REC/CEC definitions

Overall assesment

The definition transposed in Hungary attempts to combine both definitions into one concept. However, it fails to create an overall coherent concept, as it adopts the standards of the CEC. From a technical standpoint, RECs, which are framed as a sub-category of CEC, only operate in electricity, excluding heating and cooling. Furthermore, more stringent governance criteria for RECs have been omitted, meaning that the Renewables Directive has been incorrectly transposed. The definition does, however, include detailed requirements limiting control and ensuring autonomy. The definition also limits the number of legal forms to those that might be used for non-profit and socially innovative purposes, although actors at the national level have expressed that the available legal entities do not provide sufficient flexibility. Furthermore, there is a registry, allowing for tracking energy communities.

Detailed assesment

Criteria of EU definition reflected in national definition

  • Autonomy is covered
  • Open and voluntary participation are not covered
  • There are no eligibility restrictions, in particular for RECs

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

  • Management of an REC is limited to members in geographical proximity, which is defined as connection points located in the same high/medium voltage transformer substation area as the storage or power plant owned by the energy community
  • Certain natural and legal persons involved in the electricity and gas sectors, and those that have sole or majority ownership in a legal person, or a senior executive or a related undertaking of a legal person that engages primarily in the electricity and gas sector, is forbidden from managing the energy community alone, or from being a majority member. They are also not allowed to participate in the decision-making body of the energy community to the extent that it equates to exercise of the right of management

Clearly defined purpose

  • Primary purpose to provide environmental, economic and social benefits to members or the area of operation specified in the energy community’s charter
  • Integrates activities: an energy community must perform one of the following, including production storage, consumption, provision of distribution flexibility services, electricity distribution, aggregation, provision of electromobility services and operation of electric charging equipment (it excludes sale or supply, although this is mentioned in the sub-definition on RECs)
  • Heating and cooling is excluded by virtue of only referencing electricity in the REC sub-definition

ICA cooperative governance principles reflected

Partly, as open and voluntary participation are not covered.

Legal entities allowed

Cooperative or non-profit company – this is overly restrictive as existing cooperative legislation limits configurations of different entities (e.g. municipalities, SMEs and NGOs) in the energy community, and needs to be amended; associations and non-profit organisations (which cannot have an economic activity as a purpose) are also excluded.

Citizen participation is ensured


Designated authority to oversee

There is a register of energy communities which is public.

Number of definitions

1 - there is only one definition, which is named an ‘energy community’ – in this sense, the definition attempts to mix both the REC and CEC definitions.

Coherency between both definitions

  • A REC is sub-defined as an energy community that generates, consumers, stores or sells electricity from renewable sources – excluding district heating and cooling
  • There are no eligibility requirements for an energy community or REC, meaning that the latter contradicts the requirements of the RED II