Implementing a Block-Level Energy System Through Energy Communities

Various energy community models are emerging in many discussions today. Associations of energy producers and consumers are of interest to municipalities and cities in zoning projects, housing cooperatives in energy renovation contexts, and large property owners in regional development projects. The EU directive on energy communities is driving the legislation for energy communities, which also promotes decentralised renewable and carbon-neutral electricity production at the national level.

This is about a sharing economy where an energy community revolves around an energy commodity such as electricity, heat, cooling, or biofuels. The greatest opportunities arise in producing, using, and sharing renewable electricity, where community members can potentially save on both electricity transmission fees and electricity taxes.

In the superblock concept, the technical implementation of the block’s energy system is enabled by the energy system implementation model, which refers to the administrative arrangement of how energy production and distribution within a property, between multiple properties, or across a wider area, is most sensibly implemented. Different implementation models set restrictions and open opportunities for energy system implementation. The goals may include cost savings as well as other benefits like reducing carbon emissions.

Traditionally, there are four main implementation models for energy systems:

1. The conventional option is connecting properties to the district heating and electricity networks.
2. A single property owner or housing cooperative can invest in its own energy production, such as geothermal heating or solar panel systems. This model limits sharing between properties.
3. Renewable energy can be purchased as a service (“energy as a service“), where an external operator handles energy production and distribution on a turnkey basis.
4. In a local energy community, members invest in, for example, solar panels and share the output across multiple usage points. In housing cooperatives, this is referred to as collective investment, where costs and benefits are shared among all participants.

Energy Community Models: From Housing Cooperatives to Hospital Campuses

On the smallest scale, an energy community might mean a housing cooperative sharing heat produced by an air-source heat pump or electricity produced by solar panels among its members. An energy community could also consist of a unified superblock or include a broader property portfolio owned by a municipality, city, or other large property owner, such as a university, hospital, or industrial area.

The only limiting conditions in the energy community model are:

• All plots and properties joining the local energy community must have the same holder through ownership or land leasing.
• The properties must border one another.
• The local energy community must be connected to the electricity distribution network via a shared connection.

However, there is an exception to this. In a decentralised energy community, property owners acquire a share of, for instance, a wind farm and purchase earmarked electricity at a specific price. In this case, savings are lower because electricity transmission fees still apply.

Electricity Legislation in a Nutshell

When considering establishing an energy community, only electricity sharing is subject to restrictive legislation: the Electricity Market Act. In contrast, distributing heat energy or arranging cooling between multiple properties is purely a contractual matter between the properties.

There are a few key aspects to understand about the Electricity Market Act. Before a legislative amendment, a housing cooperative could use surplus electricity for common areas under its own meter, but not for individual apartments. After the amendment, a property owner can distribute electricity for the use of shareholders and even within a group of properties.

The most significant change is the compensation accounting model. In a housing cooperative, residents can utilise electricity produced by, for example, solar panels in their own apartments, enhancing the usability of solar power and reducing each shareholder’s electricity bills. After all, purchased electricity is the most expensive! Additionally, shareholders can distribute the proceeds from selling electricity as they see fit.

On a larger scale, it’s about more than just savings. Energy communities make energy systems more equitable: more people can participate in energy-related decision-making. Energy communities also encourage renewable energy production, support the energy transition, and offer a highly tangible way to participate in the green shift.

Oskari Fagerström

Group Manager

Granlund Group