As the energy price crisis bites, is the future of renewable energy community-owned?

EXCLUSIVE: With the gas price crisis, economic recovery from Covid-19 and climate crisis converging, many European towns are exploring community energy as a co-solution. We travel to Sardinia to hear from the Mayors of two of these towns – and from Patagonia, which is promoting their work.

As the energy price crisis bites, is the future of renewable energy community-owned?

Pictured: The press trip group at the Ussaramanna solar array

“The most popular beaches in Europe? In Sardinia, of course,” states the island’s tourism board on its website. But, as I’m driven inland with other journalists, our guide Claudia explains (over her Dire Straits CD) how she has spent two decades convincing visitors that there’s more to her home island than sun, sea and sand.

An island with almost 2,000km of coast, 1.6 million inhabitants and a warm climate (it’s 37C outside the taxi, in mid-afternoon in July), Sardinia’s economy is heavily dependent on tourism, agriculture and construction.  It’s a context in which, we are told by Claudia, many young people leave the island seeking university education and corporate jobs outside of these three sectors, in markets with a lower poverty rate than Sardinia’s 20%.

It’s also an interesting context for energy. Sardinia has no gas backbone. Homes largely meet their heating, cooking and cooling needs using electricity – or bottled or solid fuels if they are lower-income and more rural.

Sardinia’s electricity mix is currently dominated by coal and other fossil fuels. But with power plant closures planned, the island is planning a shift to 100% renewable electricity generation by 2040. Nuclear hasn’t been in the picture in the past and isn’t on the cards for the future.

There are two main schools of thought on how to meet the 2040 renewables goal: using either large-scale or small-scale solutions. A utility-scale wind farm sits next to Cagliari airport’s runway and Claudia points out large, ground-mounted solar farms glistening in the mountains. Enel is the main developer and is reportedly eyeing more than 4GW of new renewables capacity here this decade.

Local generation, local benefits

But it’s the smaller community projects that I am here to see – the first two on the island to be completed since the EU introduced its Clean Energy Package in 2019, paving the way for growth in community energy. The flagship arrays are in the villages of Villanovaforru and Ussaramanna, each home to around 250 families.

It’s early evening by the time I reach the hotel and I won’t have time to see these villages’ solar arrays today, but their Mayors arrive to watch a screening of Patagonia’s ‘We the Power’ movie along with sustainability professionals from the outdoor brand. Maurizio Onnis, of Villanovaforru, and Marco Sideri, of Ussaramanna sit comfortably in shorts, T-shirts and running shoes as the movie plays – a far more casual mayoral situation than I’m used to when arranging interviews with London’s Sadiq Khan.

Pictured: Onnis, left, and Sideri, right. Image: © Schirra/Giraldi

Patagonia is facilitating the trip as part of its ongoing campaign encouraging people to join existing community energy hubs – or, if this is not possible, to start their own or invest in the space. The firm has been funding community energy projects in other countries like the UK and the Netherlands, and offtaking their energy. But Patagonia Italy’s environment and marketing manager Damiano Bertolotti tells me that it sees its primary role in many other markets as “giving voices to projects and communities”, as “this is a new topic for many”. It showcases projects on its website as case studies and also supports existing organisations offering education in community energy through its 1% for the Planet donations.

So, why is Patagonia advocating for community rather than grid-scale renewables? The key message from the film is that, while emissions reductions benefits would be the same, but the social impacts are worlds apart.

“This is not an energy problem. This is a problem of global capitalism out of control,” says one British community energy advocate in the movie. Another, based in Spain, adds: “The problems we face are too great. We cannot leave it in the hands of a few big corporations”

The movie explains how, in a centralised system – whether it is based on fossil fuels, nuclear or renewables – the money paid by homes and businesses rarely stays local. It usually entres corporate coffers at the other end of the country, or in a different national market altogether. Even the jobs offered at these arrays are not always guaranteed to local people, with international partnerships sometimes choosing to fly in their own temp workers. Some developers are seeking to allay these concerns with community funds, but this isn’t always the case.

