faq and useful information

A constantly updated database of useful FAQs about Energy Communities basic topics, working principles and regulatory frameworks including some insights on ROSE, our software solution for simulating and managing Energy Communities.

GENERAL

Energy Communities are groups of entities ( citizens, local authorities, companies) located near renewable energy production plants that voluntarily  join to produce and consume clean electricity, according to the principles of self-consumption and energy self-sufficiency.

The main goal of energy communities is to provide environmental, economic and social benefits to the surrounding community rather than financial profits.

The Italian Decree Law 162/19 provides for different types of energy community configurations: Renewable Energy Communities (RECs) and Collective Self-Consumption Groups (CSCs).

As a first step in creating a Renewable Energy Community (REC), members must be set up as a legal entity.

Community members can be natural persons, small and medium-sized enterprises (SMEs), local bodies or authorities, including municipal authorities. In the case of private enterprises, participation in the renewable energy community must not be their main commercial and/or industrial activity.

The main technical requirement is that community members must own low-voltage connection points (PODs) connected to the same medium/low-voltage substation.

Self-consumers of renewable energy acting collectively (CSCs) must be in the same building or condominium. A separate legal entity does not need to be set up.

In addition, each production system must be operational from 1 March 2020 and within sixty calendar days after entry into force of the transposition of Directive 2018/2001 with a maximum power limit of 200 kW.

A producer who is part of the group of collective self-consumers or a third party can operate the renewable energy production system. In addition, energy communities are incentivised pursuant to ARERA Resolution 318/2020/R/eel and the implementing decree of MiSE according to the energy shared by members.

The shared energy is thus equal to the minimum value, in each hourly period, between the electricity produced and fed into the grid by the renewable energy systems and the electricity withdrawn by all associated end customers.

Each member will therefore continue to purchase their energy freely through their supplier, and energy sharing will be calculated retrospectively. The Energy Services Operator recognises the economic values following access to the incentive service.

The renewable energy fed into the grid can be sold with dedicated withdrawal by the Energy Services Operator or traded on the free market.

A consumer is a person who withdraws electricity from the public distribution grid to supply the users within their consumption point. For this purpose, the end customer is the owner of the connection point of the consumption unit and, thus, the recipient of the electricity bill.
A producer is a natural or legal person who produces electricity and is not necessarily the owner of the production system. Therefore, they must comply with the owner’s instructions. A producer is the titleholder of the electricity production system and holder of the authorisations for building and operating the production system.
A prosumer is a consumer who also owns production facilities: they can either withdraw energy from the grid, like a pure consumer, or feed it into the grid, like a pure producer. Although they may have two opposite configurations, these can never coincide since the current in an electrical node always flows in one direction.

Self-consumption refers to the portion of energy produced that is not fed into the grid, as the prosumer consumes it directly. Energy communities, on the other hand, are based on the concept of virtual self-consumption, i.e. sharing energy via the local distribution network. This means that energy is shared by consuming and withdrawing from the grid while renewable systems feed into it. Therefore, there is no direct physical connection between consumers and producers, but a virtual relationship is established to calculate the shared energy.

Shared energy is defined in each hour as the minimum between energy fed into the distribution grid and energy withdrawn from the grid by all community members (REC or CSC).

Community members can be natural persons, small and medium-sized enterprises (SMEs), local authorities, including municipal authorities. In the case of private enterprises,

participation in the renewable energy community must not be their main commercial and/or industrial activity.

Persons belonging to the same condominium, building or complex of terraced houses, or group of building units having a common part.
Small enterprises are companies with fewer than 50 employees and an annual turnover or annual balance sheet total not exceeding EUR 10 million; medium-sized enterprises are companies with fewer than 250 employees and an annual turnover not exceeding EUR 50 million or an annual balance sheet total not exceeding EUR 43 million.
Members can keep their contract because they are free to choose their supplier.

An electricity production system powered by renewable energy sources exclusively uses wind, solar, aerothermal, geothermal, hydrothermal and ocean energy, hydropower, biomass, landfill gas, sewage treatment system gas and biogas production.

