Posted on: 9th May 2025
Article written by Ulrika Stevens.
With the ambitious goal to become carbon neutral by 2050, Spain is currently working towards this target through its National Energy and Climate Plan 2021-2030. This plan highlights improving energy efficiency, raising the share of renewable energy production in electricity generation to 74 per cent, and a significant decrease in greenhouse gas emissions. To achieve these targets, support for energy communities is highlighted as a priority, emphasising the role of citizens at the core of the energy transition. This institutional framework, together with favourable climate conditions in Spain, provides the basis for current developments in renewable energy production.
Municipalities are eager to support the development of self-generated electricity through offering support to entities interested in building up an energy community through eliminating existing barriers and providing capacity-building opportunities. One such example of a publicly supported energy community is the Urtinsa Industrial Park Energy Community (la Comunidad Energética del Polígono de Urtinsa). We interviewed Daniel Fernandez, an innovation technician from the Municipal Services‘ Company of Alcorcón, to understand their journey of setting up an industrial energy community in the city.
The Spanish context
In Spain, there is currently no specific model for developing energy communities, which leads municipalities to develop their own schemes. When discussing about the planning phase, Daniel tells us:
“Even within the Spanish framework, every energy community model is different. Each energy community has its own particularities and its own vision of what an energy community should be and how it is going to be conducted, which goals and how to arrive at those goals.”
In 2022, the IIDMA (The International Institute for Law and the Environment) published the first ‘Legal Guide for the Constitution of Energy Communities in Spain’ (in Spanish), which identifies all available legal options and describes the steps to follow in creating an energy community, but as Spain is still developing regulatory framework for energy communities, much is left for the energy communities themselves to define. While energy communities can be found throughout the country, they are particularly concentrated in the economic regions of Madrid, Catalonia, and the Basque Country.
Establishing the Urtinsa energy community
With 170 000 inhabitants, Alcorcón is located 13 kilometres southeast from the Spanish capital of Madrid. The Municipal Services’ Company of Alcorcón is in charge of different services within the municipality, such as waste management, public lighting, and infrastructure support services. They are increasingly aligning their activities around the energy transition, cooperating with other sectors of the municipality. Within the Municipal Services, a new office was set up in 2024, ESMASA Energía, which will support the Urtinsa energy community through expertise on how to build up their energy production activities.
Daniel has been part of the team that was developing the energy community model, which was officially established in 2023, and is currently in the working group, supporting the development of the Urtinsa energy community, located in the industrial district of Alcorcón. While IDAE (Spanish Institute for Energy Diversification and Saving), is the leading institution in the development of energy communities, guiding entities when it comes to legal or technical doubts, it works in the wider field of renewable energy production in Spain.
Going back to the beginning – forming the energy community
An energy community in Spain must be registered as an association, which is the first step that the working group took when setting up the Urtinsa energy community. This step is fairly straightforward, as it is based on a law regulating associations and how they should be organised legally and operate as a managing entity. From that point, the association must define the particular conditions, for example, energy price and the distribution among the members of the community. The more challenging aspect is finding the partners to join the journey. Often companies who are trying to create an energy community find themselves isolated with a lack of exchange with others. As Daniel puts it:
“The main challenge that one should overcome when trying to organise an energy community is that this kind of community forms of organisation, although they are not non-existent, are not as common as they should be.”
Companies are experienced in economic activities, but often lack the expertise to engage with or as a community. There is much at stake in current times of uncertainty, with a strong need for security and stability, leading them to look for models that they know will work. Shifting the mindset from the individual company pathway, to the collective one, is a crucial step, and one where support is needed.
So, how did the Urtinsa energy community come together?
It all started with curiosity, an idea. The team in charge of the project scouted the industrial zone in search of companies that were interested in the constitutional energy community. Six entities in a variety of industrial domains answered the first call, with whom the energy community was established. After this, once the operating model became clearer and the level of abstraction decreased, more companies got interested in joining. In the planning phase, the working group realised that establishing clear protocols and well-defined contracts is crucial. Demonstrative positive examples of energy communities, allowed to alleviate uncertainties, guaranteed all parties can achieve economic and energy transition goals.
The energy community was established in 2023 with governmental funding support. The governmental funding scheme is based on European funding, since the European Union has been promoting energy communities in the last years. There was specific funding for the constitutional development of energy communities, which gave the Urtinsa energy community the means to get started.
“We found ourselves in a context of rising energy prices, and both those economic aspects and the ecological aspects of the energy transition led us to a point in which we thought that an energy community would be a great initiative”
The first year’s focus was on the model of the energy community, to make it work, how new partners can join, how the partners that are already part of the energy community are going to benefit from it, and what kind of profit can be achieved. From the very beginning, the working group has truly believed that through this, it is possible to tackle common issues and receive great benefits from the operation. However, there is a long way from establishing an energy community to being able to produce and share energy. Currently the energy community is working intensely on the operation of the energy community, which will take place in 2025. This means that in a short time, the installations must be up and running, ready for energy distribution.
