The Wallonia region in Belgium transposed the provisions for energy communities with a degree introducing amendments to the decree of 12 April 2001 relating to the organization of the regional electricity market that partially transposed the internal Electricity Market Directive (IEMD) (in force since the 5th of May 2022) and another Decree from 05 May 2022. This legislation introduces both RECs and CECs, while also containing several provisions on energy sharing.
Overall, there is concrete analysis in the legislation of what each term means in the context of Wallonia and the Walloon regulator of the electricity and gas markets (CWaPE) is assigned as the responsible authority to monitor the development of the energy communities and to supervise their compliance with the legislation.
Criteria of EU definition reflected in national definition
- Open and voluntary membership
- Requirement of proximity
- Effective control
- Open and voluntary membership
- Autonomy (although not required from EU Directives)
Level of detail in the elaboration of principles contained in EU criteria
- Eligibility - natural persons, local authorities (as defined by the Government), including municipalities, and small or medium-sized enterprises whose main commercial or professional activity is not participation in one or more energy communities. Thus, energy companies and large businesses are excluded.
- Effective control and proximity: a REC is effectively controlled by the participants located near the production facilities which it owns or over which it has a right of use. Proximity is primarily defined in terms of eligibility to perform energy sharing. Article 26 of the draft order of the Walloon government specifically regulates the requirement of proximity for the activity of energy sharing.
- Autonomy - an explanation of what autonomy means is included in the draft order of the Walloon government.
- Effective control - natural persons, local authorities as defined by the Government, including municipalities and small businesses whose main commercial or professional activity is not participation in one or more energy communities and whose main area of economic activity is not the energy sector. Thus, energy companies and large businesses are excluded.
- Autonomy - also mentioned for CECs, going beyond EU requirements, thus strengthening the governance of the community. The explanation of what autonomy means is included in the draft order of the Walloon government.
Autonomy in more detail - Article 13 of that draft order specifies that an energy community is deemed to be autonomous provided that a member or shareholder does not hold, alone or jointly with one or more related persons within the meaning of article 1:20 of the Companies and Associations Code, fifty percent or more of the energy community's voting rights.
By way of derogation from the first paragraph, when an energy community is made up of less than three members and shareholders, each holds, alone or jointly with one or more related persons within the meaning of article 1:20 of the Companies Code and associations, a maximum of 100/(number of members and shareholders)% of the voting rights of the energy community. According to paragraph 2, however, an energy community is not deemed to be autonomous if it is linked to another entity or natural person by any of the following relationships:
1° an entity or a natural person has the right to appoint or dismiss the majority of the members of the management, management or supervisory body of the energy community;
2° an entity or a natural person has the right to exercise a dominant influence over the energy community by virtue of a contract entered into with the latter or by virtue of a clause in its articles of association;
3° an entity or a natural person alone controls, by virtue of an agreement concluded with other members of the energy community, the majority of the voting rights of the members of the latter. By way of derogation from the first paragraph, when manifest and repeated attacks on the autonomy of the energy community are observed, any member or shareholder of the energy community may refer the matter to the CWaPE. Article 14 also specifies the procedure that should be followed in case a conflict of interest is observed with a member or shareholder of the community.
The statutes should also clarify the provisions guaranteeing the autonomy and independence of the energy community vis-à-vis each participant and other market players who participate in the energy community or cooperate with it
Effective control in more detail - Article 59 of the decree states that the energy community determines in its statutes the provisions relating to the effective control of the energy community by its participants and, in the case of a REC, the way in which this criterion will be assessed with regards to proximity making it possible to establish which members and shareholders hold effective control of the community.
Clearly defined purpose
The decree mentions that main objective of an energy community is to provide environmental, economic or social benefits to its participants or to the local territories in which it operates rather than to generate financial profits. The Government may specify the notions of environmental, economic or social advantages and financial profits. Article 11(1) of the draft order of the Walloon government specifies that the managing body of the energy community (or if not possible, the members) has the obligation to produce an annual report to the members and shareholders on the way in which the activities, actions and decisions carried out by the energy community contribute to the achievement of the objectives pursued in terms of environmental, economic or social benefits. This report is made available to the CWaPE and must in particular establish that the expenditure relating to investments, operating costs and remuneration are designed in such a way as to favor the achievement of the objectives pursued in terms of environmental, economic or social advantages.
The statutes of the energy community must also detail how any income generated by the activities of the energy community is distributed.
ICA cooperative governance principles reflected
To the level reflected in the EU provisions.
Legal entities allowed
Citizen participation is ensured
Designated authority to oversee
Any creation of an energy community whose purpose is one or more activities on the electricity market is notified to the Walloon Energy Commission, the Walloon regulator of the electricity and gas markets (CWaPE) before the start of its activities. The notification is accompanied in particular by the following documents and information:
1° the statutes of the energy community;
2° the agreement between the energy community and its participants;
3° the characteristics and power of the electricity production facility/ies owned or used by the community that may confer on it the status of producer, as well as the date of their current or estimated commissioning;
4° the list of participants.
The Government may complete or specify the list of documents to be transmitted and also determine the notification procedure in the event of the end of activities or the dissolution of the energy community. The draft order of the Walloon government specifies in more detail the process of such notification (check articles 17-20)
The CWaPE may use this data:
1° to monitor the development of the energy communities and to check their compliance with the obligations imposed on them by or under this decree;
2° to fulfill any legal or regulatory mission assigned to it.
Article 16 of the draft order of the Walloon government states that only the energy communities notified to the CWaPE are authorized to include the mention "energy community" on their documents, publications or communications.
Any energy sharing activity within an energy community is subject to the prior granting of an authorization issued by the CWaPE. Article 25 of the draft order of the Walloon government explains the process that the CWaPE will follow in case it finds that an energy community does not comply with the conditions and obligations prescribed in the law for energy sharing.
Number of definitions
Coherency between both definitions
The decree mentions that an energy community is a REC or a CEC and also refer to several articles to energy communities in general, thus maintaining coherence between the 2 definitions.