Guidelines on community-led heating and cooling

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Choosing your governance model

A community heating and cooling (CH&C) network creates connections between producers and consumers of thermal energy around a democratic, ethical, solidary and social economy. The purpose of CH&C is to facilitate citizens, municipalities, and small businesses thermal energy for a democratic, transparent, and affordable price.

For the system to ensure these prices it must have a governance model that allows citizens to control the price of production in full transparency.

The energy community that exploits these thermal energy installations (TEIs) must also have a not-for-profit objective, seeking instead the fulfilment of social and environmental criteria as established in the EU definitions for energy communities. The ultimate objective of a Community-led Heating and Cooling (CH&C) network is to democratise thermal energy by putting production and/or distribution capacities in the hands of the participating citizens.

Within this logic, you have multiple options for governance models:

 

  1. Multi-stakeholder cooperative model

In the development of district heating and cooling it is important to involve key stakeholders. One way to do this is to create a multi stakeholder cooperative model. This way the stakeholders are not only customers but also co-owners and more invested in the decision making of the energy community. This also means that they have a collective responsibility for the operation of the district heating and cooling network.

Example

The Danish cooperative FD Hvidovre is an example of how a district heating cooperative is organised in a multi-stakeholder cooperative model. The board of representatives in FD Hvidovre is divided into 6 groups: Citizens, the municipality, larger housing associations, smaller housing associations, larger private properties, and SMEs. Decision making is accomplished through a majority of votes.

 

  1. Cooperative model with shared limited entities

A different form to work together with other partners is through organising collectively joint ventures. This is often the case when energy communities work together with companies that are strategic suppliers of expertise or capital.

Example

In Amsterdam the cooperative MeerEnergie U.A. works together with the regional Distribution System Operator (DSO). Due to Dutch regulation the DSO can only invest in infrastructure networks. For that reason they will set up a joint venture in a limited entity where the cooperative owns 51% of the shares, and the DSO owns 49% of the shares. They both put up the capital to the ratio of shares.

 

  1. Shared service company (ESCo)

Shared service companies are usually owned by a group of cooperatives or energy communities themselves. By sharing services, cooperatives and energy communities do not have to organise everything by themselves. They pool the knowledge and expertise needed to run the cooperatives into one organisation. For five cooperatives in the same region it is not needed to have five different bookkeepers, with five different systems or membership support systems, or five different teams of technicians. They can organise efficiently by working together. This of course follows the cooperative principle of ‘cooperation among cooperatives’.

Example

Member States such as Denmark and Italy (Sud Tirol) are being supported by shared service companies. The companies exist to support Community-led Heating and Cooling. This can include full service for invoicing, (financial) administration, communication, and technical planning and support. In Italy for example there is the Sudtiroler Energieverband (SEV). This is a cooperation of all the energy communities in the Sud Tirol region. They help energy communities with legal questions and for the representation at the national level. When there are changes they train their members on how to operationalise these changes into their organisation.