The potential of cross-border energy communities

Feburary 2025

The transition to clean and sustainable energy systems is a pressing challenge. In this context, cross-border energy communities are emerging as a means to accelerate the energy transition while fostering cross-border cooperation.

From a policy perspective, cross-border energy communities align with key EU initiatives such as the European Green Deal, which aims to make Europe the first climate neutral continent by 2050. They contribute to energy solidarity and integration by addressing challenges specific to border regions, where resources, infrastructure and policies often need to be aligned. Moreover, such communities resonate with the EU's emphasis on empowering citizens, promoting inclusiveness and ensuring that the benefits of the energy transition are widely shared.

At the energy level, cross-border energy communities enable innovative solutions for decentralised energy production, shared consumption and storage. By pooling resources and expertise, they promote the use of renewable energy, increase energy efficiency and support the development of resilient energy systems. They also provide a framework to address cross-border challenges, such as grid compatibility and regulatory differences, which often hamper progress in border regions.

To support the further development of cross-border energy communities, the European Commission has published a handbook on cross-border energy communities (S'ouvre dans une nouvelle fenêtre). It provides practical guidance and detailed case studies for those interested in promoting cross-border cooperation in the energy sector.

What is a cross-border energy community?

A cross-border energy community is a collaborative initiative that brings together individuals, businesses and public institutions from two or more neighbouring countries to jointly produce, consume, store and manage energy. Rooted in the principles of citizen empowerment, decentralisation and sustainability, these communities aim to localise energy solutions while taking into account the unique dynamics of cross-border regions.

Cross-border energy communities typically operate on cooperative principles, allowing participants to collectively own and manage renewable energy projects. They often focus on renewable energy sources such as solar, wind or biomass, and may include shared infrastructure such as microgrids or battery storage. The governance structures of such communities vary, but generally ensure active participation, transparency and equitable benefits for all members.

The legal basis for cross-border energy communities is supported by the EU Clean Energy Package, which provides a legal framework for energy communities and recognises their potential to enhance citizen participation and foster innovation.

What is the experience with existing cross-border energy communities?

The implementation of cross-border energy communities is still in its infancy, but several examples illustrate their potential and challenges. Existing communities are often concentrated in regions with strong cross-border links and complementary resources, such as the German-Dutch and French-Belgian borders. These initiatives range from small-scale projects focused on local renewable energy production to larger collaborations involving several municipalities and cross-border institutions.

The handbook (S'ouvre dans une nouvelle fenêtre) and also REScoop (S'ouvre dans une nouvelle fenêtre) (the European federation of energy communities) provide several examples of cross-border energy communities. They illustrate the diversity of cross-border energy communities and how shared expertise and funding can accelerate project implementation.

Geographically, cross-border energy communities have been for example been active in:

• German-Dutch Border: Known for initiatives leveraging shared renewable energy projects like wind and solar farms.

• French-Belgian Border: Focused on shared energy storage and local renewable energy distribution.

• Spanish-Portuguese Border: focused on cross-border energy trading by establishing cross-border cooperatives

• Other European Cross-Border Regions: Emerging initiatives supported by programmes such as Interreg and the European Grouping of Territorial Cooperation (EGTCs).

Despite their promise, the number of fully operational cross-border energy communities remains limited. Barriers such as regulatory fragmentation and mismatched energy policies often slow progress. However, growing political and financial support for such initiatives signals a positive trend.

What are the benefits of cross-border energy communities?

The benefits of cross-border energy communities are manifold and include environmental, social and economic dimensions:

• Environmental benefits: Cross-border energy communities can offer a unique opportunity to pool renewable energy resources from several countries, enabling optimised energy production and reducing dependence on fossil fuels more effectively than single-country energy communities. By addressing common environmental challenges across borders, they contribute significantly to reducing greenhouse gas emissions at a regional level.

