COMMUNITYENERGYBENEFITS

POWERINGUNIVERSALWELLBEING

?IRENA2024

Unlessotherwisestated,materialinthispublicationmaybefreelyused,shared,copied,reproduced,printedand/orstored,providedthatappropriateacknowledgementisgivenofIRENAasthesourceandcopyrightholder.Materialinthispublicationthatisattributedtothirdpartiesmaybesubjecttoseparatetermsofuseandrestrictions,andappropriatepermissionsfromthesethirdpartiesmayneedtobesecuredbeforeanyuseofsuchmaterial.

ISBN:978-92-9260-638-1

Citation:IRENACoalitionforAction(2024),Communityenergybenefits:Poweringuniversalwellbeing,InternationalRenewableEnergyAgency,AbuDhabi.

AbouttheCoalition

TheIRENACoalitionforActionbringstogetherleadingrenewableenergyplayersfromaroundtheworldwiththecommongoalofadvancingtheuptakeofrenewableenergy.TheCoalitionfacilitatesglobaldialoguesbetweenpublicandprivatesectorstodevelopactionstoincreasetheshareofrenewablesintheglobalenergymixandacceleratetheenergytransition.

Aboutthispublication

ThiswhitepaperhasbeendevelopedjointlybymembersoftheCoalition’sWorkingGrouponCommunityEnergy.TheCommunityEnergyWorkingGroupbringstogetheradiverserangeofstakeholdersunitedbythegoalofempoweringcommunitiesandcitizenstoparticipateintheenergytransition.Thiswhitepaperdetailshowcommunity-ledrenewableenergyprojectscanunlockmultiplebenefitsacrosseconomic,socialandenvironmentaldimensions.

Acknowledgements

Contributingauthors:AyuAbdullah,SoniaLuhongWan(COMET);SebastianHelgenberger(formerIASS);KanakGokarn,DavidJacome-Polit(ICLEI);NamizMusafer(IntegratedDevelopmentAssociationKandy);ShotaFuruya(InstituteforSustainableEnergyPolicies);KellyTrumbull,IgorVejnovic(TheNatureConservancy);EmanAdel,AkramAlmohamadi,MagedMahmoud(RCREEE);AlexandrosFakasKakouris(RGI);NamrataGinoya,VanditaSahay(WRI);StefanGs?nger(WorldWindEnergyAssociation);andGiedreViskantaiteundertheguidanceofRaúlAlfaro-Pelico(IRENA)

Furtheracknowledgements:ValuablereviewandfeedbackwereprovidedbyJanetMilongo(CANInternational),MonicaOliphant(ISES),AndreaWainer(REN21),IraShefer,AndrzejCeglarz(RGI),UteCollier,CeliaGarcía-Ba?os,JarredMcCarthy,IlinaRadoslavovaStefanova,MirjamReiner,MichaelRenner,NtseboSephelane,andKamranSiddiqui(IRENA)

ThereportwaseditedbyJustinFrench-Brooks.PublicationsandeditorialsupportwereprovidedbyFrancisFieldandStephanieClarke.DesignwasprovidedbyMyrtoPetrou.

Disclaimer

Thispublicationandthematerialhereinareprovided“asis”.AllreasonableprecautionshavebeentakenbyIRENAandtheIRENACoalitionforActiontoverifythereliabilityofthematerialinthispublication.However,neitherIRENA,theIRENACoalitionforAction,noranyofitsofficials,agents,dataorotherthird-partycontentprovidersprovidesawarrantyofanykind,eitherexpressedorimplied,andtheyacceptnoresponsibilityorliabilityforanyconsequenceofuseofthepublicationormaterialherein.

TheinformationcontainedhereindoesnotnecessarilyrepresenttheviewsofallMembersofIRENAorMembersoftheIRENACoalitionforAction.Mentionsofspecificcompanies,projectsorproductsdonotimplyanyendorsementorrecommendation.ThedesignationsemployedandthepresentationofmaterialhereindonotimplytheexpressionofanyopiniononthepartofIRENAortheIRENACoalitionforActionconcerningthelegalstatusofanyregion,country,territory,cityorareaorofitsauthorities,orconcerningthedelimitationoffrontiersorboundaries.

