Smart Solutions
Local Energy Community
Neighbours, private companies and public institutions come together to install and manage a system to generate and distribute local renewable energy.
Implemented in : Orexa
Country :
What’s the solution?
A Local Energy Community is formed by neighbours, private companies and public institutions with the task of producing and distributing renewable public energy – and related benefits - according to the needs of the local community. It can also carry out and promote further actions for the energy sustainability of the community.
The aims are on the one hand to reduce both the cost and the environmental impact of local energy consumption, including potentially to achieve full energy sovereignty for the local community, and on the other hand to ensure a just and fair distribution of the generated energy in order to support local business opportunities and families in need.
The community can plan and manage the installation of renewable energy infrastructure in the local area, such as installing photovoltaic panels on roofs belonging both to municipal and private buildings. It also establishes a distribution system for sharing the new energy generated among the different local users, including public institutions, private companies and inhabitants.
Public institutions can be a key stakeholder to make or support the first investments in installing the required infrastructure, which would otherwise be beyond the resources of local businesses and inhabitants on their own.
The community can decide to distribute the benefits of the system as it chooses, for example to offer incentives for companies to boost the economic activity of the village, and/or to offer significant energy cost savings to the most vulnerable families of the village.
What makes it smart?
The solution is smart because:
It proposes a radical change in the production, distribution and management of energy at the local level; it generates public, clean and renewable energy.
In addition, it proposes a system of social coverage for local companies and the most vulnerable families. Thus, the problem of energy poverty is also faced and the most vulnerable people are supported.
Energy becomes a social dimension and the community's relationship with it is transformed. It represents a revolutionary approach: the project is understood as an instrument of social protection and not just an environmental or energy efficiency issue.
Innovation also comes from the way it is managed: all the facilities are public and the inhabitants decide what investments to make and how to distribute the savings generated to develop a community and support the most vulnerable agents.
How is the solution implemented?
To create a local energy community, you need to:
- Ensure engagement of the local authority with the ambition of local energy autonomy
- Engage the community - both companies and inhabitants - with the ambition to create an energy community.
- Seek technical expertise for the purchase and installation of reliable renewable energy infrastructure
- Seek legal expertise to ensure that regulations allow the installation of renewable energy infrastructure
- Seek investment support for the initial cost of installing the renewable energy infrastructure.
- Seek to give the energy community a legal form and structure.
- Ideally, hand control over the system and the distribution of the related benefits to the energy community.
- Continue to plan further investments and activities to build the capacity of the system over time.
In what local context has it been applied?
Orexa is a small village of 123 inhabitants located in the region of Tolosaldea, at the East of Gipuzkoa in the Basque Country region of Spain, in a mountainous area bordering Navarra.
There are only two private companies based in the village. In general, private companies face many difficulties because they are in a rural environment without any industrial activity and where there is a continuous process of population decrease.
There are several families in difficulties, who are well known to the local authorities given the small size of the village. A social worker regularly visits homes in the village to assess the situation and needs of families and to offer support.
Retaining population is the most important challenge for the village’s sustainable rural development. Just 34 of the 123 inhabitants are under twenty-five years old. It is a major challenge for the survival of the village to create conditions which can enable and attract the young people to stay in the village to live.
Therefore, the Council developed a strategy both to try to retain the existing young population and also to attract more young people to the village. The Council asked them what are the principal factors that could encourage and facilitate their staying in the village. With this strategy, five lines of action were defined:
- Orexako Ostatua (municipal restaurant bar)
- Oihan txiki kooperatiba (local cooperative where cheeses and curds with Protected Designation of Origin (D.O.P.) Idiazabal are produced).
- Towards energy sovereignty
- Visitors
- Corporate image
The main challenge in energy issues was to make an essential service such as energy more affordable for inhabitants and companies in the village. Thus, energy services will be considered as social protection and an advantage for those who decide to stay in the village.
Who was behind the implementation?
- The project was led by the Village Council (local authority) of Orexa.
- The two companies of the village also collaborated in the project.
- Village inhabitants (and potential beneficiaries) also participated in the development of the project through group meetings and personal interviews. Decisions were made by the inhabitants in open meetings.
What was the local journey?
- The process for the development of the project began with the elaboration of a municipal Strategic Plan.
- First, the Council made a diagnosis of the current situation in Orexa under the parameters of Agenda 21. To do this, the Council developed a participation process through which the situation was debated, and different points of view were incorporated. The diagnosis was presented to the entire village to ask for additional input.
