EU Directives on the internal governance of energy communities and their exclusionary effects

If already existing energy cooperatives and other citizen-led initiatives are to benefit from energy sharing and other privileges under the EU Internal Electricity Market and Renewable Energy Directives, their internal governance will have to adhere to the requirements set by these Directives. This contribution combines legal-doctrinal and empirical research on German energy communities to determine the extent to which different interpretations of the Directives respect established governance structures. It goes on to evaluate which interpretation creates the least disruptive incentives for communities to adapt their internal governance to the Directives. The contribution argues that the Directives should tolerate that energy communities pursue financial goals in addition to economic, environmental, or social benefits. It finds that the exclusion of energy companies, large enterprises, and non-local authorities from membership under the Renewable Energy Directive deters a desirable skill transfer. An exiting member should not be entitled to an immediate reimbursement, to preserve the financial viability of the community. The interpretation of autonomy and effective control should respect the indirect democracy in most communities with few active members leading the way and taking the most important decisions. Finally, the activities and size of the community should inform the interpretation of the proximity requirement.