26.04.2024.
Energy communities and crowdfunding. Legislation, opportunities and good practices - A SunSharing Conference in Plovdiv, Bulgaria

On March 14, 2024 in the city of Plovdiv Green Synergy Cluster organized a conference on the topic "Energy communities and crowdfunding. Legislation, opportunities and good practices". The event was attended by interested parties, including representatives of municipalities, regional town halls, agencies, non-governmental organizations and others. The event was organized within the framework of the SunSharing project, financed by EUKI (European Climate Initiative).

The SunSharing project seeks to assist citizens and support the energy transition by creating partnerships and collective funding of Energy Communities in Bulgaria, Greece, North Macedonia and Croatia. Despite the high potential for solar energy in all partner countries, the lack of appropriate legislation and public incentives results in a lack of innovative business models to encourage citizens to co-invest in RES.

Within the framework of the project, 4 reports have already been published for each of the four countries (https://sunsharing.fsb.hr/?elearn) - on the state of their legislation, good practices, prerequisites and obstacles during the development of energy communities and initiatives for group financing. Other activities include selecting best practices from Europe to serve as examples, as well as the creation of citizen guides describing methods and tips for building energy communities and crowdfunding initiatives.

 

A number of experts took part in the event. Nadia Nikolova from SOFENA presented the current legal framework for energy communities in Bulgaria. The legal definitions of Energy Communities for renewable energy and Civil Energy Community are already defined in the Bulgarian legislation (in the Energy Law and in the RES Law), and at the moment new additions and amendments to the law are being adopted to promote investments in RES. In 2024, Ord. No. 6 is in the process of being adopted to ease the procedures for joining electricity producers from RES with an installed capacity of up to 1 MW, and Ord. No. 1 to regulate energy prices is under discussion.

Although the introduction of the definitions of energy communities in the Bulgarian legislation is a step in the right direction, there are still many things that need to be improved. Further changes to the legislative and regulatory framework are needed to achieve a more effective transposition of Directives 2018/2001 and 2023/2413, for example:

·       the definition of energy communities (EC) needs to be updated, distinguishing between different types of actors, including introducing micro-enterprises as equal actors;

·       clear rules and criteria are needed for community registration, protection of the rights of active customers, as well as prohibition of discriminatory practices;

·       it is necessary to ensure and guarantee transparency and fairness of all aspects of EC activity.

Additional legislation is also needed to:

·       regulation of the net accounting of produced and consumed electricity;

·       elimination of double network charges for energy communities; and

·       creating standardized procedures and protocols for creating and managing energy communities.

Lyubimka Georgieva from the Black Sea Energy Research Center presented support mechanisms for the creation of EO in Bulgaria within the framework of the SHAREs project . This is an initiative supporting the so-called local leaders in creating or expanding their energy community. In addition, it offers solutions to overcome difficulties in attracting partners, including those who are not yet excited about energy issues or unfamiliar with the concept of energy communities.

The project aims to directly support the creation of at least 20 energy communities or collective actions (pilot projects) in the six partner countries (Austria, Bulgaria, Germany, Georgia, Hungary and Croatia). SHAREs supports local initiatives through national online portals that provide the necessary information for building and developing an energy community. On their website can be found a set of tools that provide technical, legal and financial information and useful links, including the most significant aspects of the existing legal framework, sample contracts, technical standards and IT solutions, descriptions of successful business models, etc. Also on the platform can be found the necessary elements to carry out a communication campaign tailored to the specific needs of energy communities, which will enable local heroes to effectively promote their idea among the most relevant user groups.

SHAREs also brings together pioneers – existing ECs or collectives who can provide beginners with valuable guidance based on their wealth of experience within the mentoring program. They become part of the circle of pioneers and act as a knowledge hub for the energy community. In addition, they promote the ideas and the online portal of the SHAREs project in their community, acting as multipliers.

Daniela Peeva from Patient Capital presented "Crowdfunding Initiatives - Legislation, Examples and the Patient Capital Platform". Crowdfunding initiatives are a method of raising funds through collective efforts. They allow greater independence for projects seeking funding, as they do not depend on a small number of large investors, but on more smaller participants who independently assess the benefits and risks of their investment. This form of alternative financing is usually used by start-up and innovative enterprises - micro and SMEs.

Crowdfunding is very popular for social and environmental projects and involves three types of participants: the project owner, investors and an intermediary organization in the form of a crowdfunding service provider that brings project owners and investors together through an online platform. It, as a GF service provider, does not take its own risk, but operates a digital platform open to the public to connect stakeholders.

Regulation (EU) 2020/1503 on European crowdfunding service providers for businesses is in force from July 2022. The regulation establishes uniform requirements for the provision of crowdfunding services for the organization, authorization and supervision of funding services for the operation of these platforms, as well as for transparency and marketing communications in relation to the provision of such services in the EU.

