Overall assessment

Updated December 2023

Greece firstly introduced legislation on energy communities with the Law 4513/2018, which was elaborated before the adoption of the EU provisions, so it was not fully compliant with them. This Law established a new type of civil cooperative, the ‘energy community’, which incorporated a lot of the elements included in the EU definitions, such as the open and voluntary membership, the democratic governance and effective control, the requirement of proximity and more. Although this was a good piece of legislation providing novel interpretations on specific issues such as insularity, energy poverty and special care to municipalities and local authorities, the definition of energy communities was broad enough and caused a phenomenon of hijacking. As such, a lot of energy communities were developed by private investors and not citizens, in order to take advantage of the incentives provided for them. As of November 2022, there are 1.406 active energy communities in Greece established under the Law 4513/2018.

In March 2023 the Law 5037/2023 introduced provisions for two new definitions, Renewable Energy Communities (RECs) and Citizen Energy Communities (CECs), thus transposing the relevant EU provisions. This legislation specifies that, as of 1 April 2023, no new energy community under the Law 4513/2018 can be set up, while also as of 1 November 2023 the existing energy communities established under the previous law are not allowed to submit new applications for a producer certificate or for a final connection offer in the case of excluded stations, practically phasing them out. Still a lot of questions remain on the implementation of the existing legislation (e.g. how the old energy communities can be converted to RECs or CECs, what will happen with their existing projects in that case etc), which are expected to be answered with by laws and ministerial decisions.

Overall, the parallel existence of 3 definitions causes a lot of confusion to citizens that want to set up energy communities, as the legal framework they need to navigate is complex and the differences between the 3 definitions are not easy to distinguish.

Detailed assessment

Criteria of EU definition reflected in national definition

For RECs

  • open and voluntary participation
  • membership: members in a REC can be:

a) natural persons with full legal capacity, including civil servants,

b) local authorities of first and second degree, enterprises belonging to such local authorities, as long as they are small and medium-sized enterprises (SMEs) , as well as their associations,

c) SMEs,

d) agricultural cooperatives and urban cooperatives of the Law 1667/1986, as long as they are SMEs,

e) public or private non-profit legal entities, as long as they are SMEs.

A member of a REC cannot be a member of another REC that operates in the same region, with some exemptions.

  • requirement of proximity: Such proximity is:

a) for natural persons, either the permanent residence or the full or bare ownership or usufruct in a property, which is located in a region where the REC is active or the renewable project is being developed,

b) for legal entities, the registered seat of the legal entity, which is located in a region where the REC operates, or the renewable project is being developed.

50% plus one (1) of the members should be in the proximity of the area where the REC carries out its activities and develops the renewable project. The proximity of the members is checked from the Registry when the REC is being established.

  • democratic governance and effective control: the law states that a REC should be under the effective control of its members that are in its proximity. It also specifies that each member may own, in addition to the mandatory cooperative share, 1 or more optional cooperative shares, with a maximum participation in the cooperative capital of 20%, with the exception of local authorities of first and second degree and enterprises that are 100% owned by such local authorities, which can each participate in the cooperative capital with a maximum limit of 40%.
  • Autonomy: regardless of the number of cooperative shares they own, each member participates in the general assembly with only 1 vote.

For CECs:

  • Open and voluntary participation
  • membership: members in a CEC can be:

a) natural persons with full legal capacity, including civil servants,

b) local authorities of first and second degree, enterprises belonging to such local authorities, as well as local authority unions,

c) legal entities of public and private law,

d) agricultural cooperatives and urban cooperatives of the Law 1667/1986.

For private companies, their participation in a CEC should not be their main commercial or professional activity. Also, a member of the CEC cannot be a member of another CEC that operates in the same region, with some exceptions.

  • democratic governance and effective control of the CEC by its members: each member may own, in addition to the mandatory cooperative share, one or more optional cooperative shares, with a maximum participation in the cooperative capital of 20%, with the exception of local authorities of first and second degree and enterprises that are 100% owned by such local authorities, each of which can participate in the cooperative capital with a maximum of 40%.
  • autonomy: regardless of the number of cooperative shares they own, each member participates in the general assembly with only one vote.

