Report
25.03.2025
Cross Sectoral

Regulatory and Consumer Considerations for Decentralised Energy Opportunities

Introduction

The rapid growth of renewables and the increasing electrification of consumption are transforming the energy landscape, bringing both challenges and opportunities for consumers and regulators alike. This paper explores the implications of decentralised energy opportunities—such as self-consumption, energy sharing, and energy communities—on markets, networks, and regulatory frameworks, aiming to support informed decision-making for both consumers and national regulatory authorities (NRAs).

Context and Purpose

The acceleration of renewable energy deployment and the electrification of consumption present both challenges and opportunities for the electricity system. New actors and activities—such as self-consumers (individual or collective) and energy communities—are driving the rapid expansion of distributed energy resources. Their emergence necessitates careful consideration of their impact on the market, networks, and the energy system as a whole.

The CEER report “Regulatory and Consumer Considerations for Decentralised Energy Opportunities” examines the implications of various decentralised energy models—including self-consumption, energy sharing (also referred to as collective self-consumption, which may be physical, within a building, or virtual), and energy communities (which encompass cooperatives engaging in activities such as generation, supply, energy sharing, and aggregation). These models are underpinned by consumer choice, private acceptance, and willingness to participate, fostering flexible consumption patterns. However, their implementation can yield significantly different outcomes for the power system and the market.

Drawing on insights from NRAs and other sources, CEER aims to:

  • Assist consumers (and their associations) in selecting the most appropriate decentralised energy model based on their available physical assets and individual interests, while sharing the latest learnings from these evolving activities.
  • Provide regulatory insights into the key factors to consider when implementing energy sharing and other decentralised energy concepts, ensuring alignment with each Member State’s energy transition progress, national targets, and specific challenges.

Key Considerations for Consumers

Consumers considering active participation in self-consumption schemes should make informed decisions to select the most suitable model for their needs.

For residential users opting for energy sharing or energy communities, the following considerations are essential:

  • Available assets – What generation or flexible assets are accessible?
  • Regulatory environment – What are the relevant national regulations?
  • Motivation and objectives – What is the purpose of participating in community energy?
  • Commitments and expectations – What level of engagement is required, and what role will each participant play in decision-making?
  • Investment and benefits – What resources (time, effort, and money) can be allocated, and what are the expected benefits (monetary vs. societal/environmental, short-term vs. long-term)?

Key Considerations for Regulators

NRAs are encouraged to:

  • Implement and advocate for the national transposition of relevant provisions of the Electricity Market Design (EMD) and Renewable Energy Directive (RED III).
  • Supervise market developments by closely monitoring the growth of new market actors and adapting the regulatory framework accordingly.
  • Remove regulatory barriers within their remit to ensure fair access for all market participants engaging in energy sharing.
  • Ensure a balanced framework for energy sharing, clearly defining the roles and responsibilities of regulated entities and sharing participants.
  • Engage with stakeholders to understand their needs and identify the most suitable regulatory approaches within the NRA’s remit.
  • Facilitate aggregation as a key activity for energy communities, supporting demand response and market participation.
  • Enhance consumer awareness through targeted information campaigns and transparency measures.
  • Ensure effective price signals by enabling consumers to respond to energy and network tariff structures, such as dynamic tariffs and time-of-use (ToU) charges.
  • Leverage regulatory tools to embrace dynamic regulation, improve market observability, and adapt frameworks as the energy landscape evolves.