Energy Transition

The transformation of energy systems from fossil to renewable sources, the energy transition, is a global trend. The shift towards green and sustainable energy systems that has gained momentum over the past 25 years is reflected by policy decisions of governments around the world encompassing around 144 countries having corresponding policy targets in place already in 2014. This Chapter provides an overview of the forces driving the energy transition in the countries under consideration. Comparing countries with each other in particular with regard to the current energy production landscape, the present challenges and the future prospects for policy development we describe common elements as well as differences thus identifying – where possible – clusters and drawing brief conclusions in Section 2.1. The motivations underlying the Energy Transition are diverse and manifold. They differ from country to country and sometimes even between regions of the same country rooting in the specific challenges determined by geography, the historical development of national energy markets and cultural factors. We also observe that these motivations often are het-erogeneous including conflicting elements resulting in discrepancies between the declared goals regarding the deployment of RE and the actually implemented energy policies. A discussion of structural differences of fossil and RE production follows in Section 2.2. To illustrate the state of affairs in the countries under consideration we provide an overview of the energy mix for each country, regarding total energy production, consump-tion and, especially, electricity production. We conclude with a short summary of the impact that digitalisation has on the Energy Transition in Section 2.3.

In contemplating the launch and the implementation of an Energy Union, the European Commission envisioned a regulatory framework “with citizens at its core, where citizens take ownership of the energy transition, benefit from new technologies to reduce their bills, participate actively in the market, and where vulnerable consumers are protected”. Regarding the question of how consumers benefit from these objectives, the Commission Communication “Delivering a New Deal for Energy Consumers” (COM(2015) 339 final) identified a number of obstacles and highlighted areas for improvement with respect to the three mentioned pillars of consumer policy, that is, consumer empowerment, smart homes and networks, as well as data management and protection. The empowerment of consumers in particular poses three challenges, namely, (1) how to motivate them to increase demand-side flexibility and (2) improve energy efficiency while (3) reducing energy poverty—a structural challenge in the energy transition not limited to the European Union. Carefully calibrated policy action is required if the “consumer at the heart of the energy markets” is not to remain an empty slogan. As this chapter will argue, consumer ownership can contribute to meet each of the mentioned challenges.

The evolution of consumer ownership models for renewable energies is not a solely financial issue; it is a social justice one too. Energy transitions geared towards renewables are often promised with the “best in mind”—low carbon production, greater energy efficiency, greater awareness from consumers around their consumption habits, and in the case of this book, increasingly distributed ownership (Bergman and Eyre 2011; O’Rourke and Lollo 2015). Positioned as part of this transformational change, the implementation of consumer ownership schemes in general and that of a Consumer Stock Ownership Plan (CSOP) in particular could, in theory, increase the success and speed of these energy transitions by increasing the integration of low-income, hard-to-reach consumers, enabling participation and distribution at low-threshold levels, and avoiding energy efficiency rebound effects as we move towards energy prosumption (Lowitzsch, this volume; Ellsworth-Krebs and Reid 2016). In this context, (co-)ownership appears to be a positive motivator for more sustainable practices. What is more, this could occur not only in relation to what we classically consider to be “renewable technologies”, such as wind, solar, and wave, but also increasingly in relation to the smart technologies that will become part of consumer life (Sovacool et al. 2017a). Yet consumer ownership approaches are not entirely unproblematic or without danger. This brief synthesis chapter explains why from an energy justice perspective.

Across Europe and worldwide, the sustainable transition of energy systems from fossil fuels towards renewables and higher energy efficiency led to the emergence of business models involving citizens. This involvement included participation in renewable energy project planning and financing with self-consumption having either a subordinate or no importance at all as well as business models that explicitly foster consumer (co-)ownership that confers ownership rights in renewable projects to prosumers in a local or regional area. Proponents of these business models have identified positive aspects such as changes in individual consumption behaviour towards improved energy efficiency through the assistance and advice on the adoption of environmental friendly technologies and energy efficiency measures. However, methodological concerns on these results remain as a clear examination of the causal effects of belonging to consumer (co-)owned energy initiative on energy use requires collecting experimental or quasi-experimental data which has not been done so far. The aim of this chapter therefore is twofold: First, we provide an overview on existing studies related to the behaviour of members of consumer (co-)owned models (CCOM). Second, starting from this short review, we will assess the potential contribution of experimental methods for the analysis of the behaviour of CCOM members and give recommendations for further experimental research.

