Energy communities are highly topical. Hardly any energy conference comes without a dedicated session on them. There are growing initiatives, both driven by people and policy, supporting their widespread adoption. Some consider them as a game changer for mastering the energy transition, whereas critics see them as an alibi for good will of policy makers in the climate crisis. Therefore, I want to have a closer look on energy communities: What is their vision about? What can we expect from them in reality? Revolving around this question, this blog article gives insights into the current situation of energy communities in Austria, the specifics in regulation and the main barriers to put them into practice.

The Vision

The notion of sharing economy, decentralisation, participation and self-sufficiency have shaped the concept of energy communities in recent years, resulting in their formal definition in European legislation through the Clean Energy Package. However, the expectations, what energy communities should offer and enable have always been very diverse. As shown in Figure 1, the big picture of energy communities can be quite extensive, ranging from joint energy generation and sharing to energy efficiency optimisation or even services for balancing the energy grid and national energy markets. 

Figure 1: Potential energy services offered within an energy community (as envisioned by [1])

First small steps in Austria  – the Renewable Energy Act 2021

Following the requirements of the EU Clean Energy Package, the concept of energy communities has been officially defined in Austrian legislation in summer 2021. There are two types: Renewable Energy Communities (REC) and Citizen Energy Communities (CEC). Their main characteristics are based on the EU directives and shown in the table below.

Table 1: Difference between REC and CEC in Austria (based on [2])

Geographic proximityLocal (common low voltage grid), or regional (common medium voltage grid)Unlimited
Grid tariffReduced tariffFull tariff
TechnologyRenewable electricity only All energy carriers
ParticipantsNo large companies or energy suppliersNo restrictions, but medium and large companies and energy suppliers are not allowed to have decision authority in the community

In Austria, there is also a specific support facility [2] that provides knowledge for implementing energy communities with branches of this facility located in each of the 9 federal states. Also, a lot of commercial service providers have emerged that offer their support for planning, setting up and operating energy communities, often also offering specifically developed software tools. Currently this is a vivid market under development.

What is possible now and where are the roadblocks?

People in Austria can now collectively engage in an energy community by founding a dedicated association or cooperative. All participants have to sign an agreement with their local DSO (=grid operator) and those with energy generation assets share their surplus generation with the other participants. The “sharing“ is done by the local DSO by assigning the energy quantities to each participants’ electricity bills. This looks like a straightforward and practical concept, but it certainly has some limitations.

The main conceptual shortcomings of energy communities in Austria might be the restrictions for eligible community participants. As stated by the EU directives, large companies are not eligible to participate or to have any decision authority within the community. This is mainly due to the idea that energy communities should be non-profit and grassroot organisations, meaning that they are organised bottom-up by the people. Considering the regulatory exemptions for energy communities (such as reduced grid tariffs and exemption from balance responsibility) it seems reasonable to limit participation to citizens only. However, this is a major roadblock for the breakthrough of energy communities. Practical experience from Austria shows that many large companies, especially (social) housing companies would be interested in initiating and engaging in energy communities. They could leverage the huge potential of rooftop PV and energy communities would be an efficient instrument to unleash these benefits for citizens. 

On top of this conceptual barrier, there are still some practical barriers to be overcome. I would like to name a few aspects that are currently giving prospective energy community founders a hard time [3]:

  • Finding peers that are interested in joining an energy community can be difficult. You need to send a request to your local DSO to find out if you are connected to the same low voltage feeder as another prosumer. Considering that there are 122 DSOs in Austria with different processes to do that, this is a quite complex task.
  • RECs can be only implemented within the grid area of a single DSO, which can be a major barrier. For example, the second largest city of Austria, Graz, is divided into 3 DSO areas! 
  • An energy community needs to hold certain ownership rights of the generation asset that is feeding into the community. This is typically not the case for private prosumers with rooftop PV panels and therefore still a grey area in the legal framework.
  • There are uncertainties about the suitable legal form of an energy community. It is often argued that a non-profit association or a cooperative is the best way to go, but there are still contradicting points, especially regarding taxation.
  • Energy communities require smart meters, but the roll out is lagging behind in some parts of Austria. Whereas in the state of Upper Austria the roll out is nearly completed with 98%, the state of Salzburg has a current roll-out rate of only 6% [4]!
  • The DSO is responsible for assigning the energy quantities shared within the energy community. This is done not in real time, but based on the smart meter readings that are retrieved once a day by the DSO. This enables simple energy sharing, but it does not enable optimisation of energy self-consumption within the community. For flexible building management such as smart charging of electric vehicles or smart heat pump operation, real time meter data from all community members is a must. 

Energy Communities as a contribution to Europe’s energy transition?

What about the actual impact energy communities might have for pursuing a fully renewable energy system? To put it short, the main aspects are investments in decentralised energy generation, consumer awareness and potential benefit for the grid.

