The Energy Union strategy has put citizens at the core of the energy transition aiming to shape a future where citizens benefit from new technologies that will help them reduce energy costs and allow them to actively participate in the market while tackling energy poverty. In anticipation of the upcoming Winter Package, questions arise with regard to creating a framework that will enable citizens to take ownership of this transition and reap the benefits that it has to deliver. In order to answer these questions one needs to look at the role of citizens in the energy market and the way they interact in it.
Traditional, old-fashioned market models are based on centrally managed, large-scale fossil fuel plants producing electricity to meet passive consumers’ demand. In future systems with higher shares of variable, distributed renewable energy generation, citizens as consumers should be empowered to actively participate in the energy market by responding to market signals and in return benefit from lower electricity prices or other incentive payments.
The energy system transformation also allows for more generation facilities to be owned by more citizens instead of a small number of large power plants owned by a few companies. Citizens have been playing an increasingly important role as producers of renewable energy. This role should be further strengthened by empowering them to generate, store, self-consume and sell electricity at an individual / residential level, but also at a community level where energy cooperatives generate affordable energy for their community members or shareholders.
Along with community energy and cooperatives, alternative online financing schemes like crowdfunding are becoming mainstream offering citizens the option of participating in renewable energy and energy efficiency projects as retail investors. Citizen participation can bring substantial benefits in terms of public acceptance of renewable energy as well as access to much-needed financing.
The upcoming Winter Package should tackle all dimensions of the three-fold role of citizens (i.e. as consumers, produces and retail investors) in the energy market, should citizens be put at the centre of the energy transition. It should create a conducive, enabling framework that allows citizens and their initiatives to operate in the market on a level-playing field without facing disproportionate burdens in comparison to large-scale players.
The CrowdFundRES project, funded by the Horizon2020 programme, has recently forwarded an overview of its findings and draft policy recommendations to DG-ENER, which can be downloaded here.
By Thomas Maidonis, Project Manager at WIP Renewable Energies & Coordinator of CrowdFundRES.