January success story: Making community energy a reality in the Czech Republic
Community energy is key to action on the climate crisis. It can empower people, boost local economies, and reinvigorate communities. Community-led initiatives play an important role in the transition towards a 100% renewable and just energy future. Success stories of community energy projects can be found all over Europe. At REScoop.eu we want to highlight these stories to further accelerate the movement towards a cleaner and democratic system.
This month, we travelled to the Czech Republic to learn more about the country’s first energy cooperative, Hnutí DUHA, serving as a lighthouse example to inspire other bottom-up projects in a region with little tradition of energy cooperatives.
A lighthouse example
Friends of the Earth Czech Republic embarked on the journey to create an energy cooperative that would serve as an inspiration for future endeavours.
They sought to distinguish community energy as a grassroots movement, distinct from more institutional initiatives which may emerge under the sponsorship of private companies or municipalities in light of the recently approved community energy law.
In December 2023, after months of dedicated work, the cooperative Hnutí DUHA was established by 47 founding members, surpassing expectations by attracting 200 new members and raising around €125,000 two months later. Ondřej Pašek, chair of the board and member of Friends of the Earth Czech Republic, emphasises the importance of having that first project in place before launching the cooperative: “We wanted to offer something specific; we didn’t want to just promise a cooperative without saying what we would be doing”. This approach proved to be successful.
The first PV installations
Hnutí DUHA's inaugural project involves a 50kWp PV installation on the roof of a bio farm in Velké Hostěrádky, southern Brno. About 30% of the energy generated will power the farm, with the remaining 70% shared among cooperative members. Despite facing a financial obstacle due to changes in subsidy conditions, Ondřej Pašek emphasises their commitment to adapting the financial plan.
“We designed the financial plan taking into account a subsidy from the national government. However, in the meantime, the subsidy conditions changed and the project is not eligible anymore. Although this didn’t come as a surprise and doesn’t put the project at risk, it means that we have to substantially redesign the financial plan. We are now working on a few alternatives – still respecting the core of the project - and members will vote for their preferred option.”
Simultaneously, Hnutí DUHA is defining its second project, a PV installation on social housing apartments for Ukranian refugees and single mothers. The apartment block, which is owned by the Hussite Church, also hosts a community cafe, a book store and a couple of other services. The solar panels will supply energy to the social houses and services, and if there is anything left, it will be shared among cooperative members.
Members shaping the future of the cooperative
While Friends of the Earth Czech Republic played a crucial role in the creation of Hnutí DUHA and still provides administrative services to the organisation, the environmental organisation plans to slowly step out, allowing the initiative to evolve independently. The board plans to create a portfolio with ideas from members, empowering them to decide on future investments. The general assembly will be entitled to vote on their preferred projects.
Discussions about the allocation of generated revenues highlight the cooperative's commitment to democratic decision-making. Ondřej has a hunch.
“From what I have discussed with some members, they are mostly interested in democratising the energy sector and making the idea of community energy a reality in the Czech Republic. Thus, I guess our first revenues will be reinvested in new projects to spread the idea of community energy. But this is just my guess, members will have to vote.”
The Energy Communities Act
Hnutí DUHA stands as the pioneer energy community under the new Energy Communities Act, the law that transposes European legislation on energy communities in the Czech Republic. Ondřej anticipates a surge in similar initiatives.
“The law’s strongest point is that it obliges market actors, especially grid operators, to connect energy communities to the grid and process all the data of the energy infrastructure so that people can actually share energy. These are not some kind of fake community energy provisions that make it practically impossible to implement. This law really makes community energy possible in practice. And this will bring a lot of interest.”
While acknowledging the law's positive aspects, Ondřej notes its late implementation – the deadline to transpose the EU provisions for energy communities in the Renewable Energy Directive passed on 30 June 2021. He also identifies a flaw in how energy sharing is regulated. It doesn’t allow dynamic allocation, which would have allowed members of the community to use the energy not used by other members. Instead, the energy assigned, but not used by a member, needs to be fed to the grid. As a result, many projects may not be economically viable, which may lead to a cooling-off period after the initial interest surge in energy communities, Ondřej foresees.
Advocacy and future challenges
Organisations like UKEN, the Community Energy Union of the Czech Republic, which we featured in a success story around two years ago, worked hard to get the Energy Communities Act approved. After achieving this first milestone, they will focus their advocacy efforts on securing financing to support technical work and daily operations of emerging energy communities. Hopefully, they will manage to pull a good programme which will make energy cooperative Hnutí DUHA only the first of many community energy projects in the country.