— The 7 principles of cooperative —
Energy Communities are governed by the values of solidarity, justice, equality, democracy, self-reliance and self-responsibility. The 7 cooperative principles, which have emerged through the long and international experience of the cooperative movement safeguard this institution.
The cooperative principles strengthen the social role of Energy Communities, especially those that aim at public benefit. They become the core of a collective and mutually supportive Just Transition, centered on local communities.
Energy Communities were introduced in Greek legislation by Law no. 4513/2018. They are currently regulated under Law no. 5037 / 2023 on the transposition of the European Directives 2018/2001 and 2019/944.
The legislation provides for three (3) types of Energy Communities:
- Renewable Energy Communities (RECs)
- Citizen Energy Communities (CECs)
- Energy Communities under Law no. 4513/2018 (established until 01/04/2023)
All three types of Energy Communities are established as civil cooperatives under Law 1667/1986 and are based on open and voluntary participation; their primary purpose is to provide environmental, economic and social benefit, at community level, to the members or areas where the community operates, rather than financial gain.
RENEWABLE ENERGY COMMUNITY (REC)
Eligibility for participation:
- Natural persons with full legal capacity, including civil servants.
- Local and regional authorities, associations of local and regional authorities, as well as enterprises that are fully (100%) owned by local and regional authorities.
- Small- and medium-sized enterprises (SMEs).
- Agricultural cooperatives and civil cooperatives under Law 1667/1987.
- Non – for- profit legal entities under public or private law.
Locality criterion:
- At least fifty percent (50%) plus one (1) of the members must have proximity to the area where the REC operates and the RES Project is being developed.
A REC must have a minimum of thirty (30) members, or:
- Twenty (20) members, if the REC is established in an island municipality with a population of less than three thousand one hundred (3,100) residents, according to the last census.
- Fifteen (15) members, if at least fifteen (15) participants are SMEs.
- Three (3) members, if one of them is local/ regional authority and the other two members are either enterprises that is fully (100%) owned by a local or regional authority or local / regional authority.
Note: A member of a given REC cannot be a member of another REC that carries out the same activities and operates within the same region, except in the case of legal entities under public law; local and regional authorities and enterprises fully owned by local and regional authorities; and agricultural cooperatives.
CITIZEN ENERGY COMMUNITY (CEC)
Eligibility for participation:
- Natural persons with full legal capacity, including civil servants.
- Local and regional authorities, associations of local and regional authorities, as well as enterprises that are fully (100%) owned by local and regional authorities.
- Legal entities under public or private law
- Agricultural cooperatives and civil cooperatives under Law 1667/1987.
Locality criterion:
- At least fifty-one percent (51%) of CEC members must have proximity to the RES project or to the CEC’s area of operation.
A CEC must have a minimum of thirty (30) members, or:
- Twenty (20) members, if the REC is established in an island municipality with a population of less than three thousand one hundred (3,100) residents, according to the last census.
- Fifteen (15) members, if at least fifteen (15) members are legal entities under public or private law.
- Three (3) members, if all three are local or regional authorities; or if one of them is local or regional authority and the other two members are either enterprises that is fully (100%) owned by a local or regional authority or local / regional authority.
Note: A member of a given CEC cannot be a member of another CEC that operates within the same region, except in the case of legal entities under public law; local and regional authorities and enterprises fully owned by local and regional authorities; and agricultural cooperatives.
—
Proximity to the RES project or the REC/CEC’s area of operation shall be established:
(a) for natural persons, if either the permanent residence or full or partial ownership or usufruct of real estate located in an area where the REC/CEC operates or the RES project is being developed;
(b) for legal entities, if the company seat is located in a region where the REC/CEC operates or the RES project is being developed.
RENEWABLE ENERGY COMMUNITY (REC)
Renewable Energy Communities (RECs) operate within one region and 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:
(a) may share -within the Community- energy from Renewable Energy Sources that has been produced and stored, respectively, in REC-owned production and storage plants;
(b) has access to all energy markets, both directly and through cumulative representation, in a non-discriminatory manner.