Financing and governance in the renewable energy (RE) sector differ across countries and regions. The country reports in Chapters 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , and 27 illustrate this wide variance of structures to be found around the world, summarised in the comparative tables in Chapter 28 with regard to the resulting ownership structures distinguishing between communities of interest, communities of place and communities of interest and place. This chapter investigates commonalities and differences in the financing of consumer (co-)ownership in the countries analysed in this book. As the country chapters illustrate, contractual arrangements vary significantly within and between countries. Unlike geography or culture—within the boundaries of the legal framework—it is up to the contracting parties to choose the contractual settlement they deem most appropriate for the given project. To cast light on the reasons and the process of this choice, we present principles and decision criteria to select “appropriate” financing structures complementing this normative perspective with a description of financial and legal structures observed in the countries under examination. As investment motives largely determine what to be considered “appropriate” for the parties involved, we start with a brief overview of research on investment behaviour and motives, focusing on investments involving consumer (co-)ownership. Besides, we summarise some of the observations from the country chapters regarding the link between consumer co-financing and social investment.

The realisation of the Energy Transition and the compliance of climate and sustainability goals are among the greatest political challenges in Europe inseparably connected with a shift towards a decentralised renewable energy (RE) supply. The question is no longer whether this process is to be continued but how this transition can be facilitated. In this context RE cooperatives have gained importance as the collective organisation of a common objective in the form of a cooperative is based on particular benefits for all stakeholders and hence a cooperative surplus. Optimistic assessments surmise that by 2050 half of the EU population could be producing its own energy from RES and that collective projects, such as RE cooperatives, could contribute 37 per cent of the electricity produced by “energy citizens”. There are currently about 3500 RE cooperatives, mainly in Western European countries, of which 1500 and their one million members are represented by the European federation of RE cooperatives, REScoop.eu (REScoop.eu 2018b, 2018c; Huybrechts et al. 2018) and registered as a Renewable Energy Sources Cooperative (REScoop). Thereby RE cooperatives have the potential to not only become a successful model for consumer ownership in RE projects all over Europe but substantially contribute to the success of the energy transition as such. This chapter introduces the concept of RE cooperatives, discusses its advantages and disadvantages as a business model and investigates their potential as well as the obstacles to further development in the context of the Energy Transition. This analysis draws on examples from the countries under consideration as well as on information provided by REScoop.eu.

The Consumer Stock Ownership Plan (CSOP) applies the future savings principle to the financing of new utilities in the energy sector. This technique, invented in the 1950s by the American lawyer and investment banker Louis O. Kelso, is especially applicable to financing public utilities on regulated markets so that they are owned by consumers rather than outside investors; due to guaranteed prices, investments in the sector involve lower risk and thus are easier to finance. CSOP financing is based on the following core principles: (1) the allocation of borrowed investment funds sequestered in a special vehicle with its own legal personality, that is, a trust or a similar intermediate company, invested in a business enterprise or equity interest on behalf of the individual plan participants, namely consumers, employees or citizens; (2) the repayment of the loan from future earnings of the credit-financed shares—the essence of every profitable investment—instead of savings from foregone consumption; (3) the securing of the loan by the investment entity, preferably backed by a state guarantee. Kelso first introduced the CSOP in 1958 in California’s Central Valley by enabling almost 5,000 local farmers to become owners of a fertilizer processing plant the Valley Nitrogen Producers, Inc., of which they were the primary consumers. The overall investment of USD 120 million (today an equivalent of a billion euros) was success; by 1978 Valley Nitrogen, Inc. had four manufacturing plants in California and one in Arizona. This chapter describes the legal structure of the CSOP, together with a case study of the first 1958 pilot CSOP.

The sample calculations in this chapter illustrate the life cycle of a CSOP. They are based on the German Renewable Energy Act before the 2017 reform. This reform ushered the transition from a plain feed-in tariff (FIT) system to a tendering-based scheme. The main differences with regard to projects of a size that now fall under a tender scheme, as the example for the wind turbine below, are twofold: (1) investors interested in a project now need to bid for the contract, that is, they offer to implement the project based on an individually agreed FIT—the bids are those tariffs. Thus, the lowest bidder wins the procurement contract and later operates on the agreed FIT. (2) winners are no longer allowed to self-use the produced energy—all produced electricity has to be fed into the electricity system. While this contradicts the prosumer idea, for the sample calculations, both differences are unimportant: Firstly, instead of referring to the FIT as stipulated by in the Renewable Energy Act, the FIT that was determined in the tender applies. Secondly, RE-CSOPs are now lucrative if and only if the investors decide to sell the entire energy production. However, this has been the assumption of many simulated RE-CSOP implementations before; the following model calculations will illustrate why. Nonetheless, it should be noted that this circumstance is a specific feature of the recent German renewable energy policy, not having universal validity for other countries, either in the EU or worldwide.

