The Dutch Energy Act (Energiewet) gives energy communities an explicit place in the energy system. This marks a substantial change compared to the situation under the 1998 Electricity Act, in which collective energy initiatives had to fit into a framework that was not designed for this form of cooperation. The new Act therefore provides a clearer legal starting point for resident collectives, local cooperatives, and collaborating businesses that want to jointly generate, use, store, or share energy.
Energy communities play a crucial role in promoting sustainable practices and local energy autonomy.
Many energy communities are emerging across Europe, showcasing innovative solutions for energy generation and sharing.
This recognition does not mean that energy communities fall outside regular energy law. On the contrary: precisely because they operate at the intersection of generation, supply, storage, allocation, and grid use, their structure requires careful legal analysis. In this article, we discuss the main features of the legal framework and the key points of attention for practice.
These energy communities enhance local resilience and offer benefits beyond just energy savings.
For many residents, joining energy communities can lead to significant financial and environmental benefits.
What is an energy community?
Through collective efforts, energy communities can negotiate better rates and improve local energy systems.
Understanding the nuances of energy communities is essential for their successful implementation.
The Energy Act aligns with two European concepts: the citizen energy community and the renewable energy community. In both cases, this concerns a legal entity with voluntary and open participation, in which control should not lie solely with capital providers and the primary purpose is not profit maximisation, but rather achieving environmental, economic, or social benefits for its members or the local area.
Energy communities can significantly impact energy consumption patterns and local economies.
By fostering collaboration, energy communities can contribute to broader climate goals and community well-being.
Additional conditions apply to renewable energy communities. It is particularly important that control is genuinely embedded locally and is not effectively taken over by large market parties. Anyone wishing to structure an initiative as an energy community must therefore look not only at the chosen legal form, but above all at the actual balance of power, membership conditions, and the way benefits and costs are distributed.
The governance of energy communities must reflect the democratic values of their members.
What activities are possible?
An energy community can, in principle, carry out multiple activities. These include generation, supply, storage, aggregation, flexibility services, charging infrastructure, and energy sharing. This broad applicability makes the concept attractive for collective projects, both in the built environment and on business parks.
Implementation challenges for energy communities often require collaborative problem-solving approaches.
At the same time, care must be taken not to overestimate the scope of the concept of an energy community. The mere fact that an initiative can be classified as an energy community does not remove other regulatory classifications. Whether there is supply, aggregation, or another regulated activity must always be assessed separately. This applies in particular to energy sharing, where the civil arrangements between participants, the allocation of energy, the role of the supplier, and the technical system processing must align closely with one another.
Licensing obligation, consumer protection, and grid access
As soon as an energy community supplies electricity to small consumers, it comes into contact with the rules governing supply and the protection of end users. The Energy Act creates room for collective models but does not offer a generic exemption from the regular regime. Whether a licence is required, or whether the community can operate within an exception or special regime, depends on the specific design of the model.
Energy communities can act as catalysts for change in local energy markets.
The relationship with the grid operator also deserves attention from the outset. An energy community is, in principle, entitled to access to the grid under non-discriminatory conditions, but remains subject to the usual system obligations. Think of connection, transport, metering, data exchange, grid tariffs, and restrictions resulting from congestion. Anyone wishing to build their own infrastructure within a project must also carefully assess whether this affects the regime for closed distribution systems or other regulated grid structures.
Legal structuring in practice
Building networks among energy communities enhances their collective impact.
The legal quality of an energy community is not determined solely by its articles of association. Opting for a cooperative or association is often obvious, but this is only the beginning. What matters is whether the governance aligns with the statutory features of open participation, appropriate control, and a purpose that is not primarily aimed at profit distribution.
Participating in energy communities can lead to personal empowerment and community engagement.
In addition, a solid contractual basis is required. In practice, this involves at least agreements on participation, entry and exit, voting ratios, investment contributions, operations, allocation of generated energy, settlement of benefits, liability, and dispute resolution. On top of that come agreements with suppliers, market parties, installers, financiers, and the grid operator. It is precisely at this point that a technically or commercially workable model regularly proves to be insufficiently developed from a legal perspective.
Legal structures supporting energy communities are vital for their sustainability and growth.
Main risks
In practice, three risks keep recurring.
The first is the governance risk. Conflicts often do not arise at the start of the initiative, but as soon as the economic interest increases. Uncertainty about control, the admission of new participants, the allocation of profits, or the role of professional partners can then put pressure on the functioning of the community.
The second is the regulatory risk. An incorrect delineation between energy sharing, supply, and other regulated activities can result in an initiative unintentionally operating subject to a licence requirement, or failing to comply with the rules protecting consumers and the proper functioning of the system.
The third is the grid risk. Even a legally carefully structured energy community remains dependent on available transport capacity. In congestion areas, this can have direct consequences for the feasibility and profitability of the project. A business case based solely on local generation, without a serious assessment of connection and transport, is therefore vulnerable.
Conclusion
The Energy Act provides energy communities with a considerably stronger legal foundation than before. This opens the door to collective energy projects in which generation, use, storage, and energy sharing are organised at the local level. At the same time, the framework is legally layered and operationally complex. The success of an energy community therefore depends not only on technology or public support, but above all on a legally consistent structure.
Anyone setting up or joining an energy community would do well to have the structure comprehensively reviewed in advance: from a corporate, contractual, and energy law perspective. Only then can the room offered by the Energy Act actually be put to use.
Frequently Asked Questions
Is an energy community exempt from a supply licence if it supplies its members?
Not automatically. The Energy Act provides an exception to the supply licence requirement for energy communities, but this only applies if specific conditions are met, including a maximum of five hundred members or shareholders and supply that does not exceed what the community itself feeds in. Whether a specific initiative falls under this exception must be assessed on a case-by-case basis.
What is the difference between energy sharing and supply?
Energy sharing is a separately regulated statutory right whereby an active customer or connected party within an energy community shares energy via the grid, linked to, among other things, an agreement with a supplier that offers energy sharing and a suitable metering device. Supply is a separately regulated activity with its own obligations. The two regimes are not interchangeable and must be qualified independently of each other.
Does an energy community pay the same grid tariffs as other consumers?
Yes, in principle it does. The regulations require that the tariffs for an energy community contribute sufficiently and proportionately to the total costs of the transmission or distribution system. There is no general tariff exemption for energy communities.
Which legal form is suitable for an energy community?
In practice, a cooperative or association is usually chosen, as these legal forms align well with the statutory requirements of open and voluntary participation and member control. However, the legal form alone is not sufficient: the articles of association and underlying agreements must genuinely safeguard the governance requirements as well.
Can an energy community build its own electricity grid?
This is possible under certain circumstances, but this quickly brings the regime for closed distribution systems or direct lines into play. This requires a separate legal assessment, independent of whether the initiative qualifies as an energy community.
Does an energy community face risk from grid congestion?
Yes. An energy community remains dependent on available transport capacity and may face restrictions from the grid operator in congestion areas. This can directly affect the feasibility and scalability of the project and therefore deserves attention when drawing up the business case.
