How Can the Citizens Energy Package Boost Energy Communities

A tale as old as time: the EU Legislation is ready, but Member States lag behind. The Citizens Energy Package finally pushes countries to finish their homework.

This is confirmed by the recently published Citizens Energy Package (CEP) which offers no new legislation, rather it pushes EU countries to finalise their existing homework. The CEP reaffirms the Commission’s holistic support to energy communities as vehicles of affordability, local energy security, and citizen empowerment.  

This acknowledgement is not just symbolic: the EU aims to increase community energy capacity ten-fold to 90 GW by 2030 (up from 9 GW today). It will do so through an Energy Communities Action Plan, and dedicated guidance to Member States on how to set up a national enabling framework for energy communities.  

These admirable goals could result in over 16 million citizens producing up to 8% of all electricity in Europe by 2030. The sticking point to this feel-good story? It’s all voluntary. The CEP in its current form does not foresee any governance mechanisms to ensure that Member States actually follow up with concrete actions, nor does it foresee earmarking any budget to achieve these aims. With a very patchy national track record in terms of providing supportive policies and necessary funding for energy communities to flourish, how can we make sure that national governments take bold steps to turn the CEP’s goals into reality? 

Cash for reforms

As part of the new budget architecture proposed by the Commission in July 2025, almost 50% of the entire two trillion euro envelope of the next EU budget will go to the so-called “National and Regional Partnership Plans” (NRPPs). Every Member State now has to draft its NRPP, outlining a series of reforms and investments for its entire economy (energy, regional cohesion, migration, agriculture, etc.). The NRPPs adopt the ‘cash for reforms’ model first observed in the Recovery and Resilience Facility (RRF). Effectively, this means that a Member State has to fulfill certain milestones in order to unlock subsequent funding tranches. A positive side to this is that it ensures European policy coherence and predictability for citizens and businesses. 

A Member State has to fulfill certain milestones in order to unlock subsequent funding tranches.

The NRPPs can thus be the implementation vehicle for the Citizens Energy Package, by bringing in the two missing elements: funding, and legally binding reforms. Citizens can play a key role in bridging the climate funding gap. For every public euro invested in a community energy project, €40-60 of citizen capital are mobilised down the line. The NRPPs can thus help de-risk community energy projects, particularly in more innovative activities such as storage, renovations, and district heating and cooling.  

Crucially, Member States can leverage the NRPPs to push through enabling reforms for energy communities. For example, Sweden and Malta –the last countries in Europe without a functioning legal framework for energy communities – can implement the missing secondary legislation. Greece, where almost half of community energy projects never go ahead because of a lack of grid access, could implement reforms to reserve capacity for energy communities and accelerate permitting. Croatia could simplify the – currently very bureaucratic – registration procedures for energy communities, while keeping appropriate oversight to avoid corporate capture.

Lessons from the Recovery and Resilience Facility

Member States used their Recovery and Resilience Plans to provide significant funding to energy communities (Italy, Lithuania, Spain). But most importantly, they pushed through important enabling reforms: 

• Spain set up a national network of Community Transformation Offices, effectively functioning as One Stop Shops to help citizens set up or join energy communities in their area.  

• Cyprus passed a reform establishing the regulatory framework for energy communities, elaborating existing laws through secondary legislation. 

• Czechia also established the secondary legislation for energy communities, but went further: the Czech Recovery Plan included measures towards the education and information of municipalities and citizens on the concept and advantages of energy communities, including the creation of one stop shops to provide technical support on regulatory, technical, financial and organisational aspects, related to energy communities and specific renovation and energy efficiency measures. 

Shaping the future of community energy  

Helping shape the NRPPs today will decide the future of the community energy sector for the next decade. This is a major moment for civil society and for national governments themselves to embed support for energy communities in public policy for years to come, by meaningfully including funding plans and supportive reforms for citizen-led energy initiatives in their NRPPs. Understanding the gravity of the moment, REScoop.eu and Friends of the Earth Europe have initiated a major campaign linking NRPPs and energy communities in 18 Member States. In the factsheets, the various socio-environmental benefits of energy communities are highlighted, linked to the objectives of the NRPP Regulation: 

• Energy communities help tackle the cost of living crisis. In fact, the Commission estimates that an average household saves €1100/year by participating in an energy community. 
   

• Energy communities support rural areas and farmers: They diversify farmers’ incomes, and reduce their operational expenses (e.g. through agri-voltaics or through the selling of residual biomass for energy).  
   

• Energy Communities contribute to regional development and cohesion. They can deliver two to eight times more economic benefits for local economies (compared to private projects), thereby reducing energy poverty, building energy security, and boosting competitiveness for SMEs. For every euro invested in a community energy project, €50 are generated for the territory.  

The Citizens Energy Package made the first significant step in centering energy communities as a key actor of Europe’s (future proof) energy system. Now the NRPPs can and should be the implementation instrument.