In addition, RECs may engage in the following:
- implementation of virtual net-metering through RES and RES plants with storage owned by the REC in order to meet the energy needs of their members or consumers living below the poverty line;
- management, such as collection, transport, treatment, storage or disposal of raw materials for the production of electricity or thermal or cooling energy from biomass or bioliquids or biomethane or through the energy recovery of the biodegradable fraction of municipal waste;
- installation and operation of water desalination plants using RES;
- raising capital in order to invest in the development of RES or CHP or to implement energy efficiency improvement measures;
- drawing up studies for the development of RES or providing relevant technical support;
- management or participation in projects financed by national or European Union resources;
- advising on the management or participation of its members in programs financed by national or European Union resources and related to its objectives;
- providing information and education, as well as raising awareness on energy sustainability issues at local and regional level;
- support vulnerable consumers and address the energy poverty of citizens living below the poverty line within the region where the EnCom is seated -whether or not they are members of the EnCom- such as net-metering, supplying energy to these individuals and performing residential energy upgrades or other actions to reduce energy consumption in their homes;
- network development, management and operation of alternative fuel infrastructure or management of sustainable transport means, provision of energy services;
- forming cumulative representation bodies;
- activities to promote electromobility, including the operation of electric vehicle charging infrastructure;
- public benefit activities related to the sufficiency and supply of raw materials, energy, fuels and water.
CITIZEN ENERGY COMMUNITY (CEC)
Citizen Energy Communities (CECs) are active within one or more regions and are required to 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, cumulative representation, provision of flexibility and balancing, as well as provision of energy efficiency, electric vehicle charging and other energy services to its members.
A CEC may also carry out the following:
- manage or participate in projects financed by national or European Union to serve its objectives;
- advise on the management or participation of its members in programs financed by national or European Union funds or resources relevant to its objectives;
- provide information and education, as well as raise awareness on energy sustainability issues;
- actions to support vulnerable consumers and address the energy poverty of citizens living below the poverty line -whether or not they are members of the CEC- and particularly net-metering, supplying energy to these individuals and performing residential energy upgrades or other actions to reduce energy consumption in their homes.
CECs may additionally engage in all REC-specified activities and benefit from the financial incentives and support measures provided for RECs provided that the provisions on the proximity of members apply.
In all types of Energy Communities, at least ten percent (10%) of each year’s surplus shall be retained to create the regular reserve. The retention is not obligatory when the amount of the reserve matches or exceeds that of the cooperative capital of EnComs under Law 4513/2018, RECs and CECs. Beyond this restriction, financial surplus management differs per type of Energy Community.
RENEWABLE ENERGY COMMUNITY (REC)
At least seventy percent (70%) of each financial year’ surplus is retained by RECs as extraordinary or special reserves and is allocated, by decision of the general assembly, in accordance to the activities and as provided by the statutes.
RECs may distribute financial surpluses to members, after deduction of previous reserves, if a provision to this effect is made in the statutes.
CITIZEN ENERGY COMMUNITY (CEC)
At least seventy percent (70%) of each financial year’ surplus is retained by CECs as extraordinary or special reserves and is allocated, by decision of the general assembly, in accordance to the activities and as provided by the statutes.
CECs may distribute financial surpluses to members, after deduction of previous reserves, if a provision to this effect is made in the statutes.
Self-production is a way for citizens to participate in the energy transition, while contributing to meeting their own energy needs through the use of renewable energy sources. Until recently, the tools for this purpose have been net metering and virtual net metering. Now, on the basis of recent institutional changes, self-generation of energy, either individually by households, businesses, local authorities, or collectively by energy communities, or jointly (multi-family houses), is done through net billing and virtual net billing. Specifically for energy communities, the only available energy sharing tool is virtual net billing.
Existing virtual net metering projects by energy community continue to operate.
Only the beneficiaries of the Program “Photovoltaics on Roof” and farmers for installations with a capacity of up to 30 kWp can now apply for the virtual net metering scheme. All other categories of self-producers can only use the (virtual) net billing scheme.
