The communities outsmarting land speculation in the renewable race

In the heart of the Mediterranean, a region grappling with an energy crisis, poverty and environmental degradation, the immediate focus on clean energy is not a top priority. Amid the ongoing energy transition and the conflict in Ukraine, people in Southern Europe have expressed challenges in maintaining sufficient warmth in their homes.

The energy poverty impact became starkly evident in 2022, affecting 9.3 per cent of the EU population.

Southern Italy experienced a more pronounced aftermath, particularly in municipalities with fewer than 50,000 inhabitants. In one such small town, Melpignano, a solution has been cultivated over the years, offering a potential example for addressing the current challenges.

Nestled in the southernmost part of Italy, Melpignano lies in Puglia, a region celebrated by The New York Times as a "joy in many forms." Yet, for locals, joy takes on a nuanced meaning as energy poverty looms large, surging by 5.5 per cent since 2020. This challenge is compounded by pressing environmental concerns and the burden of land speculation.

Amid its captivating landscapes, the region hosts Cerano's coal-fired power plant and Ilva, a steel mill - entities that have profoundly shaped the environmental fates of the areas and the lives of those who inhabit them. Mortality from cardiovascular and respiratory diseases, along with lung cancer, stands out among the causes of death in these affected regions.

According to experts, the risk of natural mortality due to respiratory causes in the province of Taranto, for instance, was 8.74 per cent between 2008 and 2014. Meanwhile, in the Brindisi area from 2001 to 2013, there is a documented higher annual mortality rate for all cancers, reflecting an increase of 8 per cent.

Not far from there, Melpignano has taken the step of redefining the region's narrative, navigating the intricate interplay between the energy crisis and sustainability.

Melpignano Powers Up, Cutting Costs and Emissions

"We were born in 2011 as an energy community, among the first in Italy and Europe," said Gianluca Greco, the president and administrator of Comunità Cooperativa Melpignano. Roughly 54 active energy communities are operating now in Italy - with nearly a hundred more seeking official recognition.

"We are citizens who, organically, unite around a shared concern: how to generate energy sustainably amidst severe environmental challenges," added Greco. 

In a city of 2,200 inhabitants, the small-scale project of the cooperative energy community hosts 29 families with an installed capacity of 159.93 kW. This setup effectively caters to the electricity needs of nearly just as many families. The tangible benefits translate into avoiding 118,892 kg of CO2 emissions each year.

Reflecting on the years when the concept of the energy community took shape, Greco recalled the significant challenges involved in promoting such a project in a marginalised context accustomed to being the target of speculation by large companies.

When the community members launched a call for tenders to finance the project, no one applied "because big companies have no interest in parcelling out photovoltaic energy production, preferring large expanses of fields," Greco said. Leveraging the economic incentives of the Quarto Conto Energia, the Community Cooperative, an organisation behind the energy community funded by Gianluca Greco, extended an invitation to citizens and economic operators. This initiative served as a collaborative tool for the development of city life, fostering shared participation and engagement.

It decided to take the initiative, paving the way for substantial cost savings and universal access to energy with zero production costs. The goal is not only to self-produce and consume, but also to share excess energy back into the grid, explained Greco.

"My family is among those who can benefit from the free installation of solar panels," said Sara Cerullo, community referent since 2012. "My system is the smallest and produces almost 3 kilowatt-hours. 

"I have had the opportunity to use household appliances when the panels operate. We are reimbursed for the energy I produce on-site but do not consume." 

When asked if this can be considered a solution to the energy crisis, she responded with a decisive 'yes.' However, conditions have changed, and these incentives are no longer available to make such an investment easily replicable in other small municipalities.

Considered too expensive for the state, these incentives have been replaced by others that are less generous and inclusive, and energy communities in Italy continue to grapple with challenges in obtaining legal recognition.

from Speculation to Sustainable Energy

The imperative to shift European resources away from Russian gas and towards sustainable alternatives has triggered a surge in new investment. In Puglia, multinational companies compete for agricultural land, reshaping the landscape and a local economy that traditionally relies on agriculture and tourism. 

