Consumer Stock Ownership Plans (CSOPs)—The Prototype Business Model for Renewable Energy Communities

Abstract

The 2018 recast of the Renewable Energy Directive (RED II) defines “renewable energy communities” (RECs), introducing a new governance model and the possibility of energy sharing for them. It has to be transposed into national law by all European Union Member States until June 2021. This article introduces consumer stock ownership plans (CSOPs) as the prototype business model for RECs. Based on the analysis of a dataset of 67 best-practice cases of consumer (co-) ownership from 18 countries it demonstrates the importance of flexibility of business models to include heterogeneous co-investors for meeting the requirements of the RED II and that of RE clusters. It is shown that CSOPs—designed to facilitate scalable investments in utilities—facilitate co-investments by municipalities, SMEs, plant engineers or energy suppliers. A low-threshold financing method, they enable individuals, in particular low-income households, to invest in renewable projects. Employing one bank loan instead of many micro loans, CSOPs reduce transaction costs and enable consumers to acquire productive capital, providing them with an additional source of income. Stressing the importance of a holistic approach including the governance and the technical side for the acceptance of RECs on the energy markets recommendations for the transposition are formulated.

Mainstreaming Energy Communities in the Transition to a Low-Carbon Future: A Methodological Approach

“…Moreover, CSOPs contribute to the energy transition and climate change mitigation by facilitating local, decentralized production through investment in renewable energy installations. Interestingly, in the CSOP model [12,13] different actors become as owners of the new energy plant system of RE, as shown in Figure 3, and the main elements are as follows:…”

“…At this point it is possible to calculate the net flow simply as the difference of the outgoing one and the incoming one. The net flow allows us to directly compare the proposed alternatives and provide the ranking of alternatives as shown in Equation (6).…”

“…The "one-to-many configuration", from a single system to multiple end-consumers (between different buildings with different enduses) is allowed with the support of new legislative framework (Figure 1). In this context on 30 November 2016, the European Commission presented the "Clean Energy for All Europeans" package, also known as the "Clean energy package", which includes several measures in the fields of energy efficiency, renewable energy, and internal energy market power [6]. Among all, two directives are important since they significantly address EC issues: (1) Renewable Energy Directive II (RED II,2018) and (2) the new directive on the new rules of electricity market (2019).…”

New Pathways for Community Energy and Storage

“…All contributions to this issue focus on the role of energy communities, energy storage, or both. Nine contributions investigate the potential and constraints of energy cooperatives, citizens energy and community energy [1][2][3][4][5][6][7][8][9]. Three contributions discuss both community energy and local energy storage [10][11][12].…”

Innovation Dynamics of Socio-Technical Alignment in Community Energy Storage: The Cases of DrTen and Ecovat

“…These changes demand the increased engagement of citizens and communities in the energy system [8][9][10][11][12][13]. Accordingly, there are new regulatory and governance changes such as new European clean energy for all packages, as well as new societal developments in the form of local energy initiatives [3,5,9,[14][15][16][17]. The concept of Renewable Energy Communities (REC) and Citizen Energy Communities (CEC) were introduced in the European legislation by the 2018 recast of the European Renewable Energy Directive (RED II) and the 2019 recast of the Electricity Market Directive (EMD II), respectively [18,19].…”