France published an Ordinance in March, 2021, with provisions on both renewable energy communities and citizen energy communities. This has been followed up by an Application Decree, which was finalized in October, 2021. There is no attempt to link the two definitions together, nor to join up any of the criteria that differ. The definition does reference a strong standard of Autonomy, which is based in France’s existing company law. An application decree, which is about to be published also elaborates effective control and geographical proximity in detail. One significant distinguishing feature between RECs and CECs is eligibility: for RECs, there are strong restrictions on companies, whereas for the CEC definition it explicitly states that there are no restrictions to participation. This could create a risk that CECs become highjacked by traditional energy sector market actors. For the most part, the definitions are copy-paste of the EU directives. Furthermore, there is no monitoring role assigned to the regulatory authority – this could raise risks of abuse of both the REC and CEC definitions, leading to a lack of trust.
Criteria of EU definition reflected in national definition
Renewable Energy Communities
- Open and voluntary are covered
- Autonomy is covered
- Geographic proximity is covered
- Effective control is covered
Citizen Energy Communities
- Voluntary and open are covered
- Effective control is covered
Level of detail in the elaboration of principles contained in EU criteria
For Renewable Energy Communities:
- A REC is autonomous where at least two different categories of eligible members exercise ‘effective control’ over the REC (the standard is established for Citizen Energy Communities) or where it is effectively control directly by at least 20 citizens. For SMEs to be eligible to exercise effective control, they must be autonomous under the standard set by Article 3 of EU Recommendation 2003/361/EC (Recommendation on SMEs)
- Eligibility is limited to companies that do not have participation in energy communities as a main commercial or professional activity
- Geographical proximity is dealt with in an application decree. For natural persons and SMEs, close proximity is residence or location in the department or a bordering department where the project is being implemented (there are exceptions for departments that do not have more than two neighboring departments). There are also standards made for local authorities and for enterprises with majority ownership (direct and indirect) by local authorities.
For Citizen Energy Communities:
- Eligibility is open to any type of member or shareholder
- Explicitly mentions IEMD language on effective control, limiting it to natural persons, local authorities and small enterprises
- Effective control is elaborated in detail. To meet this standard, energy communities must meet four very detailed criteria relating to: 1) minimum ownership thresholds for different member classes; 2) a maximum holding of 40% of shares or voting rights for individual members; 3) minimum voting rights for members eligible for effective control, and 4) limitations on holdings of companies that participate in more than one energy community.
- No partner or shareholder may own directly or indirection, more than 40% of the voting rights of the energy community
Citizen intermediation structures: renewable energy communities or funds
Clearly defined purpose
Copy-paste of the EU legislation for both definitions.
ICA cooperative governance principles reflected
Yes, to the extent they are included in the EU definition – there is a prohibition on making financial profit one of the main objectives.
Legal entities allowed
A draft application decree elaborates which legal entities are allowed to become energy communities, including joint-stock companies, and cooperative societies.
Citizen participation is ensured
Designated authority to oversee
Number of definitions
Coherency between both definitions
The Application Decree covers both RECs and CECs, although they remain separate concepts with no explicit articulation about how they relate to each other. Nevertheless there is alignment on standards of effective control.