The only operations permitted are those involving the construction of new facilities or the expansion of existing facilities, in which case only the additional system section is considered in the configuration. With the transposition of the REDII directive, existing systems that also produce renewable electricity will be allowed to join, but not exceed 30% of the community’s total installed capacity.

No, there is no limit to the number of installations, as long as the total installed power does not exceed the maximum power associated with an energy community.

Storage systems installed at the community level, alongside the energy production systems, always increase shared energy because they allow feed-in periods to be varied according to electricity needs but do not reduce network withdrawals. Instead, if prosumers own storage systems, they can both vary feed-in periods and reduce network withdrawals.

Yes, charging stations can also be included in the configuration entitled to the incentive.

This is electricity withdrawn without application of the transmission and distribution tariff components. This share of energy includes withdrawals of electricity from the grid to

supply auxiliary generation services and storage systems for subsequent feed-back into the grid.

The contract for regulating the electricity valorisation and incentivisation service shared by a group of self-consumers or a renewable energy community is updated whenever changes occur that affect the calculation of the contributions due, such as those resulting from including end customers and/or producers in the configuration and/or their exit.

The first step is to have a statute based on open and voluntary membership. Then, after choosing a contact person, an application must be made to the GSE.

The person chosen by the energy community. This person manages the bureaucratic aspects of the community and therefore liaises with the GSE and the electricity grid operator. In the case of a group of self-consumers, this role is usually held by the administrator.
No, because the incentive mechanism related to shared energy is an alternative to the Home Exchange.
The forecast is that by 2025 there may be 30,000 communities in Italy, with a 3.5 GWp increase in renewable photovoltaic power.
Members can request to withdraw from the community contract at any time once any financial suspensions have been lifted.

LEGISLATION

The development path of the Energy Community and collective self-consumption legislation began in February 2015 following the publication of the ‘Energy Union Strategy’, a law aiming to strengthen and secure the European energy service by improving ecological impact and competitiveness.

Subsequently, packages of measures were published, such as the ‘Clean Energy for all European Package’ (CEP) which was proposed in 2016 and completed in 2019. With this package, the European Union clarified the direction of European energy policy, making a key contribution to the long-term strategy with regulations that promote the transition towards a decentralised energy system in which end consumers play an active role.

This legislation also introduced energy communities.

The most important directives following the CEP were:

  • Renewable Energy Directive 2018/2001 or RED II
  • Directive on common rules for the internal market for electricity 2019/944 or IEM, published in June 2019.

The primary aim of the RED Directive II is to increase the share of energy produced from renewable sources in the European Union and to tackle energy poverty. ‘Renewable Energy Communities’ (RECs) and ‘jointly-acting renewable self-consumers’ (CSCs) were carefully defined in RED II.

Instead, the purpose of the EMI Directive is to adapt the European electricity market to the technological and structural changes underway. The configurations introduced relate only to the production and exchange of electricity and are authorised to join energy services as new players in the electricity market.

The transposition of the two directives by the EU Member States is mandatory.

The limit for RED II was set in June 2021, and the limit for IEM in December 2020.

In any case, the European Directives define different ‘degrees of freedom’ for the Member States. The main ones include:

  1. defining the concept of ‘proximity‘ for Renewable Energy Communities;
  2. defining the roles of members and third parties regarding ownership and management of the facilities;
  3. offering power network management;
  4. defining related economic items, particularly regarding tariff charges.

Italy has begun transposing the RED II Directive by incorporating the configurations introduced at the European level into the Italian legal framework. The journey started with the Milleproroghe Decree, which took effect in February 2020 (converted into law in February 2021). It introduced the definitions of ‘Self-consumers of renewable energy acting collectively’ and ‘Renewable Energy Communities’ into Italian law for the first time, providing the opportunity to create communities that exchange energy for collective self-consumption.

Subsequently published were ArERA Resolution 318/2020 (August 2020), the Implementing Decree of the MiSE (September 2020), which set out the incentive tariff for the remuneration of energy produced by renewable energy systems, distinguishing between collective self-consumption and renewable energy community, and the technical rules of the GSE (December 2020).