The support of consumer ownership of RES is not explicitly mentioned as a goal in any policy document as neither citizen energy nor community energy or prosumership as concepts so far have received government recognition. However, consumer (co-)ownership received explicit recognition of its crucial role in the 2018 recast of the Re-newable Energy Directive (RED II) as part of the Clean Energy Package. Independently, in 2016, the Czech Community Coalition for the promotion of RE made up of more than 60 cities and municipalities, associations, industry experts and the Hnutí DUHA was established. Furthermore, in April 2018 the Horizon 2020 project SCORE was launched with the aim to facilitate consumers to become (co-)owners of RE in three European pilot regions, one of them being the City of Litoměřice, employing a Consumer Stock Ownership Plan. More general, besides individual ownership, the following legal forms of business can be used as corporate vehicle for consumer co-ownership: associations of entrepreneurs, that is, an association of several self-employed persons invoicing under one name but otherwise mostly independent, (interest associations of legal entities, limited partnerships, limited liability companies, joint-stock companies, cooperatives, foundations and finally non-profit organisation. Finally, energy efficiency projects for privatised blocks of flats which were bought by the tenants from former state com-munal housing cooperatives in the 1990s can be a lever for consumer-owned RE pro-jects where the installation costs partly overlap with energy efficiency measures as, for example, insulation of rooftops and installation of rooftop PV systems.

The Electricity Reform–Agreement of 1999 between the Government and a broad majority in Parliament restructuring the electricity market stated that in the grid companies, directly or indirectly, elected consumer representatives must have a controlling influence. The energy policy agreement 2008-2012 included in the new Act on Renewable Energy further supported the consumer (co-)ownership in onshore wind turbines with the right to local ownership of 20 per cent for land turbines now also applying for large-scale solar PV for 2018 and 2019. Furthermore, consumer (co-)ownership received explicit recognition of its crucial role in the 2018 recast of the Renewable Energy Directive (RED II) as part of the Clean Energy Package. There is a long historic tradition for cooperative ownership in the Danish energy sector. Electricity and district heating companies were founded by municipalities in the larger cities and by consumer cooperatives outside the large cities, and small wind turbines are often owned by cooperatives or individuals. Today, cooperatives and municipalities own DSOs and district heating companies. Furthermore, individual farmers and cooperatives of farmers installed biogas plants, while almost 100,000 solar PV systems have been installed primarily on individual houses over the past five years. The Danish Energy Association estimates that in 2017, among the 2.7 million households, about 60,000 heat pumps and about 100,000 wood pellet heaters are in use.

Despite the central and constraining role of the State regarding energy decisions and citizens initiatives in the field of RE, recently energy policy documents, in particular the 2015 Energy Transition Act include provision favourable to community and participative projects reflecting a “French localism” that seems to be emerging. We observe a dynamic development over time from only four co-owned renewable power plants in the field of energy in 2008 to 54 in 2016 Finally, consumer (co-)ownership received explicit recognition of its crucial role in the 2018 recast of the Renewable Energy Directive (RED II) as part of the Clean Energy Package. In principle participation in RE projects is possible via any available type of corporation, partnership or individual business activity, similar to those in other European countries. Co-operatives as a legal vehicle are also available and RE cooperatives are expressly mentioned in the article 111 of the Energy Transition Act. Individual investments in solar collectors and photovoltaic installations on private buildings, often facilitated by municipalities making use of financing programs offered by the state are gaining popularity. While RE projects take diverse forms the simplified joint-stock company (SAS, Société par actions simplifiée) and the cooperative company of public interest (SCIC, Société cooperative d’interet collectif) are the most widely used corporate vehicles. Despite obstacles, these projects are increasing in number and are becoming more and more common. Programs such as the village centrals (“Centrales villageoises”) supported by European and French regional funds also contribute to creating legal tools, e.g., company statutes, leases for rooftop installations and shared services like insurance policy or accounting adequate for these projects.

The German legislator has made the “…preservation of the diversity of actors…” an explicit policy goal introduced since the 2014 recast of the Renewable Energy Sources Act (EEG). Furthermore, sec. 3 no 15 of the 2016/17 recast of the EEG defines citizen energy companies as consisting of at least ten natural persons who are members eligible to vote or in which at least 51 per cent of the voting rights are held by natural persons with a permanent residency in the administrative district of the project location, and where no member or shareholder of the undertaking holds more than 10 per cent of the voting rights. Other measures at the national and the federal states level exist to support citizen energy. Finally, consumer (co-)ownership received explicit recognition of its crucial role in the 2018 recast of the Renewable Energy Directive (RED II) as part of the Clean Energy Package. As of today, RE consumer (co-)ownership comes mainly in two forms: individual ownership and/or leasing arrangements, especially for small PV or battery storage projects, but also for heat pumps, with self-sufficiency being a major motivation as the legal framework is shifting away from guaranteed feed-in tariffs; and collective investments differing with regard to motivation and organizational form. Three legal structures have become “standards” for collective investments in the German RE sector, namely (i) civil law partnerships in use mainly for small PV installations, (ii) limited partnerships with a limited liability company as a general partner common for medium- to large-scale projects, especially in wind energy, and (iii) energy cooperatives whose number has increased significantly in the past, especially in the period 2008—2012.

