Europe’s clean energy transition is at a crossroads, and the path forward is paved with both challenges and opportunities. The recent discussions involving Dirk Vansintjan, President of REScoop.eu, Sara Tachelet, ACCE project coordinator, and Chris Vrettos, policy advisor finance, have shed light on the critical role that citizen-led energy communities can play in this transformation. These communities, often overlooked, have the potential to mobilise billions in renewable energy investments, but they are currently hamstrung by complex regulations and inaccessible funding mechanisms.
The European Commission’s estimate of a €400bn annual shortfall by 2030 underscores the urgency of the situation. While the Action Plan for Affordable Energy Prices acknowledges the potential of energy communities in stabilising and lowering energy prices, the Clean Industrial Deal (CID) has yet to fully embrace their role in mobilising investment. A study reveals that citizens could contribute a staggering €176bn to wind energy alone by 2030. This is not just about numbers; it’s about democratising the energy system, stabilising prices, and boosting local economies. Every euro invested in citizen energy projects can generate two to eight euros locally, a stark contrast to the up to 75% of profits from large energy companies that are distributed as shareholder dividends.
Energy communities are not just about small-scale projects; they are increasingly investing in industrial-scale initiatives like offshore wind and large-scale district heating. This demonstrates their capacity to contribute to Europe’s reindustrialisation objectives. However, without tailored financial support, their expansion remains constrained. The current financing tools and policy reforms are not cutting it. State aid rules are complex, public funding gaps are glaring, and commercial banks often hesitate to lend, disregarding the social and economic benefits these communities can bring.
Innovative solutions are already emerging. National federations of energy communities in countries like the Netherlands, France, and Spain have created ‘Community Energy Financing Schemes’ (CEFS). These schemes pool investments from citizens, public institutions, and private investors, effectively leveraging public funding to attract private investment. The experience from the Netherlands and France shows that every euro of public funding in the early stages can attract up to 60 euros in private investment for project implementation. This is a model worth scaling up.
However, the revised EU State aid Guidelines, while an improvement, remain difficult to navigate. Member States need clearer guidance on designing support schemes that are accessible to energy communities. Administrative and regulatory hurdles, such as grid connection fees and complex licensing processes, continue to slow down community-led projects. This is where policymakers need to step in and provide targeted financial support.
The EU should consider creating dedicated financial instruments tailored to the needs of energy communities. This includes an EU Guarantee Facility, simplified State Aid procedures, stable financing mechanisms in the next Multiannual Financial Framework, and technical assistance for Member States. Supporting national federations in scaling up financing models like CEFS can also help advance and professionalise community-led energy projects across Europe.
The energy transition cannot be left solely in the hands of large corporations and institutional investors. Energy communities have shown they can drive the shift to renewables, help citizens access affordable local production, and invest in industrial-scale projects. But they need the right tools to scale up. Policymakers have a unique opportunity to empower energy communities to become a cornerstone of Europe’s clean energy future. The time to act is now, and the stakes are high. The future of Europe’s energy landscape depends on it.
