Renewable Energy Communities: clean energy for self-consumption

Italy will soon have its own Renewable Energy Communities: groups of citizens, retail businesses and other companies that join forces to produce and share electricity generated from renewable sources. A new option that paves the way for new development opportunities for the nation’s energy transition

Published on 21 May 2020

Renewable Energy Communities with the “Milleproroghe” Decree

Clean energy development in Italy has taken another leap forward. With the so-called Milleproroghe Decree being converted into law, the country is introducing the concept of Renewable Energy Communities: groups of citizens, retail businesses and other companies that decide to join forces to equip themselves with systems to produce and share energy from renewable sources.

Henceforth, citizens’ associations, chain stores or companies with offices in the same building can invest in a shared system with an overall power output of up to 200 kW, and then share the energy produced either by consuming it immediately or by storing it in storage systems for use when required. The system must also be connected to the low-voltage network, through the same MV/LV transformer substation from which the energy community receives power from the grid. The new law makes no specific reference to which renewable technology should be adopted, but photovoltaic solutions will make best use of the advantages it offers.

This is how Italy has defined Energy Communities, contained in EU Directive RED II (2018/2001/EU), which for several years have already been a reality in Northern European countries such as Denmark and Germany.

Prior to this, in Italy, individual citizens and companies were already able to join forces to finance the installation of a shared renewable energy system, but said system could not provide energy to other users. Now, the new law has given Energy Communities legal status by defining the rights of their individual participants, who will still be free to choose their electricity provider and can name a delegate, including someone belonging to an external company, to manage flows with the GSE (Gestore dei Servizi Energetici, the State-controlled Energy Services Operator). This essentially refers to the reimbursement of tariff components not due for the energy shared, and the incentivising tariff. The law is an important step forward, towards an energy scenario based on distributed generation, which will lead to the development of “zero-miles energy” and smart grids.

The law identifies the GSE as the operator enabled to pay the incentivising tariffs it provides for, for electricity produced by Renewable Energy Communities. The incentive, which is not part of those outlined in the FER 1 Decree, has not yet been defined but should be shortly (the law states this must be done within 60 days from the day it came into force, which was 1 March).

The legislation ushers in an experimental phase that will last two months from the date of the passing of the transposition measures for Directive 2018/2001 (which has a final deadline of 30 June 2021), and which will provide useful insight in view of the complete implementation of the legislation and regulations about Energy Communities.

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