Due to favourable government incentives, and spatial and financial accessibility, the prevalent technology for prosumership has been solar PV. However, it should be noted that in Italy a legal framework addressing prosumership is still absent, and there is there no official definition of prosumership. Although no national regulation concerning prosumer rights has been enacted yet, many proposals have been debated or are awaiting discussion in Parliament. However, consumer (co-)ownership received explicit recognition of its crucial role in the 2018 recast of the Renewable Energy Directive (RED II) as part of the Clean Energy Package. Furthermore, in April 2018 the Horizon 2020 project SCORE was launched with the aim to facilitate consumers to become (co-)owners of RE in three European pilot regions, one of them being the Susa Valley, employing a Consumer Stock Ownership Plan. RE consumer (co-)ownership can be set up in the form of a cooperative; these started to emerge from the beginning of the twentieth century. If these cooperatives are non-profit only 30 to 55 per cent of their revenues are taxed. Municipalization of energy services is gaining importance, with municipal utilities playing an important role in attracting investment in RE infrastructure and often entering into public—private partnerships. Public utilities in the energy sector usually have the legal form of joint stock companies, with a majority of public ownership and the remaining shares in the hands of various shareholders such as SMEs, citizens as individual investors, associations, and NGOs.

In 2017 over 500 projects were counted in the Netherlands, aiming at creating a joint ownership structure for local renewable energy utilities; the number of energy cooperatives has substantially increased. There is not only potential for consumer activism and (co-)ownership, there is also societal momentum. Although these developments have not escaped political attention and distributed energy was emphasized in the Energy Agreement, a wide legal operationalization has not yet taken place. There is, however, one exception: the Decree of 2014 concerning “Experimental de-central sustainable energy production” which defined experimental energy projects, aimed at the production and self-supply of energy for a period of 10 years. With respect to onshore wind energy, a soft-legal instrument outlines that onshore wind farms should be open to financial and non-financial participation of residents. Furthermore, consumer (co-)ownership received explicit recognition of its crucial role in the 2018 recast of the Renewable Energy Directive (RED II) as part of the Clean Energy Package. Most collective RE projects are cooperatives; others opt for a foundation or a limited liability company. Many of the cooperatives that have emerged in the Netherlands aim at the collective purchasing of solar panels, with 14 MWp installed capacity of solar panels realized in 2016. It is estimated that 3 per cent of wind turbines on land were cooperatively owned in 2016. The role of municipalities in RE generation and supply is one of facilitation and collaboration. Many collective RE projects are sited on communal property such as schools or libraries. Local authorities also provide advice and support in the planning phase of collective projects.

The Renewable Energy Sources Act of 2015 (RES Act) introduced the definition of prosumers, and a 2016 amendment finally introduced incentives (focusing, however, on biogas) and modified net-metering for owners of micro-installations (in relation 1 to 0.8 or 0.7 depending on installation size). A 2018 amendment enables FiTs and FiPs as remunerations possibilities, increases the maximal capacity of micro-installations to 50 kW and that of small installations to 500 kW, and reduces administrative effort of new installations. Although it focuses on individual prosumers, the RES Act recognizes RE cooperatives, enumerating their possible activities with regard to RE electricity production. Additionally, the legislator introduced so-called energy clusters, that is, models bringing together diverse actors to tackle local challenges. Furthermore, consumer (co-)ownership received explicit recognition of its crucial role in the 2018 recast of the Renewable Energy Directive (RED II) as part of the Clean Energy Package. Finally, in April 2018 the Horizon 2020 project SCORE was launched with the aim to facilitate consumers to become (co-)owners of RE in three European pilot regions, one of them being the city of Słupsk employing a Consumer Stock Ownership Plan. Although RE consumer (co-)ownership projects open are not widespread in Poland yet, investments in solar collectors and photovoltaic installations on private buildings, often facilitated by municipalities making use of financing programmes offered by the state, are gaining popularity. With the exception of the limited liability partnership, participation in RE projects is possible via any available type of corporation, partnership or individual business activity, as well as cooperative activity. Municipalities attempt to attract investors to invest in RE infrastructure themselves or enter public—private partnerships.

