III. ENERGY COMMUNITIES IN THE CLEAN ENERGY FOR ALL EUROPEANS
3.5. Reduction of administrative burden and providing economic incentives for energy
3.5.1. Removing the obstacles to energy communities’ development.
As follows from the EU Commission assessments, neither households, businesses nor industry are currently sufficiently incentivized to actively participate in electricity markets.358 Moreover, it is also admitted that being an active energy consumer should not be complicated or time-consuming.359 So, administrative obstacles which prevent consumers from self-generating elec-tricity and from consuming, storing and selling self-generated elecelec-tricity to the market should be removed.360 In addition to that, economic incentives should be provided for both consumers in-dividually and energy communities. It is possible to distinguish two groups of measures aimed at consumer activation. The first group of legal measures is focused on the removal of obstacles that hinder consumer activation, as there are still many obstacles to full participation of consum-ers in the energy market.361 Second group of measures adds further incentives and preferences.362
As follows from Article 3 of the IEMD, Member States are obliged to ensure that their national law does not unduly hamper consumer participation, including through demand response. Na-tional law should not also unduly hamper investments into, in particular, variable and flexible energy generation, energy storage, or the deployment of electromobility or new interconnect-ors.363 It is true to say that the legal obligation provided by this provision is ratherbroad and un-specific. However, it shows the general aim of the legislator and could be used in situations when provisions need to be interpreted in connection with general aims envisioned by the legislator.364
IEMD obliges Member States to ensure that all customers are free to purchase and sell electricity services, including aggregation, other than supply, independently from their electricity supply contract and from an electricity undertaking or their choice.365 For that purposes, it is stated that
358 COM(2015) 340 final, p. 8.
359 Ibid., p. 8.
360 Recital 42 of IEMD.
361 COM(2015) 340 final, p.8;
362 Huhta Oil, Gas & Energy Law Intelligence (OGEL) 2019a, p. 4, 5.
363 Article 3 of IEMD.
364 Huhta Oil, Gas & Energy Law Intelligence (OGEL) 2019a, p.5, 10.
365 Article 13(1) of IEMD.
contracts between final customers and aggregators should not be subject to the consent of the final customer’s supplier.366
3.5.2. Adding incentives to energy communities’ development.
In order to integrate energy communities into the electricity system with a long-term perspective, it is necessary to provide these communities with the long-term sustainability. If such communi-ties will be short-lived and not economically feasible, it would be difficult to persuade new par-ticipants to become involved. The most existential question concerning the development of community projects is therefore that of the access to financial resources.367 To begin with, there are much more incentives provided for renewable energy communities under RED than for citi-zen energy communities under IEMD, as the former ones are favored by the legislator due to their importance for the energy transition.
Both IEMD and RED state that Member states shall ensure that final customers are entitled to participate in the electricity market without any disproportionally burdensome procedures and network charges that are not cost reflective368. For renewable energy communities, more con-crete and significant incentives are put in place by RED. Article 21 of RED includes an obliga-tion for the Member States to ensure that self-consumers of renewable energy receive remunera-tion for the self-generated renewable electricity they feed into the grid which reflects the market value of electricity. The RED also obliges Member States to make sure that tools to facilitate access of RECs to finance and information are available.369
Perhaps one of the biggest advantages of being a REC now is that Member States bare obliged to take them into account while designing renewables support schemes in order to allow them to compete for support on an equal footing with other market participants.370 The RED defines
‘support scheme’ as any instrument, scheme or mechanism that promotes the use of energy from renewable sources by reducing the cost of that energy, increasing the price at which it can be
366 Article 13(2) of IEMD.
367 Savaresi Journal of Environmental Law 2019, p. 500.
368 Article 15 (1) of IEMD; Article 21 of RED.
369 Article 22(4) (g) of RED.
370 Article 22 (7) of RED.
sold, or increasing the volume of such energy purchased.371 These instruments may include in-vestment aid, tax exemptions or reductions, tax refunds, renewable energy obligation support schemes including those using green certificates, and direct price support schemes including feed-in tariffs and sliding or fixed premium payments.372 In the feed- in tariff system, the energy producer is paid a predetermined price based on a fixed fee.373 A feed- in premium means that the producer receives an additional fee on top of the market price.374Guarantees of origin offer another significant instrument through which to promote the production of renewable energy.375 Member States are to ensure that the origin of renewable energy can be guaranteed on the basis of objective, non- discriminatory, and transparent criteria. Through this system, the share or vol-ume of renewable energy in a producer’s energy mix can be reliably shown to the end- users of electricity.376
The RED does not prescribe how exactly Member States must ensure equal footing for RECs.
Implementation of the requirement to provide an equal footing for RECs in renewables support schemes will also be impacted by the EU state aid rules, in particular the Guidelines on State aid for environmental protection and energy 2014-2020 (EEAG)377. Now the 2014 EEAG provide thresholds that exempt smaller projects (installations with an installed electricity capacity of less than 500 kW) from market-based forms of support and from competing in tenders and make no exceptions for RECs.378 However, the EEAG are expected to be revised by the European Com-mission after 2020.379
377 Communication from the Commission — Guidelines on State aid for environmental protection and energy
2014-2020, OJ C 200, 28.6.2014, p. 1–55.
378 EEAG p. 124-127.
379Gleiss Lutz 2019. European Commission revises EU State aid rules – will energy-intensive companies face radical cuts in support? [https://www.gleisslutz.com/en/European_Commission_revises_EU_State_aid_rules.html]