Kimmo Ruotoistenmäki, CEO of Cozify, opens his blog with why energy communities are currently a hot topic.
Energy communities are currently a hot potato in the industry. If you are not familiar with the term itself or why the topic is being discussed right now, then let me begin with an overview of the phenomenon.
Single-family households have long been able to produce their own electricity with, for example, solar panels and sell any excess electricity to an energy company. For housing companies, the transition to self-produced solar power has been slowed down by legislation that has made it difficult to utilize the electricity produced other than for communal use. Solar panels have therefore not reduced the electricity bill for housing company residents since self-generated electricity can only be utilized in common areas such as corridors and shared rooms.
It has come down to profitability. Solar power plants haven’t been interesting investments for housing companies, as after the electricity tax and the electricity transmission fee, self-generated electricity would be more expensive than “ordinary” electricity.
The energy community – a housing company producing its own energy
Now things are different. The new legislation, which came into force at the beginning of 2021, will enable residents of blocks of flats and terraced houses to combine electricity production and consumption and distribute the benefits of surplus production to residents. This is guaranteed by the energy community.
The energy community is a form of sharing economy in which the shareholders of a housing company share the benefits of electricity produced with solar panels amongst themselves. The shareholders therefore set up a local energy community within which electricity produced by a non-financial company can be distributed to the community members without any administrative or network costs.
The result? Cheaper energy.
And looking at the bigger picture, so much more.
The smart energy network – virtual power plants meet demand
Because there is currently a great need for renewable energy production, I see a lot of potential in the energy community. As we move away from fossil fuels, electricity use will increase. Or rather, the proliferation of new technologies means that everyday life becomes ever more dependent on electricity. Electric cars are becoming more common, as are solar and wind turbines in housing communities.
This change is pushing us towards smarter energy consumption, where energy communities will play a major role within the electricity system. By this I mean that, as energy communities grow in the future, they will have the potential to become virtual power plants with the capacity to produce, sell, buy - and even store energy during a profit spike. It should also be noted that the virtual power plant does not focus solely on electricity network solutions. Ideally, the solution manages and optimizes the sharing of several forms of energy, such as mains power, solar power, and district or geo-heat.
The virtual power plant balances the total energy production needs and network load by, at certain times, using less energy from the grid. For example, on a frosty day, when energy needs are at their highest, the property uses energy stored in a heating well instead of expensive mains electricity, and perhaps even receives compensation from the network operator.
Building demand-response into the energy community is a very high priority for Cozify. We want to be involved in building a smart energy network where efficient tech solutions can control household energy consumption without compromising everyday comfort. At the same time, the balance of the entire energy system is maintained. In this way we are doing important work combating climate change.
Energy for autumn!
Kimmo Ruotoistenmäki
Cozify, CEO
PS. If you are interested in energy communities or building a site with demand response and rational energy production at its core, please call me on 040 352 8898 or email pro@cozify.fi and let's talk some more.
