Renewable Energy Communities as models for Cities of the Future

In a not-so-utopic future, cities will be organised in clusters of several-scale renewable energy communities. More than an effective way to lower your electricity bill, the implementation of renewable energy communities will be the turning point for cities’ decarbonisation.

In a not-so-utopic future, cities will be organised in clusters of several-scale renewable energy communities, where households will generate electricity, which is then self-consumed, used to charge electric vehicles and public transportation, or stored and shared with your next-door neighbour.

More than an effective way to lower your electricity bill, the implementation of renewable energy communities will be the turning point for cities’ decarbonisation.


First of all, although covering less than 2% of the surface of the Earth, cities are still responsible for more than 60% of greenhouse gas emissions, while consuming 78% of the world’s energy.

In fact, studies show that just 25 mega-cities produce 52% of the greenhouse gas emissions.

This is due not only to the fact that more than half of the world’s population lives in urban areas (and this percentage will most likely increase in the next few decades), but also due to the impact of the construction and the mobility sectors.

Considering the ambitious targets of carbon-neutrality set forth in the European Green Deal, which aims to reduce net greenhouse gas emissions at least by 55% by 2030, compared to 1990 levels, cities definitely play a paramount role towards meeting such targets and decarbonisation objectives.

This may be achieved through several measures and policies adopted on a country-by-country basis, then on a city-by-city basis, and even on a neighbourhood basis, either through a change from fossil fuels to the use of green gas or electric mobility in transports, through the introduction of ultra-Low Emission Zones, and through the construction of near-zero energy buildings.

In light of the above, implementing the decarbonisation of the cities will only increase the weight of electricity demand, thus requiring significant investment in electricity generation from renewable sources and electrification. The rise in electricity demand may even ultimately lead to grid overload and lack of grid security.

Meanwhile, we are assisting to an unprecedent rise of electricity prices: consumer prices for electricity, gas and other fuels increased by 25% between December 2020 and December 2021 and import prices have more than doubled in the same period, leading to a potential outburst of an energy crisis.

In this context, one of the most impactful policies will be the implementation of self-sufficient cities energy-wise, which are vital for the success of Energy Transition.

This is possible through self-consumption, i.e., by enabling consumers to generate their own energy, in their homes or offices, without relying on a supplier and, more generally, on the electricity market, paired with the possibility of sharing and storing the electricity generated.


But let’s get back to basics.

Traditionally, the activity of power generation is separated from the activity of energy supply, being generally developed by different players. Electricity is commonly a centralized market activity.

In the previous decade, the cost of technology and implementation of renewable solutions, to be implemented in households and residential areas to allow self-consumption (such as photovoltaic panels) was generally unaffordable and the offer was scarce.

Similarly, only very recently the possibility to implement batteries or a storage system became an option.

On the other hand, the majority of European countries was not prepared with a solid legal framework foreseeing a licensing procedure for self-consumption, enabling a swift implementation of such projects. Moreover, the possibility of electricity sharing, and peer-to-peer trading was not allowed in certain jurisdictions.

Paired with a significant decrease in technology costs, the Clean Energy for all Europeans package, adopted in 2019, has introduced the concept of “energy communities” in legislation, while the Directive (EU) 2019/944 of the European Parliament and of the Council of 5 June 2019 on common rules for the internal electricity market includes new rules that enable active consumer participation, individually or through citizen energy communities, in all markets.

Moreover, the review of the Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources (also designated as “RED II – Renewable Energy Directive II”) imposed on the Member-States to establish a regulatory framework which would empower renewables self-consumers to generate, consume, store, and sell electricity without facing disproportionate burdens and expressly referring that “citizens living in apartments for example should be able to benefit from consumer empowerment to the same extent as households in single family homes”.


Energy communities organise collective and citizen-driven energy actions, through the installation of one or more renewable source generation units (e.g., rooftop solar panels), that may or may not include storage facilities, and which are connected to one or several facilities for the use of the electricity generated (e.g., households). Electricity may also be shared and, if not consumed, even sold and injected to the public grid.

Such communities often require the geographic proximity and vicinity of the members, in order to facilitate connection, sharing and decrease the investment in grid costs.

As a result, not only this collective self-consumption provides direct benefits to citizens by cutting electricity costs, as this enhances the generation of cleaner energy which does not depend on the centralized system, thus avoiding grid overload and assuring energy reliability, leading therefore to the sustainability of cities and urban areas.

