Demand Response, Decentralisation and Energy Communities:

the general framework and the Italian case.

Federico Pierucci

Published in: Rapporto Italia 2022, Eurispes

1. Introduction

It is estimated that for the year 2050 there will be almost 10 billion people in the world 1. The
constant increase in population is followed by the growth of world’s GDP, due to economic
development and to the increasing industrialisation of developing countries. These two trends
determine a constant increase in the demand for electricity. According to IEA data 2 , there has been
a continuous increase in world energy consumption since 1971: whereas in 1970 the annual kW
consumed per person was about 1.2 thousand, in 2014, on average, one person consumed 3.1 kW
per year, almost tripling electricity consumption. It is estimated that by 2050 there will be an 83%
increase in electricity production, with non-OECD nations accounting for most of the growth. In
fact, Africa’s estimated consumption growth is about three times that of today, while the Asian and
Latin American regions will double their consumption.3
In 2019, net electricity consumption worldwide amounted to almost 24 thousand TW/h, an increase
of more than 27% from a decade earlier 4. Compared to 1980, global electricity consumption has
more than tripled.
Global inequalities in terms of energy consumption go hand in hand with the gap in electricity
consumption: the estimated average consumption of a Norwegian citizen in 2020 was 26,492 kW/h,
that of an American citizen in 2020 was 12,000 kW/h, and that of a Nigerian citizen just 84 kW/h.
Although the Covid season brought a reduction in electricity demand in June and July 2020,
compared to 2019 levels of the same months5, an upturn in energy demand was quickly seen as
lockdowns became less widespread. In Europe, despite a slump in demand for electricity due to the
presence of Covid, which saw an average reduction of 4.5% in 2020, 2021 saw the demand for
electricity going back to pre-pandemic levels6.
As demand for electricity fell (in line with other European countries), imports also fell during 2020:
while monthly net imports never fell below 2.2 TWh in 2018 and 2019, they fell to 0.8 TWh and
0.5 TWh in April and June 2020 respectively, driven by exports that more than doubled in Q2 2020
compared to the same period in 2019.
In the face of the ever-increasing electricity consumption, we observe that around 60 per cent of the
world’s electricity production comes from fossil fuels 7. Focusing on those nations and regions
whose electricity production is most dependent on fossil fuels (coal, oil and gas), such as China or
India, we see that China’s electricity production is 60% fossil fuels, India’s 74%, and the North
African region’s electricity production is almost entirely fossil fuels.
Faced with a growing demand and consumption of energy, and the ecological impact of increasing
1
2019 Revision of World Population Prospects, https://population.un.org/wpp/Accessed 26/03/2022
2
IEA Statistics © OECD/IEA 2014
3
https://eneroutlook.enerdata.net/forecast-world-electricity-consumption.html, accessed on 26/03/2022
4
https://www.statista.com/statistics/383633/worldwide-consumption-of-electricity-by-country/ accessed on 26/03/2022
5
https://www.iea.org/reports/covid-19-impact-on-electricity, accessed on 28/03/2022
6
IEA (2022), Electricity Market Report - January 2022, IEA, Paris https://www.iea.org/reports/electricity-market-
report-january-2022, accessed on 28/03/2022
7
https://ourworldindata.org/electricity-mix#electricity-production-by-source , accessed on 28/03/2022
1
CO2 emissions and pollutants, the leaders of European and world nations endorsed the Paris Climate
Agreements in 2015. Those agreements revolved around two main action points8 :
 keep the global average temperature increase below 2°C compared to pre-industrial levels.
 ensure that global emissions peak as soon as possible, recognising that this will take longer
for developing countries.
The European calls for action and plans, such as the Organic Action Plan9 , the Zero Pollution
Action Plan10 , and the Sustainable Blue Economy11 are part of an ecosystem of projects that make
up the so-called European Green Deal, which represents a shared strategy for restructuring the
energy market. This strategy aims to reconstitute the economic system in a fully renewable way,
aiming at the decarbonisation of energy production (which accounts for 75 per cent of greenhouse
emissions) by 2030, the elimination of greenhouse gases, and the complete elimination of the
carbon footprint caused by the massive use of fossil fuels.12
Although we are still far from the targets set by European agreements, positive notes come from the
latest available data on electricity production. The greenhouse gas emission intensity of electricity
production in the EU has steadily decreased over the last three decades: the production of a 1kW/h
in 2020, on average, results in half the CO2 emissions compared to production in 1990 13. Energy
policies have played an important role in driving this shift towards less carbon-intensive energy
sources, particularly those addressing climate change, renewable energy supply and efficient energy
use. For example, among the most virtuous countries are Iceland and Norway, where respectively
83% and 77.4% of energy is produced from renewable sources 14. One of the most promising
prospects for sustainable electricity consumption comes from renewables, through decentralisation
of the energy structure. In Italy, since the 1990s, efforts have been made to intensify investment in
the reconversion of the Italian energy scene, through a series of incentives and liberalisation on the
introduction of renewable sources. In particular, the electricity market, traditionally a monopoly,
has been liberalised since the ‘Bersani Decree’ (Legislative Decree 79/99) of 1999, separating
generation, transmission, distribution and sales activities, in accordance with European Directive
96/92/EC. Traditionally, the electricity distribution process, and the relationship between the
citizen/consumer and the figures in charge of transmission and distribution, such as the TSO
(Transmission System Operator) and the DSO (Distribution System Operator), was thought of in a
unidirectional and centralised manner. Since the spread of renewable technologies, alternative
forms of relationship with the energy system have emerged, in which the division of roles is not as
clear-cut as it was before the liberalisation process. The most significant feature (which will be the
subject of this contribution) of this new way of conceiving the energy system decentralisation. By
decentralisation we mean a way of designing the structure of the units of production, distribution,