In 2014, a Community Energy Strategy was introduced, to find ways of overcoming the barriers faced by community energy. In spite of some improvements with a change of government in 2015, this strand of work did not continue. The year 2015 also saw sharp reductions in FiT rates, alongside reductions in tax incentives and the closure of early-stage funding and support instruments. In this environment, community groups are attempting to adapt and innovate—ideas are being floated for new business models, new sources of funding, and new technologies. Furthermore, consumer (co-)ownership received explicit recognition of its crucial role in the 2018 recast of the Renewable Energy Directive (RED II) as part of the Clean Energy Package. However, in the light of ‘Brexit’ the transposition of the RED II into UK Law until 2021 is unsure, although it would be an important legislative impulse as it introduces a legal framework for consumer (co-)ownership. Individual households can own RE installations, and use the power or heat directly, or sell to the grid, with investments in so-called Individual Saving Accounts being tax-exempt. Community ownership takes a number of legal forms, with the Industrial and Provident Society, a form of co-operative, being the most common type. Another option is the Community Interest Company, which is essentially a company working for the benefit of the community or a registered charity. Following the decline in support from the Feed-in Tariff in 2015–16, community groups have been looking at new business models for consumer (co-)ownership of energy, focusing on options for self-supply, where energy is used locally, not sold through the grid. Partnership with local authorities and housing associations to further local ownership of RE is also present.

Community and local ownership in RE are an integral part of Scottish climate change policy, energy policy, and its rural and community development policies. The Government has released a Community Energy Policy Statement, and has set a target for community and local ownership of RE of 500 MW by 2020, which was met in late 2015. As a result, the government’s Draft Energy Strategy 2017 sets out two further aims of 1 GW of community and locally owned energy by 2020, and 2 GW by 2030. Furthermore, consumer (co-)ownership received explicit recognition of its crucial role in the 2018 recast of the Renewable Energy Directive (RED II) as part of the Clean Energy Package. However, in the light of the UK’s decision to leave the EU, the transposition of the RED II into UK Law until 2021 is unsure, although it would be an important legislative impulse as it introduces a legal framework for consumer (co-)ownership. Distinguishing by the degree of ownership, there exist various models enabling community and individual investment, such as owner operator, commercial developer led, joint venture, and community developer—the first being a model of full community ownership and the last three being forms of shared ownership. The majority of community energy projects are fully community-owned and, unlike in many other countries, the dominant finance/development model employed is that of a ‘Development Trust’. Only approximately 5 per cent involve some form of shared ownership with a developer or community investment in a commercial project. Common options available are listed in the Governments’ good practice principles with an emphasis on (i) shared revenue, (ii) joint venture, and (iii) split ownership.

Until the new left-wing government was elected in May 2018, the government had barely promoted RE consumer (co-)ownership. On the contrary, it restricted, for example, legislation for net metering, which is why until 2018 excess production of prosumers fed into the grid was not remunerated; however, new legislation enabled the introduction of net metering in October 2018. Furthermore, one particularly contested regulation required paying a tax for RE installations connected to the grid was repealed with the same law 15/2018 introducing supportive rules for self-consumption and permitting its pooling. The regional governments of Navarre, the Balearic Islands, Extremadura, and Murcia are pushing for regulation in the field of RE, yet they risk contravening the national regulations as this area is considered the competence of the federal legislator. Furthermore, consumer (co-)ownership in general received explicit recognition of its crucial role in the 2018 recast of the Renewable Energy Directive (RED II) as part of the Clean Energy Package. RE consumer (co-)ownership occurs through three main models: (i) in the joint purchase model, consumers participate collectively in the electricity market, either by purchasing kW directly on the electricity market (see OCU, 2017), or through the collective purchase of PV module kits for self-consumption; (ii) community projects favour popular participation, although primarily in the role of an investor, while ownership, management, and formal promotion responsibilities reside mainly with the promoter organization; and (iii) RE cooperatives allow direct consumer (co-)ownership with 33 consumer cooperatives registered in the production and distribution sector of electricity, gas, and water in 2016.

Swiss Energy Law (EnG) does not contain specific targets for expansion of consumer (co-)ownership of RES, but it does contain several provisions that encourage and support such (co-)ownership schemes. One of them is an explicit authorization of self-consumption, which states that producers can consume self-generated electricity entirely or partially at the place of generation. Furthermore, the new version of the Federal Energy Law (2016) that was enacted in the beginning of 2018 allows the formation of self-consumption communities. In the future, more institutional investors like pension funds might become active in financing RE infrastructure, due to the new legislation that creates a separate asset class for infrastructure investment. At the time of writing, one chamber of the parliament and the commission of the second chamber have approved this proposal, which makes the legislation likely to pass. Direct ownership of a RE facility is the most widespread form consumer (co-) ownership despite the disadvantage of necessitating the available infrastructure, e.g., an appropriate rooftop for a solar PV installation. Cooperatives are an established vehicle for consumer (co-)ownership both at the national and regional levels. Since 1990, more than a hundred new RE-cooperatives have been founded, which are mainly active in the production of electricity from solar photovoltaics and heat from wood-chips. In 2016, around 30 per cent of the energy cooperatives active in electricity generation were applying self-consumption schemes. In recent years, consumer (co-)ownership provided new opportunities for joint projects of different partners. For example, an installer, often a non-for-profit start-up, develops a renewable energy project and partners with the utility to sell the project’s shares to the utility’s clients. The utility, in turn, delivers the produced ‘green’ electricity to their clients through their grid and manages the billing.

