Microgrid and
energy community
The project “System Change with Locally Shared Energy — an Economically Viable Model” explores key issues related to energy communities. We analyze and evaluate energy communities from various perspectives.
Through the project’s two pilots, the existing area of Hammarby Sjöstad in Stockholm and the newly developed Tamarinden area in Örebro, we take a closer look at aspects such as legal conditions and barriers for energy communities, different types of governance structures and business models, social obstacles and drivers, as well as opportunities and limitations associated with technological choices for energy production and sharing.
The project also formulates guidelines for procurement, laws, and regulations to enable the creation of services, innovations, and business plans that can realize effective energy communities in Sweden.
Project period
Oct 2021 - Dec 2024
million Swedish Crowns
in grants for Hammarby Sjöstad
Project info
Category Energy
Project nameSystem change with locally shared energy
LocationHammarby Sjöstad
PartnersElectriCITY, RISE, KTH, Ellevio, KTC, Siemens, Enstar, Enstar, E.ON, Örebro kommun och Örebro bostäder.
FinancingEnergimyndigheten (The Energy Agency)
Project coordinatorRISE
Project manager ElectriCITYJörgen Lööf, CEO
Contact persons at ElectriCITY
Annie Albåge
Jörgen Lööf
Josefin Danielsson
Ulrika Jardfeldt
Background — Energy meetings and capacity shortage
The idea of an energy community in Hammarby Sjöstad has been around for some time. Since 2014, ElectriCITY has been working on energy-related issues in the district and organizing regular energy meetings for representatives of the housing associations. These meetings have served as a platform for engaging residents in energy issues and promoting collaboration on sustainable energy at the local level, with a focus on energy efficiency and profitable investments. The question of forming an energy community with the aim of sharing electricity, reducing energy costs, and increasing the use of renewable energy has been discussed at these meetings.
In Stockholm, there is also a risk of a capacity shortage as the city grows and electricity demand increases. The power grid is periodically under high strain, and there are indications that some substations in Hammarby Sjöstad may face capacity issues in the coming years.
During steering group meetings with ElectriCITY’s partners and members, including Stockholm Exergi, Ellevio, EON, Vattenfall, and KTH, it was concluded that a potential solution to this issue could be so-called energy communities.
Energy communities can help use the energy in the district more efficiently, improve energy efficiency, reduce peak demand, and simultaneously increase the share of locally produced renewable energy. The purpose of such a community is to establish a sustainable energy loop where the district’s residents act as “prosumers” — that is, both producers and consumers of energy — by partially consuming self-produced electricity. The energy community in Hammarby Sjöstad therefore has the potential to create significant climate benefits for the district, while also offering the grid operator additional tools to manage the capacity shortage. This formed the basis for the pilot project in Hammarby Sjöstad.
This is how a microgrid works
There are many issues that need to be solved to establish a microgrid. However, if you simplify it to its basic form, this is what is required: Through the existing power grid, locally produced electricity is shared between properties.
The energy from solar panels can be stored in batteries within the building. It is also possible to store electricity in parked electric vehicles, and with bidirectional charging stations, the electricity can be returned to the building, thus balancing the load. In other words, the electricity can be saved for later use, when it is needed more and the price of electricity is high.
LSO stands for Local System Operator (the grid operator), and in Hammarby Sjöstad, it is Ellevio.
Benefits of sharing electricity
Property
Reduced capacity demand through smarter load management for more efficient use of grid resources.
A reduction in the number of electricity subscriptions leads to lower electricity costs.
Local production and consumption of tax-reduced electricity results in lower electricity costs.
District
Public benefit in the form of increased influence for residents in the district.
Increased resilience. Reduced vulnerability to power outages and disruptions.
The Environment
More renewable energy for lower environmental impact and greater climate benefits.
Public Benefit
System services to the public energy system in the form of flexibility and reduced power consumption.
Energy Community Established
In September 2023, the “Hammarby Sjöstad Energy Community” was formally established. It currently consists of ten housing associations with over 1,000 apartments. The long-term goal is to involve all 65 housing associations as well as other property owners in Hammarby Sjöstad. The community’s work is based on the goals set at the time of its formation.
The primary objectives are to provide environmental, economic, and social benefits to its members in the local area, rather than generating financial profits. The set goals include: reduced energy consumption, increased production of renewable electricity, reduced overall power consumption, shared cost savings, and electricity sharing and storage.
Profitability in
the Energy Community
Several different revenue streams and cost-saving opportunities are key building blocks for creating long-term sustainability and a strong economy for the energy community and its members. What these have in common is that they arise from actively working together.
The main points of the business model identified in Hammarby Sjöstad are:
• Joint procurement of products and services,
• Systems for managing electricity usage during hours with lower electricity prices,
• Management of electricity and heating demand to reduce capacity costs,
• Virtual sharing of electricity, which lowers the cost of using locally produced electricity and increases revenue for those producing local energy, and
• Participation in local and national flexibility markets with the controllable energy resources available within the community.
In addition to the points above, there are the reduced energy costs that arise primarily from the opportunity for members to learn from and with each other within the energy community. This not only creates revenue and savings but also fosters social benefits, such as increased community and cooperation within the district. By actively collaborating to share and optimize energy use, residents and businesses strengthen the local community.
This also contributes to a stronger sense of belonging and engagement with energy issues, while driving social innovation and long-term sustainable urban development.