POWERINGUNIVERSALWELLBEING3

Contents

EXECUTIVESUMMARY 6

INTRODUCTION 8

1SOCIALBENEFITS:ADVANCINGJUSTICETOGETHER 10

1.1BUILDINGPUBLICACCEPTANCE 10

1.2MAXIMISINGWELLBEINGANDSOCIALBENEFITS 12

1.3EMPOWERINGCITIZENSANDENHANCINGSOCIALCOHESION 14

1.4IMPROVINGGENDEREQUALITY 17

2ECONOMICBENEFITS:SHARINGPROSPERITYWIDELY 20

2.1ENABLINGENERGYACCESSANDLOCALDEVELOPMENT 20

2.2PROVIDINGENERGYINFRAGILEANDCONFLICT-AFFECTEDAREAS 23

2.3ACHIEVINGLOCALENERGYSECURITY 24

3ENVIRONMENTALBENEFITS:CO-EXISTINGWITHNATURE 26

3.1ENHANCINGCLIMATEADAPTATIONANDRESILIENCEOFENERGYSYSTEMS 26

3.2PROTECTINGNATUREANDBIODIVERSITY 28

4INCREASINGFINANCINGFORCOMMUNITYENERGY 32

4.1COMMUNITYENERGYFINANCINGOPTIONS 32

4.2CHALLENGESANDOPPORTUNITIES 34

5GAININGCOMMUNITYSUPPORTFORTHEENERGYTRANSITIONINFRASTRUCTURE 36

6COMMUNITYENERGY:BARRIERSANDENABLERS 39

6.1HOWTOIMPLEMENTAPARTICIPATORYANDINCLUSIVEAPPROACHINPRACTICE? 40

7POLICYRECOMMENDATIONS 41

REFERENCES 43

4COMMUNITYENERGYBENEFITS

Figures

FIGURE1Elementsofcommunityenergyinitiative 8

FIGURE2Communityenergybenefitsacrosssocial,economic,andenvironmentaldimensions 9

FIGURE3Processofperformingacommunity-centredsocialperformanceassessment 9

FIGURE4Barriersandenablerstocommunityenergy 13

Tables

TABLE1OptionsforconsumerstosupportcommunitygoalsinJapan 16

TABLE2Communityenergyfinancingoptions 34

Boxes

BOX1HepburnEnergycommunitygrantsprogrammeinAustralia 15

BOX2ShonanPowerinitiativesenhancingsocialcohesioninJapan 16

BOX3SosaiRenewableEnergiesempoweringwomeninNigeria 17

BOX4Youthengagementinmicro-hydroinMalaysia 22

BOX5Solarmini-gridstrengtheningthelocaleconomyinMataRedi,Indonesia 22

BOX6SolarpowerimprovinglivelihoodsintheruralcommunityinMozambique 22

BOX7Women-ledsolarcommunityinYemen 24

BOX8CommunityenergysecurityinIndia 25

BOX9Communityenergyinitiatives:Enhancingclimateresilience 27

BOX10TheEnergyGarden:ImprovingurbanbiodiversityintheUnitedKingdom 29

BOX11Micro-hydro:FosteringenvironmentalawarenessinthePhilippines 31

BOX12Pay-As-you-SavemodelofBrightonandHoveEnergyServices,UK 33

BOX13Community-owneddistributiongridinNicaragua 36

BOX14EirGridCommunityBenefitSchemefortransmissioninfrastructureinIreland 38

POWERINGUNIVERSALWELLBEING5

Abbreviations

DREdecentralisedrenewableenergy

DSOdistributionsystemoperator

SDGSustainableDevelopmentGoals

TSOtransmissionsystemoperator

WWEAWorldWindEnergyAssociation

6COMMUNITYENERGYBENEFITS

Executivesummary

Astheworldgrappleswiththeinterrelatedchallengesofclimatechange,inequalityandgeopoliticaltensions,itisimperativetorethinkthewayoursocietalandeconomicstructureswork.Complexproblemsdemandholisticsolutions.Futureenergysystemsmustnotonlyberenewables-based,butalsoinclusiveandresilient.Thisrequiresactivecitizenparticipationinadditiontouniversalaccesstoaffordableandreliableenergyservices(IRENA,2023a).Communityenergy,definedastheeconomicandoperationalparticipationinand/orownershipofenergyprojectsbycitizens,emergesasavitalcomponentoffutureenergysystemsdesignedtotacklethesechallenges.