and consumption of electricity, in which units of production are situated closer to units of
consumption.
Where, for example, a group of citizens can harness the renewable energy generated by their solar
panels, self-producing a share of their own energy, the relationship between consumer and
producer of electricity becomes more blurred.
In fact, because of this process, it is estimated that electricity consumption from renewable sources
now accounts for 20 per cent of total consumption 15. One of the major changes brought by the
transformation from a centralised to a decentralised model of energy production and distribution is
8
Paris Agreement, https://unfccc.int/sites/default/files/english_paris_agreement.pdfaccessed on 28/03/2022
9
https://ec.europa.eu/commission/presscorner/detail/en/ip_21_663, accessed on 28/03/2022
10
https://ec.europa.eu/commission/presscorner/detail/en/ip_21_2345, accessed on 28/03/2022
11
https://ec.europa.eu/commission/presscorner/detail/en/ip_21_2341, accessed on 28/03/2022
12
https://ec.europa.eu/info/strategy/priorities-2019-2024/european-green-deal/energy-and-green-deal_en, accessed on
28/03/2022
13
https://www.eea.europa.eu/ims/greenhouse-gas-emission-intensity-of-1, accessed on 28/03/2022
14
https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Renewable_energy_statistics, accessed on
10/04/2022
2
the role that the consumer plays in this transition.
While in other fields the figure of the consumer has long been studied from a political, sociological
and economic perspective, as far as the energy sector is concerned, this figure has long remained
unnoticed. Carrosio16 sets out three main reasons for this lack of interest:
 From a socio-cultural point of view, energy consumption was seen as insignificant.
 For a long time, the energy sector saw the state as the monopoly owner. This meant that there
was no possibility for the consumer to decide on his energy supplier
 Both geographically and psychologically, energy production is far removed from consumption.
In recent years, however, we have observed a renewed interest in the figure of the energy consumer
as prosumer: while the traditional consumer in the energy market merely receives energy from the
various utilities, the prosumer, thanks to the use of photovoltaic systems, can independently produce
part of his or her own energy. Within this mechanism of decentralisation and co-generation of
energy, the mechanism of demand response and demand-side flexibility is introduced.
By demand response we mean ‘the willingness to reduce or increase one’s energy consumption in
response to peaks in demand or supply in the electricity market, receiving remuneration for this
willingness’17. Realising this demand-side flexibility (in which the consumer modifies his or her
consumption dynamically) is possible thanks to technological innovations that allow, to make more
accurate estimation of future consumptions using artificial intelligence, or to measure electricity
consumption using smart meters.
These technologies and services are possible thanks to a new way of thinking about the
communication system between energy users and producers, the smart grid: a series of innovations
in the electricity grid (from power plants down to the substations and meters in homes) that can
intelligently integrate the actions of all users connected to it - generators, consumers and those who
do both - in order to efficiently provide sustainable, affordable and secure electricity supplies. The
smart grid is a system of integrated technologies that provides a bi-directional connection between
users and energy producers/distributors, capable of adapting to a distributed method of electricity
generation and enabling ‘green’ conversion through the communication capabilities that are made
available. What, however, most represents the innovative element in energy production and
distribution is the energy community.
An energy community is realised through the spontaneous organisation of individuals who perform
collective energy transformation actions, guided by citizens who help facilitate the path to a clean
energy transition. They help increase public acceptance of renewable energy projects and make it
easier to attract private investment in the transition to clean energy production. At the same time,
they have the potential to provide direct benefits to citizens by advancing energy efficiency and
reducing the costs of their electricity bills.18 In addition to the incorporation of technological
improvements within the energy grid, in order to enjoy the benefits we have listed above and bring
sufficient results for the purpose of reducing emissions, it is necessary to realise a strong consumer
involvement in designing new processes of self-consumption and energy community building. This
is achievable, in the first place, by constructing what Ingrid Ballo 19 calls a ‘socio-technical
imaginary’: a series of assumptions that characterise the implementation of a technology in society.
From a socio-political point of view, it is of utmost importance to reflect on the different
approaches that can be used to analyse a technology. It would be wrong to consider technology as a
neutral element, but every technology is employed and deployed in a precise system of social
15
https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Renewable_energy_statistics, accessed on
10/04/2022
16
Giovanni Carrosio, 'Energy and the social sciences: state of the art and research perspectives', Quaderni di
Sociologia, 66 | 2014, 107-116.
17
https://www.enelx.com/it/it/faq/cosa-e-il-demand-response-perche-conviene, accessed on 28/03/2022
18
https://energy.ec.europa.eu/topics/markets-and-consumers/energy-communities_en, accessed on 28/03/2022
19
Ballo, Ingrid Foss (2015): ‘Imagining energy futures: Sociotechnical imaginaries of the future Smart Grid in
Norway.’ Energy Research & Social Science, 9: 9-20
3
relations. Indeed, the social image of demand response and energy communities is one in which the
individual is placed at the centre of the creation of a new energy system. This paper will set out the
main elements of the decentralisation process from a technological, legal and social point of view
(2), and will offer a focus on the Italian situation with respect to demand response, energy
communities and self-consumption initiatives, also briefly mentioning the role of the incentives
present in the PNRR (National Recovery and Resilience Plan) (3). An outline, albeit not complete,
of the Italian condition with respect to decentralisation will thus be offered, so that the reader may
have an idea of what socio-technical imaginary is described by recent national and European
directives on the green transition.

