Overall assessment

Updated December 2023

The Irish Government has not published a specific law transposing the EU directive provisions on energy communities and there are currently several gaps. However, their first step in the process was the creation of a support scheme tailored to allow for participation by Renewable Energy Communities, and in particular ‘community-led’ projects, which are defined by the scheme. These definitions are also utilized to provide some advantages for RECs that want to obtain a grid connection. The Government is currently consulting on the transposition of the rest of the provisions. This assessment looks at elements that have either been finalized or proposed as a result of these processes. Autonomy and openness are covered but not elaborated in detail, although autonomy is expressed in terms of one-member-one-vote. Furthermore, there is a strong expression of effective control in the renewables support and grid connection schemes already developed. The Regulator’s proposal for a registry to monitor RECs will also help prevent abuse and ensure trust. In addition, the Regulator has expressed a clear conception of the relationship between RECs and CECs. It should be highlighted that in Ireland there was a pre-existing concept of Sustainable Energy Communities that was introduced by the Sustainable Energy Authority of Ireland (SEAI) before the introduction of the Clean Energy Package provisions for energy communities. This is a much broader term than RECs and introduces much looser collaborative partnership approaches by local community actors on various local actions focused on energy efficiency and renewable energy. All the relevant information on Sustainable Energy Communities can be found in SEAI’s Sustainable Energy Communities Handbook.

Detailed assessment

Criteria of EU definition reflected in national definition

The Irish Renewables Support Scheme (RESS) includes a definition of REC:

  • Openness and voluntary are covered
  • Autonomy is covered
  • Effective control is covered – effective must reside with shareholders or members that are located (n the case of SMEs or local authorities) or resident (in the case of natural persons) in proximity to a RESS 1 project that is owned and developed (or proposed to be owned and developed by the REC.
  • To be a REC, at least one shareholder/member must be registered as a “Sustainable Energy Community” with the SEAI
  • Proximity is defined by a Decision Paper of the Commission for Regulation of Utilities (CRU)

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

Under RESS:

  • Autonomy – each shareholder/member is entitled to one vote, regardless of shareholder or membership interest
  • Eligibility – must be natural persons, SMEs, local authorities, not-for-profit organisations, or local community organisations
  • Effective control– to be a community-led project, the project must be at least 51% owned by a REC either by way of (1) direct ownership of the project’s assets; or (2) direct ownership of the shares in the generator. Furthermore, at least 51% of all profits, dividends and surpluses derived from REC projects must be returned to the relevant REC.

For proximity of RECs generally, the Regulator proposes different geographic boundaries for different activities, although for RECs it prefers a connection of same distribution that a physical asset of the REC is connected to (38 kv); whereas CECs would not be limited in terms of geographic proximity.

The Decision Paper of CRU on proximity requirements for RECs specifies that:

  • proximity requirements for a REC are to be set by those in the community
  • requirements should be established when formalising the REC as a legal entity through a written constitution
  • it should be clear from the REC’s constitution how it assesses the proximity criteria
  • the RECs constitution should be accessible such that members / shareholder (or potential members / shareholders) can see who can be involved in the control of the REC
  • membership of the REC is limited to those served by the Irish distribution network
  • the REC must satisfy itself that its constitution is in line with the intentions of the Renewables Directive and must state this in its constitution. Effective control must remain within the proximity of the renewable asset.

It is possible for there to be two categories of members / shareholders of a REC:

  1. those in proximity to the renewable energy project owned by that REC who can be involved in the control of the REC, and
  2. those outside the proximity of the asset who can hold shares and participate in the activities of the REC, but cannot be involved in the control of the REC.

Clearly defined purpose

Primary purpose must be to provide environmental, economic, societal or social community benefits for members/shareholders or for local areas where it operates, rather than profits – very similar to the EU definition, although it elaborates societal benefits.

ICA cooperative governance principles reflected

Yes, to the extent they have adopted the principles contained in the Renewables Directive.

Legal entities allowed

Any.

Citizen participation is ensured

No; however, a Sustainable Energy Community must be associated with a community-led project in order for it to qualify. Hence, local citizen representation is covered at least by proxy.

Designated authority to oversee

Ministry, along with the Regulatory Authority under the RESS Scheme; CRU will also be developing a registration framework for ‘Relevant Market Participants’ such as RECs to engage in energy activities in suitable markets.

Number of definitions

1 (finalized under RESS) 2 (being consulted by Regulator)

Coherency between both definitions

In its consultation, the Regulator states that it sees RECs as a subset of CECs.