Thispaperhighlightswhycountriesshouldpursuecommunityenergytoachievetheirgoalsoftriplingrenewableenergycapacityby2030inajustandinclusivemanner.Communityownershipandinvolvementfromprojectinceptiontooperationcandelivermultiplebenefitsacrosssocial,economicandenvironmentaldimensions.Inaddition,citizenownershipensuresthatthesebenefitsaresharedmorewidelyandequitably.Activemeasuresandpoliciesareessentialtoensurethatthesebenefitsarefullyrealised.

Widespreadcitizensupportiscentraltoarapidenergytransition.

Communityenergybasedupontheparticipationoflocalstakeholdersisnotonlyinherentlymoreaccepted,butalsofostersactivecitizenshipandsocialcohesion.Suchinitiativesarewellplacedtoensurefairrepresentationinownershipanddecision-making.Fairness,transparencyandequitabledistributionofcostsandbenefitsmustguidedecision-makingprocessestogainstakeholders'trustandengagement.Thisrequirestailoredstrategiesdevelopedwithconsiderationforgender,low-incomehouseholdsandmarginalisedcommunities.

Nationalenergyplansandpoliciesshouldprioritisecommunityownershipandcitizeninvolvement.

Supportiveregulatoryframeworksarenecessarytoremovebarrierstocommunityenergyinitiatives.Auctionschemesthattendtoexcludesmallerinvestorsshouldincorporatenon-financialcriteriatocreatealevelplayingfieldforcommunityenergyinitiatives.Simplifiedandflexibleregulationsforownership,permitting,licensing,tariffsettingandsellingexcesselectricityareessential.Additionally,communitiesshouldbeabletobenefitfromlocalprojects,suchasbyowningastakeinthem.

POWERINGUNIVERSALWELLBEING7

Itshouldbecomestandardpracticeforenergyprojectstoprioritise

advancingcommunitywell-beingandmaximisesocio-economicbenefits.

Theenergyprojectassessmentshouldgobeyondtechnicalandfinancialparameters,takingintoaccountlocalsocialperformance,andcommunityneedsandpreferences.Thisincludesfosteringlocaleconomicvaluecreationandemployment,promotingcommunitycohesion,andmaintainingahealthynaturalenvironment.Facilitatingcommunityownershipofenergyprojectsandassociatedinfrastructureiscrucial.Itnotonlyfosterspublicsupport,butalsocreatesoptimalincentivesforintegratingrenewableenergygeneration,energyefficiencyandaffordabilityobjectives.

Asecureandaffordableenergysupplyisapreconditionfordevelopmentandwell-being.

Decentralisedrenewableenergyprojectsownedbycommunitiescandeliveraffordableandreliableenergyservicesinremoteareas.Communityenergycancontributetoachievinguniversalenergyaccessandincreaselocalenergysecuritybyreducingrelianceonimportedenergywithfluctuatingcosts.Giventheirdecentralisednatureandlocalmanagement,communityenergyinitiativescanalsoreachthosemostinneedinconflict-affectedareas.

Theenergysystem’sresilienceandcapacitytoadapttoclimatechangeisincreasinglyimportant.

Withever-increasingclimatechangepressures,involvingcommunitiesmoreactivelyintheenergysystemearlyonensuresthatadaptationmeasuresfunctioneffectivelyandarebettersuitedtolocalneeds.Decentralisedrenewablesolutionsthatcanbeoperatedindependentlyfromthecentralsystemstrengthenresilienceandfacilitateamorerapidrecoveryinthefaceofanysuchshocks.

