Citizen Energy Community · Glossary

Citizen energy community is the English term for the Bürgerenergiegemeinschaft under European electricity market law. It originates from the Electricity Market Directive (EU) 2019/944: Article 2(11) defines it, and Article 16 regulates it in more detail. The term does not denote a tariff, a support programme or a specific installation. It describes a type of actor in the electricity system. The Directive aims to recognise certain citizen energy initiatives at Union level. They are to receive an enabling framework, fair treatment, a level playing field and a clear set of rights and obligations. Other citizen initiatives, for example those based on private-law contracts, expressly remain possible alongside it.

Definition under EU law

Under the Directive, a citizen energy community is a legal entity that meets three criteria. Member States may allow it to be organised, for example, as an association, cooperative, partnership or SME. What matters is that it can hold rights and obligations in its own name.

Openness and control: Membership is voluntary and open. The community is effectively controlled by members or shareholders who are natural persons, local authorities including municipalities, or small enterprises. Members may leave again and retain their rights as household customers or active customers.
Purpose: The primary purpose is not financial profit. The community is to provide environmental, economic or social benefits to its members or to the areas in which it operates.
Fields of activity: The community may be active in generation (including renewable generation), distribution, supply, consumption, aggregation, storage, energy efficiency services and charging services for electric vehicles. It may also offer other energy services to its members.

A citizen energy community therefore does not need to own a large generation plant. It can, for example, operate charging points, pool storage units or, as an aggregator, market the flexibility of many small installations. The core is the combination of market role, membership and effective control. A purely financial investment in a wind farm without effective say does not satisfy the term. The EU rules only set a framework. Who exactly may become a member, how voting rights are distributed and which legal forms are permitted is governed by the respective national law.

Distinction from the Renewable Energy Community

The citizen energy community is often confused with the renewable energy community (Erneuerbare-Energie-Gemeinschaft). The latter originates from the Renewable Energy Directive (EU) 2018/2001. Its members must be located in the proximity of the renewable projects, and it is limited to renewable energy. In return, it is not restricted to electricity and may, for example, also cover heat. The citizen energy community, by contrast, relates to the electricity sector. No spatial proximity requirement is provided for, and it is not limited to renewable electricity. An overview by the Umweltbundesamt (German Environment Agency) therefore describes its electricity quality as “grey”. In practice, many communities nevertheless use photovoltaics, wind and storage. Both forms of community generally use the public electricity grid. They belong to the umbrella term energy community.

No exemption from the electricity system

A common misconception is that a citizen energy community is a special zone without grid rules or levies. It is not designed that way. Members retain their rights and obligations as final customers. Where electricity is shared via the public grid, metering, balancing group management, supply relationships and consumer protection remain relevant. The Directive also requires transparent, non-discriminatory and cost-reflective network charges for citizen energy communities. They are thus to contribute appropriately to the overall costs of the system. Network access to a grid that such a community operates itself must likewise be fair and cost-reflective.

Physically, electricity in the grid cannot be allocated to an individual household like a parcel. When members notionally draw electricity from a shared installation, it is not exactly these electrons that reach their socket. The allocation is made on an accounting basis, using simultaneous measurement values, contracts and market processes. This distinction is important so that no false expectations arise with local electricity tariffs. Where a model is regulatorily favoured, it should be disclosed who bears the network costs that continue to be incurred. Otherwise, costs are shifted unnoticed to consumers who do not participate.

Sharing and the new right to energy sharing

Under Article 16, citizen energy communities must have the right to share, within the community, electricity from generation installations owned by the community. The rights and obligations of the members as final customers remain safeguarded. With the electricity market design reform, Directive (EU) 2024/1711, Article 15a was added. It gives households, small and medium-sized enterprises and public bodies a separate right to participate, as active customers, in the sharing of renewable energy. This applies within the same bidding zone or in a smaller area determined by the Member State. This energy sharing is not tied to a citizen energy community and may also take place through private agreements.

