LexisNexis

The future of renewable energy communities in Italy: an opportunity

Tuesday 8 June 2021

Francesco Castronovo

Pedersoli Studio Legale, Milan

f.castronovo@pedersoli.it

Luca Saraceni

Pedersoli Studio Legale, Milan

l.saraceni@pedersoli.it

EU Directive 2018/2001 aims at establishing a common framework for the promotion of energy from renewable sources. In particular, under article 22 of the Directive, Member States shall ensure that final consumers are entitled to participate in a renewable energy community.

The renewable energy community is a legal entity, members of which are individuals, SMEs or local authorities. Their primary purpose is to provide environmental, economic or social community benefits to stakeholders, members or for the local areas in which it operates. In other words, the members set up or join the local energy community with the purpose of a more efficient use of the renewable energy projects that are owned and developed by the community itself.

Under the Directive, the energy community aims to promote and facilitate the use and sharing of renewable energy by small customers, such as individuals, SMEs or local authorities. The Directive requires EU Member States to enact legislation ruling the energy community, pinpointing, under article 22, just the main criteria that the national law shall use as reference points in elaborating its own legislation. The Directive, therefore, leaves the member states with a relevant amount of leeway as to the exact rules to be adopted.

In Italy, the Directive has already been enacted by the Legislative Decree no. 162/2019 and by the Resolution 4/2020 by ARERA (the Italian Regulatory Authority for Energy, Networks and Environment). However, these pieces of legislation basically repeat the provisions of the Directive, leaving to further acts or integrations, which are still due, a specific ruling of the energy community. In particular, the Italian law so far does not specify the broad provisions of the Directive and therefore does not currently dictate specific standards ruling the legal characteristic, structure and requirements with which the energy community shall comply.

Despite this, the energy community is already a workable and useful part of the Italian energy market, and has gained attention both at local and national level. In recent months, several local initiatives, often supported by the local authority, have formed energy communities. Several big players in the Italian energy market are also interested in this new market segment and are beginning to set up internal divisions dedicated to providing services and support in the setting up and management of such new legal entities.

As mentioned above, the Italian law does not rule the legal status of the energy community. In the light of the fact that under the Directive, and subsequently under the Italian law, the primary purpose of the energy community is to provide environmental, economic or social community benefits, rather than financial profits, at the moment the legal status that better complies with such broad requirements is the non-profit association.

By definition a non-profit association is organised and operated for a collective, public or social benefit and that, in this case is a more efficient sharing and use of renewable energy. On the one hand the non-profit organisation is a proper legal entity, enabling the organisation to be treated as a distinct body by law and to enter into business dealings; on the other, it requires a simpler and cheaper structure than a for-profit entity, such as a private company limited by shares.

However, it is clear that in the very near future, together with the growth of this segment of market, the importance of the energy community will grow, and it will therefore be advisable and convenient to use legal forms different from a non-profit association.

Even if the current Italian law dedicated to the energy community is still under development, it is already clear that such a community is a useful means of meeting the needs of both the big players in the energy market and the small consumers, linking these two categories and allowing them to cooperate in the market.