Present to elaborate is enostra’s head of marketing and sales Giacomo Prennushi, an engineer by background who has worked in Italy’s energy sector since the early 2000s, at utilities and beyond. He says: “Everyone is talking about community energy but, big energy companies in particular, are using the term as a keyword just for communications. Complete projects are few and, in most cases, led by illuminated mayors.

“I must say that it’s not easy. The system is centralised. Also, people are centralised. It’s not always easy to change mindsets or the state of the grid.”

Enostra manages 22 community energy projects across Italy. In a community energy approach, communities pay to install their own arrays and meet to decide rules about its operation. Members receive energy directly from the array or arrays, which may cover all or part of their needs. They also receive a share of the related financial benefits, proportional to their energy consumption, which they can keep for themselves or choose to re-invest locally.

Crucially, each member gets an equal say at votes, which prevents large energy consumers from having power over families. This means that municipalities and businesses can participate without having the chance to domineer.

Onnis says: “It’s a very democratic system. It empowers people to take part in the system and make choices they couldn’t in the past, which is a completely new mindset.”

There’s the implication that this mindset change is a lot easier to drive with wholesale energy prices rising and with people seeking a sense of community connection after the Covid-19 lockdowns, which came in three waves across 2020 and 2021.

Solar roofs for Sardinia

On the agenda the next morning is a talk from Onnis about his village’s solar array. It’s a short walk from our hotel, on the local media school’s roof. Temperatures have already passed 30C as we arrive around 11am. The school is closed for summer and the road quiet, bar a few people walking their dogs past and greeting us.

The 50KW array, Onnis explains in Italian (Bertolotti is on hand to translate), will be used to generate electricity for 40 homes and a handful of small businesses including our hotel.

Pictured: The solar array on the media school. Image: © Schirra/Giraldi

Work on the array began in January 2021, Onnis says, when he first met with all homes and businesses connected to the electricity cabin adjacent to the school. After several more meetings, installation began in the second half of 2021. Installation was financed through the annual share of EU funding that the village receives for the energy transition, Onnis adds. This funding was used for LED street lighting in 2020 and community energy in 2021. This year, it’ll go towards another community solar array of a similar capacity on the village stables.

Onnis says: “The most important two things about having community energy are that, firstly, we’re moving away from a centralised system where there is one big producer and the people using them don’t know each other, or the producer. A more decentralised, or horizontal model, involves people becoming prosumers. They actively generate their own energy and decide, by their own rules, what to do with their energy and money.

“The second is that community energy can help us try and solve energy poverty.”

Enostra’s Prennushi adds, on these points, that community energy can really help people grasp the need for energy efficiency. When they can see that generating takes up land or roof space, and they can see the generation from their windows, energy becomes far more personal.

Ultimately, Onnis would like every business and home to have the opportunity to join the local energy community. This is also the medium-term vision of Ussaramanna’s Sideri, who we meet at his village hall after a short minibus ride. The church bells are chiming loudly as he speaks in the school courtyard. The temperature is now approaching 40C.

Ussaramanna’s 60KW solar array is spread across multiple buildings at the local elementary school. Signed up to use its energy are 55 homes, five SMEs and the municipality, for the school, library and its offices.

Sideria says he worked “closely” with Onnis to plan the project, also pairing with enostra and working towards “more or less the same timeline”. He argues that it was “crucial” to inform the community and implement the project in tandem, to keep the momentum going.

An economist by training and Mayor since 2015, Sideria used EU funding in 2016 to add energy storage to homes which already had rooftop solar in a bid to showcase the energy ‘prosumer’ model as a way to cut bills and increase community engagement. He describes the community array as the next step up, which he was always keen on, but which was “not possible from a legal point of view” pre-2019.

“I think, in a small village like this, an innovative project will be good news for the average citizen… they feel like they’re the hero in the story,” he tells us. “The average home could save €130 a year on their electricity bill…Social reactivation is really important after Covid. Getting the messaging right, here, also means looking at this from the environmental point of view.”

Pictured: A drone shot of Ussaramanna’s school and solar. Image © Schirra/Giraldi

Connections and cabins

As we’ve already been told, installing a community energy array isn’t an easy, linear process. Communities face challenges in the form of households who don’t want to change their buildings or who have misconceptions about energy security, and from big energy companies co-opting community energy terms for marketing but doing little to further the cause on the ground.

