Posted on: 24th July 2024
Article written by Ulrika Stevens.
The context
Establishing an energy community requires consideration of various legal, technical and organizational aspects. For those without a background in energy production,the process can seem difficult and daunting. One of the biggest challenges is the support available when communities decide to create an energy community of their own. This is where Neoom comes in.
Neoom is a Vienna – based platform that supports energy communities – from establishing the organization to producing and sharing energy within the community, they offer support each step of the way. After identifying the need for adequate support mechanisms in this field, Neoom developed an app through which they communicate and guide citizens with their expertise. For those interested in establishing an energy community of their own, it all starts with one simple step: downloading the app.
The initial need
The company set out to offer solutions after witnessing the challenges people face when establishing an energy community, Neoom identified the need for an application or a platform that would make it easier for people to establish and join energy communities in their own neighbourhood. Given that the concept is still quite young, it goes without saying there still are some barriers that prevent people from taking that first step. Neoom states that the software application they built serves this need, connecting communities with citizens and making joining energy communities much easier.
The technical constellation
How are energy communities set up? The type of an energy community depends on the grid structure that they have. The smallest energy community (LOKAL) would consist of neighbors who share their energy resources. In this case, you would have, for example, a system on the roof of a building with many units and residents. LIkewise, the community can also consist of different buildings collaborating together, and not just a single one. All residents in the building can use the collectively owned and created electricity, which would serve to build up the energy community. In such a constellation, the community would not need an external network supply to share the locally produced energy. The next step would be sharing the produced energy regionally, which would require the infrastructure of the energy grid, where energy is stored and delivered within the region to other users.
Accessing the grid would also require a transformation station and storage facilities. Adding this infrastructure allows the community to share the local energy production across the region. In the regional model, people attached to the same infrastructure can share their production. Regulations regarding the size of energy communities are based on the Austrian Renewable Expansion Act.
How it works
Neoom offers a package that includes everything necessary for an energy community to be established. No money is exchanged in the beginning, it simply starts with the app. Once an energy community is capable of charging for the delivery of energy, that is when Neoom receives a percentage of the deliverable energy quantity. Given that Neoom is a start-up, investors are a crucial part of developing the business. Most of the company’s income stream comes from selling energy storages and photovoltaic materials. While the company is based in Vienna, they are not constrained by geographic location. Everyone who has a smartphone and is in Austria can download the app and get started. While mostly focusing on the Austrian market, the company is experimenting with expanding their business internationally.
What sets Neoom apart from other companies in the field is the app that they have developed. While other companies focus on consulting with high fees, the consulting mostly focuses on explaining the concept and drafting an analysis of the energy community and what is possible. Establishing an energy community can be a mind-boggling and confusing process, so the expertise that Neoom offers to the end customer through supporting the development in every phase and helping solve any issues that may arise, is a significant contribution to the process. Thus, in their business concept, the focus is on the end consumer from the first touch of information, to the ongoing process of the energy community activation, and then the operation.
Focusing on the end customer means that communities can consume energy for a lower price and sell it for higher. Within an energy community, there is the freedom to define the prices. Because of that freedom, it is often the case to sell the energy for a higher price than other energy suppliers. The basic concept of selling energy from your own photovoltaic system is that you have your energy supplier, and the energy supplier defines the price for your produced energy.
The importance of citizen participation
While energy communities consist of different people with varying backgrounds, one thing is essential: you could use members with a variety of interests and expertise. For instance, a person that is quite interested in the technical aspect could come in crucial when setting up the infrastructure, and a member with knowledge regarding finance and contracts could prove to be essential given that forming an energy community requires many contracts. These are just some examples of how citizens with different degrees of knowledge can contribute to the development of energy communities. As Neoom sees it, citizens are the key part of the whole concept because energy communities are about bringing people together and creating value for everyone that wants to participate. Especially given the current situation of the energy market, it is clear that people really are interested in this topic as it offers the opportunity to access electricity for a lower price.
Current challenges in developing energy communities
As energy communities are a fairly new concept, there are some challenges that hinder development. For Neoom, the largest ones are external factors, legal and regulation aspects, given they are elements that communities cannot control.
The network of actors within any energy community is extensive. Not only does it involve citizens, but the energy supplier, the grid operator, and others as well. Moreover, participating in the community and its activities is not a day-to-day job for most, but something they do in their free time. Thus, energy communities must adapt to new ways of working efficiently and productively, within such constraints. Given the limited resources and time, this can pose challenges for development. There is a lot of information to take in, which is why the support of Neoom clarifies the whole process for energy communities. Luckily, each change leads Neoom to tackle the challenge on-hand to create more efficient measures to support energy communities digitally.
Focusing on the end customer means that communities can consume energy for a lower price and sell it for higher. Within an energy community, there is the freedom to define the prices. Because of that freedom, it is often the case to sell the energy for a higher price than other energy suppliers. The basic concept of selling energy from your own photovoltaic system is that you have your energy supplier, and the energy supplier defines the price for your produced energy.
Neoom and the public
Developing the concept of the company and the app happened rapidly and simultaneously for Neeom. Many internal partners were involved, internally and externally. Additionally, there are other partners who provide them with consultations.
Externally, Neoom works closely with other actors in the field of renewable energy production, including public bodies, and corporations. As Neoom offers a paid service, there are some competitors in the field. However, these are seen as “loosely competitive”, but in a positive way: there is a constant process of learning and creating more effective measures, making the competition stimulating. Additionally, the Climate and Energy Fund is expanding this topic among the public and making it an attractive option through funding opportunities, while Energy Burgenland, an energy service company, is interested in supporting the activities of energy communities. Working together with other actors in the field makes it easier to attract a wider audience, within which, you find those people that are interested in the topic. Further, it is important to know where to go to find the right people.
Finally, the Austrian Coordination Office for Energy Communities is an important source of information for Neoom, as they are helpful especially for end users because they have detailed information, such as documents that offer an overview of energy communities as well as detailed information regarding contracts and legal aspects. They are mostly in charge of developing the concept of energy communities, while making it more accessible for different people, through linking suggestions and ideas from public bodies, and the wider public.
What the future holds
As experts on the topic, Neoom understands that it is not so easy for people to establish energy communities. If the process would be easier for the end users, the positive impact would increase as more energy communities are created. At the same time, dependence on other states or other large energy suppliers wanes as citizens become more aware. The large energy suppliers still dominate the market, and given that Austria is dependent on other countries for energy production, the idea of decentralized energy production is definitely taking off.
Will energy communities contribute to fixing the issues we are facing right now? Can it be a long – term solution for decreasing external resources? These are the questions that Neoom explores as they develop their business. Of course, the aim is that in the coming years, more energy communities are established throughout Austria and that these energy communities bring value to everyone who participates.While it might not be the main focus, an important aspect is that they bring people together to gain knowledge and a better understanding of energy, what it is, where it comes from, and how they can manage to consume less energy to fight climate change.
“I see it as a concept that will last for a long time because the background of this is from the European Union, since they have identified the need for this type of action. Everyone should be able to be part of the energy transition because every citizen is part of climate change. I think it is a perfect way to get everyone involved in this topic. In this way we can make the world a little bit better.”
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