Microgrids and EU law: Three Microgrid models to solve one regulatory puzzle

Abstract

Microgrids are decentralised electricity systems that can operate independently of the main electricity network, and which have the potential to contribute to the energy transition towards a more sustainable energy mix. However, the integration of the system in the EU electricity market is not regulated and the resulting uncertainty discourages the system's development. This article provides the first step towards increased legal certainty for microgrid users and initiators by developing a regulatory approach based on three different microgrid ownership and operation models. If the existing rules in EU energy law allow for some flexibility to include electricity household consumers under the provisions of Closed Distribution Systems and allow for Citizens Energy Communities to manage part of the distribution system, the legal framework does offer possibilities to regulate microgrids. Nevertheless, many legal questions remain, in particular regarding responsibilities of active customers, consumption management, and regulation of flexibility services. In addition, the regulatory approach towards microgrids depends on EU Member States granting energy communities the right to manage part of the distribution network, which now depends on the discretion of the Member States. This discretionary nature should be reconsidered given the significant potential for local initiatives to contribute to the energy transition.