Finally, the National Recovery and Resilience Plan (NRRP), approved on 13 July 2021 by Council Implementing Decision, contains other crucial ecological transition measures.

Of the over EUR 220 billion planned investments, 68.3 billion are earmarked for the ‘Green Revolution and Ecological Transition‘, and more than 20 billion are earmarked for renewable energies. The objectives are to increase the share of renewable energy sources (RES) in the system – in line with decarbonisation targets – and to upgrade and digitise network infrastructures to accommodate the increase in production from RES.

Hopefully, after the missed deadline for the transposition of RED II, things will speed up to complete the process and thus start the implementation of large-scale energy communities. What are the key changes introduced with the RED II Directive? The RED II Directive has introduced two important innovations, which will soon be incorporated into the regulations governing energy communities: Maximum system size will increase to 1MWp; All consumers and producers connected to the same HV cabin can be part of the same energy community.

 
 

The RED II Directive has introduced two important innovations, which will soon be incorporated into the regulations governing energy communities: Maximum system size will increase to 1MWp; All consumers and producers connected to the same HV cabin can be part of the same energy community.

INCENTIVES

The incentive is defined by two factors: Premium Rate and Return Rate Components, the latter defined according to the value of the unit fee. They are provided by the Energy Services Operator and are worth €110/MWh and approximately €8/MWh, respectively. ARERA defines the return of the tariff components and calculates them using the parameters that define grid charges, which are specified annually by the authority. The MiSe set the Premium Tariff (now on behalf of MiTE). To reach the total incentive, these values, in euro, must be multiplied by the shared energy obtained.
Tariff Premium and Tariff Component Return determine the incentive, but the latter depends on the unit fee and the network loss coefficient. They are both provided by the Energy Services Operator and are worth €100/MWh and approximately €8/MWh, respectively. ARERA defines the return of on tariff components and calculates them using parameters that terminate network charges and network losses, which the authority specifies annually. The MiSE set the premium tariff (now on behalf of MiTE). To reach the total incentive, these values in euro must be multiplied by the shared energy obtained.
Energy fed into the grid, whether by a producer or the surplus of a prosumer (consumer with a photovoltaic system connected to their network), can be remunerated in two ways: Dedicated withdrawal (RID) or sale on the free energy market. The Energy Services Operator manages the first resale method and applies the same zonal price set by the market zone to which the system belongs. In addition, the Energy Services Operator sets minimum prices each year, which are always guaranteed.
It is still possible to benefit from the tax deductions of the Consolidated Law on Income Tax, or for photovoltaic systems only, from the Superbonus. The Superbonus is limited to a maximum of 20 kW. The share of energy fed into the grid cannot be subject to the incentive tariff but only to the return on tariff components and dedicated withdrawal. The energy produced by this part of the system and fed into the network is reserved for the Energy Services Operator. Tax deductions can apply to all the installed power except that subject to the Superbonus.

Yes, specifically, the following systems are not eligible for incentives:

  1. the power share of photovoltaic installations that have access to the 110% Superbonus;
  2. the Po power and obligation share of new constructions;
  3. photovoltaic systems with modules in agricultural areas.

The 110% Superbonus is compatible with REC and CSC incentives, but it is important to consider a few factors.

The GSE FAQ explains how the Superbonus deduction is applied on the first 20kW of production system’s power and is conditional on the electricity fed into the grid being sold to the Energy Services Operator. Therefore, the premium tariff envisaged by the MiSE (110€/MWh for REC and 100€/MWh for CSC) is not recognised on this share of energy on which the Superbonus is applied. However, the right to the ARERA fee (which values the shared energy) remains.

The ordinary deduction provided for in Article 16-bis, paragraph 1(h) of the Consolidated Law on Income Tax (TUIR) may be applied on the portion of expenditure exceeding 20 kW and up to 200 kW.

To illustrate this with an example: if a 50kW photovoltaic system is built, only the ARERA fee is recognised for the first 20kW, while for the remaining 30, both the ARERA fee and the MiSE incentives are recognised.

