The Government has proposed legislation on CECs, while it is also working on developing provisions for RECs. The transposition of the CEC in the proposed legislation technically covers the requisite participation criteria. It details a standard of effective control, which will help establish legal clarity. However, there is an inherent geographical proximity requirement for CECs, which will significantly limit the scope where CECs can operate, potentially violating their rights to participate in activities that are covered by EU legislation. Additionally, geographical proximity is not a requirement for CECs, meaning that the definition is overly-restrictive. The stated purpose of a CEC in the transposed legislation is also more restrictive and based on technical activities than the Electricity Directive, which is framed around social innovation. Given the expansive number of legal entities allowed to become CECs, the lack of an oversight or compliance mechanism creates a significant risk of abuse.
Criteria of EU definition reflected in national definition
- Voluntary and open participation is covered
- Effective control is covered
- CEC definition does not mention autonomy (although this is not required for CECs)
- Geographic proximity is covered, even though it does not apply to CECs in EU legislation
Level of detail in the elaboration of principles contained in EU criteria
- Decision-making and rights of control must reside with members/owners who are household consumers, local governments, or micro- and small enterprises; they must also not be involved in trading, generation and distribution of electricity as their primary activity
- Control is understood as direct or indirect exertion of decisive influence or the exercise of rights in relation to appointment and the performance of functions as part of the supervisory board, management board or other bodies authorized to represent the CEC
- Limits geographical scope of CECs to distribution networks with a rated voltage level of no more than 110 kV – this is a potential violation of CECs’ rights as inherent geographical limitations prohibit CECs from engaging in activities for which they have a right to participate in
Clearly defined purpose
- CECs have an objective of producing, distribution, sale, consumption, aggregation, storage, provision of energy efficiency services, charging of electric vehicles, or the provision of other energy services to members or shareholders
- Purpose is to provide members with affordable electricity and increase energy efficiency, and not to generate profit – this is a narrower scope than the Electricity Directive
ICA cooperative governance principles reflected
Only partly, through reference to the principles included in the EU definition.
Legal entities allowed
Associations (excl. ordinary associations), cooperatives, most partnerships, and limited liability companies.
Citizen participation is ensured
Designated authority to oversee
Number of definitions
Coherency between both definitions