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New project on clean energy communities attracts high interest in Norway

News - News from CICERO

Published 26.01.2021

The large number of participants at the first meeting of the Norwegian COME RES country desk indicates that there is high interest in the development of renewable energy communities in Norway.

The meeting was held as a digital event on 14 January, and 36 people participated. Of these, 30 are from 27 different organisations and companies, and the remaining six are part of the COME RES project team at CICERO Center for International Climate Research and at the Norwegian Water Resources and Energy Directorate (NVE).

The 27 organisations that were represented at the meeting are from various sectors, such as public administration, the energy industry (mainly power companies, developers and industry associations), property developers, the food industry and citizens and interest organisations.

“The COME RES project just started, but we already have many participants in the Norwegian country desk. So, this project is clearly about a topic that many people are interested in,” said CICERO researcher Karina Standal, who is involved in the project.

“The participants are from several different sectors, which ensures a broad set of perspectives and experiences. The diversity of the group enables engaging conversations, something we experienced at the first country desk meeting. It was a good meeting with interesting discussions,” said Standal.

What is a renewable energy community?

During the first meeting of the Norwegian country desk, Standal presented the COME RES project and its context, and pointed to how the EU’s recast renewable energy directive (RED II) has highlighted the role of renewable energy communities in Europe’s energy transition. She also explained what a local, renewable energy community could be in the Norwegian context.

Standal was followed by Anton Eliston, head of the section for policy instruments at NVE, who presented the current legal framework for renewable energy communities in Norway.

According to RED II, all electricity end-users in EU countries have the right to participate in a local renewable energy community. Moreover, the directive states that the participation of local citizens in renewable energy communities could increase public acceptance of renewable energy.

The directive defines local, renewable energy communities as legal entities with open participation where control is evenly shared among shareholders or members who have a local connection to the area where the energy community is based. Shareholders or members of the energy community may be citizens, small or medium-sized enterprises or municipalities.

The directive also states that renewable energy communities cannot be commercial entities that focus solely on profit, but that their main aim should rather be to create environmental, social or economic gains for the shareholders or members, or for the local community.

“In Norway, we have a long tradition of local power production where farmers or landowners have helped transform water resources into electricity. Moreover, much of our power production is owned by local authorities. However, we currently do not have many examples of local energy communities in which citizens of the local community participate as members or shareholders,” Standal said.

Challenges related to the development of renewable energy communities

Three of the members of the Norwegian COME RES country desk gave presentations during the meeting, where they talked about their experiences in developing clean energy and their thoughts about renewable energy communities.

One of them was Karina Halstensen Birkelund, chief commercial operator at Småkraft, Norway’s largest operator of small-scale hydropower plants. Her presentation focussed on the challenges related to the development of renewable energy communities in Norway and on possible business concepts for this ownership model for clean energy.

Birgitte Molstad, environmental director at OBOS, Norway’s largest housing developer, discussed the challenges related to joint ownership of solar panels among housing cooperatives, and presented their thoughts about the future when it comes to decentralised energy solutions.

The participants at the meeting also got to hear the views of energy utility Agder Energi on the current legal framework, presented by the company’s senior adviser Ole-Petter Halvåg. He also presented their advice for what Norwegian authorities should do to prepare the way for the development of renewable energy communities in Norway.

During the discussions at the meeting, it was emphasised that the development of renewable energy communities could be important for local growth and business development, and could contribute to reducing greenhouse gas emissions, for example in the transport sector.

Housing cooperatives could for example establish their own energy communities to cater for their increased need for electricity, for example due to more residents switching to electric cars.

Complicated legal framework

The meeting participants also discussed the challenges faced by those wanting to establish renewable energy communities in Norway. Several of them said that today’s legal framework is complicated and requires that the citizens, businesses and local authorities involved have in-depth knowledge of the field.

They therefore called for a simplification of the Norwegian legal framework and for better and more accessible information about the current rules for establishing renewable energy communities.

Several of the participants said that there is a need for a legal framework and for business models that ensure that the costs involved in increasing the capacity of the grid to accommodate for the development of renewable energy communities are evenly shared among the renewable energy communities and the local community.

It was highlighted that if renewable energy communities are exempted from having to pay grid charges, it could lead to other electricity costumers having to foot the bill instead.

For those in Norway wanting to establish renewable energy communities, it can be challenging to raise the funds needed for the investment, the meeting participants pointed out. Furthermore, it can also take a long time before they see a return on their investment. It can therefore be difficult to find the financing needed to establish renewable energy communities.

As part of the COME RES project, CICERO and NVE will organise two more country desk meetings in 2021. The first will take place in late May/early June, and the second in October/November.

You can read more about CICERO’s work in the COME RES project here. For more information about the project, please see the COME RES website.