Enhancing the Energy Transition of European Cities through Energy Communities

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Original abstract

Abstract Urban areas account for over 70% of greenhouse gas emissions and are therefore central to the European Union’s goal of climate neutrality by 2030. This paper examines energy communities as enabling mechanisms for the urban energy transition, focusing on their capacity to integrate renewable generation, strengthen local engagement, and improve system-level performance. Framed within the EU’s Climate Neutral and Smart Cities Mission, energy communities are interpreted through the lenses of connectivity, circularity, and the regenerative economy, as they link prosumers through digitally coordinated, decentralized energy exchanges that promote local energy reuse and value regeneration. While not a standalone solution, energy communities illustrate a systemic approach that complements broader electrification, smart grid, and governance strategies. Specifically, we present a day-ahead scheduling model applied to a real medium-voltage distribution network in Modena, Italy. This model minimizes energy procurement costs, derives internal transaction prices using shadow prices, and shows how storage and local generation enhance economic and operational performance. We also quantify how community size and energy exchange rules affect efficiency. The results show that energy communities – when embedded in broader electrification and smart grid strategies – can play a catalytic role in building resilient, interconnected, and regenerative urban energy systems.

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