In the current geo-political climate, energy independence and ecological transition are key objectives in the political agendas of many European states. One of the most recent developments is the Renewable Energy Communities (RECs), which, by putting individual actors ‘at the center’, are based on the concept of sharing and the active and responsible role of the consumers involved.
But, specifically, what is a REC?
A Renewable Energy Community (REC) is a legal entity whose main objective is to provide environmental, economic or social benefits at community level to its shareholders or members or to the local areas in which it operates.
RECs are based on open and voluntary participation and must be effectively controlled by shareholders or members located in the vicinity of the renewable electricity generation plants owned and developed by the legal entity in question (REC).
RECs must:
- be established as an autonomous legal entity acting in its own name;
- own, or have full availability of, the production facilities.
Who can be part of it?
Shareholders or members of a REC may be:
- natural persons;
- small and medium-sized enterprises (provided that the production and marketing of energy does not constitute the main commercial and/or industrial activity);
- research and training institutions;
- religious, third sector and environmental protection organisations;
- all local administrations located in the same municipalities where the facilities are located.
All of these entities must be holders of connection points located on low-voltage electricity networks underlying the same primary substation and are divided into:
- Consumers: holders of the connection point of the consumption unit and therefore holders of the electricity bill.
- Producers: natural or legal persons producing electricity.
It is possible for a person to be both a consumer and a producer (prosumer).
General Requirements
- The REC is an autonomous legal entity and has open and voluntary participation.
- Participation as a member/shareholder in the community provides for the retention of end-customer rights, including the right to choose one’s supplier.
- The right of withdrawal and exit from the REC of participating entities must be provided for, without prejudice to any consideration agreed upon in the event of early withdrawal for co-participation in investments made, which must in any case be fair and proportionate.
- A Delegated Person responsible for the distribution of shared electricity is uniquely identified.
Self-consumption
The energy produced, in the first place, can be ‘self-consumed‘ by members/shareholders directly connected to the sources of energy production (e.g. apartment blocks with a photovoltaic system installed on the solar slab), resulting in bill savings for these individuals.
Economic Contributions
The financial contributions due to REC s, per kWh of shared electricity for a period of 20 years, are:
- Unit fee: valorisation of the shared energy by returning the tariff components;
- Premium tariff: incentivisation of shared electricity through the payment of a premium.
These amounts are disbursed by the GSE to the Delegated Person, who, in accordance with the provisions of the articles of association and the regulation of the REC, will administer and/or distribute them.