Ms. Peeva also presented the Patient Capital platform - a crowdfunding platform where various companies from start-ups to large established companies can create such an initiative to attract external funding. The platform is expected to be operational from April 1, 2024. Financial support will be sought there mainly for projects with a social direction or those focused on the environment. The term for raising funds on the platform is 30 days, after which, if the initiative is successful, they are transferred to the company.

Stanislav Andreev from EnEffect presented "Model of an energy cooperative with public-private partnership - A good example from a community in Gabrovo". The municipality of Gabrovo, together with EnEffect and with the support of the international initiative TANDEMS, financed under the EC LIFE program, created an energy community (in a format consistent with EU Directives and the requirements of national legislation). This EC includes a partnership between the Municipality, individuals and legal entities and SMEs, with the value of the investment for the construction of RES being BGN 180,000, and the location of the installation will be at the Regional landfill for non-hazardous waste.

A public invitation was published to individuals, local authorities, municipalities, non-governmental organizations and small or medium-sized enterprises to join the community, which happened in two stages - in the first stage, the invitation was open only to participants registered on the territory of Gabrovo municipality and the second stage was open to all other regions of the country. The financial participation of individuals and legal entities was between BGN 500 and BGN 5,000.

On January 15th 2024 the capital needed to build the RES installation was secured and the procedure for recruiting participants in the energy community was closed. 73 participants joined the community, of which 31 are from Gabrovo, and the remaining 42 are residents of various regions in Bulgaria, including six legal entities.

Eng. Petar Kisyov from Green Synergy Cluster presented renovation concepts that will be implemented within two multi-family buildings, which are related to the implementation of air-to-water heat pumps for the efficient generation of energy for domestic hot water supply, in addition to the measures on the enclosing constructions. In order to achieve higher efficiency and to reach the energy class "A" of the buildings, the systems will be implemented together with a photovoltaic installation that will generate electricity to supply the heat pumps. In hours with no or low self-consumption, the photovoltaic systems will generate electricity that will be stored in lithium-ion energy storage systems. This will allow the maximum utilization of sunlight into electricity, and hence a high percentage of own RES electricity. The detailed analysis demonstrate that this approach achieves an energy class "A", while the insulation of the enclosing structures in the specific two buildings only leads to an energy class "B". In addition, the energy and financial savings are significantly higher with the addition of the hybrid plant, thus significantly reducing the carbon emissions generated.

The event was also attended by the project partners, who presented legislation, good practices, obstacles and conditions in their countries:

·       Antun Pfeifer / UNIZAG FSB – Croatia

·       Konstantinos Oureilidis / University of Western Macedonia - Greece

·       Vladimir Gjorgievski / SDEWES Skopje - North Macedonia

 

The lead partner on the project - Dr. Antun Pfeiffer from the University of Zagreb presented the state of energy communities and crowdfunding initiatives in Croatia - although there is a definition of Energy Communities for RE and Civil Energy Communities in the legislation, at the moment still there is no EC in the true sense of the definition. Key problems in Croatia include legal and practical problems with the implementation of crowdfunding initiatives, lack of proper transposition of the civil energy and renewable energy communities of the EU directives. Some by-laws and regulations are currently being developed by the national regulatory agency, but they do not promise to achieve incremental changes in the energy system. Dr. Pfeiffer also spoke about the first crowdfunding initiative for a RES project - " Krizevski Solar Roofs" - implemented in 2018-2019, they were implemented through crowdfunding campaigns in cooperation with Green Energy Cooperative and the city of Križevtsi. This pilot project has allowed citizens to invest their own funds at an annual interest rate of 4.5% for 10 years. It included the installation of photovoltaic plants on two public buildings.

Konstantinos Ourelidis from the University of Western Macedonia present the Greek case - In Greece, the new legislation provides a tailored regulatory framework that is closer to the relevant EU directives. However, introducing new conditions for energy communities while already existing energy communities are still active is confusing. Additionally, the differences between the types of energy communities are not well established, raising more concerns for further updates to the legislation. Regarding the number of energy communities in Greece, although a large number of energy communities have already been established, most of them are still inactive. The problem for this situation mainly refers to the inability of the grid to connect more RES due to saturated electricity grids. Clearer incentives should be provided to local society so that citizens become active members and are motivated to invest in such activities.

Vladimir Georgievski from SDEWES Skopje presented the topics in the context of North Macedonia. There is a lack of legislation defining energy communities and yet the National Energy and Climate Action Plan in North Macedonia envisages over 1 GW of PV capacity in 2040 with up to 400 MW of rooftop PV systems in 2040. To accelerate progress towards this objective, but also as a measure to protect consumers against the energy crisis, changes were made to the Renewable Energy Regulation to maximize the allowable capacity for photovoltaic installations that can be installed on roofs. Although these changes are a step in a positive direction, they fail to unlock the potential of community energy projects, leaving stakeholders (citizens, municipalities, public institutions) unable to co-invest in community solar PV projects. Directive 2018/2001/EU, which regulates renewable energy communities, must be fully implemented by 2024, which suggests that regulatory authorities will need to make framework changes to improve the conditions for EC formation in North Macedonia in the -recent deadlines.