Currently, the region must integrate its tools for territorial governance and support for innovation in productive sectors with specific provisions for energy efficiency and the use and exploitation of renewable sources, which are still being discussed at the EU level.

More than 100 projects are in the approval phase in Puglia, a region with the largest surface area of installations, accounting for approximately 34 per cent of the total national installations.

Over time, with the absence of concrete regulations, speculation fueled by the approval of numerous renewable energy plants in an already saturated territory is on the rise.

"At the European level, we fight for clear policies that safeguard the intended use of land, because land is essential for food production, not energy," Aurelio Angelini, sociologist of environment and territory, told FairPlanet. 

"We have moved away from speculation by multinationals interested in centralised production by removing many photovoltaic panels from farmland," explained Gianluca.

Land acquisition is, in fact, often driven by fossil fuel companies eager to improve their environmental credentials. Eni, Amazon and Shell initiatives serve as examples of the expanding influence of multinational corporations, contributing to a notable power imbalance in the local communities where they choose to establish their presence.

"We cannot think that the energy transition will be led by those who have generated the climate change problem," Angelini said. "When they go to make plants, they are certainly not people who are sensitive to the protection of the environmental balance and, therefore, want a free hand in being able to make them where, when and in what area they want, without any limits, without any alley."

The push for land acquisition in Italy was stimulated by Legislative Decree 387/2003, introduced during the Berlusconi government. It stated that "the construction of renewable energy plants [...] is of public utility." This regulation, which recognised the right to acquire land, facilitated private investment. 

At the same time, the limited bargaining power of small land owners eliminated the potential for local spatial planning. The lack of negotiation tools and capacity clashed with the interests of multinational corporations that, in some cases, privatise energy production for their benefit using the Power Purchase Agreement instrument, leaving communities without any benefits.

Lack of planning inhibits proliferation

"The development of energy communities of small producers is not supported, not favoured," argued Angelini. "This aspect is leading, on the one hand, to environmentally unsustainable choices and, on the other hand, to creating new large concentrations of control over energy production."

In the European regulatory framework, despite the introduction of the 2019 Renewable Energy Directive and the 2019 Electricity Market Directive, there is a lack of transposition of these regulations into the legislative frameworks of the member states. Administrative barriers disincentivise the creation of energy communities, making them vulnerable to private actors taking over the initiatives and losing the initial objective and community spirit.

Among the effects is a lack of administrative tools and essential information for initiating a cooperative, further impeding the development of sustainable self-production of energy.

The speculative drive persists as big companies are attempting to carve out a management role for themselves despite the goal of decentralising energy distribution. Good examples of this are the energy communities in Romania and Poland, where citizens cannot fully profit from inefficient infrastructure and mistrust towards these investments.

This could be solved potentially by including energy communities in operational programmes at regional and national levels, creating more incentives and providing more accessible ways to utilise them from the grassroots level.

"Without state incentives, installing additional systems is no longer economically viable. It's worth noting that any economic benefit for the cooperative isn't an end in itself," said Cerullo, referring to the collaborative nature of the project. 

"Therefore, all proceeds, net of the cooperative's management costs, must be reinvested in new projects or actions that contribute to the well-being of the Melpignano community." 

The end of incentives and the low remuneration of energy sold to the grid have discouraged energy production beyond individual needs and have not favoured the realisation of collective plants or the creation of local energy communities.

Green energy production through photovoltaic panels in citizen-built communities will not be possible, locals point out, without the electricity grids’ modernisation, better laws and a phase-out of fossil fuels.

Meanwhile, the implementation of European law is lagging far behind, and in many countries, the authorities do not prioritise this issue.

This investigation has been supported by Journalismfund Europe.

Image by Gianluca Greco.