Implementation in Germany and Austria

Germany has implemented Article 15a with § 42c of the Energiewirtschaftsgesetz (Energy Industry Act, EnWG). The provision entered into force at the end of December 2025. Since 1 June 2026, distribution system operators must enable the sharing of electricity from renewable installations in their network area for eligible actors. This takes place via the grid for general supply. Specialist institutes initially assessed the practical implementation as only partly feasible. The reasons are missing metering infrastructure, open market communication processes and difficult economic viability. In July 2026, the Bundesnetzagentur (Federal Network Agency) recommended organising the processing through a sharing service provider. Important: § 42c regulates energy sharing and not a stand-alone citizen energy community within the meaning of Article 16.

The Bürgerenergiegesellschaft (citizen energy company) under § 3 no. 15 EEG 2023 must also be distinguished. It must consist of at least 50 natural persons with voting rights. At least 75 percent of the voting rights must be held by natural persons registered within a radius of 50 kilometres around the installation. No member may hold more than 10 percent of the voting rights. Such companies are, for example, exempted from participating in tenders. The Scientific Services of the Bundestag emphasise that they are not to be equated with the citizen energy community under European law.

Austria has expressly incorporated the citizen energy community into its legislation (§ 16b ElWOG 2010). Large enterprises and energy companies may also participate there. However, control is reserved to natural persons, local authorities and small enterprises that are not active as electricity undertakings. The example shows how a Member State specifies the EU framework through control rules.

Practical significance, governance and limits

Formerly, a few large power plants faced many passive consumers. Today, rooftop photovoltaics, battery storage, heat pumps and electric cars shift electricity over time, feed it in or can act on the market in a pooled manner. For individual households or individual prosumers this is often too complex. A community can pool investment, metering, contracts and control. However, the benefit only arises through rules. Metering concepts must capture quarter-hourly values. Contracts must clarify supply, balancing group responsibility and deviations. Grid operators need data on controllable installations.

Whether a model is economically viable depends on electricity prices, network charges, levies, load profiles and the costs of metering, billing and platforms. In terms of governance, what matters is membership, voting rights and protection against de facto dominance by professional actors. Otherwise the community becomes a mere label. Good regulation rewards actual grid relief, flexibility and participation. Mere spatial proximity or a purely notional community is not sufficient for this.

The citizen energy community thus stands for an institutional opening of the electricity market. Citizens, municipalities and small enterprises are to be able to act jointly as market actors, not just as customers. The practical significance depends on national implementation. It must enable participation without endangering grid operation, cost allocation and security of supply. For further context, see also citizen energy.

Sources

Richtlinie (EU) 2019/944 mit gemeinsamen Vorschriften für den Elektrizitätsbinnenmarkt — Europäische Union, EUR-Lex; 2019-06-05. Erwägungsgründe zu Bürgerenergiegemeinschaften; Art. 16
„Energy Sharing“: Regelungen zur gemeinsamen Energieerzeugung und -nutzung (WD 5 - 3000 - 134/24) — Deutscher Bundestag, Wissenschaftliche Dienste; 2024-09-02. S. 4, 6–9, Abschnitte 2.2 bis 3
Energy Sharing under § 42c EnWG: A legislative milestone, framework conditions and next steps — Forschungsstelle für Energiewirtschaft (FfE); unbekannt. Einleitung und Fazit
Energy Sharing ermöglicht lokales Teilen von Ökostrom — BDEW Bundesverband der Energie- und Wasserwirtschaft; unbekannt. Abschnitte „Seit wann gibt es Energy Sharing“, „Rechtlicher Hintergrund“
FAQs – häufig gestellte Fragen (Energiegemeinschaften) — Österreichische Koordinationsstelle für Energiegemeinschaften; unbekannt. FAQ zu Bürgerenergiegemeinschaften, § 16b ElWOG 2010

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Edited by eCMS on 11.11.2026 17:16