- Net billing
It is the netting of the electricity produced by the generating station and the electricity absorbed in the self-consumer’s consumption supply, in a time frame equal to the Deviation Clearing Period (15 minutes of the hour) according to the certified metering data from the competent Operator.
In case of energy injection from the generating station into the Grid or the System, the self-consumer may be compensated for the injected energy provided that this activity does not constitute his main commercial or professional activity. For the compensation of surplus energy, it may either participate directly in the electricity market or be compensated on the basis of operational support (tariff or premium) depending on the technology of the plant. The compensation price for surplus energy injected into the grid is set based on the wholesale market price at the time of injection. For the Non-Interconnected Islands, the surplus energy is compensated on the basis of the Special Market Price (SMP) of RES and CHP technologies published by the RES & Guarantees of Origin Operator and cleared by the HEDNO.
The consumption supply is located on the same or adjacent site as the generating station or is located on another site but electrically connected to a dedicated interconnection line. The generating station is connected to the Grid or the System through the supply of the consumption installation.
The capacity of each generating station (in kWp) can be up to 100% of the agreed consumption capacity (in kVA).
- Virtual net billilng
The netting of the electricity produced by the generating station with the electricity absorbed in the consumption supply to be netted by the self-consumer, which is carried out in a time frame equal to the Clearing Period Deviation (15 minutes of the hour), according to the certified metering data from the competent Operator.
The self-consumer may be compensated for the surplus energy, provided that this activity is not his main commercial or professional activity. For this compensation he may either participate directly in the electricity market or be compensated on the basis of operational support (tariff or premium) depending on the technology of the plant. The compensation price for surplus energy injected into the grid is set on the basis of the wholesale market price at the time of injection. For the Non-Interconnected Islands, the surplus energy is compensated on the basis of the Special Market Price (SMP) of RES and CHP technologies published by the RES & Guarantees of Origin Operator and cleared by the HEDNO.
The consumption facilities to be netted shall not be electrically connected to the internal electrical installation of the generating station even if they are located on the same or adjacent site. Generating stations may be located in any region of the country, irrespective of the location of the consumption facilities to be netted, provided that both the station and the consumption facilities are located in the same electricity system, i.e. in the Interconnected System or, for Non-Interconnected Islands, in the respective electricity system.
The capacity of each generating station (in kWp) can be up to 100% of the agreed consumption capacity (in kVA). In the case of Non-Interconnected Islands, different limits apply for each cluster.
- Self-consumers acting together – Joint self-consumption:
At least two or more self-consumers located in the same building may jointly participate in the installation of stations and regulate between them the sharing of the energy produced by them, subject to applicable network charges and other related charges, fees, levies and taxes. The joint self-consumption scheme may also include consumption in common areas of buildings. For self-consumers of energy acting jointly, virtual net billing shall be applied.
- Self-consumption without injection or synchronous offsetting without injection or zero feed-in:
The offsetting of the energy produced by the generating station and the electricity absorbed in the final consumer’s consumption supply, without injection of energy from the generating station into the Grid or the System.
The terms and conditions for the implementation of self-production are defined by Ministerial Decision of the Ministry of Environment and Energy.
The way to implement the various methods of self-production is presented in the Guide of the Association of Photovoltaic Companies published in September 2024.
- Virtual Net-Metering:
Virtual net metering is the off-setting of the electricity produced by RES or CHP plants with the electricity consumed in self-producers installations, provided that at least one of which is either not located in the same or adjacent area as the plants or, or operates using a different power supply. The production plants are located in any region irrespective of the location of the self-consumer’s installations.
—
From 1 November 2023, no new requests may be submitted to the Operator for self-consumption projects with the application of virtual net metering by Energy Communities under Law 4513/2018.
In order to connect RES projects to the grid, Energy Communities are required to obtain a license from the Network Operator (HEDNO) and the System Operator (IPTO), depending on the category of the project. The licensing process follows a priority system for granting Final Connection Offers to RES plants and storage plants by the respective Operator; this system is determined by a Ministerial Decision of the Minister of Environment and Energy. Ministerial Decision ΥΠΕΝ/ΓΔΕ/84014/7123 (Government Gazette 4333/B/12.08.2022) is currently in force.