2. Distributed Generation and Demand Response

Contrary to the image of an outdated electricity grid in which all energy is produced by large plants,
today’s trend (starting, as we have seen, in the 1990s) is to orient the energy production system
towards a more decentralised model. A decentralised energy ecosystem is an infrastructure of
resources for producing energy, from wind power to photovoltaics, that produce less energy than
larger plants (usually under 30mW) and that can be located close to the places where the energy is
consumed. The advantages of a distributed model of energy generation are both environmental and
economic: from an environmental perspective, decentralising energy production through the
installation of renewable resources makes it possible to avoid the installation of large and plants.
From an economic perspective, lower capacity generators allow for lower investments, and in a
more liberalised market, it allows more players to enter and generate variety of supply and profit.
However, a greater integration of renewable energies into the energy pool leads to certain problems
regarding voltage stability, and this needs to be constantly monitored 20. This need is compounded
by the need for a proper control system: whereas previous grid models were oriented towards a uni-
directional mechanism, there is now a tendency to build models in which information circulates bi-
directionally through the use of smart-meters: not only is the DSO able to have information on
consumption, but it can also send information in near real time, facilitating a flexible and
participatory type of consumption from the user.
Compared to the traditional grid, the modernisation of the electrical grid coincides with integrated
systems on the user side, such as the smart meters, and in general with a process of automated home
automation technology (Internet of Things) where devices connected to the Internet and to each
other are installed in the domestic space. In addition to this, the smart grid has the following
properties:

(a) it enables two-way communication,

(b) is structured to facilitate distributed generation,
(c) possess self-monitoring skills,
(d) it has the function of ‘self-healing’, i.e. it has the ability to identify errors in the network and
correct them,

20
C. D. Iweh, S. Gyamfi, E. Tanyi, and E. Effah-Donyina, 'Distributed generation and renewable energy integration into the
grid: Prerequisites, push factors, practical options, issues and merits,' Energies, vol. 14, no. 17, 2021, doi:
10.3390/en14175375.

4
(e) allows remote control of the technologies present.

The use of the internet and big data, such as the use of artificial intelligence for data acquisition
and analysis, can provide greater accuracy and reduce the amount of time needed to make
measurements. IoT-connected objects not only communicate but are also able to sense the
environment and respond quickly to the current situation thanks to sensor network technology. The
wireless sensor network is seen as the main part of the IoT as it connects to devices in an observed
area to create a network system with integrated devices. These allow for the constant transmission
of information, and real-time measurement of consumption that is being made, giving the user
accurate information on how much this amounts to. The ability to capture consumption in real time
(a capability enabled by the new generation of smart meters) promotes what is known as demand
response.
Demand response can be seen as a mechanism of self-regulation of consumption by consumers,
through a system of incentives that promotes a more participatory and conscious form of
consumption. This spontaneous regulation of individuals and communities takes place through a
series of incentive mechanisms, which pass through an effective configuration of certain market
systems, understood as types of tariffs that help to incentivise the so-called demand-side flexibility,
i.e. the ability of the user to dynamically adapt his or her consumption starting from certain signals
and information transmitted to him or her by the distributor. The benefits of this adaptation derive
from certain properties of the energy grid: since it is difficult to store electricity, when demand for
energy is not in balance with production, the excess energy is dumped on the ground, representing a
cost not only in economic terms, but also in environmental terms, since constant power generation
by power plants (necessary to meet the overall energy needs of an area), requires a high
consumption of fossil resources21. If, on the other hand, a market and a system are built to users to
modulate their consumption in relation to what are the peaks (of demand and production), it is
possible to think of a gain both in individual terms, when the user is compensated for the deviation
and the increase in efficiency produced, and in environmental terms. In addition to offering
economic and environmental benefits, demand response also provides a series of benefits defined as
‘ancillary services’, a series of services that guarantee the security of the electricity system,
including:
 the possibility of adjusting the grid frequency, which must be kept within a certain range,
 the ability to prevent blackouts caused by overloading,
 the ability to avoid congestion at certain nodes.
Other services that can be improved by demand response are voltage control, grid monitoring
functions, frequency control and support for maintaining the right voltage. When the user modifies
his consumption by postponing the use of certain appliances or actions (or when offices, companies
or factories decide to apply energy-saving practices) the user is compensated for this.
Behavioural change can take place either on the basis of an indirect economic incentive (when, for
instance, the cost of consumption per kW/h is higher), or a direct one, where a control signal is sent
to the user (via a notification or a text message), where consumers may adjust their energy demand
by postponing certain activities that require large amounts of electricity, or may decide to pay a
higher price for their electricity. Once a change request is sent to customers, there are two ways to
implement a DR control.
In an implicit implementation, a price signal can be sent to each residence, and customers are
https://www.betterenergy.org/wp-content/uploads/2018/03/DR-Fact-Sheet-2-Environmental-Benefits-of-
21

DR.pdf#page=1&zoom=auto,-265,798, accessed on 3/04/2022

5
informed that prices change according to a certain schedule. It is up to the customer to determine
how, and if, they should change the way they currently use electricity.
In a second way to implement demand response, the utility, or a third-party aggregator, also sends a
price signal to customers, but this is received by devices such as smart meters that respond to the
price signal based on internal set points and set points determined by the customer. These price
signals are used to incentivise changes in consumer behaviour and are defined through various
forms of pricing22. Below is an outline of what kind of tariffs are usually used in DR:

Time of use Two or three price types are created per time
slot, and the user can choose how to organise
his or her consumption.
Critical Peak Pricing In the event of peak demand or a critical event,
the price is increased (disincentivising
consumption).
Critical Peak Rebate In the event of a peak demand or a critical
event, the price is kept stable, and the user is
compensated for the change in consumption.
Direct load control The utility can centrally control the user’s
consumption (e.g., by controlling heating
systems). The user is financially rewarded for
the control he leaves to the utility.
Real Time Pricing The user receives information on energy price
variations during the day and can dynamically
adapt his consumption. This is possible thanks
to smart meters that provide real-time
information on energy prices, allowing greater
flexibility on the part of the user.

