Contribution of Local Energy Communities to the Realization of a Just Energy Transition in Spain

Abstract

This chapter begins by stressing the importance of electricity as an essential element to modern life in society. The above is followed by an insight into the relevance of local energy communities, an emerging figure that can enable new ways of producing and consuming electricity for the benefit of the community. Such a structural shift must be guided by the principle of energy justice. However, the current Spanish regulatory context is not enabling of this. In addition, existing European directives applicable to energy communities have not yet been fully transposed. But despite these barriers, opportunities for the development of local energy communities in Spain do exist. The country possesses abundant renewable energy resources, including solar and wind power, which can be harnessed by communities to become more self-sufficient and sustainable in their consumption of energy. To conclude, the chapter proposes a series of regulatory mechanisms that may be useful for deploying energy communities in Spain in light of the above-mentioned principle of energy justice.

1 Social Impact of Local Energy Communities: From Rural Areas

Energy is present in the most basic and daily activities of life in society, but it also accompanies the most avant-garde industrial processes and enables the high-level technological development of our times. This shows that necessity and interdependence are two fundamental elements that allow us to understand the dimension of energy.¹ Energy is necessary for the social life we know and the satisfaction of what we consider as basic needs or dignified living conditions. Without energy the world and society would be exponentially different. Interconnectivity is also seen in relation to sustainable development, communication, and sustainability.

Critical events, such as the COVID19 pandemic, extreme weather conditions, and political conflicts, present a risk to the security of energy supply by affecting the availability of resources, the operation of the energy industry, and by the resulting intense increase in demand. This risk scenario highlights the complexities of facing a world without electricity and the critical situation faced by those who do not have safe, sustainable, and affordable electricity.

The principle and framework of energy justice seek to address these issues and promulgate that the energy-just world would be one involving happiness, welfare, freedom, equity, and due process for both producers and consumers. It also ensures that access to energy systems and services is equitable.² This is without prejudice to the legal and regulatory content that must be analyzed for its incorporation.

2 Relationship Between Energy Justice and Local Energy Communities

Energy justice as a principle implies a mandate for optimization, and in line with SDG7, it seeks alternatives which allow people living in communities where the electricity service is not safe, sustainable, and affordable to seek solutions to reverse this inequitable situation. Further in the current energy transition, justice as it relates to vulnerable communities must be included especially when looking at decarbonization impacts.

Energy communities are groups of individuals who cooperate to carry out the participation of citizens in the energy transition. By fostering active citizen participation, they promote the acceptance of renewable energies and democratizing access to resources.

Specifically, energy communities develop the different dimensions of distributive justice to the extent that they improve access to energy, reduce energy costs, and promote local economic progress with the development of local competencies. They also encourage procedural justice to the extent that they encourage citizen participation, contribute to the resilience of communities, facilitate access to educational spaces, and increase social capital. They also promote recognition justice since energy communities are seen as a space for the inclusion of people with different economic characteristics and groups that have been marginalized and now have defined participation mechanisms.³

As an example, in communities that have intermittent electricity service provision through fossil fuels, the promotion of energy communities has been identified as a tool to strengthen these communities against the aforementioned issues and also to ensure sustainable and safe provision of electricity supply.

3 Regulatory Context for Local Energy Communities in Spain: Barriers and Opportunities

The regulatory context for local energy communities in Spain is currently facing barriers and opportunities, with one significant hurdle being the lack of transposition of European directives into national legislation. Beyond their legal definition, the absence of a regulatory framework specifically tailored to local energy communities does not create the ideal scenario for investors—who, in many cases, are domestic consumers.

The European Union has provided directives that aim to promote the establishment and operation of local energy communities. However, the full transposition of these directives into Spanish law has not yet been accomplished, hindering the implementation of supportive policies and regulations at the national level. The absence of clear rules and guidelines tailored to local energy communities creates obstacles for their formation and effective functioning.

In addition to the lack of transposition, administrative procedures, and grid connection processes pose further challenges for local energy communities. Complex and time-consuming administrative procedures often act as barriers, making it difficult for communities to navigate the regulatory landscape and establish their operations. Similarly, grid connection procedures can be burdensome and create delays, hindering the integration of renewable energy generation within local communities.

Furthermore, it should be noted that the Spanish Climate Change Act, approved in May 2021, dedicates its Title VI to “Just Transition Measures.” However, this section of the cited Act should have a broader scope, without limiting itself exclusively to requiring the central Government to draw up a Just Transition Strategy and establish the essential elements of just transition agreements linked to the cessation of national coal production.⁴

Despite these barriers, opportunities exist for the development of local energy communities in Spain. The country possesses abundant renewable energy resources, including solar and wind power, which can be harnessed by communities to become more self-sufficient and sustainable in their energy consumption.

4 Energy Justice as a Key Element in the Regulatory Design of Local Energy Community Incentive Schemes

Energy justice is a crucial element that should be considered in the regulatory design of local energy community incentive schemes. As these schemes aim to promote renewable energy generation and community engagement, it is essential to ensure equitable access and benefits for all participants.

Energy justice, as it relates to energy communities, encompasses various dimensions, including mainly distributive justice, procedural justice, and recognition justice.⁵ Distributive justice emphasizes the fair distribution of costs and benefits associated with energy projects. In the context of local energy communities, it is crucial to design incentive schemes that prioritize equal access to financial support and rewards, ensuring that disadvantaged communities have an opportunity to participate and benefit from renewable energy projects.

Procedural justice focuses on inclusive decision-making processes and meaningful participation. As it relates to energy communities, regulatory design should incorporate mechanisms that allow for community involvement in the planning, implementation, and governance of local energy communities. This can be achieved through public consultations, transparent decision-making frameworks, and community representation in relevant decision-making bodies.

Recognition justice recognizes the diverse needs, values, and identities of different communities. The regulatory design of incentive schemes in energy communities should consider the unique characteristics and aspirations of local communities, taking into account factors such as social, economic, and cultural contexts.

It would be interesting if the Spanish Climate Change Act, in addition to the issues mentioned above, had addressed more ambitious measures such as “cap-and-trade” mechanisms and other possible incentive schemes able to encourage investment in decarbonization projects—especially those of a tax nature.

Additionally, local energy communities will also be essential to attract people to rural areas, distribute energy resources, and spread job creation throughout the territory. In short, to overall achieve a more just energy transition.

In conclusion, energy justice should be a fundamental consideration in the regulatory design of local energy community incentive schemes. By ensuring equitable distribution of benefits, inclusive decision-making processes, and recognition of diverse community needs, these schemes can promote a just and equitable transition to a cleaner and more sustainable energy future.