There were and are only a few support policies focusing directly on consumer (co-)ownership. California Senate Bill 1 of 2006 set a renewable distributed generation target of 12 GW installed capacity by 2020, which included 3 GW for self-generation to be realized through the California Solar Initiative. California is one of 17 US states with a virtual net metering policy which, however, is restricted to adjacent or contiguous properties, unlike other states that allow aggregation within a utility territory. CCAs there is no opportunity for consumer ownership, no sharing of tax credits, no consumer involvement in pricing, governance or project-related decisions. California’s Community Choice Aggregation (CCA) model adopted in 2002 empowered municipalities and other units of government, that is, counties, and associations of cities, counties and other public entities, to take control of the procurement of electricity supply in their territory. CCAs can also incentivise consumer-owned RES with enhanced NEM and/or FITs and have the potential to offer additional financing options. All California’s operating CCAs state the goal of progressively increasing their ownership of RE plants to meet their customers' requirements for renewable electricity supply. More general, participation in RE projects is possible via any available type of corporation, partnership or individual business activity, similar to those in other countries. Cooperatives as a legal vehicle are available but not common. Investments in solar collectors and photovoltaic installations on private buildings, often facilitated by municipalities making use of state financing programs, are gaining in popularity.

Community ownership in renewable energy (RE) is currently not an issue on the political agenda in most of the country, with the exception of New Brunswick and Nova Scotia with its COMFIT Program. While Ontario had generated the most community-owned RE across the country, the political agenda in the province has shifted away from community ownership and RE towards consumer choice and price fairness. The dominant majority of community energy activity in Canada has taken place in the only two provinces that enacted feed-in tariff policies with community energy-specific components or “set-asides”: Ontario and Nova Scotia. Consumer (co-)ownership has consequently been marginalized in policy and practice from the outset, and renewable energy followed by “choice” and “price fairness” has dominated the dis-course and government action. The concept most commonly used in Canada for referring to consumer (co-)ownership of RE is “community energy” (CE). The acceptance of this concept can be linked to the term “community” being widely used to frame broader social economy practice in Canada. Within Canada’s CE field, there are five ownership models that are most commonly applied to develop projects: (i) cooperatives; (ii) Aboriginal ownership; (iii) community investment funds; (iv) non-profit organizations; and (v) municipalities, universities, schools, hospitals (MUSH sector). While cooperatives are involved in numerous energy-related activities in all jurisdictions of Canada, over 70 per cent of them are RE co-operatives whose primary business activity is electricity generation. Community Investment Funds, or CIFs, are locally sourced and controlled pools of capital contributed to by individual investors within a specific geography or community.

The federal government promotes consumer (co-)ownership in the form of prosumership of individuals and organizations with micro and mini installations. Since April 2012 the Brazilian consumer has been able to generate electricity from renewable energy sources for self-consumption and feed the surplus into the local distribution network through a net metering system. In 2015 the power limit was scaling up, net metering improved and new collective forms of distributed generation (DG) allowed, bundled in the Programme for the Development of Distributed Generation of Electric Energy. In addition, first socio-ecological pilot projects that link energy access with income-generation for disadvantaged communities are set up and funded by the government. (Co-)ownership of DG facilities can be realized in the form of individual ownership, community projects or the use of any kind of corporate vehicle. As the regulatory scenario has changed recently, DG is currently still in its first stages of development. Despite this, the sector is already displaying considerable dynamism. So far, individual prosumers with micro solar installations—acquired through sales contracts—is the prevailing form of consumer (co-)ownership in Brazil. The shared generation model allows the cooperation of different stakeholders like natural persons or corporate entities in a cooperative or a consortium to prosume energy and reduce the organization’s energy bills regardless of their place of residence. This model is currently used by 64 units with a total capacity of around 14,500 kW. Overall 60 cooperatives active in the RE sector were accounted for in 2017, with 14 rural electrification cooperatives exclusively serving their members.