These price and supply regimes make it possible to find more efficient ways of realising the shift in
energy consumption away from the critical bands, ensuring that the environmental and economic
impact of consumption is reduced, offering more flexibility to the consumer, and benefiting the
overall stability of the electricity grid.

3. The Italian case

In the Italian case, demand response is recently gaining ground, also thanks to the ongoing
modernisation of the energy grid, with the installation of new generation meters 23. The consumer’s
function, in this case, lies in participating in dispatching services (the activity of managing and
balancing energy flows through the grid, which is necessary for its proper functioning and for
balancing supply and demand). Since ARERA Resolution 300/2017, the Italian Transmission
System Operator (TSO), Terna, has opened the energy market to small generation plants,
aggregating them through Virtual Enabled Mixed Units (UVAMs). UVAMs are unions of one or
more consumers, geographically close to each other, that are managed by the Aggregator (or
Balance Service Provider), which takes care of the aggregation and balancing of demand
fluctuations by users, facilitating competitive tariffs on the energy market.The capabilities offered
22
P. Du, N. Lu, and H. Zhong, Demand Response in Smart Grids. 2019
23
https://www.arera.it/allegati/operatori/elettricita/smartgrid/Relazione%20Finale%20ACEA%20D.pdf , consulted on
5/04/2022
6
by the decentralisation of the market and the renewable energy pool not only ensure greater
empowerment and freedom of choice for the consumer, but also enable political forms of
association, through self-consumption and energy communities, through two important directives of
the Clean Energy for all Europeans, such as:
 The Renewable Energy Directive 2018/2001 (RED II) of December 2018, which defines
‘Renewable Energy Communities’ (RECs) and ‘jointly-acting renewable self-consumers’;
 The Directive on common rules for the internal market for electricity 2019/944 (EMI
Directive), published in June 2019, in which Citizen Energy Communities (CECs) are
defined.
Fully realised in Italy through the Decreto Milleproroghe (162/2019), energy communities are a
new form of association of prosumers who share energy produced spontaneously using renewables,
financed by national and European funds, and often with the collaboration of companies,
universities, electricity service providers and consumer associations. Collective self-consumption in
energy communities is economically incentivised through an advantageous tariff that sees energy
shared in collective self-consumption (in the same building or apartment block) valued at 100
€/mWh, and energy shared within renewable energy communities (within the same medium/low-
voltage electrical substation) at 110 €/,mWh24.
In addition, further incentive mechanisms are applied, such as the 110% ecobonus tax deduction on
photovoltaic installation (Decree-Law No. 34/2020).
Since these directives (although energy sharing experiences have existed since before the above-
mentioned articles) innovative legal and socio-political associations have been introduced into
Italian legislation, precisely to meet the European community’s demand for change towards
renewable energy. RECs (Renewable Energy Communities) represent an autonomous legal
entity, created by the aggregation of individuals, small and medium-sized enterprises, and local
authorities, through energy-sharing facilities and technologies 25. According to the regulation
Renewable Energy Directive (2018/2001):

‘Member States should have the possibility to choose any form of entity for renewable energy
communities provided that this entity can, acting in its own name, exercise rights and be subject to
certain obligations. To avoid abuse and ensure broad participation, Renewable Energy
Communities should be able to maintain their autonomy from individual members and other
traditional market actors participating in the community as members or shareholders, or
cooperating by other means, such as investment. Participation in renewable energy projects should
be open to all potential local members on the basis of objective, transparent and non-
discriminatory criteria.’

