Germany is a country with an already long tradition with CSC schemes on building scale. In 2017, the so-called “Mieterstrommodell” has been legally introduced (BMWI 2017). This model allows the plant operator in a multifamily house to sell locally produced electricity to the tenants in direct proximity. The unclear definition of proximity has led to a range of individual case-related legal decisions (Verbraucherzentrale 2018). The plant operator has the status of an electricity supplier. In case of multi apartment buildings, the plant operator receives a self-consumption support from the DSO of 2.1 – 3.7 Cent/kWh for PV electricity, depending on the plant size, for a period of 20 years (Bundesnetzagentur 2017). According to the law, the precondition is that the PV plant has a maximum capacity of 100 kW and is installed in a residential building. In order to receive support, the plant operator can sell the electricity to either: a) tenants of the building or b) owners of apartments in the building. The entire capacity supported per year is 500 MW. The German law explicitly states that, in case storage is used, the self-consumed electricity after storage rather than the stored electricity defines the self-consumption subsidy. For electricity fed into the grid, the plant operator still receives a feed-in tariff/premium. Collective self-consumers, as opposed to simple self-consumers, have to pay the “EEG surcharge”. This surcharge is part of the retail electricity price and finances the German renewables support scheme (EEG). In a proposal for an amendment of the EEG in 2021, the self-consumption support and capacity limits would be increased to between 3.79 €Cent/kWh (up to 10kW) and 2.73 €Cent/kWh up to a size of 500 kW (Federal Government of Germany 2020).
Source: Frieden et al., 2020
RECs and CECs
Germany has not fully transposed the EU provisions for energy communities into national law. In Germany there is a long history of citizen-financed project that are regarded as energy communities in a wider sense. Cooperatives have a long tradition in Germany. There are about 1,000 cooperatives for the operation of renewable energy plants. These often would like to use the electricity generat-ed by their plants themselves. Implementing the EU directives on energy communities could give these cooperatives such an advantage.
According to the Cooperatives Act (GenG), they are defined as an association of persons “whose purpose is to promote the acquisition or the economy of their members or their social or cultural interests through joint business operations”. Most energy cooperatives were founded in the last 10 years and have proven their worth in Energy Transition 1.0 as a form of enterprise that brings citizens, energy suppliers and municipalities closer together to jointly finance and implement renewable energy projects. The cooperative form of organisation with its characteristic principles such as self-help, self-responsibility, “one person, one vote” is also suitable for advancing the Energiewende 2.0, possibly in the form of Renewable or Citizen Energy Communities. Energy supply in Germany is quite diverse and rather complex. Among other things, the role of the approximately 1,000 mostly municipal public utilities and regional suppliers must be taken into account. There are quite a number of things to consider when implementing the EC directives. This is one reason why they have not been transposed to national law so far. For example, there should be a prosperous cooperation between the new players in the energy system and the municipal utilities that have been operating sustainably in their region for a long time. Further fragmentation of the energy markets or even competitive situations on the market could also hinder the urgently needed energy transition.
The EC directives want to strengthen individual citizens and cooperative action in the energy market. Sometimes it is also feared that large companies and investors will establish (many) proforma cooperatives in order to meet the requirements for energy communities and control the market at the same time. This would not be in the spirit of the EC directives, especially if such organisations were to enjoy more rights and higher standing than, for example, municipal utilities, which are not usually considered energy communities under the EC directives. In any case, the legal and regulatory framework should also recognise organisations as energy communities that are not after self-supply but just improving energy efficiency, that manage energy exchanges via block-chains or optimise the use of charging infrastructure.
The German government in April this year proposed a reform of its renewable energy law (EEG), to be adopted by summer. The existing term citizen energy community was adopted to accomodated elements of the EU directives. The new law defines them as small and locally rooted communities consisting of at least 50 natural persons, that are shareholders or members. At least 75% of members with voting rights should be residents in the city or region in which the plant is implemented, the remaining 25% can be attributed to SMEs or municipal entities. No shareholder can have more than 10% of the share. The voting members should have an effective influence on the decision making process of the organisation. Sharing of energy via the public grid, storing or selling energy, key elements of the EU provisions are not yet mentioned (Draft EEG 2023).