We are used to think of power generators, distributors and users as separate entities, but this paradigm is shifting towards a new model, where energy is increasingly produced by the same stakeholders who consume it. Thanks to accessible photovoltaic and solar installations, a decentralised and somehow democratised energy system is getting a foothold in many countries around the world, and it is becoming quite popular in Europe.

According to the latest Energy Atlas by Friend of the Earth Europe, in Germany about 42% of renewables are owned by private households and small cooperatives. All together, the existing 800 local energy communities would rank 14th among the largest European power suppliers. Smart Energy is progressing in Italy too: Politecnico di Milano estimated a potential of at least 500 local energy communities, which could generate annual savings up to 6 billion euros for power generation and distribution, at the same time cutting up to 11 million tons of CO2 emissions per year.

The European Union is encouraging this evolution, looking at local energy communities within the comprehensive climate change mitigation strategy and the target of at least 32% of overall energy to be generated by renewables by 2030. The revised Renewable Energy Directive (‘Red II’) inclused specific measures to allow households, communities and businesses to turn into clean energy producers. This would open the possibility for residential buildings to install a single photovoltaic system and power individual apartments (regulation for this use case is not consistent in EU member states), or households to establish self-sufficient local energy communities, able to share power surplus with other communities nearby.

Smart technologies will become more and more important to build reliable and efficient networks, both for utilities and local energy communities. And the blockchain might be the best possible answer to improve data, application, and transaction security on those networks, but also to enable innovative business models to monetize the value of energy-related data.