Level of detail in the elaboration of principles contained in EU criteria

There is a lot of elaboration and detail on what each term means (see the text above), which is positively evaluated. The law also sets a minimum content for the statutes of a REC and a CEC and specifies the process that a REC/CEC should adhere to in order to be legally established that includes the submission of supporting documents to the One Stop Service of article 8 of Law 4919/2022. Following this procedure, a REC/CEC acquires legal personality and commercial status with the registration of its statutes in the General Commercial Register (GEMI), in accordance with the provisions that regulate the REC and CEC Registry (see below). The law also specifies the use of surpluses of a REC and a CEC. More specifically, from the surpluses of each use of the REC/CEC, at least 10% is withheld for the formation of the regular reserve. Such withholding of the surpluses is not mandatory when the amount of the reserve is at least equal to the amount of the cooperative capital of the REC/CEC. Without prejudice to this rule, at least 70% of the surpluses of each year should remain in the REC/CEC in the form of extraordinary or special reserves. These extraordinary or special reserves are available, by decision of the general assembly, in accordance with the provisions that regulate the activities a REC/CEC can undertake and the statutes of the community. Moreover, the REC/CEC can distribute to its members the surpluses of the year, after deducting the reserves as mentioned before, if there is a relevant provision in the statutes.

Clearly defined purpose

Copy paste from the Directives for both RECs and CECs: their primary purpose is the provision of environmental, economic, and social benefits at community level for their members or the local areas where they operate, rather than financial profits.

The reference to alleviation of energy poverty and to social economy that was mentioned in the main purpose of the Energy Communities established under the previous legislation is not mentioned in the new law.

ICA cooperative governance principles reflected

Yes, the ICA principles are reflected in the Greek Law, as the legal entity chosen for RECs and CECs is the civil cooperative. There is open and voluntary membership, democratic Member Control, member Economic Participation, Autonomy and Independence and Cooperation among Cooperatives (the Law provides for the possibility to establish Unions and Federations of energy communities). The law also introduces provisions regulating the administrative bodies of a REC, including the general assembly of the members and the board of directors.

Legal entities allowed

The new Law maintained the same legal entity for RECs and CECs, as was established for the energy communities of the Law 4513/2018, which is the legal form of the civil cooperative (cooperatives are regulated by the Law 1667/1986).

Activities

RECs operate within one region, subject to the criterion of effective control, and its statutes can only include the activities specified in the law. More specifically, the REC can carry out at least one of the following activities: production, consumption, storage and sale of energy from renewable sources. In the context of its activity, each REC may share, within the community, the energy from renewable energy sources, which is produced by production stations and stored in storage stations owned by the REC.

The REC may additionally exercise:

a) the application of virtual net metering from renewable stations and renewable stations with storage owned by the REC to meet the energy needs of their members, consumers living below the poverty line,

b) the management, in particular collection, transport, processing, storage or disposal of raw material for the production of energy from biomass or bioliquids or biogas or biomethane or through energy utilization of the biodegradable fraction of urban waste,

c) the installation and operation of water desalination units using renewable energy sources,

d) the attraction of funds for the realization of investments in the exploitation of renewable energy sources,

e) the development of studies for the utilization of renewable energy sources or provision of technical support in the above areas,

f) the management or participation in programs financed by national or EU resources,

g) the provision of advice on the management or participation of its members in programs financed by national or EU resources,

h) the information, training and awareness raising at local and regional level on energy sustainability issues,

i) the support of vulnerable consumers and tackling of energy poverty of consumers living below the poverty line, regardless of whether they are members of the REC, such as the provision or the offsetting of energy, the energy upgrade of homes or other actions that reduce the consumption of energy in the residences of the above,

j) the network development, the management and exploitation of alternative fuel infrastructures, in accordance with the Law 4439/2016 or the management of sustainable means of transport,

k) the provision of energy services, in accordance with the relevant decision of the Minister of Environment, Energy and Climate Change,

l) the exercise of aggregation activities in accordance with the relevant provisions of the Law 4001/2011,

m) carrying out actions to promote electric mobility, including the activity of the operator of electric vehicle charging infrastructure, according to the provisions of the Law 4710/2020,

n) actions of public utility/common good related to the adequacy and supply of raw materials, energy, fuel and water.