Technical solutions
Despite challenges such as a lack of standardization and data compatibility, the pilot in Hammarby Sjöstad has made significant progress. The proposed architecture, which includes the RealEstateCore standard and the platforms ProptechOS and BRIKKS, has the potential to create sustainable and scalable solutions for future energy communities.
One of the biggest challenges for the energy community is the lack of compatibility between different building automation systems. The buildings generate large amounts of energy data from a variety of sources, with different naming conventions and formats. This led to issues with interoperability, as many systems use different naming conventions and lack common standards. This inconsistency is not only present between different suppliers but also within the same supplier. This lack of uniformity makes it difficult to analyze, develop digital services, and act on data efficiently together.
To overcome the challenges of data integration, a clear standard is needed for how energy data should be structured, named, shared, and used. As a solution, it was decided to connect the buildings’ various energy service systems to the ProptechOS platform, which uses open standards and the RealEstateCore ontology to digitize and integrate property systems. In the pilot, BRIKKS is used as an open digital marketplace where service providers can offer their digital energy-related services directly to the energy community members. Through ProptechOS, standardized property data is transferred from the building automation systems to BRIKKS, which then processes the data to present it to service developers with sufficient quality and in the requested format. This ensures that the services are based on accurate and up-to-date information from the connected properties.
EU, energy communities, and virtual electricity sharing
Energy communities have become a central component of the EU’s strategy to achieve sustainable energy goals and increase the share of renewable energy. Through the Electricity Directive (EU 2019/944), particularly Article 16, a clear framework is established to promote the creation and development of energy communities. The EU defines energy communities as legal entities that allow citizens, small businesses, and local authorities to produce, manage, and consume their own energy. The aim is to enable these actors to take a more active role in the production, consumption, and sharing of renewable energy.
Energy communities are described as one of the key factors in achieving the energy transition within the EU: by 2050, half of Europe’s citizens should be able to produce as much as half of the renewable energy within the Union. The focus is on enabling members of an energy community to share energy, such as electricity from solar panels or other renewable sources, via the existing electricity grid. By facilitating this sharing, incentives are created for more people to invest in local energy production, contributing to the EU’s goals of increased energy efficiency and energy self-sufficiency.
Since January 2022, it has been allowed in Sweden to share energy between residential buildings, opening up entirely new opportunities. However, current legislation in Sweden is still not adapted to energy communities or virtual electricity sharing, which limits the possibilities for efficient energy sharing among members of an energy community. The lack of clear profitability for virtual sharing also hinders its development.
In collaboration with partners both within and outside the project “System Change with Locally Shared Energy”, a model for virtual electricity sharing has been developed, with the potential to create benefits for the grid operator, electricity retailers, energy community members, and society at large. Through close cooperation with the involved stakeholders, roles and functions for the participants in the ecosystem have been defined, and a proposal for an economic distribution model has also been developed.
To facilitate the implementation of these initiatives and promote a more sustainable energy supply, continued efforts to align Swedish legislation with EU directives will be crucial.
Insights and lessons learned
The work of establishing the Hammarby Sjöstad Energy Community has resulted in several important insights that can serve as guidance for others working with or wishing to start their own energy community. Here, the most central lessons and some concrete suggestions for future initiatives are summarized.
Being aware of the challenges that may arise during the startup phase, such as administrative complexity and the need for long-term financing, can make it easier to manage these issues when they occur. Planning for these from the outset increases the likelihood of success. A strong recommendation is to initially require open and standardized solutions from partners and technology providers.
Long-term and inclusive process
A long-term and inclusive process is crucial for building a sustainable and stable energy community. By involving all members of the energy community early on and ensuring that everyone understands and shares the common vision, a strong foundation can be created that provides direction for future work. This increases engagement and ensures that the vision is rooted among all members of the energy community.
Clear anchoring of purpose and goals
It is important to take the time to anchor the idea of what the energy community aims to achieve. Is the goal simply to share electricity among members, or is there an ambition to work more broadly on energy use together? This discussion is central to shaping the future direction and structure of the community.
Choice of organizational structure
Start by considering what the energy community wants to achieve and choose an organizational structure that aligns with the overall goals. For example, a cooperative (economic association) could be a good option to enable democratic governance and member engagement, but the choice should be based on the specific needs that have been identified.
Formulation of statues
A clear formulation of the purpose in the statutes is crucial for the continued work. The purpose paragraph serves as a guiding light when decisions are to be made and when the community grows. It also provides a clear direction for new members and actors who want to participate in the project. The wording of the purpose has also been very important in the process of getting the energy community registered with the Bolagsverket (Swedish Companies Registration Office).
Implementation and financing
Launching an energy community is a comprehensive project that requires careful preparation regarding who will lead the work and how the financing will be secured. Identifying resources and roles at an early stage ensures that the project can be run more efficiently and with a greater chance of success.
Technical inventory and data normalization
One way to make meaningful comparisons between properties, especially when detailed information is lacking, is to use the energy class for each building and apply templates and normalization tools from organizations like the Swedish National Board of Housing, Building and Planning (Boverket) and SVEBY. This can provide a good overview and serve as a basis for making decisions about investments and technical solutions.
Technical integration and data standardization
It is beneficial to consider the need for technical integration and data standardization at an early stage. Having a budget for integrating technical systems onto a unified platform can save time and resources in the long run, making data collection more efficient and useful.
If the energy community’s sole goal is to share electricity on an hourly basis, data collection can be limited to information from electricity grid providers and solar panels. By focusing only on the data that is necessary for the chosen purpose, the process can be simplified.
Partners i projektet
