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Energy cooperatives: A promising but underutilized path in Poland’s energy transition

ENERGYEnergy cooperatives: A promising but underutilized path in Poland's energy transition

Energy cooperatives and other forms of citizen energy can be the dark horse of the Polish energy transition. However, they still face many barriers, including a lack of institutional support and legal restrictions, as well as a lack of wider awareness of the benefits of such a solution among local governments. Access to finance is not an obstacle. “In the coming years, we have a total of over PLN 2 billion, which can be allocated to such investment -” says Joanna Furmaga, President of the Polish Green Network. The availability of European funds led to a sharp increase in interest in creating energy cooperatives among local governments recently.

“European funds provide significant support in financing energy cooperatives and, more broadly, citizen energy. This is consistent with the response to the climate crisis and the pandemic, the war in Ukraine, the need to step away from Russian resources and fossil fuels in general,” says Joanna Furmaga to the Newseria Biznes agency.

Energy cooperatives create a local energy market for their members based on collective prosumer activity based on local resources. It is a model in which several entities (local communities, local government units, households, small and medium-sized enterprises) jointly invest in a RES installation, jointly manage it and use the energy produced, and sell any surpluses to the grid. As a result, they gain, among other things, greater energy security – because energy is balanced locally, in a small area – as well as cheaper energy and, consequently, lower electricity bills.

“The European Union – which, after Russia’s attack on Ukraine, created the RePower EU program to secure our energy independence and cheap, green energy – wants an energy community to be established in every larger commune. In Poland, we have over 2,000 rural and urban-rural communes where, under current law, energy cooperatives can be created. Active, registered cooperatives are currently less than 50, but this number is continually growing. The potential and interest are enormous,” underlines Krzysztof Mrozek, manager of the European Funds for Climate program in the Polish Green Network.

Energy cooperatives are an entity defined in the Act on renewable energy sources from 2015 and according to current regulations can be established only in rural and urban-rural communes, where there is the most significant potential for the development of RES. An example might be a cooperative generating energy in a biogas plant, which uses crops supplied by a group of farmers. However, such initiatives are still not very popular. In Poland, there are only a few dozen of them, while in the EU, there are about 3.5 thousand civil communities producing renewable energy. Experts point to the need for changes in regulations that would eliminate current barriers to creating such entities. Especially since there is financial means for it.

“In the coming years, we have a total of over PLN 2 billion, which can be allocated to such investment,” says Joanna Furmaga. “Firstly, in the ROP, there are about PLN 800 million for both the pre-investment part, i.e., preparing the entire process of creating a cooperative, creating a business plan, constructing statutes, relations between cooperative members, and also for the investment part. Another significant source of EU funds is the Modernisation Fund and the “Energy for the countryside” program with a budget of PLN 1 billion. Here, all initiatives in the countryside that allow for energy self-sufficiency are supported.

This program is quite popular, and the funds are still available. “Energia dla wsi” is a program aimed at increasing the use of RES in rural areas. Financial support – in the form of a loan or grant – for OZE installations along with energy warehouses located in rural and urban-rural communes is directed to several groups of beneficiaries, including individual farmers, agricultural energy cooperatives and energy cooperatives composed of enterprises. In early February, the NFOŚiGW announced that the “Energy for the countryside” program would be continued in 2024, and its planned budget would increase to a total of PLN 3 billion.

“We also need to mention an interesting program from the European Funds for Social Development, concerning the incubator of green social innovations. Its aim is to build competencies, in this case concerning the creation of energy cooperatives and other forms of citizen energy. This program will be launched in a few months and has a budget of PLN 6 million. Although it may not be a spectacular amount compared to other sources of financing, we are talking here about soft skills: cooperation, creating business plans, self-organization, education, relations with the local community in which such a cooperative may function,” explains the president of the Polish Green Network.

“Additionally, funds are also planned for energy cooperatives in regional European programs. We are talking about traditional structural funds. However, the amount is not yet known, as the regions are preparing to launch competitions. We, as the Polish Green Network, help in constructing project selection criteria. These competitions are expected to be launched later this year.”

According to experts, energy cooperatives and other forms of citizen energy could be the dark horse of the Polish energy transition.

“The financing offer, which appeared for the first time with the National Recovery Plan, has caused enthusiasm for creating energy communities to turn into readiness to create them and apply for funds. Since the ROP in Poland was announced, the number of registered energy cooperatives has increased 15-fold. And this is just the beginning, more cooperatives are at the stage of developing their strategy, preparing documentation and will soon be ready to build installations and start operations,” adds Krzysztof Mrozek.

However, such initiatives still face many barriers, including a lack of institutional support and legal restrictions (for example, a cooperative can operate in the area of a maximum of three communes, the power of the installation is also limited), as well as a lack of wider awareness of the benefits of such a solution among local governments.

“Energy cooperatives are still not well known in Poland, few people simply know about them. Therefore, as part of the “More than energy” program in the Polish Green Network, we try to travel all over Poland and organize workshops where we explain how to set up such a cooperative – also in those communes that are only considering such a solution. Additionally, together with our European partners from the Beyond Fossil Fuels campaign, we have prepared a brief in which we talk about how energy cooperatives are developing in Poland and show what it looks like in individual communes,” says Dr. Justyna Orłowska, an expert of the Polish Green Network.

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