The EU’s Multiannual Financial Framework 2021-2027 offers a unique opportunity to use public finances to accelerate the energy transition. But to succeed, this transition must be inclusive, equitable and citizen-centred.
Chris Vrettos, REScoop.eu, Joanna Jakubowska, Just Transition Policy Officer, CEE Bankwatch Network | 19 May 2023
A study by CE Delft has shown that half of the EU’s population has the potential to produce its own electricity by 2050 and, as a result, significantly contribute to the EU’s overall demand. But this can only be achieved if citizens are empowered to lead the transition and have access to predictable and adequate financing instruments.
Governments across the EU must take proactive steps to support energy communities, in particular by providing them with access to finance and ensuring that energy policies are designed with citizen participation in mind. The EU’s Recovery and Resilience Facility, cohesion policy funds and Modernisation Fund offer Member States a unique opportunity to do just that. These funds can be used to support citizen-led renewable energy projects, promote energy democracy and strengthen the resilience of local communities in the face of climate change.
To ensure that these public funds are used effectively, it is important to monitor their use and impact. To that end, CEE Bankwatch Network, in partnership with REScoop.eu and Climate Action Network (CAN) Europe, have launched a new Public Financing Tracker, which shows how these funds are being used to support energy communities in 19 EU Member States. Updated on an ongoing basis, the tracker is a valuable tool for citizens and civil society organisations seeking to track progress and hold governments accountable.
CEE Bankwatch Network assessed eight central and eastern European countries – Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Poland, Romania and Slovakia – to determine the level of support among these countries for using EU public funds to develop the community energy movement. It found that the level of ambition varies widely across the region, with some countries prioritising support more than others. While some countries, such as the Czech Republic and Poland, have made tangible progress in this area throughout the programming phase, others, such as Bulgaria, Estonia and Romania, are still lagging behind with no specific measures for energy communities in place. Therefore, these Member States need to increase their efforts to support the community energy movement.
Understanding and using the Public Financing Tracker
The Public Financing Tracker is similar in structure and logic to the REScoop.eu Transposition Tracker, which assesses the progress of Member States in transposing energy community definitions contained in the EU’s Clean Energy Package directives into national legislation. Featuring an interactive interface, the Public Financing Tracker assesses the progress of Member States in supporting energy communities through the EU’s Recovery and Resilience Facility, Cohesion and Modernisation Funds. The tracker is visualised as three colour-coded maps representing different types of funds. Each Member State is assigned a colour on the map based on an assessment of whether and how it is supporting energy communities through a particular fund. This assessment is determined based on the mentions of ‘energy communities’ within the funds and a further 12 criteria covering programme design, transparency and alignment with implementation.
The tracker, which is regularly updated as new data and analysis become available, can be used by national campaigners as an advocacy tool and by policy-makers as a clear communication roadmap. The development of the tracker involved extensive background research carried out by a network of national campaigners. Additionally, data collection was carried out by REScoop.eu, CEE Bankwatch Network and CAN Europe. To ensure accuracy and relevance, interviews and bilateral feedback sessions were conducted with relevant stakeholders throughout the process.
For more information, please visit the Public Financing Tracker on the webpage of REScoop.eu.
Trends and policy proposals
Our accompanying policy brief provides recommendations for designing public support programmes tailored to the needs of energy communities. EU legislation on Renewable Energy Communities (RECs) requires Member States to put in place a supportive framework to encourage and facilitate the development of RECs, including mechanisms to improve access to finance.
However, countries such as Bulgaria and Romania have not yet created specific legislation or enabling frameworks for energy communities, nor are they using EU funds to support them. In other countries, such as Germany, Ireland and the Netherlands, EU funds are not being used to support energy communities because robust national financing mechanisms already exist for this purpose.
We believe that EU Member States should allocate specific EU public funds to support energy communities with clear quantitative and time-bound targets for their growth. It is also essential that public funding programmes are co-designed in collaboration with community energy stakeholders and civil society, and that they prioritise support for energy communities that meet certain social and environmental criteria, such as the inclusion of energy-poor households, the reinvestment of revenues in the local community and the promotion of gender equality.
To avoid corporate capture and to ensure the process is rigorous and trustworthy, we recommend that the European Commission develop a best practice guide for developing clear criteria. Satisfactory calls for applications, including appropriate selection criteria, are essential to maximise the social and environmental impact of energy communities and to realise their full potential. We call on managing authorities to develop appropriate selection criteria together with stakeholders. This will help to expand the community energy movement and unlock its many benefits, including its potential to create jobs, ensure energy security and reduce greenhouse gas emissions.
Lastly, Member States should take advantage of the upcoming opportunity presented by the REPowerEU chapters to advance the democratisation of energy systems. This can be achieved by developing energy communities, scaling up existing measures and adding new policies to their national recovery and resilience plans.
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