Renewableenergydevelopmentsmustprioritisetheprotectionofnature,biodiversityandlocalculturetoachievetruelong-termsustainabilityandclimategoals.

Bysitingrenewableenergyinamannerthatsupportsecosystemconservationandalignswithlocalvaluesandpreferences,negativeenvironmentalimpactscanbeminimisedandlandconflictsmitigated.Localcommunitiesarethemosteffectivestewardsoftheenvironmentbecausetheypossessaknowledgeoftheirecosystemsandthemotivationtopreservethemforthemselvesandfuturegenerations.Community-ownedrenewableenergyprojectsarewellplacedtoincorporatethislocalknowledge,leadingtotheidentificationofsustainableapproaches.

Recognisingthesocialvalueofcommunityenergy,itiscrucialtofacilitateaccesstofinance.

Innovativefinancingoptionscanderiskprojectsandallowmarginalisedcommunitiestoparticipate.Leveragingdigitaltoolscanstreamlinethepoolingofcitizenfunds,whilerisk-sharingmechanismsandpublic–privatepartnershipscanincreasefundingandlowerthecostofcapital.Aggregatingsmallerprojectscanreduceoverallcostsandmakethemmoreattractivetolargerinvestors.

Introduction

Whiletheeffectsofclimatechangeareincreasinglyevident,theworldisnotontracktoachieveglobalclimategoalsanddeliveranenergytransitionthatensuresaffordable,reliable,sustainableandmodernenergyforallinlinewithSustainableDevelopmentGoal7.Boldactionisneedednotonlytotackletheclimatecrisis,butalsotoaddresswidespreadinjusticeswithintheworld’senergysystems.Overaquarteroftheglobalpopulationlacksaccesstocleancookingand8%stilllivewithoutelectricity(IEAetal.,2024).Numeroushouseholdsinbothdevelopedanddevelopingeconomiesarestrugglingwiththeirenergybills.Communityenergycanplayanimportantroleinacceleratingthedeploymentofrenewableswhilegeneratinglocalsocio-economicbenefits,givingmoredecision-makingpowertocitizensandthusincreasingpublicsupportforlocalenergytransitions.

Climate-resilientdevelopmentisachievedwhengovernments,civilsocietyandtheprivatesectormakeinclusivedecisionsprioritisingriskreduction,equityandjustice(IPCC,2022).Thisrequiresbuildingpartnershipswithtraditionallymarginalisedgroups,includingwomen,youth,indigenouspeoples,localcommunitiesandethnicminorities.Forthesuccessfuldeploymentofrenewableenergy,itisnecessarytogivedueconsiderationtoitsinterconnectionswithsocio-economicandenvironmentalsystems.

Communityenergyisdefinedastheeconomicandoperationalparticipationinand/orownershipofanenergyprojectbycitizensormembersofadefinedcommunity,inotherwordsasalocallyownedand/orcontrolledproject(IRENACoalitionforAction,2018).AcommunityenergyinitiativeincorporatesatleasttwooftheelementsinFigure1.

Figure1

Elementsofcommunityenergyinitiative

Localstakeholders

ownamajorityorall

ofarenewableenergy

project

Votingcontrol

restswitha

community-based

organisation

$

Themajorityof

socialandeconomic

bene?tsaredistributed

locally

Source:(IRENACoalitionforAction,2018).

POWERINGUNIVERSALWELLBEING9

Communityenergyprovidesanalternativeorasupportivemodeltothetraditionallydominantstate-ownedorprivateenergyutilities.Itcanplayasubstantialroleintheenergysystembyallowingcitizenstoownaconsiderableshareofrenewableenergyprojectsandsupportinginfrastructure.Beyondincreasingrenewable

energysupply,itcanprovidemultiplesocial,economicandenvironmentalbenefitsandensurethatthese

benefitsaresharedmorewidely.Asdescribedinthispaper,thesepotentialbenefitsrangefrombroaderpublicsupportandtheinclusionoftraditionallymarginalisedgroups,torevitalisedeconomies,improvedenergysecurityandincreasedresilience.