Against the background of supply deficiency and citizen opposition to the construction of large-scale hydro power plants, numerous movements against energy projects emerged during the last decade and ultimately paved the way for a participatory energy policy design process in Chile. The “Energy 2050” strategy was developed through a participative process that lasted over 18 months aiming at technical, political, and social legitimacy through the involvement of energy experts, civil society, bureaucrats, and government officials. “Energy 2050” set a shared vision of a long-term sustainable energy future which translated into a series of policy goals, of which the most relevant are a 70 per cent RE share in the electricity system by 2050 and the creation of partnership and shared value mechanisms between energy companies and communities. Although the renewable energy (RE) market is skewed towards international utility-scale projects, RE consumer (co-)ownership schemes have been able to evolve both on-grid and off-grid. Though legally allowed, partnership participation in RE projects has not been reported for energy generation projects. Limited Liability companies are common. Furthermore, electricity distribution cooperatives are active, for whom per DFL-1 law it is mandatory to provide electricity to interested parties in a geographical area for which they own the concession even if a loss is expected. Net Billing can be used by individuals or by organized groups of people sharing an electric connection to the grid. In the off-grid sector, electrification projects for poor and isolated communities may take different organizational structures, including private, municipal, or community-managed models depending on the local conditions, the commitment of local government, and the engagement of the community.

There is no clearly defined concept of consumer (co-)ownership of renewable energy sources (RES) in the Electricity Act of 2003. However, to promote RE both federal and state governments provide facilitative measures through schemes, incentives, etc. for consumer (co-)ownership at a varying level. In rural areas, decentralized off-grid RE installations are implemented, most of which are triggered by social policies and are project based, with public financial support be it from the government or donor agencies. In 2011 the Solar Energy Corporation of India was established with the target of generating 20,000 MW power and connecting it to the grid by 2022, which also includes support to solar rooftop PV systems. However, as the RE sector is dominated by the interests of commercial actors, there seems to be little space for policies supporting individual consumer (co-)ownership in RE except for “captive power generation plants” (CGP) for self-consumption for commercial or industrial use. CGPs can be set up by a registered cooperative or an association. Depending on how the consumer is defined, for example in captive power generation for commercial use, in community projects in villages, or simply as individual users, and on the choice of RES and location, there is a wide variation of forms of RE consumer (co-)ownership promoted across India. The concepts vary with regard to the contractual arrangement chosen, for example PPP, business corporations, cooperatives, and trusteeship, and with regard to the involvement of actors like federal government, state government, donor agencies, industries, community and individual citizens. In rural areas, off-grid RES are often built and operated by state as well as donor agencies, with ownership typically shared under the legal form of a cooperative and the responsibility for day-to-day operations and collection of electricity bills, etc. assigned to local institutions.

In September 2015, the National Electric Power Regulatory Authority (NEPRA) introduced Net Metering Regulations allowing domestic, commercial, or industrial electricity consumers to install up to 1 MW capacity solar and wind power systems for personal use as well as feed them into the national grid. The government furthermore abolished the import tax duty of 32.5 per cent on solar energy equipment announced in the 2014–15 budget to incentivize consumers to install rooftop solar panels and thus acquire ownership of RE installations. Consumer (co-)ownership is not directly conceived as a policy goal except for the indirect mention in off-grid power projects to be commissioned through public sector financing and/or through community/NGO/donor participation. Participation in RE projects is possible via any available type of corporation including cooperatives, partnership, or individual business or institutional activity, similar to those in other countries. Investments in grid-connected solar collectors and PV installations on private buildings, often financed through the owners’ equity are gaining popularity. However, on-grid citizen energy or community projects open to the public are not popular yet. However, off-grid community power projects, mostly hydro, having micro/mini grids have been present in the northern areas of Pakistan for more than two decades. Most of these projects are conceived by general purpose or specialized Village Organizations (VOs) registered with any NGOs such as the Agha Khan Rural Support Program (AKRSP) and Sarhad Rural Support Program (SRSP). Although VOs and NGOs jointly finance these projects usually at 20 and 80 per cent respectively, ownership rests with communities, with the NGO being a mere facilitator to channel government and donor grants.

The Japanese Ministry of the Environment is actively supporting the spread of “community power” initiatives. The Feed-In Tariff (FIT) Law itself apparently does not actively seek to promote consumer (co-)ownership providing disadvantageous conditions for citizen- and community-based projects. At the same time, the Japanese government views distributed RE as an important vehicle to promote regional economic growth and employment, as well as resilience against natural disasters; it has initiated budgetary measures to promote regional deployment under the guidance of various ministries such as the Ministry of Economy, Trade and Industry, the Ministry for Agriculture, Forestry and Fisheries, or the Ministry of Environment. With the exception of cooperatives RE business can take all possible legal forms of business associations under Japanese commercial and corporate law such as joint stock company (KK), limited liability company (LLC), or limited liability partnership (LLP), but also not-for-profit organizational schemes. The RE project itself is often housed in a Special Purpose Company (Tokubetsu mokuteki kaisha/SPC) for transactional, tax, and accounting reasons. To avoid capital market regulation, citizens often form an anonymous partnership with less than 49 members that will invest the privately solicited funds in RE projects; such a scheme only requires notification to, not registration with, the Local Financial Bureau. Alternatively, citizens entrust their funds with a trust company (Shintaku Kaisha) registered with the FSA that will establish a Special Purpose Company to invest and operate RE projects.

