Energy community business models and their impact on the energy transition: Lessons learnt from France

The need to accelerate the decarbonisation of the energy system has led to renewed interest in energy communities. Such communities are now identified by institutions as new instruments that can contribute to four main policy objectives: i) increase renewable energy capacity, ii) mobilize private capital, iii) provide flexibility for the electricity system, and iv) empower consumers. Within the frame of the historically centralised French energy system, we present five energy community business models (ECBMs) and explore the extent to which they contribute to the four aforementioned policy objectives. Our analysis shows that, while no ECBM has yet enhanced the flexibility of the grid, each ECBM contributes differently to realising three other policy objectives. We also show that the diffusion of ECBMs remains limited as a result of legal, organisational and financial barriers. We propose three recommendations that could help ECBM diffuse – protect economic viability, support intermediaries that facilitate the adoption of ECBMs, and nurture local governments as key enablers. Our outcomes are intended to guide policymakers by providing insights into which types of energy communities could contribute most significantly to the various policy objectives and provide recommendations to include them in their energy policy roadmaps more effectively.