- Allocation of available network
The distribution of the available RES and CHP plant hosting margins per substation or per high voltage/medium voltage transformer (HV/MV), not including the 10 MW capacity, is allocated 60% to self-productio RES and CHP plants and 40% to commercial RES plants.
- Additional space available 10MW
An absorption margin of 10 MW per substation, in addition to the existing margin, has been ensured exclusively for the installation of RES and CHP plants by autoproducers of all categories.
The additional margin is available to all substations of the Greek Electricity Distribution Network including areas with saturated networks, while only the network of the Non-interconnected Islands is excluded. The 10 MW capacity margin per substation is distributed as follows:
(a) The 6 MW of margin per substation:
(aa) Self-production stations from households, including stations of the special programme for the development of photovoltaic systems, for a total capacity of up to 3 MW. Maximum power limit of 10.8 kW per consumption supply.
(ab) Self-production plants of the primary sector, for a total capacity of up to 3 MW. Maximum power limit of 50 kW per consumption supply.
(b) The 3.8 MW of margin per substation:
(ba) secondary sector,
(bb) tertiary sector (other uses),
(bc) Renewable Energy Communities and Citizens’ Energy Communities with a maximum installed capacity of 200 kW,
(bd) biogas or biomass plants with a maximum installed capacity of 100 kW and small hydroelectric plants with a maximum installed capacity of 1 MW.
(c) 0,2 MW of margin per substation in generation or self-production stations of small wind power plants with an installed capacity or maximum output of up to 60 kW.
In particular for self-production stations of energy sharing, self-consumption stations of net-billing scheme and self-consumption stations of virtual net billing scheme implemented by legal persons governed by public law of a welfare nature, ecclesiastical legal persons, charitable foundations, private non-profit organizations, which provide social care services, as well as by local authorities of first and second degree for covering the needs of municipal kindergartens, infant and nursery schools, primary and secondary education units, health centers and hospitals, municipal and public sports centers, the power limit is set at 200 kW.
- Network available for (virtual) energy offsetting projects:
For net metering and virtual net metering projects, the maximum limit for the total capacity of RES and CHP plants that can be connected to the grid is set at 2GW.
- Priority for connection
Requests for net billing and virtual net billing will be classified in Priority Group B for their examination, similarly to requests for (virtual) net metering.
- Guaranteed prices outside competitive procedures
Energy Communities have the opportunity to participate in the RES market with guaranteed prices and without entering competitive procedures, exclusively with 2 PV projects of up to 500 kW each and until 30 September 2024. This deadline does not apply to Energy Communities that include local and regional authorities as members or to those that have more than 60 members, of which at least fifty (50) are natural persons. These categories of EnComs can enter into feed-in-tariff contracts without prior participation in competitive procedures up until 30/09/2024.
As of 1 January 2025, Energy Community RES projects will have to participate in competitive procedures in order to enter the RES market.
Energy Communities in the lignite region of Western Macedonia can enter into feed-in-tariff contracts for photovoltaic plants until 01 October 2024.
- Connection Priority
In order to connect RES projects to the grid, Energy Communities are required to obtain a license from the Network Operator (HEDNO) and the System Operator (IPTO), depending on the category of the project. The licensing process follows a priority system for granting Final Connection Offers to RES plants and storage plants by the respective Operator; this system is determined by a Ministerial Decision of the Minister of Environment and Energy.
Ministerial Decision ΥΠΕΝ/ΓΔΕ/84014/7123 (Government Gazette 4333/B/12.08.2022) is currently in force.
Based on this decision, Energy Community self-production (net-metering) RES projects are classified in HEDNO’s Priority Group B, while all other EnCom projects in low-medium voltage fall under HEDNO’s Priority Group C.