In the Italian case, several initiatives were already present on the territory before the enabling
legislation, such as those in the San Giovanni a Teduccio district in Naples, in the municipality of
Magliano Alpi, the port of Savona or the Bolzano tech-park26. Some fully realised, others still under
construction, all aim to transform local energy production and consumption to make it ecological
and sustainable. Below is a table showing the status of Italy’s energy (and renewable) communities:

24
https://www.enea.it/it/seguici/pubblicazioni/pdf-volumi/2020/guida_comunita-energetiche.pdf , accessed on
3/04/2022
25
https://www.rse-web.it/wp-content/uploads/2022/02/OrangeBook-22-Le-Comunita-Energetiche-in-Italia-DEF.pdf ,
accessed on 3/04/2022
26
https://www.comunirinnovabili.it/wp-content/uploads/2021/05/CR2021-1.pdf, accessed on 3/04/2022
7
 Name Type Municipality Production Prosumers
CE San Giovanni a Solar photovoltaic Naples 53kW 40 families
Teduccio
Energy City Hall Solar photovoltaic Magliano Alpi 20kW 5 families,
library,
school,
gymnasium
Porto di Savona Solar photovoltaic Savona 4mW Terminal
autosufficiente and port
operators
Noi Techpark Solar photovoltaic Bolzano 60kW Various
CER Macerata Solar photovoltaic Macerata Feltria Up to 1.5 mW Users of
Feltria municipal
services
D’Annunzio Solar photovoltaic Chieti To be defined Academic
University staff
CER Biccari Solar photovoltaic Biccari 200kW Citizens
CE TITO Solar photovoltaic Tito 20kW Citizens

EC of the Angitola Solar photovoltaic Philadelphia 1,000kW Citizens

CER Common Solar photovoltaic Ferla 20kW 5 citizens
Light and 1
company
CER Ussaramanna Solar photovoltaic Ussaramanna 60kW 90 families
CER Solar photovoltaic Villanovaforru 54.4kW Gymnasium,
Villanovaforru citizens
CER Alpina in District heating and Tirano 20mW Citizens
Tirano biomass
EC of the Pinerolo Biogas, Turin Thermal: 18.8 Various
area hydropower, solar gW/h public,
and photovoltaics Electricity: 17.1 residential,
gW/h business and
Hydroelectric: industrial
450kW users
EC Agricultural Solar photovoltaic Veneto / Apulia 668 owner-
1,811 mW/a users and
consumers
CER Pilastro and Solar photovoltaic, Bologna Biogas (20kW) Residential
Roveri (Bologna) Biogas Photovoltaics and
Industrial

Figure 1 - Italian CERs, data processing from the report ‘Comunità Rinnovabili 2021’ by Legambiente

Another possible form is self-consumption, where citizens can independently produce energy from
their own solar photovoltaic installations. The RED II Directive defines the self-consumer as the
end-user who, operating on its own sites within defined boundaries, produces renewable electricity
for its own consumption, and can store or sell this energy. According to the legislation:

‘Member States shall ensure that self-consumers of renewable energy, individually or through
aggregators, are allowed to:
8
(a) produce renewable energy, including for their own consumption; store and sell surplus
renewable electricity production, including through renewable electricity trading agreements,
electricity suppliers and peer-to-peer agreements, without being subject [...].
(b) install and operate electricity storage systems coupled with renewable electricity generation
facilities for self-consumption purposes without being subject to any dual charges, including grid
tariffs for electricity
stored electricity that remains in their possession;
(c) maintain their rights and obligations as final consumers;’27
Moreover, the Italian case is currently rich in experiences of self-consumption, as we can see from
the following table:

Name Production Municipality Production Type/prosumers

Pinerolo Solar photovoltaic Pinerolo Solar Condominium
Photovoltaic:
20kW,
Solar Thermal:
83 -71kW
Via Solar photovoltaic Turin 255kW Condominium
Bardonecchia
RE[Y], Retail Heat Pump Venice Heat pump: Shopping centre
Efficiency Photovoltaic 240kW
Venice
Photovoltaics:
249kW
NzeB (Nearly Prato Heat pump: 152 Social Housing
Zero Energy Solar kW (Condominium)
Building) Photovoltaic Heat Solar thermal:
Pump 64.86
Solar thermal Solar
photovoltaic:
32.7