- Once the diagnosis was established, the same process was repeated to define the necessary objectives and actions to deal with the problems detected. In 2013, Orexa's long-term strategy was defined, called ‘Orexa Alive’ (‘Orexa Bizirik’ in Basque). This strategy established five lines of action. One of these five lines of action was the goal of energy sovereignty. The main objective of the strategy is that young people stay to live in the village, opting for a long-term life model in Orexa, and thus revive the economic sector of the village.
- The Council decided to make a little financial investment and to use some fundings (provided by the LEADER Programme, the Basque Energy Entity and the Gipuzkoa Provincial Council) for the photovoltaic infrastructure. Also they sought technical and legal assistance for the steps to follow. To do this, they contracted the Goiener energy cooperative. Their support, expertise and advice (both technical and legal) and monitoring and control of the project was essential to its success.
- On the basis of the advice received, the municipality modified laws that govern the production and consumption of renewable energy in order to enable the process: the urban regulations were modified to facilitate the installation of photovoltaic panels on roofs; in turn, the use of rural land for this was limited.
- The first photovoltaic installation for self-consumption was made in 2019 in Ostatu (one of the two companies in the village) by the Goiener energy cooperative.
- Later, a second photovoltaic installation was created in the municipal fronton (pelota court) for collective consumption.
- Finally, a third photovoltaic installation is being built in Oihan txiki (the other company in the village). To allow this, a transfer of use was made to the Council to put solar panels on the roof of the company.
- In parallel with this third installation, an energy community with legal form is currently being created. This community is made up of all the families in the village, the two companies in the village and the Council: 55 users in total.
- The Council decided to assign all the facilities built and all the savings created to the local energy community. The inhabitants can distribute them in the manner they deem appropriate. The local energy community will also act as a promoter of future projects.
- The inhabitants decided that half of the savings should go to the companies and the Council, to be used to encourage the economic activity of the village. The other half is for the most vulnerable families in the village: 10 families in total.
- The ambition of the project is to achieve energy sovereignty. To do this, it is necessary to produce more energy through the installation of more photovoltaic panels, as well as batteries to store and make better use of the energy created, regardless of the production schedule. From now on, it will be the energy community of Orexa (in development) that will be in charge of the management of the savings generated and the future investments.
What have been the main outputs & results?
- Orexa today produces 50% of the energy it needs through solar panels. The goal is total energy sovereignty to become a referent village in this area.
- There are 55 supply points that are benefiting from community self-consumption. The economic benefits are distributed among all the neighbors and companies.
- The people who have benefitted the most and the ones with the most savings are companies and the most vulnerable families. These families have energy that is 5 times cheaper than that of an average family.
What does it bring the village/community?
- The commitment to renewable energy is not only ecological and ideological but tries to provide social coverage and protection to the most vulnerable people in the village, as well as to companies rooted there that provide quality work to its inhabitants.
- Through the energy community, a system that helps local companies has been created, lowering energy costs and raising the possibilities of creating local and quality employment. Thus, it is expected to greatly help the rural development of the village.
- The energy community reinforces the social protection system for the most vulnerable families, allowing them to reduce costs.
- With all these benefits, the village hopes to increase possibilities and incentives for people and businesses to stay in village.
What’s needed
Financial resources
Main types of cost:
Financial needs:
The total cost of the three facilities has been about EUR 169 500, counting all the technical work that has had to be done.
The cost of maintenance has been almost nil because they are relatively new and under warranty installations. Through the savings it is ensured that installations can be renewed when they becomes outdated or not profitable.
Funding received:
| Source | Amount | Funded |
|---|---|---|
| LEADER PROGRAMME | 80,000 € | Photovoltaic panels, technical works. |
| Basque Energy Entity (EVE) | 20,000 € | Photovoltaic panels, technical works. |
| GIPUZKOA PROVINCIAL COUNCIL | 50,000 € | Photovoltaic panels, technical works. |
| Municipal Council | 19,500 € | Photovoltaic panels, technical works. |
Human resources
Technical expertise for the purchase and installation of renewable energy infrastructure
Legal expertise for advising public authorities on ensuring that regulations facilitate installation of renewable energy infrastructure.
Physical resources
In the first moment, only roofs in the village suitable for this type of installation are needed.
What to do…
- Participation of the community in decisions is key. For this reason, it must be a community and shared project.
- Technical support is essential. In this case, the project had the support of a local energy company: Goiener. Without this collaboration, it would not have been possible to carry out this project.
- Seek also legal support to ensure local regulations facilitate installation of renewable energy infrastructure.
and not to do
- Seek also legal support to ensure local regulations facilitate installation of renewable energy infrastructure.