With regard to the priority framework of the IPTO, Energy Community projects are classified into Group C, which is divided into subgroups including, inter alia, the exempted plants exclusively of EnComs with the participation of local and regional authorities, exempted plants to be installed exclusively within the Regional Units of Kozani and Florina, and wind power plants that have been exempted or have a production license or a Producer’s Certificate for a maximum capacity of up to 6 MW; for wind power plants, IPTO shall grant connection offers with a maximum capacity limit of 90 MW of maximum production capacity, with a maximum limit of 6 MW per EnCom.
- Transfers of administrative licenses
The transfer of Production Licenses, Production Certificates or Special Project Certificates and other licenses and authorizations of power plants belonging to a Citizens’ Energy Community (CEC) is not permitted.
Furthermore, Law no. 5043/2023 (Article 121) provides for the possibility of converting energy community commercial projects (with a production license or producer certificate or exempted stations that have received or are receiving a final connection offer) into self-production projects (virtual net-metering projects) by the same or new energy communities.
2018: Law no. 4513/2018: Energy Communities founding law
2023: Law no. 5037/2023: Transposition of Directive 2018/2001 on the promotion of the use of energy from renewable sources and Directive 2019/944 on common rules for the internal market for electricity, and introducing an institutional framework for RECs and CECs.
—
PREVIOUS PROVISIONS ON ENERGY COMMUNITIES UNDER LAW NO. 4513/2018
Eligible Participants:
- Natural persons.
- Legal entities under public law, except for local and regional authorities.
- Legal entities under private law.
- Local authorities (within the same Region) and regional authorities.
Locality criterion:
- At least 51 % of members must be related to the area where the seat of the Energy Community is established.
Minimum number of members for the establishment of a non-profit Energy Community:
- Five (5), if the members are legal entities under public law (other than local/regional authorities) or natural persons. In this case, each member holds 20% of the cooperative capital.
- Three (3), if the members are legal entities under public or private law or natural persons, of which at least two (2) are local/regional authorities. In this case, local/regional authorities may hold up to 40% of the cooperative capital.
- Two (2), if both members are local/regional authorities on an island (with a population of less than 3,100 inhabitants). In this case, each shall hold half of the cooperative capital.
Minimum number of members for the establishment of a for-profit Energy Community:
- Fifteen (15), if the members are legal entities under public law -other than local authorities- or legal/regional entities under private law or natural persons.
- Ten (10), if the community is seated in an island municipality.
- If 50% plus one of the members are natural persons, profit sharing is allowed.
Members participating in Energy Communities under Law 4513/2018 are eligible to participate in RECs and CECs provided that the proximity requirement is met.
An EnCom is required to engage in at least one of the following activities:
- production, storage, own consumption or sale of electricity or thermal or cooling energy from RES or CHP plants or Hybrid Plants installed within the Region where the seat of the Community is established -or within an adjacent Region, for EnComs seated within the Region of Attica;
- management, such as collection, transport, treatment, storage or disposal of raw materials for the production of electricity or thermal or cooling energy from biomass or bioliquids or biogas or through the energy recovery of the biodegradable fraction of municipal waste;
- supplying its members with energy products, appliances and installations aimed at improving energy efficiency and at reducing energy consumption and the use of conventional fuels;
- supplying its members with electric vehicles, whether hybrid or non-hybrid, and alternative-fuel vehicles in general;
- distribution of electricity within the Region where the EnCom is seated;
- supplying electricity or fossil gas to final customers within the Region where the EnCom is seated;
- production, distribution and supply of thermal or cooling energy within the Region where the EnCom is seated;
- demand management to reduce electricity end-use and representation of producers and consumers on the electricity market;
- network development, management and operation of alternative fuel infrastructure or management of sustainable transport means within the Region where the EnCom is seated;
- installation and operation of water desalination plants using RES within the Region where the EnCom is seated;
- provision of energy services.