Speranza Solar photovoltaic Candiolo Solar Agricultural

Agricultural photovoltaic: Cooperative
Cooperative Biogas 221 kW

Biogas
990kW and 998
Dobbiaco-San Biomass Dobbiaco Biomass 18,000 District Heating
Candido kW Plant

Valier Farm Solar Rovigo Solar Farm

Photovoltaic Photovoltaic:
108kW,
Biomass
Biomass: kW350
27
European RED II Directive 2001/2018, Art. 22, L328/121
9
 Company Solar photovoltaic Municipality of kW 585 Plastics
LA.M. Plastic Villa del Conte production
srl company
Montale Solar photovoltaic Castelnuovo Solar Ecovillage (80
Ecovillage photovoltaic: families)
kW 103
‘Energy Solar photovoltaic San Lazzaro di Solar
Community’ Saveno photovoltaic: kW Primary school
20
Giglio smart Solar photovoltaic Giglio Island Solar Photovoltaic
island photovoltaic: shelter
kW 1403
Circolo over 60 Solar photovoltaic Santa Marinella kW 9 Association for
Santa Marinella the Elderly
Figure 2 Self-consumption in Italy, data processing from the report ‘Renewable Communities 2021’ by Legambiente

At the present moment, many of the energy community and self-consumption initiatives that have
been presented here are still in the development phase, as they are not yet operational. Looking to
the future, if we want to understand the development of decentralisation and the increase of
renewables in Italy, it is necessary to the PNRR. The National Recovery and Resilience Plan
envisages a range of funding to incentivise self-production and self-consumption (as stipulated in
the regulations). With an investment of over EUR 2.2 billion, the plan launched by the government
aims to secure 2000mW of electricity generation capacity, through the distributed grid and with
self-consumption and renewables. Specifically, in mission two, in investment 3.2 on ‘green
communities’, we see the objective of incentivising rural and mountain territories, as well as local
resources, for those communities that want to exploit the resources available to them. The
investment aims to grow local communities through the support and financing of sustainable
development plans (from an ecological, environmental and social perspective). Incentives will be
provided28 :
(a) agro forestry management.
(b) water resource management.
(c) energy production from local renewable sources, such as micro-hydro, biomass, biogas, wind,
cogeneration and biomethane.
(e) the sustainable construction and management of mountain building stock and infrastructure.
(f) energy efficiency and smart integration of plants and networks.
(g) the sustainable development of production activities.

The plan also refers to the smart grid29 , which aims to increase the flexibility, security, and
resilience of the national energy system by increasing the amount of energy produced from
renewables. There are two guidelines:
(a) increase distributed generation capacity through renewable sources (increasing it to 4,000 MW),
(b) encourage the use of clean electricity, progressively replacing other energy sources.
28
https://www.governo.it/sites/governo.it/files/PNRR.pdf, p. 127
29
https://www.governo.it/sites/governo.it/files/PNRR.pdf, p. 135
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We will therefore expect a greater diffusion of alternative production and consumption forms,
which will help combat energy poverty and foster the development of ecological and sustainable
living models.

4. Conclusion

In this paper we have seen how a new way of conceiving the relationship between individuals and
communities pave way to decentralisation and localisation of electricity generation. Due to the
environmental impacts of a fossil fuel-based system, the needs of our energy production ecosystem
need to be modified. It is necessary to rethink how the individual can be integrated into a co-
participatory mechanism. In conclusion, it is important to mention the ‘Decalogue of the Energy
Community’, where reference is made to sustainable living, to ‘Living spaces responsibly by using
and managing available resources intelligently, through the use of ecological materials and
energy-efficient solutions, while respecting health and the environment. [Living] the available
resources by sharing them, to reduce the ecological impact and increase sociality.’30 The de-
carbonisation goals that European nations have set themselves can only be achieved with an active
involvement of the prosumer at the last node of energy production.
In the future, we are likely to see a progressive decentralisation, in which greater interconnection
will allow the construction of virtual markets and new key figures, in which the periphery of the
user will effectively represent the new centre.

30
https://www.enea.it/it/seguici/pubblicazioni/pdf-volumi/2020/guida_comunita-energetiche.pdf, p.33, Accessed on
08/04/2022
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