Energy communities can achieve an increased willingness by private consumers to invest in decentralised generation assets such as photovoltaics. Being part of an energy community might be an incentive to scale up the size of my PV installation. Also, the public acceptance for renewable generation assets could be increased, if the whole neighbourhood can profit from it rather than only a single prosumer. This could be an aspect especially when thinking of the installation of small-scale wind power plants and overcoming the NIMBY effect.

Probably the main leverage of energy communities is after all the awareness they can create among end-users that they can actively participate in the energy transition. The consumer awareness aspect should not be underrated, because we – the people – might be one of the big barriers to actually achieve the transition.

Another aspect that is often raised is the potential benefit for the public power grid. As the grid is used less by community members, it might prevent the need for grid reinforcement. However, this might be a very simplistic view. As renewable energy generation is subject to fluctuations, there will always be times when the community is fully dependent on the public grid. Even if this is the case only once a year, the grid needs to be ready for that. This means investment costs most probably remain the same. On this issue, the Austrian regulator plans to undertake a cost-benefit analysis in 2024 to find out if energy communities have been beneficial to the grid or not [5]. 

What’s in for the end-users?

Energy communities are intended to mainly create a social value rather than a monetary one. However, in order to make a real impact for Europe’s energy transition, prosumers and consumers would need a convincing incentive also in monetary terms. This is especially true when thinking of the costs and personal efforts it takes to initiate and set up such a community. So how can the members of an energy community profit in monetary terms? The Austrian regulation has determined certain reductions of mandatory charges and a reduction of grid tariffs for the energy generated and consumed within the community. Latter accounts for a reduction of 57% for local RECs [6]. But a more effective leverage could be the price for the locally shared energy. This might be fully individual and depending on the agreements between community members, which means it is hard to quantify. However, the community members have the possibility to generate and share the electricity below the market prices. Thinking of decreasing prices for PV installations and recently dramatically increasing spot market prices, this could be a valuable approach for the whole community. 

Community models in current regulation as alternatives to energy communities

Some initiatives for community-like energy projects have emerged already before the legislation of the Clean Energy Package was implemented in Austria. Such initiatives follow a similar vision, but they don’t fall under the definition of energy communities.

A typical concept are joint investment initiatives, facilitating crowd-funding campaigns for renewable energy assets. This approach has been taken either by start-ups, like for instance Collective Energy [7], or also big incumbent energy suppliers, such as the BürgerInnenkraftewerke by Wien Energie [8]. However, these models can be only referred to as communities in the broadest sense. Communities that also feature direct peer-to-peer energy trading usually are built upon dedicated balance groups. This means that all prosumers have supply contracts with one energy supplier that facilitates the bilateral contracts between peers [9]. In Austria, frontrunners who have implemented this model are the start-up e-Friends [10] or the cooperative Our Power [11]. Increasingly, also typical incumbent energy suppliers have taken up this idea and also provide contracts that enable some kind of energy sharing.

What’s left of the vision?

We can see energy communities, as defined by the Austrian Renewable Energy Act 2021, offer a basic scheme for energy sharing. But considering the big vision of energy communities presented in Figure 1 above, this can be only seen as a first step in unleashing their full potential. We also see that even in this basic approach there are severe barriers for practical implementation. Many of them can only be overcome through transformation of existing processes at the 122 Austrian local DSOs. Properly integrating decentralised prosumers into the existing energy regulation framework is a complex task. The legal framework has been defined decades ago and is historically based on central energy markets. Energy communities are definitely an element of the energy transition that should not be left aside. However, it is only one piece of the puzzle and we need to be aware of the actual leverage energy communities can bring along in the pursuit of a climate neutral continent. 


[1] Klaassen, E. and Van der Laan., M., 2019. USEF White paper on Energy & Flexibility Services for Citizens Energy Communities. Available at: [30.10.2022]

[2] Österreichische Koordinationsstelle für Energiegemeinschaften. Available at: [30.10.2022]

[3] Preßmair, G., Maldet, M. et al. 2022, Von der Energiegemeinschaft zum „Energy Point“- Status Quo und neue Rollenverteilung. Wien: Klima- und Energiefonds. Available at: [30.10.2022]

[4] e-Control 2022, Bericht zur Einführung von intelligenten Messgeräten in Österreich 2022. Available at: [30.10.2022]

[5] Österreichische Koordinationsstelle für Energiegemeinschaften, FAQ 7.4. Available at: [30.10.2022]

[6] Österreichische Koordinationsstelle für Energiegemeinschaften, Niedrigere Netzkosten für EEGs. Available at: [30.10.2022]

[7] Available at: [30.10.2022]

[8] Available at: [30.10.2022]

[9] Preßmair, G., Amann, C., 2021. Gebäudeübergreifende Nutzung lokaler erneuerbarer Stromerzeugung: Wie werden peer-to-peer Handel und Energiegemeinschaften zu einem Geschäftsmodell? Presented at the 12th International Energy Economic Symposium at TU Wien, Wien. Available at: [30.10.2022]

[10] Available at: [30.10.2022]

[11] Available at: [30.10.2022]