ThispaperdetailsthesebenefitsandhowtheycanbeachievedbypoolingtheIRENACoalitionforActionCommunityEnergyWorkingGroup’sknowledgeandon-the-groundexpertise.Thelistofbenefitspresentedisbynomeansexhaustive.Thebenefitsofcommunityownershipandengagementhighlightedinthispaperwereselectedtoaddresscurrentkeychallenges,setagainstthebackdropoftheclimateemergency,energycrisisandpoliticalinstability.Eachsectioncanbereadasastandalonearticle,articulatinghowcommunityinvolvementandownershipcanserveasfoundationalpillarsforachievingjustandinclusiveenergytransitions.Numerouscasestudiesinthispaperillustratethatthebenefitsareofteninterrelated,creatingpositivefeedbackloops.

Thetools,insightsandexamplesbuildthecaseforamoreprominentroleforcommunityenergyinenergysystems.Thispaperprovidesrecommendationsforpolicymakersonhowtopursuethesebenefitswhilechoosingenergytransitionpathwaysthatmeetthespecificneedsofcitizensandcommunities.

Thefirstsectiondelvesmoredeeplyintothesocialaspectsofcommunityenergy,includingpublicacceptanceandsupport,well-being,citizenempowermentandgenderaspects.Followingthis,thesecondsectionexaminestheeconomicbenefitsofcommunityenergy,suchasprovidingenergyaccess,includinginconflict-affectedareas,enablinglocaldevelopmentandenhancinglocalenergysecurity.Thethirdsectionanalysestheintricateconnectionbetweencommunityenergyandtheenvironment,highlightinghowthecapacityforadaptationandresiliencecanbeenhancedwhiledevelopingrenewableenergyinlinewithenvironmentalandbiodiversityprotectiongoals.Thefourthsectionoutlinesapproachestoincreasingfinancingforcommunityenergy,whilethefifthsectionexaminescommunitysupportfortheenergytransitioninfrastructure.Thesixthsectionenumeratesbarrierstoandenablersofcommunityenergyandaparticipatoryandinclusiveapproach.Figure2summarisestheselectedbenefitsacrosssocial,economicandenvironmentaldimensions.

Figure2

Communityenergybenefitsacrosssocial,economicandenvironmentaldimensions

?Buildingpublicacceptance

?Maximisingwell-being

Socialbene?ts

Advancingjusticetogether

?Empoweringcitizensandenhancingsocialcohesion

?Improvinggenderequality

COMMUNITYENERGY

Economicbene?ts

Sharing

Environmentalbene?ts

Coexistingwithnature

?Enhancingclimateadaptationand

resilienceof

energysystems

?Protectingnatureandbiodiversity

prosperitywidely

?Enablingenergyaccessandlocaldevelopment

?Providingenergyinfragileand

con?ict-afectedareas

?Achievinglocalenergysecurity

Socialbenefits:Advancingjusticetogether

01

Thissectionunderscoresthetransformativepotentialofcommunityenergyinitiativestoempowercitizensbygivingthemavoiceandastakeintheenergytransition.Thefirstpartdetailshowactivecommunityinvolvementbuildsacceptanceandsupport.Section1.2buildsthecaseforenergyprojectstoprioritiseholisticwell-beinginadditiontofinancialandtechnologicalobjectives.Section1.3elaboratesonhowcommunityenergyempowersindividualsandimprovessocialcohesion.Finally,theimportanceofgenderequalityishighlighted,outliningbarriersandpotentialsolutionsinSection1.4.Together,theseaspectsunderscorethevitalroleofcommunityenergyincreatingamoresustainableandinclusiveenergyfuture.