An EnCom may carry out one of the following activities:
- raising capital in order to invest in the development of RES or CHP or to implement energy efficiency improvement measures within the Region where the EnCom is seated;
- drawing up studies for the development of RES or CHP or the implementation of energy efficiency improvement measures or providing relevant technical support to its members;
- managing or participating in projects financed by national or European Union funds and related to its objectives;
- advising on management or participation of its members in programs financed by national or European Union resources and related to its objectives;
- providing information and education, as well as raising awareness on energy sustainability issues at local and regional level;
- carrying out actions to support vulnerable consumers and address the energy poverty of citizens living below the poverty line within the region where the EnCom is seated -whether or not they are members of the EnCom- such as net-metering, supplying energy to these individuals and performing residential energy upgrades or other actions to reduce energy consumption in their homes.
Financial Surplus
Energy Communities under Law 4513/2018 can either distribute or not distribute financial surpluses to their members (for-profit vs. non-profit). Whether an EnCom is for-profit or non-profit is dependent on the composition of its founding members and shall be specified in its statutes.
The European energy transition policy aims to shift the energy model towards clean forms of energy and, at the same time, recognizes that the energy transition cannot happen without a strong social engagement. The EU’s “Clean Energy For All Europeans” package -agreed in 2017- and the Renewable Energy Directive that followed urge European citizens to become producers of the clean energy they consume, acknowledging the important role they can and should play in the transformation of the energy system. Energy Communities were conceived precisely on this basis and the European institutional framework provides incentives for their development.
Directive 2018/2001 on the promotion of the use of energy from renewable sources and Directive 2019/944 on common rules for the internal market for electricity define two categories of Energy Communities: Renewable Energy Communities (RECs) and Citizen Energy Communities (CECs). Member States are therefore called upon to safeguard the rights of EnComs, to establish a framework for their operation and to support their promotion and development. This obligation finds Greece in an advantageous position, as the existing Law on Energy Communities (Law no. 4315/2018) already provides a broad framework of definition along with tools for EnCom development. The aforementioned Directives were integrated into the existing legislation in March 2023.
The European Commission’s new guidelines on state aid with regard to the climate, environmental protection and energy sectors have been implemented as of 01/01/2022. They set rules for state aid in order to support the objectives of the European Green Deal, while ensuring competition and minimizing market distortions. These rules positively recognize Energy Communities’ role in the successful implementation of the European objectives and provide for the conditions under which they shall be exempted from competitive procedures and enjoy guaranteed prices for their projects; furthermore, Member States are encouraged to show flexibility in the design of RES tenders so as to strengthen EnCom participation.
The European Solar Energy Strategy adopted in May 2022 -as part of the REPowerEU plan- emphasizes citizen participation and the use of RES, either individually or collectively, to achieve European objectives. This strategy aims to install more than 320 GW of large and small-scale solar photovoltaics by 2025 (more than doubling 2020 levels) and nearly 600 GW by 2030. This installation rate could lead to the substitution of 9 bcm of fossil gas consumption per year by 2027. In order to address the challenges in the short term, four initiatives have been proposed: (a) harnessing rooftop solar energy; (b) simplifying procedures; (c) establishing a skills partnership for onshore renewable energy sources and (d) instituting a European Alliance for the solar PV sector.
Specifically, measures include the mandatory installation of photovoltaics in new buildings and the establishment of at least one Renewable Energy Community in each municipality with a population of at least 10,000 inhabitants by 2025.
The “Fit for 55” package of measures and initiatives prompted the revision of the Renewable Energy Directive (RED II) in September 2023. The revised Directive reaffirms the role of citizens in the energy transition, as well as their contribution to achieving European climate targets. In particular, as an all-encompassing principle, this Directive upholds that Member States should ensure the development of decentralized electricity production and storage systems and their participation in the energy market; moreover, it recommends that Member States encourage self-producers and energy communities to actively participate in the energy market, by providing flexibility services through demand-response and storage systems. Furthermore, RED II recognizes that self-production -including energy communities- contributes to reducing fossil gas demand and increases system resilience, thus bolstering the European renewable energy targets. Finally, it stipulates that energy communities have the potential to participate in offshore wind farms and decarbonize the building sector, as well as contribute to the promotion of renewable-based district heating (and cooling) systems.