As a renewable energy producer, you can share your surplus energy within your building and beyond. Ideally, when renewable energy is produced, such as through photovoltaic panels, it is directly consumed by the producer. However, it is not always possible to consume the energy produced immediately. The surplus of unused energy has traditionally been fed into the grid, with conventional energy suppliers buying the surplus at low prices to resell it to other consumers. This is where the energy sharing comes in.
Today, thanks to new European regulations from 2018 and 2019, it is now possible to share this surplus electricity to benefit your neighbours, shopkeepers, your business, your family, and even an entire neighbourhood. The closer you share it to your location, the more virtuous and profitable the system will be.
Types of Energy Sharing
There are three main forms of energy sharing :
1. Peer-to-Peer Exchange
Two individuals can exchange electricity generated from renewable sources. They must enter into an agreement setting out the terms and conditions of the exchange. As long as the peer-to-peer exchange activity involves only one other participant, the person who buys electricity from another participant in a peer-to-peer exchange is not subject to the obligations of an energy supplier.
2. Sharing within the Same Building
This is sharing between residents in the same building and is possible under the following conditions :
- Sharing is limited to electricity from renewable sources.
- The production plant is located in or on the building in which the participants are located.
- Each participant involved has a supply contract with a licensed supplier. Participants must sign an agreement with the sharing manager to define their respective rights and obligations and the conditions for sharing.
3. Sharing within an Energy Community
An energy community is formed when there is at least one producer and several members who will share the energy produced. Energy communities aim to generate environmental, social, or economic benefits for their members and the areas in which they operate, before seeking profit. There are three different types of energy community, with the main differences being in the participants, the type of energy shared (renewable or non-renewable), and the ownership of the plant.
- Citizen Energy Community (CEC) : This type of community allows any individual or legal person, including large companies, to become a member. It can include non-renewable sources of electricity, such as electricity production from gas cogeneration. In order to participate in electricity sharing activities, a CEC must be the legal owner of the generating plant.
- Renewable Energy Community (REC) : As the name suggests, a REC must use only renewable energy sources (fossil fuels are excluded). In terms of participants:
- Large companies are excluded.
- SMEs are allowed, but their participation (in one or more energy communities) cannot be their main commercial or professional activity.
- Individuals and local authorities can also be members of a REC.
In case of electricity sharing, the CER must necessarily own the production plant.
- Local Energy Community (LEC) : The LEC is a Brussels-based initiative that is not the result of European directives. Its purpose is to broaden the financing options for a production facility by allowing the participation of a third-party investor. Unlike the CEC and REC, the LEC may own the production facility, but it is also possible that one or more of its members may own or have rights to use the production facility. The activities of a LEC are limited to renewable energy sources. Participation in a LEC is subject to the same conditions as for RECs.
Each region may have specific regulations and requirements. Feel free to contact us for further discussion.
Differences Between Sharing within the Same Building and Sharing within an Energy Community
The main differences are:
- For sharing within a building, a simple contract is sufficient, whereas for an energy community, a legal entity is required (using an existing legal entity, possibly adapting its statues to the necessary objectives of an energy community, or creating a new one).
- In terms of the scope of the sharing activity between actively participating customers, electricity sharing is limited to a single building, whereas in an energy community, sharing can extend to a larger area.
- The resale price of the electricity is set in an agreement between the participants. Please note that grid distribution costs and VAT still apply, except for VAT for own consumption. The closer the participants, the lower the cost of using the grid, to encourage the creation of the most localised sharing possible.
If you are interested in energy communities, please do not hesitate to contact us!