1.1Buildingpublicacceptance

Publicacceptancereferstothelevelofapprovalorsupportthatacommunitydemonstratestowardsaparticularprojectorpolicy.Withoutpublicacceptance,renewableenergyprojectsfaceoppositionandresistance,whichcanhindertheirprogressandsuccessfuldeployment.Forinstance,publicoppositiontonuclearenergyinGermanyhasplayedasignificantroleinshapingnationalenergypolicy,whilecommunityoppositionisconsideredoneoftheleadingcausesoflarge-scalewindorsolarprojectcancellationsintheUnitedStates(BerkeleyLab,2024).

Inunderstandingpublicacceptance,threedimensionshaveoftenbeenreferredto:socio-politicalacceptance,marketacceptanceandcommunityacceptance(RolfWüstenhagenetal.,2007).Whilesocio-politicalacceptancereferstobroadapprovalforenergytechnologiesandpolicies,communityacceptanceisconcernedwiththedirectimpactsofenergydevelopments.Althoughthesethreedimensionsareinterconnected,communityacceptanceofaparticularenergyprojectemphasisestheimportanceofproceduraljustice,distributionaljusticeandtrustasfundamentalelementsforgarneringsupport.

Proceduraljusticeimpliesfairnessandimpartialityintheplanninganddecision-makingprocesses(Subotickietal.,2023).Peoplearemorelikelytoaccepttheoutcomeofaprocesswhentheyfeelthattheyhavebeentreatedfairlyandwithrespectandthatdecisionsweremadeinatransparent,inclusiveandunbiasedmanner.Conversely,whenpeoplefeelthatplanninganddecision-makingprocedureswereunfairandtheywerenotabletoinfluencetheformationoftheproject,theymaynotsupporttheoutcome,orevenopposetheprojectactively.

Distributionaljusticereferstotheideathatresources,opportunities,risks,costsandbenefitsshouldbedistributedequitablyamongstakeholders.Whilesuccessfulcommunityenergyprojectscangenerateavarietyofsocialandeconomicbenefits,itisimportanttodiscuss,defineandimplementdistributionarrangementsproactivelysothatstakeholderscantaketheriskandenjoythebenefitsasappropriatetothelocalcontext(KarytsasandTheodoropoulou,2022).

POWERINGUNIVERSALWELLBEING11

Photocredit:ISEP

CommunitydialogueinHokkaido,Japan

Anessentialprerequisitefortherealisationofthesetwotypesofjusticeinaconcreteprojectistheestablishmentoftrustamongstakeholders(GoedkoopandDevine-Wright,2016).Trustinfluencespublicacceptanceacrossallaspects,andrequirescommunicatingwithawiderangeoflocalstakeholdersfromtheinitialplanningstagesoftheproject,givingdueconsiderationtotheuniquelocalcontextwhenselectingtechnology,locationandscale,andemphasisingfinancingbylocalstakeholdersand/orlocalfinancialinstitutions.

Communityenergyprojectsformedwiththeactiveparticipationoflocalstakeholderscreatetheconditionstoachievejustproceduralanddistributionaloutcomes,therebybuildingtrustandachievinghighlevelsofpublicacceptance.Whenpeoplehaveastakeinaproject,theyaremorelikelytosupportandpromoteittoothersandinvesttheirtimeandresources.

Therearemanyexamplesofcommunityenergythatareactivelysupportedbybroaderstakeholders.CasestudiesinpreviousreportspublishedbytheIRENACoalitionforActionCommunityEnergyWorkingGroup(forexample,IRENA,2021)haveshownthatthecombinationoflocalproblem-solvingeffortsandcommunityenergyinitiativeshasresultedinactivesupportfromlocalpeopleforrenewableenergyprojects.Theseprojectshavebeencontinuouslysupportedwithcontributionsfrompeoplewhoseektofosterclimatesolutions,orbythosewhovaluebeinginvolvedindecentralisedanddemocraticdecision-makingprocessestoachievetheenergytransitionbyparticipatinginenergyco-operatives.AsurveyinScotlandthatcompareddifferentownershipstructuressuggeststhatcommunityenergyachievesgreaterpublicacceptancethanprivatelyownedprojectsbecauseparticipantshavemoreopportunitiesforfairinvolvement(Hogan,2024).Communityenergyisthereforemorethanacceptance:itisalsoaboutownership,controlandsharingbenefits.

