Powering Change: Liberec’s Path to Community Energy

Affordable, clean, renewable energy. Lower energy bills. Reduced energy poverty. More green jobs. Europe’s Mission Cities see these as critical benefits of their energy transition. Sustainable energy communities are emerging as a way to deliver these benefits, while preparing for a future in which fossil fuels must be phased out. 

Among the cities looking to establish such a sustainable energy community is the city of Liberec. The charming city in northwestern Czechia has an identity interwoven with its industrial-era textile industry. Now the city is threading a new narrative: one of sustainable energy.

The potential of sustainable community energy to advance the transition to climate neutrality has been recognised in the city’s climate adaptation plan. As a result, they are channelling funding and tailored learning pathways from the Pilot Cities Programme, led by EIT Climate-KIC, to set up Liberec’s first energy community in their project ‘The Initiation of Sustainable Energy Community for the City of Liberec’.

While the benefits of sustainable community energy are of clear value, Liberec and other cities face legal, financial, and structural barriers to making the shift. One key objective of the EU Cities Mission is to tackle these and help cities deliver the benefits faster.

“An accelerated climate transition demands the use of energy communities to build collective interventions that reduce costs and bring stability to local energy systems. Cities need support and expertise in order to get the policies and legal frameworks right, and to then mobilise the needed investments to bring them into operation. This support is precisely why we exist,” says Thomas Osdoba, NetZeroCities’ director at EIT Climate-KIC.

What is an energy community?

Sustainable energy communities, officially recognised in EU law four years ago, offer an alternative to the profit-driven model of large energy companies.

An energy community is a collective of citizens that is self-organised to provide energy to its members. Sustainable energy communities obtain energy from renewable sources like wind or solar power.

Thanks to the citizen-led setup, they contribute to local renewable energy projects, renovations, energy efficiency improvements, and even offshore wind developments. Energy communities ease local grid congestion by producing energy closer to where it’s consumed and decrease dependence on external energy sources by harnessing local renewable resources.

By design, energy communities can encourage social cohesion through collective ownership and decision-making, while driving technical innovation in areas such as community heating and cooling. These communities have significant potential, with estimates suggesting they could contribute up to 45% of EU renewable energy production by 2050.

Despite their potential, setting up energy communities is not simple or fast. Grid access issues, substantial initial investments, a lack of extensive technical and regulatory knowledge, limited public awareness, slow permitting processes, and bureaucratic obstacles often stand in the way.

In Europe, the Netherlands best demonstrates the success of energy communities, boasting nearly 700 such groups, rooted in its tradition of collective resource management. These communities began forming in the late 1980s, initially driven by citizen groups that jointly owned wind turbines, to pursue sustainable and independent energy solutions.

Their growth was supported by national legislation that allowed these communities access to the grid and ensured a fair price for their energy. The liberalisation of the energy market in 2004 created further opportunities, leading to a significant increase in the number of energy communities from 2010 onwards.

In contrast, many other European countries lack the Dutch experience and supportive legislation and have struggled to set them up.

Overcoming obstacles: legislation, monopolies, capital

In contrast to the Dutch model, Czech national legislation doesn’t lend itself to the set-up of local energy communities, creating a significant hurdle. Additionally, there’s a national monopoly on the provision of for-profit energy, which complicates the set-up of community-led initiatives and makes it harder for citizens to self-organise.

This prompted the city to develop its own approach, adapted to the local regulatory context.

According to Pavlína Tvrdíková, Development Manager in the City of Liberec, this comes with multifaceted challenges to tackle: “We need to set up the legal entity, in accordance with national legislation, and with the right partners, so that we can attract private capital and address the finance gap. This will be essential to the successful set-up of the energy community.”

During its two-year programme as a Pilot City, the administration will ensure compliance with national legislation – the critical first step.

Strong partnerships are key to success, so they’ll simultaneously build relationships with relevant actors. The team will also design the business model for local energy communities so that it’s both sustainable and financially attractive. Finally, they’ll develop strategies to leverage private capital, as financial backing is crucial for the initiative’s longevity.

“We need to learn more about how to finance renewable energy and sustainable construction, as well as how to attract citizens to the community. We are planning different pilot projects to learn about this, including projects around citizen investment and crowdfunding, and engaging citizens in our community business model so that they can also invest,” says Tvrdíková.

Building a sustainable energy ecosystem

The city’s strategy involves a carefully planned approach, starting with collaboration with the local heating plant, which has a technical, legislative and operational role in the project. This partnership will deliver green energy to municipal buildings and set a precedent for sustainable energy use in public spaces.

To bring the benefits directly into residents’ homes, the city will involve housing associations in the project. Only after this collaboration is operational will the city target businesses and homeowners.

Central to the project is an online portal. The portal will create a virtual marketplace for sustainable energy in Liberec by centralising communication and bringing together producers and consumers.

“The value of participating in this programme is that it has helped improve our capacities and capabilities within the city, and our project now has enough tangibility so that we can raise awareness about it. The visibility of the [EU Cities] Mission has helped us initiate the conversation with our partners in business and industry where the concept of community energy has clear benefits. It has really helped open the door to cooperation,” says Tvrdíková.

Citizen engagement and education: changing mindsets for the energy transition

In 2017, almost 50% of electricity in the Czechia was produced from coal, and roughly 75% of heating was coal dependent. However, the Czech government has approved a draft revised National Energy and Climate Plan (NECP), which aims to phase out coal by 2033 and oil and gas by 2050.

In this context, the energy community model becomes a promising driver of the transformation in Czechia, where energy has been historically centralised. But perhaps most challenging is the lack of awareness among the general population that there are alternative models of energy provision and that they can self-organise to reap the benefits. Raising awareness and increasing communication will become central in establishing such communities in Liberec.

To address residents’ unfamiliarity with this new approach and its potential benefits, the city has focused a considerable part of their project on awareness raising, which they aim to build on after the project ends. The city has partnered with the local Technical University of Liberec to update university syllabi and launch public awareness campaigns.

“We are very focused on including the right training in formal education to ensure our graduates have the skills to deliver our climate neutrality goals in the future,” says Tvrdíková. “We also want to start raising public awareness and building citizens’ climate literacy so that they feel they can get involved and even benefit financially. The university is also helping us with our public communications campaigns which we will start rolling out in the autumn.”

Power in numbers

The longer-term emphasis of the project is on learning, to then replicate and scale. If successful, Liberec’s energy community will contribute to changing the energy ecosystem. It will benefit people and businesses while reducing carbon emissions, and demonstrate the importance of all actors, including residents, in the energy transition.

“This is one of the first steps we are taking to try to do things differently,” Tvrdíková explains. “We’re asking our citizens to take a much more hands-on approach, and I really hope it will lead to a different kind of relationship with the city and an openness to innovate and work together, while demonstrating the importance of the local people in driving the climate transition.“