• Economic benefits: Cross-border energy communities can unlock greater economic potential by enabling the pooling of financial resources and expertise across nations. They can create local jobs and stimulate interconnected regional economies, with benefits flowing across borders. Shared investment and economies of scale reduce energy costs more effectively than single-country initiatives, while keeping energy revenues within multiple regions promotes economic resilience and cross-border interdependence.

• Social benefits: Cross-border energy communities can strengthen social ties between neighbouring regions by fostering cooperation and shared ownership of energy solutions. They enable citizens from different countries to participate in the energy transition together, promoting inclusiveness and cooperation. They also tackle energy poverty on a wider scale by providing affordable, sustainable energy solutions tailored to the needs of border communities.

• Energy security and resilience: Cross-border energy communities can enhance energy security by diversifying energy sources and creating shared infrastructure across nations. These integrated systems improve reliability and stability in border regions, making them less vulnerable to external shocks. The cooperative approach can ensure that energy resilience is strengthened on both sides of the border, creating a robust framework for addressing future energy challenges.

What are the pitfalls of cross-border energy communities?

While the potential benefits are significant, cross-border energy communities also face challenges that can impede their success:

• Regulatory barriers: Differences in national energy regulations, grid codes (especially on the medium and low voltage grid level), and support schemes create complexities for cross-border projects.

• Financial challenges: Securing funding for cross-border initiatives is often more complex than for national projects, requiring alignment of financial mechanisms and risk-sharing agreements.

• Cultural and linguistic differences: Effective collaboration requires overcoming language barriers and differences in organisational cultures and priorities.

• Technical integration: Ensuring compatibility of energy systems and infrastructure across borders can be technically challenging and costly.

• Governance complexities: Establishing inclusive and transparent governance structures that account for the interests of all stakeholders is crucial but often difficult.

Tips and tricks for establishing a cross-border energy community

For those considering establishing a cross-border energy community, the handbook on cross-border energy communities (S'ouvre dans une nouvelle fenêtre) offers some insights that can help navigate the process:

• Start with a shared vision: Ensure that all stakeholders agree on common goals and objectives for the community. This shared vision will serve as the basis for collaboration.

• Use existing frameworks: Use EU support mechanisms such as an Interreg programme and legislative frameworks such as the Clean Energy Package to navigate regulatory complexities and access funding.

• Involve local stakeholders: Early and continuous involvement of citizens, municipalities and local businesses is essential to build trust and ensure the long-term success of the initiative.

• Develop strong governance structures: Clearly define roles, responsibilities and decision-making processes to ensure effective and equitable governance.

• Invest in capacity building: Provide training and resources to stakeholders to fill knowledge gaps and improve technical and organisational skills.

• Prioritise pilot projects: Start with small-scale pilots to test concepts, build confidence and generate lessons for scaling up. In this spirit – starting with quasi-cross-border energy communities (i.e. communities exchanging services around energy rather than the energy itself) may help to take the first steps and overcome the lack of direct cross-border energy connections (cables, powerlines or pipelines).

• Foster cross-border networks: Work with other cross-border initiatives to share experience, best practice and resources.

Conclusion

Cross-border energy communities represent a transformative approach to energy transition in border regions. By fostering cooperation, empowering citizens and promoting sustainability, they offer a pathway to a more inclusive and resilient energy future. While challenges remain, the growing body of experience and support provides a solid foundation for scaling up these initiatives. As the energy transition accelerates, cross-border energy communities will undoubtedly play a crucial role in shaping a sustainable and interconnected Europe.

For in-depth insights and practical advice on cross-border energy communities, the handbook on cross-border energy communities (S'ouvre dans une nouvelle fenêtre) is a valuable resource. It offers step-by-step methodologies, lessons learned from existing initiatives and tools to overcome challenges. Whether you are a policy maker, a local stakeholder or a citizen wanting to be part of the energy transition, the handbook provides the comprehensive guidance needed to turn ambitions into reality.

by Kai Böhme & Bernd Schuh