The financially better choice
As with any energy community, the members have different roles. Some are energy producers, meaning they already have energy installations that do not belong to the community. However, they have the ability, or even the need, to sell the energy that they are producing, because they are producing more energy than they need themselves. If they already have an installation, they can sell the surpluses to the members of the community. Alternatively, they can sell the surpluses to the legal entity of the energy community so that the community can sell them to other members.
There are also companies that have high energy demand, which they are not able to cover with their own production, or alternatively have none of their own production. Then, there are partners who would like to provide the means to install photovoltaic modules. In exchange for providing the roof for the infrastructure, the owner of the building receives 15 percent of the production. With this model, there is no fee for using the roof and it is a win-win situation for both sides.
The installations are directly funded by the members, as the energy community does not fund this. Once members fund the photovoltaic installation, they belong to the energy community, while the members receive the proportional energy. The funding for the installation is subsidized by 50 per cent by the European Union. Ultimately, this model shows how different energy needs and capacities of the members are met through the community.
What is crucial for the next phase is – finding new partners within the industrial zone who consume the energy of the community. The working group is now conducting case studies for interested companies, providing a business model based on their energy consumption needs. Once a company decides to join the community, they already know the details of the return on investment. This is a crucial aspect in getting companies to join. As Daniel sees it, the energy community is the ideal framework in order to get the different needs to work together on the journey towards energy independence for everyone involved, which is important for the companies as they must implement more sustainable processes.
Members pay a fee of 100 euros to be part of the association. When joining, they pick their role, which defines their engagement. If a member, for example, decides to provide their rooftop for the production, then it will be equipped with photovoltaic modules. The costs are covered by the energy demanding parties of the community.
“Companies that need energy and companies that are producing energy surpluses have both a challenge on their hands. We have the chance to turn those two challenges into an opportunity for both parties. And we can promote mutual economic profit for both of them. The energy demanding party obtains better energy prices than the free energy market. And the energy selling party can sell at a better price than they do in the free market.”
Just how big can the Urtinsa energy community become?
Legally, the producers and consumer must be within a 2-kilometre radius of each other. Since the aim is to cover the local energy demand, the goal is achieved when the local energy is covered. This is a kind of a natural boundary for the community.
Working as an association
Those companies that are showing more interest in developing the community naturally push forward the activities through their ideas and initiatives. The working group is trying to solve that by emphasising the importance of the different inputs of the members. When decisions need to be made, all partners meet and vote. Each partner of the energy community has one vote. Thus, all partners of the energy community have the same power when making decisions. As the Urtinsa energy community grows, so does the need to define periodic meetings and more stable community organisation.
“Creating a collective management environment is one of the tasks that we need to master in the next months, especially for urgent decisions.”
While the member companies are located close to each other, they have not had many relations in the past. So, it is also new for them to get to know each other more, through a shared goal. The six founding partners are clearly motivated by the idea of doing something good in a collective project. However, the first benefit is the economic one. Perhaps, as the community gets to know each other, the social aspect will become stronger.
“Social benefits not going to be a critical part of the decision, it might be something that suits their philosophy as a company or that can be even used as a marketing tool in order to promote that companies are more sustainable. But I don’t think that social perspective is a key aspect of the decision of joining an energy community, especially in big companies. Maybe little companies do have more, a clearer conscience of collectivism or have that goal besides the economic goal.”
Working beyond the community – exchanging knowledge
While the working group specifically works with the Urtinsa energy community, their activities go beyond this, as they are also promoting with all the energy communities of the Madrid region. By having contact with different energy communities across Spain, there is a strong environment of learning from each other. As no one has answers to everything, what supports the development of energy communities is exchanging experiences and sharing how to overcome difficulties when things get tough.
When it comes to the role of energy communities in Spain in the future…
Daniel sees that energy communities have a huge potential in the Spanish context. And based on European funding as support, the government too highlights energy as a strategic asset. What will be left to be seen is how these communities work side-by-side with large energy corporations. But as the communities grow, it will show the potential of getting where large energy corporations cannot, in a way complimenting to their work. Energy communities as a form of organisation, and an example of decentralisation and energy sovereignty is a reality, which will have to be accepted.
“We have to re-vindicate our rights and understand that the first energy communities are going to make mistakes. But those mistakes are needed so that new energy communities can be developed, learning from those first experiences.”
Looking forward…
When it comes to setting up other communities, Daniel says that they are not closing the door. However, for now their hands are full with the Urtinsa energy community.
“We are focusing on making sure that the energy community is going to work, that the energy community is going to offer solutions to all the partners and operate up to their expectations.”
Indeed, Spain has an ideal climate for solar energy production. However, what is needed is to harness this opportunity through distinguishing different needs of actors, and creating arenas for collaboration. It all starts with some patience, and learning-as-one-goes.
Learn more about the Urtinsa energy community here.