There are also policy questions still to be answered. The Clean Energy Package lifts the limit for community projects from 200KW to 2,000KW, but Enostra’s Prennushi emphasises that many communities want more details on technical rules and financial incentives before investing. Prennushi also explains how policymakers have not, yet, collaborated with the energy sector to map transformation cabins, making it complicated to choose the best location for an array or to aggregate demand.

“Politicians are not really taking their responsibilities up yet regarding community energy,” Onnis believes.

But both Onnis and Sideria claim the biggest challenge has been waiting for the grid connection for their arrays. Both projects have been ready to connect since late 2021. The mayors speak of a complex process in getting the required compliance through E- Distribuzione, which manages Sardinia’s medium and low-voltage electricity networks, due to requests for different information from different branches at different levels of the company.

When I email E- Distribuzione, a spokesperson claims there has been “constant contact with the mayors and their technical offices” but that neither has completed the documentation process correctly. A few days later, I’m emailed to say that Villanovaforru had completed the process and can expect grid connection soon.

That message adds: “Certainly the legislation is complex and evolving, but E-Distribuzione, and the Enel Group as a whole, want to facilitate the creation of energy communities as much as possible to accelerate the energy transition and environmental sustainability. ”

A replicable solution?

So, even with these challenges, is Sardinia set for a community energy boon? Sideria thinks so. He says: “If you have the political intention to lead, you can do it. You can start with a small project if you are short on funds…. There are many mayors that are interested in this, who are asking how we make this work. Yes, I think it could work in all villages in Italy.”

For full energy independence and to meet its 2040 goal, however, our guests acknowledge that scaling community generation in Sardinia won’t be enough. Community projects either need to find energy users with different energy demands at different times, like public and private sector buildings and homes, and/or co-locate storage, to account for intermittent generation and fluctuating demand while maintaining energy security and avoiding expensive curtailment.

It is also unlikely that the pipeline of mega-projects will shrink. The Italian Government is expecting the deployment of 5.1GW of renewable capacity this financial year, mainly across larger projects with a mix of private and public funding. Much will be on the mainland, but there will also be new capacity on Sicily, which will soon be connected to Sardinia using an undersea electricity link, and on Sardinia itself.

Moreover, corporates including Enel have proposed to switch some of Sardinia’s coal-fired electricity generation to gas, in a move increasingly challenged by green groups amid the global gas price crisis.

A 2020 poll from WWF revealed that 94% of Sardinians would support skipping gas, going from coal to renewables instead. We’re told that the general mood here is one of notable opposition to renewables only when mega-projects are planned which could disrupt local industries, such as solar panels on farmland.

Only time will tell whether this message cuts through, resulting in policymakers and the industry working to properly re-assess the climate impact of the coal-to-gas proposals and update financial models in line with record-high gas prices – and to remove the last few hurdles for community energy.

These hurdles will doubtless look different in other parts of the EU, with other member states at different stages of adopting the Clean Energy Package and having the freedom not to transcribe all inclusions on community energy. And, of course, with the UK having completed the Brexit process, the playing field is different again here. In some ways, it’s even more challenging.

Patagonia is supporting Power for People in the UK, a campaign pushing the Local Electricity Bill supported by more than 300MPs across all main parties. The Bill would give electricity generators the right to supply locally, and consumers the right to buy locally, with market mechanisms and regulation up to Ofgem. The Bill should also reduce set-up and operating costs for smaller generators.

Dozens more MPs are needed to back the Bill for it to become law. With the likelihood of a general election before the set formal date in May 2024, as the Conservative Party chooses its next leader, there could be a boost for the Bill as policymakers across the spectrum are implored to go further and faster in response to the energy price crisis. Or, it could be delayed as the process of settling the next Prime Minister in takes precedence. As we leave Sardinia, we see flyposted memes depicting Boris Johnson and Mario Draghi, who resigned within weeks of each other, dressed as clowns, crying and drinking coffee.

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