This working paper is part of Work Package 4 of the NEWCOMERS project and explores the interface of two popular concepts in energy transition discourse: distributed energy resources (DERs) and energy communities (ECs). DERs are expected to play an increasingly prominent role in the creation and operation of decarbonised and decentralised energy systems. ECs have been proposed, by the European Commission amongst others, as holding the potential to empower energy consumers, making them active participants in energy systems who use, own and manage DERs. On the surface, ECs appear to be well positioned to develop DERs in the realisation of decentralised and decarbonised energy futures. This working paper examines and ultimately challenges this assumption. To take a closer look at contemporary EC activity, the paper first clarifies what DERs are conceptually, and then applies this understanding to the 10 NEWCOMER ECs to assess the extent to which they employ DERs within their current and potential future operation.
Based on a review of the literature, we suggest the concept of DERs is a system engineering view of energy systems. We define DERs as technologies and activities that contribute to establishing low-carbon, renewables-based energy systems; that can be drawn on when necessary to manage renewable energy systems; and that are located on the distribution network, often on the customer side of the meter. In doing so we highlight that what characterises DERs is their capability – rather than merely their potential – to support the management of renewables-based energy systems. This is an important distinction that is often overlooked in the literature.
Analysing our NEWCOMERS case studies through a DER lens reveals that distributed generation based on renewable sources is the most prominent type of DER delivered by our case studies. Their main contribution to power networks is increasing the amount of renewably generated electricity and reducing demand for grid-sourced electricity. Other services, such as storage and demand-side management, are offered by only a small number of cases.
Although the ECs we assessed use many of the technologies that have the potential to be a DER, they often do not exploit that potential. The difference is in the purpose of technologies ECs employ and the activities they undertake, which is usually not concerned with energy system operation. By implication, ECs are not configured in a way that makes their technologies or activities resources for system management.
A possible (partial) explanation for the limited development of DERs by ECs is that there are currently few incentives for ECs, or indeed other energy system actors, to contribute to system balancing at the level of distribution networks. If ECs are to support emerging decentralised, renewables-based energy systems through deploying technologies that can be drawn on when necessary to balance energy systems, then a variety of incentives will be required. This implies that in advancing the energy transition, it is important to consider both the value ECs may offer networks through the increased deployment of DERs, as well as the value energy systems may offer communities.
More broadly, our examination suggests that the DER and EC lenses are contrasting ways of thinking about energy systems, their intersection emphasising that energy systems must embody and deliver multiple values to a variety of system stakeholders
