Development of energy communities in Greece: Challenges and recommendations

Executive summary

The concept of energy communities was introduced in the Greek reality with the Law 4513/2018. This legislation has been welcomed in Europe as an innovative, participatory tool that enables the local community (natural persons, SMEs, and local authorities) to contribute to the transition of the country towards clean energy sources. Unfortunately, the recent developments on the framework of energy communities in Greece threatens their existence and development and, thus, the participation of citizens in the energy transition.

The report, commonly developed by Greenpeace Greece, WWF, Electra Energy and maps the problems of the legal framework for energy communities in Greece and makes recommendations to promote their development and contribution to a green and fair energy transition.

Although the Clean Energy Package explicitly recognizes the specific characteristics of energy communities as well as their environmental, economic and social benefits, the current Greek legislative framework does not allow their full development. This framework is complex and fragmented into many different laws and ministerial decisions, which intensifies the complexity of the process of developing renewable energy projects by energy communities. Furthermore, costly and complex administrative procedures continue to apply, while also energy communities face several problems regarding access to finance and information. On the same note, the vehicle of energy communities has been hijacked by private investors, who took advantage of the relevant legislation to the detriment of genuine initiatives by local communities. As a result, the Ministry took back all the incentives being granted to energy communities and regulated that starting from the beginning of 2022 all energy communities without an exemption should compete with private investors in bids to ensure operational reinforcement for RES projects.

However, the adoption of competitive processes indiscriminately for all market players will hinder the participation of energy communities, and result in their disappearance from the energy market. The inability of the latter to compete with stronger players has already been demonstrated in other countries, such as Germany and France, where energy communities could not keep up and were gradually excluded from competitive processes. On the same note, the requirement of proximity of energy communities, which aims to empower local communities, turns into a competitive disadvantage compared to private investors who are not subject to corresponding geographical constraints.

This legislative framework in Greece contradicts to the requirements of both the RED II and IEMD, which specify that Member States shall provide an enabling framework to promote and facilitate the development of Renewable Energy Communities (RECs) and Citizen Energy Communities (CECs) respectively [1]. In more detail, unjustified administrative and regulatory barriers should be removed, while also tools should be provided to facilitate access to finance and information [2]. In addition, according to article 16(3)(a) of the IEMD, Member States shall ensure that CECs are able to access all electricity markets in a non-discriminatory manner. The enabling framework is, thus, intended to create a level playing field for CECs as new market actors [3]. Member States are required to take the specificities of RECs into account when designing their renewable energy support schemes, in order to allow them to compete for support on an equal footing with other market participants [4]. As a result, both Directives recognise that the energy communities are unique players in the energy market and that the Member States should identify concrete measures to ensure that they receive adequate support to be able to compete equally with the other market players without discrimination. EU Member States must transpose the RED II provisions into national legislation by 30 June 2021 and the IEMD provisions by 31 December 2020, to ensure they are consistent with the new EU legislation.

As a consequence. the Greek government should immediately proceed with the transposition of the two Directives and adopt corrective measures to the existing legislation. Some of the proposition included in the report comprise the:

  • Immediate amendment of the Greek Law 4414/2016 in order to exclude energy communities with at least 60 members from competitive processes;
  • Immediate assessment of the barriers and potential for the development of energy communities, as specified in article 22(3) of RED II;
  • Design of a complete and functional exclusive model of collective self-consumption, which exempts the members from the obligation to register as tradesmen at the tax office;

[1] Article 22(4) of the REDII and 16(1) of the IEMD.

[2] Article 22(e) and (g) of the REDII.

[3] Aura Caramizaru and Andreas Uihlein, Energy communities: an overview of energy and social innovation, JRC Science for policy report 2020, pages 7,8

[4] Article 22(7) of the REDII. On the same note, recital 26 of the RED II specifies that “Member States should ensure that renewable energy communities can participate in available support schemes on an equal footing with large participants. To that end, Member States should be allowed to take measures, such as providing information, providing technical and financial support, reducing administrative requirements, including community-focused bidding criteria, creating tailored bidding windows for renewable energy communities, or allowing renewable energy communities to be remunerated through direct support where they comply with requirements of small installations.”.