Source: Energy Services Operator FAQ

This task is the contact person’s responsibility. The application can only be sent online by accessing the GSE IT Portal mentioned above, logging into the customer area using the credentials (User ID and password) provided by the GSE during registration and then using the ‘Production and Consumption Systems – PCS’ application within the Portal. Then, the contact person needs to complete a series of documents required by the GSE so that the final contract between the parties can be drawn up.

Once the bureaucratic procedures with the GSE have been completed, the effective date is the date on which the application was submitted to the Energy Services Operator; therefore, the latter retroactively calculates the arrears accrued during the period of bureaucratic compliance. Alternatively, the contact person and the GSE may agree on another date.

The Energy Services Operator (GSE) will decide the effective date of withdrawal for each individual system, according to different cases:

  1. as off the start date/ to the effective date of the energy production system if the application is submitted within 60 calendar days of entry into operation of the first of the systems;
  2. on the first day of the month following the month of termination of any other on-site exchange contracts;
  3. on a date defined by the parties.

PLATFORM

First, a community management platform helps implement community energy monitoring.

Installing meters and connecting them to the software allows you to monitor consumption and production and to calculate/compute the community’s self-consumption in real-time, without waiting for the Energy Services Operator to evaluate it afterwards.

In addition, an energy management solution monitors and forecasts both consumption and production and optimises the accumulators to maximise self-consumption. This is all done transparently and automatically.

Therefore, by aggregating energy resources and communities, the ROSE Energy Community Platform software creates aggregated views ensuring quick and optimised management.

With ROSE Energy Community Platform users can monitor the community’s consumption and production in real-time, by viewing forecasts and suggested optimisations and, if necessary, implementing commands on energy sources. Usersa can also evaluate the self-consumption performance of the community, the incentives generated hour by hour, and use an algorithm to reallocate the incentive. Finally, thanks to the mobile app, it’s easy to make data available to community members by sharing their day-to-day performance.

Whenever a member, whether consumer or producer, aligns their withdrawals with community input periods or their inputs with community withdrawal periods, the member accumulates shared energy per capita, thereby increasing their economic return.

Community members only have to bear GSE-related costs, which are already retained in the incentive at the year’s first disbursement, and the community’s running costs. The platform allows for cost management and, if the community wishes, the option to set aside a specific portion of the incentive for future emergencies or investments.
Data on the PODs that are part of the energy community are monitored using conventional meters controlled by the network operator, which is then required to send data to the Energy Services Operator regularly. The ROSE Energy Community Platform also uses smart meters to provide near real-time monitoring that is communicated to (community) members.

ROSE Energy Community Platform solution for energy communities can communicate with most meters on the market. In particular, the platform uses certified devices to connect to 2G (Open Meter) meters using the Chain2Full. Instead, for 1G meters, we recommend the use of Chain2Full-ready energy meters to be added to the electrical panel. The meters can connect to the internet using the community member’s WiFi or a dedicated SIM in NB-IoT mode.

The ROSE Energy Community Platform software is set up natively to dialogue with third-party systems in synchronous and asynchronous modes.

Synchronous Interoperability over HTTP

  • REST
  • SOAP

Synchronous Interoperability with Specific Protocols in Energy and Automation

  • Modbus
  • IEC 61850
  • BACnet
  • OPC-UA
  • OpenADR

Asynchronous Interoperability on

  • MQTT
  • AMQP

Specific Energy and Automation interoperability protocols enable the remote control of energy sources.

Integration through other protocols or specific messaging systems is possible but requires evaluation by our team of experts.

ROSE Energy Community Platform enables use of the statistical profiles used by the Energy Services Operator and published with the update of the technical rules on 11 April, to allow the estimation of POD withdrawals and feed-ins even when a meter cannot be installed.

In ROSE Energy Community Platform, operating model data-driven engagement is a tool to improve member engagement in an energy community. Energy data and gamification are used to incentivise the adoption of sustainable behaviour with quizzes, quests and levels.

This software uses energy data, and a mobile app to help community members increase awareness of their consumption and improve self-consumption and the incentive

Members should try to change their habits to follow solar energy production (photovoltaics) as much as possible. So as normal practice, try to concentrate your withdrawals in the middle hours of the day.

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