CECs are active within one or more regions, respecting the effective control criterion that is defined in the legislation. The CEC must carry out at least one of the following activities: production, self-consumption or sale of electricity from renewable sources, storage, distribution and supply of electricity, aggregation, provision of flexibility and balancing, as well as provision of energy efficiency services, electric vehicle charging and other energy services to its members.

The CEC may also carry out the following activities:

a) management or participation in programs financed by national resources or resources of the EU, related to the promotion of its purpose,

b) provision of advice on the management or participation of its members in programs financed by national or EU resources related to its purposes,

c) information, education and awareness raising regarding energy sustainability issues,

d) actions to support vulnerable consumers and alleviate energy poverty of consumers, who live below the poverty line, regardless of whether they are members of the CEC. These actions include in particular the provision or offsetting of energy, energy upgrading of homes or other actions that reduce the energy consumption in the residences of these consumers.

CECs also have the right to own, set up, purchase or lease distribution networks and manage them autonomously in the region in which they operate.

In this case, CECs:

a) may enter into agreements regarding the operation of their network with the competent administrator, to which their network is connected,

b) are subject to appropriate network charges at the connection points, between their network and the distribution network outside of the CEC. The said network charges include separate information, on the one hand about the electricity with which the distribution network is supplied and on the other hand for the electricity consumed by the network outside of the CEC, in accordance with the Management Code of the Hellenic Electricity Distribution Network,

c) do not discriminate or harm customers who remain connected to the distribution system they manage.

It is highlighted that for CECs that manage distribution systems, the relevant provisions on denying access to the grid and the need for justification apply. CECs are also subject to the exceptions set for closed distribution networks.

CECs can also carry out the activities of the RECs and enjoy the financial incentives and support measures of the RECs, according to the relevant legislation for RECs, as long as the provisions on the proximity of the members applies. The statutes of a CEC may not include other activities, apart from those highlighted above.

Citizen participation is ensured

The law sets a minimum number of members that a REC could have to be legally established, which is 30 members. This is introduced in an effort to deal with the corporate capture phenomenon. However, the minimum number of members is allowed to be:

a)20 members, if the REC is based in a municipality of an island region with a population of less than 3,100 inhabitants,

b) 15 members, in case at least fifteen (15) SMEs participate,

c) 3 members, if at least 1 local authority of first or second degree participates, and the other 2 members are either enterprises that are 100% owned by a local authority of first or second degree or a local authority of first or second degree.

In the latter two cases it is possible to set up a REC without citizens participating, which really negates the effort to deal with corporate capture.

Along the same lines, as a general rule the minimum number of members of the CEC is 30 members. However, the minimum number of members is defined as:

a) 20 members, if it is a CEC based in a municipality of an island region with a population of less than 3,100 inhabitants,

b) 15 members, if at least 15 legal entities of public or private law participate in the CEC,

c) 3 members, if 1 is a local authority of first or second degree with the other 2 members being either enterprises that are 100% owned by local authorities of first or second degree or another local authority of first or second degree.

In the latter two cases it is possible to set up a CEC without citizens participating, which really negates the effort to deal with corporate capture.

Designated authority to oversee

The new Law establishes a National Register for RECs and CEC, where they should notify the appropriate information, including their creation, activities and dissolution. The competent authority for its observance and the registration of the statutes and details of RECs and CECs is the General Commercial Register (GEMI). So there is a registry for RECs and CECs, but no designated authority to oversee and supervise.

Number of definitions

3 – RECs, CECs and energy communities established under the Law 4513/2018.

Coherency between both definitions

RECs, CECs and the energy communities of the Law 4513/2018 have several similarities, therefore it is challenging for citizens to understand the differences between them and choose which legal entity to establish, which create confusion. In addition, significant uncertainties still exist on how these definitions interact with each other.