IIDMA urges to facilitate the constitution of energy communities

  • The International Institute for Law and Environment (IIDMA) publishes the ‘Legal Guide for the constitution of energy communities in Spain’ in which it describes the steps to follow for their constitutions and identifies all available legal options.
  • Until the legal regime for energy communities is transposed into Spanish law, it is essential to provide legal advice to the public.

The energy transition towards renewable energy sources involves promoting energy communities, new entities that allow and encourage citizen participation in the management, production and consumption of energy. However, Spain has not yet transposed the EU directives that regulate these new instruments, which implies a delay of almost two years.

The IIDMA considers that the deployment of energy communities is essential in order to progressively abandon fossils and operate on a 100% renewable system, which is why it has drawn up a legal guide aimed at promoting their development in Spain. The problem is that the lack of transposition into Spanish law raises doubts about which legal figures can be used for the constitution of these energy communities. In its guide, IIDMA identifies all the available options and describes the steps to follow for their creation, depending on the legal form selected.

“It is essential to help clarify the legal regime applicable to energy communities in order to provide security to potential developers interested in setting them up,” says Julia Prats, an IIDMA lawyer specialised in energy law and one of the authors of the guide. “These promoters are sometimes citizens who do not have easy access to legal advice, so these kinds of documents are often very useful”, adds Prats.

Cooperatives, partnerships or limited companies?

Until Spain has transposed the European Directives into Spanish law, the suitable entities for incorporation are associations, cooperatives and limited liability companies. The choice between one or the other should be analysed on a case-by-case basis, taking into account the particular circumstances of the promoters. While partnerships may be a good option for the development of small projects, cooperatives and limited liability companies may be interesting for promoters with a certain degree of economic or territorial scope and those targeting a large number of beneficiaries, given that they are more complex than the latter.

Another criterion to be taken into consideration is the degree of simplicity with regards to the established procedure, as well as the autonomous community regulations specific to each of the legal forms. 

The choice in relation to the legal form of the energy communities is not a trivial matter, as it is fundamental for its success and entails being subject to a legal regime that facilitates its day-to-day operations, in addition to being eligible for aid and subsidies potentially granted by the public administrations.

Decarbonisation of the energy system

The IIDMA works for the decarbonisation of the energy system at a global level. As environmental lawyer Carlota Ruiz-Bautista recalls, “achieving an electricity system based 100% on renewables by 2050 is essential to reach the goal of zero net emissions on time, in line with the objectives established in the Paris Agreement”. “With this new guide, our purpose is to contribute to facilitating and encouraging the constitution of energy communities that contribute to moving from a production-based model to one where demand-side management prevails”, Ruiz-Bautista points out.

In fact, this is not the first time that IIDMA has analysed the legal regime of these entities. Back in 2019, it published the report ‘Energy communities: legal contributions for their development in Spain’ in which it was shown that many figures or groups of people already existing in Spanish law (e.g. communities of owners or communities of forests or irrigators) did not meet the requirements imposed by European regulations to be constituted as energy communities. At that time, the Institute recommended adapting their regulation to promote their development.