12COMMUNITYENERGYBENEFITS

1.2Maximisingwell-beingandsocialbenefits

Beyondensuringbroadpublicacceptance,governmentsshouldaimforamoresystematicapproachtoassessinghowanenergyprojectcanmaximisevaluetothecommunityinwhichitoperates.Aparticipatoryapproachandlocalownershipcanaddresstheuniqueneeds,valuesandaspirationsofdiversesocialgroups,andincorporatetheirviewsindecision-making.Thiscanhelptotapintothesocialopportunitiesofswitchingtorenewableenergyandacceleratingthedecarbonisationoftheenergysector.

TheParisClimateAgreementandthe2030AgendaforSustainableDevelopment,withitsSustainableDevelopmentGoals(SDGs),areimportantglobalframeworksforimprovinglivelihoodsandincreasingopportunitiesforcurrentandfuturegenerations.However,theylackthecommunityownershipandinclusivityelementsthatareessentialtoachieveajustenergytransitionandpreventglobalclimatebreakdown.

Transitionintheenergysectorisstillmostlyseenthroughatechnologicallens,focusingoninnovationandashiftinsupplysources(Rennetal.,2020;Setton,2020).Often,thesocialdimensionoftheenergytransitionislimitedtothequestionofwhethercommunitieswouldacceptrenewableenergydevelopments.Thisperspectiveoverlookstheneedtogeneratebroadagency–theabilitytoactandinfluencedecisions.Forinstance,Denmarkhasacceleratedthedevelopmentofwindpower,meetingoverhalfofitselectricitydemandthroughpoliciesthatenablecitizenstohaveafinancialstakeintheseprojects.ThePromotionofRenewableEnergyAct,whichenteredintoforcein2009,requiresthatrenewableprojectsmustofferatleast20%ownershiptolocalresidents(DanishMinistryofClimate,EnergyandSupply,2008).

Asocialperformanceapproachreferstosocialimpactsonthewell-beingofcommunitiesduringthedevelopmentandimplementationofenergyprojectsandtheusageoflocallygeneratedenergy,inbothmonetaryandnon-monetaryways.Broadpoliticalandeconomicownershipmaximisessocialopportunitiesandpreventsconflictsandcommunityunrest.Thissocialsustainabilityapproachrequiresco-operationandpublicsupportforanintervention(Setton,2020),preservingspecificvalues,suchasintra-andinter-generationalequityandhumanrights(Widok,2009).

Understandingthesocialperformanceofclimateactionhighlightstheopportunityforsocio-economicco-benefits,allowingpolicymakerstosimultaneouslymeetseveralobjectivessuchascreatingemploymentandachievinghealthcostsavingswhilereducinggreenhousegasemissions(Helgenbergeretal.,2019).Whileclimatedebateshavecentreddiscussiononfairlydistributingsocio-economiccostswithinandacrossgenerationsandregions,theco-benefitsdiscoursechangesthenarrative“fromburden-sharingtoopportunity-sharing”(HelgenbergerandJ?nicke,2017).

Jobnumbersorhealthcostsavingshavebeenexaminedinnumerousstudies,whichfacilitatestheirconnectiontospecificpoliticalagendasandsocio-economicinterests(IASSandTERI,2019;IASSetal.,2020;IRENAandILO,2023).Inlinewiththeco-benefitsnarrative,thesocialperformanceapproachentailsmakingquantifiableandpolicy-directedassessmentstoreconcilesocio-economicprioritieswithclimateaction,therebyrequiringactivecommunityparticipation(MbunguandHelgenberger,2021).

1.2.1Operationalisingthesocialperformanceofenergyprojects

Thesocialperformanceapproachprovidestoolstocomparehowdifferentenergyoptions(e.g.awindfarm,decentralisedenergyservices,suchassolarmini-gridsoracoalminingsite)performforlocalcommunities,allowingtheidentificationoftheoptionthatmaximisespositiveou