In the future, households linking up as cooperatives for electricity production will be able to cover a significant share of their own energy consumption, reducing household costs while also increasing security of supply. The best model for supporting such co-ops, however, has yet to be found, according to a new Foresight Center report out Wednesday on the outlook of such cooperatives in Estonia.
Initial steps still have to be taken via the introduction of better measures to support the creation of energy cooperatives as well as to ensure the operation of the power grid, Foresight Center expert Märt Masso said according to a press release.
"Electricity was until only recently produced in large electricity-generating and co-generation power plants, and households were just passive consumers," Masso pointed out. "Technology has now developed enough that households can play an active part in the power grid. Whether energy cooperatives can successfully be created, however, depends on people being prepared to commit and on the operating environment that the state creates."
The investment needed for a single household to produce electricity may be too costly, and so bringing households together in energy co-ops would allow them to pool their money, skills and knowledge to produce and distribute electricity jointly, the think tank noted. Doing so would help household consumers to cut their energy costs as well as their environmental footprint. It would also boost security of supply, while also maintaining the stability of the distribution network and moreover promoting a societal sense of solidarity.
Analysis produced by research and consultation firm CE Delft and funded by the European Commission considers that by 2050, households will be capable of producing up to 90 percent of their own consumed energy, up from the current 3 percent.
"The same report considered that Estonia had the potential for consumers to produce up to 70 percent of the electricity they consume themselves, as electricity generation from solar energy will become more common, and households and businesses will take more steps to save energy," Masso added.
Surveys have shown that more than 80 percent of people in Estonia believe that state policy should support households and cooperatives in energy generation and in using energy that they generate themselves. EU policy also provides for the role of the state in creating a favorable operating environment for energy co-ops, the directives on which Estonia has already transposed into its own national legislation.
"It should be noted in general, however, that the support system in Estonia is more constricted than those in other European countries, and it trails behind those countries that are forging ahead," Masso commented.
The Foresight Center's fresh report points out that supporting communal electricity generation in Estonia would not necessarily require the Estonian support system to take on every single possible measure applied in other countries.
"Rather, communities could be given opportunities to test things out, and the necessary framework of measures be shaped gradually, based on gained experiences," the expert proposed. "Such tests would help regulators understand both the efficiency as well as the risks of energy co-ops, as well as identify measures, in cooperation with communities and the state, that would efficiently support community energy in our economy and legal system."
The report on the outlook for establishing energy cooperatives in Estonia is part of the Foresight Center's research stream on Active Consumers in the Future Energy System. The aim of this research stream is to identify the factors on which the role of the consumer in the future energy system will depend, as well as to establish scenarios through 2040 for how households and other micro-producers could be involved in the Estonian energy system.
The Foresight Center is a think tank at the Chancellery of the Riigikogu that analyzes long-term developments in society and the economy. It conducts research aimed at analyzing long-term developments and discovering new trends in Estonian society.
Editor: Aili Vahtla