Case study: industry-sponsored energy communities

November 22, 2024

An energy community refers to a decentralized and collaborative approach where a group of individuals, businesses, or local organizations come together to produce, consume and manage energy collectively. There are a number of types of energy communities with varying levels of commitment and cooperation.

In urban areas, energy communities can be formed as part of a larger smart city initiative, or quite simply through agreements to share electricity and gas requirements, whether for common spaces or for an entire residence or commercial building. In rural areas, energy communities can be formed to maximize the use of local resources such as solar, wind, hydro or biomass power, while mitigating costs and associated risks.

Energy communities backed by industry sponsors have emerged as a trend in the transition towards sustainable energy. These sponsors, often large corporations with vested interests in renewable energy, provide financial backing, technical expertise and innovative technologies to ensure the success of these communities. The involvement of industry not only accelerates the deployment of advanced energy systems but also fosters trust among participants by ensuring reliability and efficiency.

One of the main drivers for industry-sponsored energy communities is the growing demand for sustainable and eco-friendly solutions from consumers. As more people become concerned about the environmental impact of traditional energy sources like fossil fuels, there is an increasing demand for alternative options that prioritize renewable sources. On the other hand, industrial actors who are already significant generators or purchasers of energy can pass on some of these synergies with local communities, while mitigating some of the effects of operations that are proximate.

Italy has emerged as a leader in the adoption of industry-sponsored energy communities, in part due to the rising cost of electricity as compared to France or other European neighbors. Energy communities backed by industry sponsors have proven to be successful in Italy, with significant investments and commitments from leading companies such as Enel, Eni and Italgas. These companies not only provide the necessary capital for infrastructure development but also offer expertise in managing energy generation, distribution and storage. Additionally, they bring their networks and relationships with suppliers, partners, local authorities and regulatory bodies.

Another recent example is the case of Ferrari, which signed an agreement with Enel X to create a photovoltaic plant serving a new renewable energy community in Fiorano and Maranello, adjacent to the Fiorano Ferrari Circuit. The Ferrari energy community will be the first project of its kind in Italy for the benefit of its local territory. The project envisages an average production of approximately 1,500 MWh over 20 years, reducing associated CO2 emissions by approximately 450 tons per year.

The benefits of industry-sponsored energy communities extend beyond environmental sustainability and economic savings by creating local jobs, harnessing local technical skills and supporting community identity and cohesion. Energy communities empower their participants to become active players in the energy transition, giving them a stake in both the economic and environmental outcomes of their efforts. As these projects develop, they encourage the adoption of new technologies and practices, fostering a culture of innovation and resilience.

Furthermore, these communities enhance local energy security and resilience by reducing dependence on external energy supplies and insulating participants from market volatilities. As more industries recognize the potential of these systems, the proliferation of industry-sponsored energy communities is anticipated to grow, driving the global shift towards a sustainable future. For policymakers, this growth presents an opportunity to support and scale up the framework needed for these communities to thrive, ensuring equitable access and benefits across diverse regions.

CPM