A Quantitative Assessment of Energy Poverty in Renewable Energy Communities: Indicators and Economic Sharing Models

Over the last few years, the effects of climate change have become increasingly severe. In response, the European Union has set up an ambitious framework to introduce useful instruments to mitigate these effects. Among them, Renewable Energy Communities (RECs) appear to be the most promising. Their diffusion is expected to bring multiple benefits, not only from an environmental standpoint but also in terms of power grid stability, energy security, and social well-being. All of these topics have been widely studied in the literature. Especially when it comes to social challenges such as energy poverty, most studies agree on the potential of RECs to alleviate these critical situations. Therefore, the aim of this study is not to verify whether joining a REC provides advantages for individuals living in vulnerable socio-economic conditions, but rather to assess the magnitude, effectiveness, and limitations of the economic benefits arising from the REC’s incentive schemes on households’ overall energy expenditure. To this end, two indicators of energy poverty are employed. The first is a relative expenditure-based index that compares each member’s energy spending to the average of comparable households; the second is a threshold-based index that evaluates whether energy costs exceed a fixed share of the household’s economic capacity. Both are used to identify vulnerable members and to assess how their condition changes with participation in the REC. According to the Italian regulatory framework, the study focuses on a REC composed of 30 members with specific electricity, natural gas, and transportation expenditures. Four economic-sharing models were applied: the first distributes the gains equally among all members; the second allocates benefits proportionally to the amount of energy shared by each member; the third extends the proportional model by introducing parameters that favour vulnerable users without excessively penalizing energy-intensive households; and the fourth redistributes the gains equally but exclusively among vulnerable members. The outcomes confirm the great potential of RECs, but at the same time highlight their current under-utilization. Although the Renewable Energy Directive II does not limit the concept of shared renewable energy to electricity alone, national regulations across all European countries tend to restrict REC implementations to the electrical vector, except in a few rare cases. However, if RECs are supposed to address the causes of energy poverty, it is necessary to extend their scope beyond electricity. Therefore, it is essential to rethink how RECs are designed and regulated, promoting a more comprehensive approach to energy sharing.