The communities are open to the volunteer adherence of their members as participation in renewable energy projects should be open to all potential local members based on objective, transparent and non-discriminatory criteria. The communities are then managed by a member or an entity, for instance the condominium, or, on a larger scale, the parish or the local municipality.

In this context, in the near future, it is more likely to receive your electricity bill from your mayor or from your neighbour managing the energy community, than from the traditional energy supplier.

In addition, energy communities may be “smart” through the implementation of smart grids, allowing a more efficient grid management and interaction between generators and end-users, and providing support for the integration of renewable energy sources and energy storage, as to avoid waste and designing more suitable energy profile for end users.

As such, consumers know exactly the time and the location where electricity is used and are able to manage real-time consumption and install integrated home solutions to interact with consumer devices, which can be remotely activated services such as tariff and power changes.

Lastly, the renewable energy community and smart management of the same may be replicated and include the efficient management of other relevant utilities, such as water and waste, and may include in a single platform the consumption profile for electricity and water.


In this context, Energy Communities are thriving mostly in Central Europe and Nordic countries.

It is even expected that in 2050, 37% of households participate in energy communities.

Indeed, renewable energy communities may be designed for a single residential building, condominium, a whole neighbourhood, a village, a parish, and ultimately an entire city.

Even starting with small-scale projects, the numbers are impressive: in a proposed project for the parish of Calvão, in the city of Chaves, a total of 86,2 kWp will be installed and the solar plant will generate around 140 MWh of clean energy per year for the supply of 10 thousand consumers.

This single community avoids the emission of 28,6 tonnes of CO2 every year, which corresponds to the absorption of CO2 from around 1,300 trees, while reducing the members electricity bill in 10% and an increase the household levels of thermal comfort.

Energy communities may also be presented different features. Here are some of the most interesting ones, either because of their impacts, design and purpose:

– Svalin is a co-housing community in Denmark with 20 households with solar panels, geothermic heat pumps, as well as electric vehicles. Each household consumes its own electricity and is even able to inject electricity surplus to the public grid. But the speciality of this community is not only generating cleaner energy but raising awareness: the outdoor lighting system in the community changes colour depending on the CO2 emission level of the electric energy consumed in Denmark, as an incentive for the consumers to decide the best time to consume electricity from the centralized system.

Schoonschip is a floating residential neighbourhood of 47 households in Amsterdam. The community runs its own private peer-to-peer electricity grid, that is connected to the main grid by one connection. Schoonschip generates its own electricity and any excess from the households is stored in large batteries and heat in heat pump boilers, pursuant to a smart grid use. Appliances are controlled by the smart grid for maximum self-consumption and optimal grid management and advanced energy trade in the future. In this energy community, all members own the collective infrastructure and battery system.

Brixton Energy in London is the first community-owned renewable energy project in a social housing estate in the United Kingdom. Other than self-consuming electricity, the community brought both financial benefits by creating an ongoing Community Energy Efficiency Fund to support the delivery of local energy efficiency projects and reducing the service charge, and social benefits by providing training and work placement opportunities for local residents.

In addition to self-sufficient housing solutions, the energy community may also present features for public space and generate electricity to be used in traffic light systems and public lightning.


Although the enactment of European policies was definitely a turning point for the possibility of developing energy communities, the change is not regulatory, technological or financial.

Indeed, the shift comes from within: citizens are now invited to take an active stance on electricity generation, ceasing to be mere energy consumers and viewers of the climate transition. They are now designated “prosumers”. The change begins with active participants that are willing to make a difference.

However, in our individualist societies, how to expand from a single initiative to a whole community? To a whole city?

In this regard, the role of local authorities and cities decision makers is pivotal. Indeed, municipalities are better acquainted with the needs of their own local communities and their willing to be a part of the change. Local authorities are also strategically positioned to raise awareness and develop and implement self-consumption solutions.

The implementation of renewable energy communities will definitely shape cities of the future and will undoubtfully grow from a “nice-to-have” to a mandatory requirement for newly developed neighbourhoods and residential, industrial and business areas.

In a poetic perspective, the creation of energy communities in busy and individualist cities may even bring more than a decrease in the energy bill. It may actually bring people closer and make them more connected.

Picture of Maria Gorjão Henriques

Maria Gorjão Henriques

Associate | Vieira de Almeida
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