Auctions for energy communities

All citizens must have a fair opportunity to take ownership and benefit from participating in the energy transition. Energy communities can be a powerful tool in the transition to a more participatory and just energy transition. This would mean a new energy system in which nobody is left behind and other urgent social issues, such as energy poverty, are tackled. A transition that fosters greater solidarity across society. Community ownership is about creating jobs, boosting local investment, providing services such as education, encouraging citizens to save energy, and fighting against energy poverty. A decentralised and 100% renewable energy system is both possible and necessary – while our energy demand must decrease.

In recent years, there has been a trend toward the use of competitive bidding procedures (auctions) in order both to set the level of compensation that project proponents receive and to determine who ultimately obtains the permission to build a project. Energy communities have been affected by this change with the result that many have had difficulties realizing projects, hindering the shift to a more citizen- and community-centric energy system in Europe.

In this short brief, we provide a critical analysis of the use of auctions for energy communities as well as our recommendations for policymakers about how energy communities can become a more central part of Member States’ national energy transitions.