This Annex provides an overview of the examples of consumer (co-)ownership that are reported in the 18 country chapters following the analytical framework developed in Chap. 28 . To enable a like-to-like comparison, other than grouping the country examples in the three categories developed, that is, communities of interest, communities of place, and communities of interest and place, we have organized the information on the examples in three columns. The first column summarizes the contractual arrangement and the type of project indicating—where available—the amount of the total investment and giving information on the contributions of the partners involved and legal peculiarities of the model. The second column provides information on the RE technology, the installed capacity, and the geography of the given project. The third column characterizes the participation of the local population, the distribution of benefits, and the drivers and motivations involved. Of course, not all pieces of information described above were always disclosed for the examples reported. To render the financial data comparable, all currencies in the tables have been converted into euro as of October 2018. For the original amounts please consult the individual country chapters.

Decentral self-consumption of renewable electricity has gained relevance in power markets around the world, driven by decreasing technology costs and favourable regulatory conditions. In this chapter, we adopt an economic perspective on the potential role of “prosumage” of renewable electricity for the low-carbon energy transition. We extend the concept “prosumption” (production and consumption) to “prosumage” (production, consumption, and storage): decentral energy storage by batteries enables prosumers to detach the moments of electricity generation and consumption. First, we give an overview of recent literature on the subject, including a brief digression on the role of network charging schemes. Second, we examine arguments in favour of and against increasing prosumage in the context of the low-carbon energy transformation. For comparability, we discuss likely benefits and drawbacks of prosumage against the reference of a centrally optimised electricity system assuming the same renewable generation capacities, and not against a system based on fossil fuels. Third, we present a quantitative, model-based analysis to illustrate possible effects of increased prosumage on the electricity system. To this end, we apply the open-source electricity system model DIETER to a future German electricity system of the year 2035.

Focused on RES generation, the previous chapters of this book provided an overview of the requirements, opportunities and challenges of shaping a consumer-inclusive energy transition from a theorical and empirical perspective. This chapter explains why further pursuing the energy transition requires entering a new phase with profound regulatory changes, even for front-runners. Against the background of recent European Union (EU) policy initiatives in this area and our country cases, this chapter presents policy leads in the EU and beyond for a consumer-centric energy transition and market design mindful of system requirements. This involves contradictory goals and entails a series of trade-offs: (1) policy efficiency and simplicity: integrating new (and most of the time small and inexperienced) actors in a complex setting requires an efficient but simple framework to reduce transaction costs, for example, concerning balancing forecast responsibilities and allocation schemes like tenders; (2) predictability and flexibility: support schemes should be predictable both for investors and public finances but should be flexible for adapting to evolving market conditions; (3) sharing of benefits and costs: exemptions for some consumers lead to a higher end-price supported by the remaining consumers, which threatens their acceptance of vRES. These trade-offs touch upon particular interests of different actors that may be conflicting like those for example of consumers as (co-)owners on the one side and grid operators and other final end consumers on the other side. One way to reconcile these interests and align them with EU regulatory policy is the support and deployment of innovative organisational and contractual arrangements that would allow to pool and scale RE investments (co-)owned by consumers while opening them to combinations of municipal or commercial investments.

Consumer ownership of renewable energy (RE) is essential to the overall success of the energy transition. Politicians across the planet are discovering its power to make energy infrastructure projects publicly acceptable. Countless grassroots initiatives rising across the board—some at the municipal level, some led by individuals and yet others by organised local citizens—testify to the rising awareness of the necessity of shifting away from fossil to renewable energy sources (RES) to arrest global warming. However, drivers and political motivations underlying the Energy Transition often are heterogeneous including conflicting elements resulting in discrepancies between the declared goals regarding the deployment of RE and the actually implemented energy policies. We observe that while declared aims—including, for example, prosumership—are easy to identify the chances for realisation need to be carefully evaluated against the background of the current challenges and the driving forces behind policy making which show a strong path dependency. At the same time energy/fuel poverty remains a problem in the majority of countries under consideration while the absence of a common definition stresses that the problem is not sufficiently acknowledged. Although the Renewable Energy Directive II paves the way to a coherent EU-wide legal framework, it still needs to be complemented by the Internal Electricity Market regulation and Directive, transposed into national law and subsequently filled with implementing provisions. Finally, the successful adoption of the Clean Energy Package should be a welcome occasion to set new priorities in energy research.