Examining the Potential of Establishing Energy Communities in Sweden : Energy Communities’ Barriers, Incentives, and Interaction with Local Electricity Market and Smart Grid

Abstract: The phenomenon global warming has necessitated the need for a transition towards more environmentally friendly behaviours. One tool amongst many, recognized by the European Commission as effective to fight global warming is energy communities. Västerås municipality’s project team is exploring the opportunity for their new district, Sätra, to operate as an energy community. This report showcases Sätra's economic, social, and technical circumstances, as well as Sweden's regulatory framework. It examines the potential role of local electricity market and smart grid with an energy community. To obtain the results, the methodology included interviews, document analysis, literature reviews, and a feasibility study. The results revealed that the barriers were lack of definition for energy community, lack of awareness among residents, marginalized groups, intermittency of renewable energy sources, and a lack of funding for initiatives. The incentives and mitigation tactics were to create a definition for 'energy communities,' to establish an umbrella organization, raise awareness, and secure funding. The result was compared with the case study of Sätra, and the Västerås municipality’s project team demonstrated utilization of incentives and mitigation strategies in the technical, regulatory, and economic aspects, indicating a likelihood of feasibility. The aspect in which the team did not utilize incentives and mitigation for the barriers was the social aspect. Local electricity markets were not deemed economically practical, but were acknowledged as resilient and efficient in energy distribution. Smart grid’s role in energy communities was, unanimously agreed upon, to be crucial for its features such as cybersecurity, energy efficiency, integration of renewable energy sources, and flexibility.