The newly adopted Energy Law 2022 transposes both REC and CEC definitions. Specifically, it merges both REC and CEC definitions into one single concept, called an ‘energy community’. RECs have a focus on local and renewable energies, and have stricter requirements. However, reflection of the autonomy principle is lacking. This means the definition has not been transposed entirely correctly. Overall, the Dutch transposition does fairly well in creating a single concept that properly distinguishes between the different participation requirements of RECs and CECs. An Explanatory Note also provides framing for the energy community concept, and the rationale behind combining RECs and CECs into one concept through the transposition process. This helps provide clarity to support potential uptake.
The definition is open to all legal persons, regardless of form, including partnerships. The Energy Law does not go into any specific detail on the participation and governance principles. While this could result in a lack of clarity, the government provides itself with authority to adopt additional rules. While the activities of energy communities are subject to regulatory oversight, no authority is assigned to oversee registration of energy communities, or compliance with the conditions for establishing energy communities. This presents a potential risk of abuse.
Criteria of EU definition reflected in national definition
An energy community must guarantee in its statues, or in the case of a partnership, in an agreement, that:
- Participation is voluntary and open
- That members and shareholders have the right to leave
- Effective control is vested in members, associates or shareholders that are natural persons, micro and small enterprises, or local authorities
- Autonomy is not included in any references to renewable energy activities
For renewable energy projects, in their statutes the energy community may state that eligibility to be a member, partner or shareholder is limited only to natural persons, local authorities or micro, small or medium-sized enterprises. In this case, the energy community should also state that effective control resides with members located in the vicinity of the project(s).
Level of detail in the elaboration of principles contained in EU criteria
Aside from eligibility for RECs, the Energy Law does not provide any specificity beyond the EU definitions. Nevertheless, the Explanatory Note states that conditions for establishing energy communities under the Energy Law are intended to protect participating end customers and should prevent energy communities from being ‘taken over’ by regular energy producers. Furthermore, it provides some rationale for different criteria between standard energy communities and those that have a local, renewable energy focus.
The government maintains the ability to lay down additional rules, by general order, to ensure and safeguard effective control.
Clearly defined purpose
For the most part, the energy community definition includes a copy-and-paste of the language of the Directives. Where it goes further is framing an energy community as a legal entity that carries out energy market activities for the benefit of members, associates or shareholders. This provides an orientation of energy communities as being strongly member-focused. The Explanatory note states that the main purpose of the energy community is not to make profit, as is usually the case for regular producers or suppliers usually is, but to provide other kinds of benefits for the participants in the community or for the environment where the community operates (environmental, economic or social benefits). However, there is no further elaboration or specificity.
ICA cooperative governance principles reflected
Only partly, through reference to the principles included in the EU definitions.
Legal entities allowed
All legal persons – not specified. The Explanatory Note states that the Dutch transposition has chosen to construe 'legal entity' more broadly than 'legal person', so that even partnerships that do not have legal personality can establish an energy community establish an energy community. The Explanatory Note also mentions cooperatives by name, and it has been suggested that the criteria are particularly suitable for the establishment of cooperatives.
Citizen participation is ensured
Designated authority to oversee
Not mentioned, at least not for compliance with the definitions.
Number of definitions
1 – there is only one definition, which is named an ‘energy community’ – Conditions for energy communities differentiate between energy communities that have a renewable energy project, and for those that do not, where relevant. In this sense, the Dutch energy community definition combines the two EU definitions (REC and CEC) definitions into one coherent concept.
Coherency between both definitions
A coherent energy community concept, encompassing all possible market activities that an energy community could engage in, is created through the Dutch transposition. Furthermore, the explanatory Note explains the commonalities and differences between the base concept of an energy community, and the more renewables and locally-focused energy community.