European Energy Communities Facility

Topic description

Objective:

Under this topic, a ‘European Energy Communities Facility’ shall be set up and run to deliver financial support to third parties and appropriate support services for the early stages of energy community projects in the EU. 

Energy communities can be an effective tool to attract private investment to renewable energy and energy efficiency, increase the public acceptance of sustainable energy projects and engage citizens in delivering a fair and clean energy transition locally. Given the speed and scale at which the clean energy transition needs to happen and the benefits of engaging and empowering consumers through energy communities, it is essential to create tools to help a large number of community energy projects to take off and contribute to the European climate and energy targets. 

With the Clean Energy for all Europeans Package, the EU introduced the definitions of citizen energy communities^[1] and renewable energy communities^[2]. For both, Member States are asked to create an enabling legal, regulatory and policy framework to provide a level playing field for energy communities and other actors and to support their development and integration in the energy system. As the transposition and implementation of the relevant Directives progresses, a growing number of Member States is developing bespoke support for energy community projects. However, there are large areas of the EU where this support is still scarce and energy community creation relies mostly on the work of volunteers.  

The early phases of sustainable energy projects developed by energy communities require a significant effort. Emerging communities often struggle to know where to start when it comes to the technical and financial aspects of setting up a sustainable energy project and funding the key pre-development work (e.g. feasibility studies, permits, legal agreements, etc.). In fact, that work is often carried out by volunteers with limited expertise and/or financed by raising funds from members who, if the project fails, lose their initial investment. As a result, many projects are abandoned at an early stage due to the lack of professional advice and the difficulty of raising funds for the early phases of project development. 

In order to support the growth of energy communities and make projects less dependent on the income level of community members or the availability of support at local level, this topic aims at creating a Facility able to provide support for the early phases of energy community projects. This support shall be designed to reduce the risk of the pre-development phase and thereby create a bridge between the project idea and the launch of the community investment.  

Moreover, given the growing number of successful energy communities, there is a need to effectively share best practices across regions and create peer support opportunities. With this aim, the Facility could take the relay from the European Energy Communities Repository and the Rural Energy Community Advisory Hub (RECAH) and further develop on some of their key outputs.

The European Energy Communities Facility should offer support services, including financial support to third parties, to develop business plans to grow and implement sustainable energy community projects (addressing e.g. energy efficiency, heating and cooling, renewable energy production and use, electro-mobility).

The support directly benefiting third parties planning to launch energy community projects should amount to at least 70% of the budget through a support scheme which may include two different stages:

• First stage: Pre-screening to check the feasibility of project ideas. The pre-screening should be carried out by a network of dedicated experts at national level^[3] able to assess the projects’ viability considering their local conditions.
• Second stage: Support to the development of business plans for energy community projects considered viable following the pre-screening. Proposals should set up a structure able to deliver financial support to third parties in the form of ‘lump sum grants’ to help projects develop business plans. These plans should be produced within a limited period of time and cover, inter alia: technical analysis of the planned investment project(s), a study of planning considerations and grid connection options, a legal analysis, a governance analysis, an engagement strategy and a clear identification of financing options. The network of national experts should also establish helpdesks to give ad-hoc advice to applicants, help promote the facility, train local actors, support third parties selected for direct financial support in contracting the expertise necessary to develop their business plans, and ensure quality control.

Proposals should outline their approach to ensure that the process and criteria for the allocation of financial support to third parties is conform to EU standards concerning transparency, equal treatment, conflict of interest and confidentiality.  In accordance with the EU Financial Regulation, when designing schemes to provide financial support to third parties, applicants should outline:

• the different types of activities that may receive such financial support.
• the definition of the persons or categories of persons which may receive such financial support.
• the criteria to select beneficiaries, including, inter alia, the ambition of the energy-related impacts, the potential impact in the context of community energy in a particular country, the soundness of the business model envisaged, and the foreseen use of potential profits. 

