Impact of energy communities on the European electricity and heating system decarbonization pathway: Comparing local and global flexibility responses

This paper investigates how the European electricity and heating system is impacted when medium-scale energy communities (ECs) are developed widely across Europe. We study the response on the capacity expansion of the cross-border transmission and national generation and storage within the European electricity and heating system with and without ECs in selected European countries. The representation of ECs has a special focus on flexibility, and we analyze the difference between flexibility responses by ECs towards local versus global cost minimization. Results show that EC development decreases total electricity and heating system costs on the transition towards a decarbonized European system in line with the 1.5 °C target, and less generation and storage capacity expansion is needed on a national scale to achieve climate targets. We also identify a conflict of interest between optimizing EC flexibility towards local cost minimization versus European cost minimization. •We study investments in the European energy market with energy community roll-out.•We compare flexibility responses with local versus European perspective.•Energy communities partly replace centralized generation and storage capacity.•Energy community roll-out shifts investments from onshore to offshore wind.•There is conflicting interest between local and European flexibility utilization.