The creation of an energy cooperative is a way of cheaper energy, as well as a real independence from external suppliers and greater control over local energy circulation. More and more municipalities, farmers and residents of smaller towns are beginning to see the benefits of a model in which the electricity generated “at home” remains within the community. However, in order for such an undertaking to function legally and to bring tangible savings, it is necessary to meet several important requirements and to understand the principles of operation of the energy cooperative - from contractual relations, through settlements, to the role of the obliged seller.
This article discusses the most important regulations, obligations and mechanisms that need to be learned before deciding to establish such a local form. This makes it easier to assess whether this form of energy cooperation is appropriate for the community and what benefits it can bring.
Home
- Preconditions for establishing an energy cooperative
- Conducting the sale of electricity within the energy cooperative
- Autoconsumer as an objective of the energy cooperative
- Significant contractual relations in the structure of the energy cooperative
- Accounting of energy surpluses and net-metering model in energy cooperatives
- Role of the seller in the management of surplus energy and clearing
- Regulatory aspects of electricity generation and sale by an energy cooperative
- Principles of energy trading within the energy cooperative
- Obligations in the settlement of energy cooperatives
- Summary
Preconditions for establishing an energy cooperative
The energy cooperative is a form of so-called civic energy. Its members can "join forces" within their RES installations and carry out cross-supply of electricity, not only through the creation of a legal framework for such activities, but also because of attractive financial benefits. However, before we start thinking seriously about setting up an energy cooperative, it is necessary to verify that the basic requirements are met:
- Appropriate number of founding members: at least 10 natural persons (ordinary cooperative), 5 natural persons (agricultural production cooperative) or 3 legal persons.
- Territorial limitation: up to three rural or urban-rural municipalities, as well as urban municipalities (after the amendment of regulations), directly bordering themselves, subject to the same distribution system operator.
- The maximum total capacity of all RES installations shall not exceed 10 MW (for electricity) and at the same time shall be sufficient to cover at least 70% of the annual demand of the cooperative and its members for electricity.
Only if we are sure that the above conditions will be met can we move on to the next step, namely formalising the activity.
Conducting the sale of electricity within the energy cooperative
One of the main problems in planning to start a cooperative
it is appropriate to determine the electricity cycle generated in RES installations belonging to the cooperative or its members. The creation of such a community triggers alternative electricity supplies to its members. This means that the cooperative facilities are "powered" from two sources:
- Electricity produced by other members of the cooperative, through the distribution network to which they are connected,
- Electricity supplied by an obliged vendor, carrying out a classic ‘out-of-net’ supply.
Autoconsumer as an objective of the energy cooperative
From the point of view of the provisions of the Renewable Energy Resources Act (‘RES Act’), it will be particularly important that the energy cooperative is a community aimed at the consumption of electricity produced by its members. It is therefore not an entity with commercial energy sales. The legislature's intention was to allow members of the energy cooperative to organise the electricity generation process to maximise "autoconsumer" within the energy cooperative.
This is encouraged by the exemption from many fees (Article 38c(7) and (13) of the RES Act), which we will mention later on.
Significant contractual relations in the structure of the energy cooperative
Looking at the contractual relations between the various entities within the structure of the energy cooperative, we will get the following results:
- The cooperative and its members must have concluded distribution service contracts with the distribution system operator.
- The cooperative and its members must have concluded contracts for the sale of electricity with the obliged seller (it may also be a seller by choice who will conduct the settlement of the cooperative).
- The members of the cooperative shall conclude comprehensive agreements with the obliged seller and, in addition, the producer members shall conclude balancing agreements with him.
- Members-producers conclude a contract with the cooperative to sell energy produced in RES installations (cooperative buys energy).
- Members of the recipient shall conclude with the cooperative a contract for the sale of electricity produced in RES installations (the cooperative sells energy previously produced by members of the cooperative).
The balancing services of an energy cooperative, the total installed capacity of which does not exceed 400 kW, shall be provided by the seller obliged at his expense (Article 38e(2) of the RES Act).
