyzed to identify enablers and blockers to the
energy transition.
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Green Mountain Power (GMP) in Colchester, Vermont, has launched the Sun Match Pilot Program to connect up to 500 low and moderate-income (LMI) customers with solar power. GMP also owns Stafford Hill Solar Farm, a microgrid powered solely by solar and battery backup on a capped landfill. The site has 2MW of solar PV and 3.4 MWh of battery storage, allowing the solar farm to disconnect from the grid to provide power.
Bronzeville Community Microgrid in Chicago, Illinois:
A microgrid developed and funded by Commonwealth Edison and is the first neighborhood-scale microgrid in the USA. The microgrid has 750 kW of rooftop solar PVs, a 2MWh BESS backup natural-gas-fired generation, and advanced grid-control systems that can partially or fully ‘island’ from the grid. The microgrid is planned to power more than 1000 residences and the Chicago police and fire department headquarters during grid outages.
Shadow Mountain in Menifee Connected Community Residential Microgrid California:
200 all-electric homes with individual battery energy storage systems (BESS) are connected to a microgrid powered by a 2 MW community battery. This system allows for ‘islanding’ from the grid during power outages to ensure the homes still have power. The homes are equipped with heat pump HVAC systems, water heaters, and other electric appliances.
Energy Community: Challenges & Hurdles
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lack of dedicated support
Community engagement works hand in hand with the belief and support from others.
Without dedicated support, implementation can be challenging in terms of planning, financing, and execution.
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energy market volatility
Energy market volatility challenges energy communities regarding cost uncertainty, revenue fluctuations, investment risk, and grid stability.
Fluctuations in energy prices can strain community budgets, impact revenue from energy trading, and create uncertainty for long-term investments in infrastructure and renewable energy projects. Moreover, grid instability may arise, particularly with reliance on intermittent renewable sources.
Legal frameworks are important for energy communities around the world
They provide legal definitions distinguishing renewable energy communities from microgrids/citizen energy communities etc. Regulations supporting energy communities provide legal backing for energy sharing, electro-mobility, and asset ownership/management to protect community investments.
Not every EU member state has fully met the requirements of EU surrounding energy communities.
The lack of cohesion across European borders creates issues for the development of energy communities, potentialy limiting their scope.
The major issue in the USA is the lack of federal legislation to support energy communities.
Additional barriers are regulatory, financial, and grid connectivity.
The UK government's Net Zero Strategy addresses funding concerns through funding, tax reliefs, and reward programs.
Additionally, in 2014, the government commissioned a Community Energy Strategy report that noted barriers to energy communities such as investment, unreliable income streams from generated electricity, and difficulty with planning and network access.
In 2023, the Australian Energy Infrastructure Commission led a community engagement review to recommend improvements to renewable energy infrastructure projects.
The Australian government has introduced the Net Zero Economy Authority, which will support community development, job creation and transition, and renewable project development.
2016's Net Metering regulation reform has allowed for collective energy schemes.
Challenges include a lack of financial incentives, capital costs, and legal insecurity.
In 2022, the National Electric Energy Agency (ANEEL) amended the electric energy compensation system law to enhance compensation mechanisms for small-scale distributed generation and address prosumers.
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Allows the value of installed renewables to be maximized, reduces grid costs, makes renewable energy more accessible, and results in increased energy savings.
The ability of a system to anticipate, prepare for, and withstand disruptions from its energy source. These disruptions can present themselves due to the intermittent nature of renewables, extreme weather events, and the scarcity of fossil fuels.
Defined by the International Energy Agency as the ability of a power system to reliably and cost-effectively manage the variability and uncertainty of demand and supply across all relevant timescales.
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Lighting Up Zambia:
Demonstrates how community-based renewable energy projects can provide access to sustainable energy, support local economic development, and reduce poverty. By involving local communities, the benefits can be shared more equitably, contributing to overall social and economic development. The Zambian government's role in encouraging and supporting these projects through policies and incentives is viewed as crucial.
Local Resilience
Decentralized energy production for more stable energy supply, quick adaptability
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