The Crash of a Policy Pilot to Legally Define Community Energy. Evidence from the German Auction Scheme

“Community energy” is a highly contested issue not only in the German energy transition governance but also in the recent legislative procedure to recast energy market legislation within the EU’s “Winter Package”. This paper analyses the effects of the privileges for “community energy actors” in the German auction scheme for on-shore wind energy. Those privileges aim to guarantee a level playing field for small actors and to enhance societal acceptance. The results of the first rounds of auctions did not merely reveal an acceptable level of losses due to recognized trade-offs between policy objectives. Instead, the results indicate a complete failure regarding all three objectives of the revised support scheme for renewables—controlled renewable energy expansion, actor plurality and cost efficiency. The paper discusses whether the policy motivations translate appropriately into legislation. It suggests differentiating clearly the economic risks for small actors from the added value that is attributed to community energy actors. De-coupling these—often mixed—motives behind the demands for actor plurality unveils policy approaches that more adequately fit with these distinct motives. The paper finally proposes rather to integrate the politically desired values into the bid evaluation criteria instead of granting privileges to specific actors that are assumed to provide these values.