The Clean Energy for all Europeans Package (CEP) aspires to achieve climate neutrality by 2050 and enhance citizen participation and empowerment in the energy transition. In December 2020 the Council decided to increase the EU’s climate ambition for 2030 to a reduction of at least 55% compared to 1990. In order for that target to be achieved, everyone should contribute towards the realisation of the energy transition to a cleaner energy future free from fossil fuels.

One of the key funding instruments contributing to the objectives of the European Green Deal is the Modernisation Fund (MF), which is a dedicated funding programme to support 10 lower-income EU Member States in their transition to climate neutrality by helping to modernise their energy systems and improve energy efficiency. These 10 countries are Bulgaria, Croatia, Czechia, Estonia, Hungary, Latvia, Lithuania, Poland, Romania and Slovakia. The MF will support investments in:

  • Generation and use of energy from renewable sources;
  • Energy efficiency;
  • Energy storage;
  • Modernisation of energy networks, including district heating, pipelines and grids;
  • Just transition in carbon-dependent regions: redeployment, re-skilling and upskilling of workers, education, job-seeking initiatives and start-ups.

The Modernisation Fund will:

  • Help the beneficiary Member States meet the 2030 climate and energy targets and play an active role in EU transition to climate neutrality;
  • Increase energy security in the beneficiary Member States by supporting increased interconnections and modernisation of energy networks;
  • Enhance the financing of renewable energy sources;
  • Help make the economies and the energy sectors of the beneficiary Member States greener and cleaner and
  • Promote exchange of best practices among the beneficiary Member States.

The national measures that will be developed to administer the MF should thus promote the fight against climate change, support environmental protection and ensure security of energy supply. Moreover, taking into consideration that the CEP enhances the role of citizens as active consumers and members of an energy community in the energy transition, the investments that these 10 Member States will submit for MF support should include support for community energy projects.

Following a request from Friends of the Earth Czech Republic, prepared a report with recommendations for the utilisation of the Modernisation Fund by the Czech Republic, so as to promote the development of energy communities.

Tomáš Jagoš from Friends of the Earth Czech Republic mentions that:
Energy communities are to become an important part of energy transformation in the Czech Republic according to the National Energy and Climate Plan. However the Modernisation fund which is the key finance source for new renewable energy projects in this decade allocates for energy communities only the lowest share of its funding. Furthermore, the Government is failing in promoting new possibilities of energy self-sufficiency and its funding. While energy companies and professionals have already prepared a number of large projects in advance, citizens and municipalities are practically unaware of new possibilities for strengthening their energy independence. Such promotion is needed here much more compared to Western EU countries because the development of renewables is stagnating for the 7th year in a row and there are only a few best practices of energy communities so far..

Dirk Vansintjan, president of concludes:
Moving forward, Renewable Energy Communities need to be explicitly recognised (consistent with the new definitions of RECs and their acknowledgment as distinct, non-commercial market actors, in the REDII) and defined in the implementation document for the Modernisation fund in the Czech Republic. Their unique characteristics, the benefits they bring forward compared to regular RES projects and their future potential should be taken into consideration for the decision of an adequate percentage of support in the MF, which should be higher than only 1.5%

The analysis in our report mainly focuses on reasons why energy communities should be clearly defined in this document and should receive a higher percentage of support from the MF.