The proposed direct financial support shall be targeted only to third parties which are compliant with the definition of “Renewable Energy Community” or “Citizen Energy Community” in EU legislation or are developing structures which aim to qualify as such.

The Facility should also establish an appropriate framework for comprehensive monitoring, analysis and capitalisation of results, which will inform the design of future potential phases of the initiative, as well as policy development.  

Applicants should maintain and expand strategic parts of the legacy of the European Energy Communities Repository and the Rural Energy Communities Advisory Hub (RECAH), in particular, the stakeholder networks created and the data collection for the impact assessment.

The Facility shall also carry out supporting actions to help best practice sharing and peer to peer exchanges between energy communities. In particular, applicants should plan cross-country trainings as well as a series of open strategic dialogues across Europe.

The European Energy Communities Facility should also monitor the emergence of services delivering support for project development in the different Member States (capacity building and technical assistance) and, to the extent possible, exploit potential synergies with those. It may also collaborate with other relevant initiatives such as the Covenant of Mayors for Climate and Energy, the EU City Facility and the European Island Facility, the Smart Cities Marketplace and the Support Service for Citizen-led renovation.   

Applicants should demonstrate an in-depth understanding of the varied typology of energy communities across the EU and their needs and challenges including the local, regional and national conditions. They should demonstrate technical expertise related to sustainable energy project implementation (economic, financial, legal, technical) and the capacity to run a large-scale financial support scheme. Consortia applying should demonstrate that they are able to mobilise a critical mass of potential energy community proponents and have a sound and inclusive outreach strategy to different areas of Europe, different sectors and different governance structures.  A link with municipal networks and support structures working on sustainable energy projects would also be beneficial.

• For actions supporting the examination and assessment of the legal frameworks for energy communities, please refer to topic POLICY-LIFE-CET-2023.

Proposals must be submitted by at least 3 applicants (beneficiaries; not affiliated entities) from 3 different eligible countries.

The Commission considers that proposals requesting a contribution from the EU of up to EUR 10 million would allow the specific objectives to be addressed appropriately. Nonetheless, this does not preclude submission and selection of proposals requesting other amounts. 

Proposals should present the concrete results which will be delivered by the activities and demonstrate how these results will contribute to the topic-specific impacts. This demonstration should include a detailed analysis of the starting point and a set of well-substantiated assumptions and establish clear causality links between the results and the expected impacts.

Proposals submitted under this topic should demonstrate how they will contribute to:

• Support the development of energy communities in the targeted countries.
• Create a network of national experts and helpdesks that is recognised by energy communities, ensures the quality of the different levels of support provided, and complements national support structures.
• Build capacity across Europe through an effective exchange of best practices across communities.

Proposals should quantify their results and impacts using the indicators provided for the topic, when they are relevant for the proposed activities. They should also propose indicators which are specific to the proposed activities. Proposals are not expected to address all the listed impacts and indicators. The results and impacts should be quantified for the end of the project and for 5 years after the end of the project.

The indicators for this topic include:

• Number of business plans delivered.
• Investments in renewable energy and energy efficiency resulting from the implementation of the business plans (cumulative, in million Euro).
• Number and diversity of energy communities supported for each type of support proposed.
• Number of energy communities having received support which are in operation.
• Number of citizens engaged in energy community projects.
• Renewable energy generation triggered by the project (GWh/year).

Proposals should also quantify their impacts related to the following common indicators for the LIFE Clean Energy Transition subprogramme:

• Investments in sustainable energy (energy efficiency and small-scale renewables) triggered by the project (cumulative, in million Euro) – covered as topic-specific indicator, see above.
• Primary energy savings triggered by the project (GWh/year).
• Renewable energy generation triggered by the project (GWh/year) - covered as topic-specific indicator, see above.
• Reduction of greenhouse gases emissions (in tCO₂-eq/year).

[1]Directive on common rules for the internal electricity market 2019/944/EU

[2]Renewable Energy Directive 2018/2001/EU

[3]Some experts may cover several countries (where relevant).