The Role of Energy Communities in a New Decentralized Energy Model

Abstract

Abstract This chapter addresses the emergence of energy communities in Colombia as an innovative element for the transition to a decentralized energy model. In a context marked by rising energy prices and an accelerated energy transition, these projects are a bet on sustainable energy practices and the improvement of national energy security. Energy communities also aim to democratize distributed energy sources. They face significant political and practical challenges. Energy communities are citizen-driven energy actions that involve local communities with the purpose of generating, consuming, and managing energy in a collective and decentralized way. The chapter reviews existing literature on the collective generation of energy and its existing experiences. Despite Colombia’s ambitious target to reduce emissions by 51 per cent by 2030, significant gaps in current laws and policies hinder the integration of sustainability into distributed energy resources (DER) programs. Key issues include regulatory barriers, limited access to finance, and the need for better integration with the country’s existing energy infrastructure. To address these challenges, various legal approaches will be analysed, drawing lessons from international experiences and proposing strategies to align incentives with the private sector and restore investor confidence. The focus is on creating an enabling regulatory framework that facilitates the growth of energy communities. Finally, the chapter highlights that energy communities have great potential to transform the Colombian energy sector, but concerted efforts are needed to address regulatory, financial, and infrastructural challenges. By aligning incentives and restoring investor confidence, energy communities can thrive as part of a new decentralized energy model in Colombia.