Accounting of energy surpluses and net-metering model in energy cooperatives
According to the above, the electricity generated by the cooperative and its members should first remain in the cooperative's "obligation". However, there is a situation where electricity produced is more than consumed. At that time, the obliged seller conducts settlements in accordance with Article 38c(3) of the RES Act, i.e. implements a net-metering model for cooperatives and its members. In short, 60% of the volume introduced to the electricity grid can later be received as part of the energy volume taken from the grid. This procedure is carried out in detail by the obliged seller.
As a result, neither the energy cooperative nor its members conduct commercial sales of electricity outside the structure of the community. They are only entitled to ‘receipt’ some of the surpluses entered into the network.
Role of the seller in the management of surplus energy and clearing
Therefore, the seller is the actual holder of the surplus. It can sell electricity from cooperatives (Article 38c(11)-12 of the RES Act). In this way, it receives funds to cover the costs of carrying out the settlement of the energy cooperative, as well as distribution fees and other charges from which electricity generated and collected under the cooperative is released.
The rules for determining the amount of energy generated and also collected by the members of the cooperative in the framework of internal settlements or cooperatives with the obliged seller are laid down in the Regulation of the Minister of Climate and Environment concerning registration, balancing and sharing of measurement data and settlements of energy cooperatives dated 23 March 2022.
Regulatory aspects of electricity generation and sale by an energy cooperative
The construction of an energy cooperative primarily attracts preferential trading conditions for electricity. Although it is sent through the distribution network of the operator concerned, it shall be exempted from fees:
- distribution,
- RES,
- Strength
- CHP,
- excise duties - unless the total installed capacity of all RES installations within the cooperative does not exceed 1 MW (Article 38c(7) and (13) of the RES Act).
In addition, the cooperative does not have to hold a concession for the trading of electricity, although it does carry out such activities (Article 32(1)(4)(e) of the Energy Law). However, this does not exempt the cooperatives or its members from the obligation to obtain a concession to produce electricity if the intended capacity of the installation is to be greater than 1 MW.
Principles of energy trading within the energy cooperative
The rules on the trading of electricity between members and cooperatives should be laid down in mutual agreements. Of course, there are no obstacles to the same member being both a producer and a recipient within a cooperative. In addition, it appears justified that general rules on the trading of electricity should be regulated in the statutes or other binding document (e.g. Regulations). This will secure the legal position of all members who, under the law, have equal rights and obligations (Article 18(1)) and will allow potential new members to be informed of the prevailing rules.
Obligations in the settlement of energy cooperatives
It is also worth remembering that the seller who conducts the settlements of the energy cooperative is the so-called ‘reseller’, referred to in Article 40(1a) of the RES Act. It may also be the person chosen by the cooperative, provided that the clearing process is undertaken. The distribution system operator is required to conclude a distribution service agreement (GUD-K) with such a vendor in order to enable him to settle for the energy cooperative (Article 38da(1)(1) of the RES Act). The seller must, at the request of the cooperative, submit to the member of this community an offer to enter into a new or amended comprehensive agreement in force. This is carried out in order to adapt its content to conduct accounts in accordance with the RES Act. It may also submit an offer for a balancing service contract, provided that the member is at the same time the manufacturer.
An important obligation for the distribution system operator will be to install, at the request of the cooperative, within its area, remote reading meters for all its members (Article 38da(1)(2) of the RES Act).
Summary
The potential of energy cooperatives is great. However, the key to success lies in matching the manufacturing capacity of individual members in order not only to meet the statutory conditions for the launch of an energy cooperative, but above all to maximise the benefits of the financial preferences granted. It is also worth remembering that the energy cooperative is a structure recommended primarily to rural areas, where increasing energy independence and raising awareness of electricity management will be particularly valuable. As part of such community activities we offer:
- Energy consulting in the process of creating an Energy Cooperative.
- Financial analysis of the viability of the creation of the Energy Cooperative.
- Analysis of energy profiles and power selection of RES for Energy Cooperatives.
- Laying out contractual relations for the sale of electricity within the Cooperative.
- Obtaining RES installations that enter the Cooperative.
- Assistance in establishing a Cooperative, including legal support.
We encourage you contact to establish cooperation!