Energy community business models and their impact on the energy transition: Lessons learnt from France

The need to accelerate the decarbonisation of the energy system has led to renewed interest in energy com-munities. Such communities are now identified by institutions as new instruments that can contribute to four main policy objectives: i) increase renewable energy capacity, ii) mobilize private capital, iii) provide flexibility for the electricity system, and iv) empower consumers. Within the frame of the historically centralised French energy system, we present five energy community business models (ECBMs) and explore the extent to which they contribute to the four aforementioned policy objectives. Our analysis shows that, while no ECBM has yet enhanced the flexibility of the grid, each ECBM contributes differently to realising three other policy objectives. We also show that the diffusion of ECBMs remains limited as a result of legal, organisational and financial barriers. We propose three recommendations that could help ECBM diffuse - protect economic viability, support intermediaries that facilitate the adoption of ECBMs, and nurture local governments as key enablers. Our out-comes are intended to guide policymakers by providing insights into which types of energy communities could contribute most significantly to the various policy objectives and provide recommendations to include them in their energy policy roadmaps more effectively.

Automated summary

The importance of accelerating the decarbonisation of the energy system has led to a renewed focus on energy communities. These communities are seen as new instruments that can contribute to increasing renewable energy capacity, mobilizing private capital, providing flexibility for the electricity system, and empowering consumers. This study presents five energy community business models (ECBMs) within the context of the centralized French energy system and assesses their contributions to these policy objectives. The analysis shows that while ECBMs have not yet enhanced grid flexibility, they do contribute differently to the other three objectives. However, the diffusion of ECBMs is limited due to legal, organizational, and financial barriers. The study proposes three recommendations to promote the diffusion of ECBMs, including protecting economic viability, supporting intermediaries, and nurturing local governments as key enablers. The findings aim to guide policymakers in effectively including energy communities in their energy policy roadmaps.