Looking past profit to see the business case for energy communities

Stanislas D’Herbemont explores the complex challenges barring energy communities from access to much-needed finance

It's an unfortunate reality that investors tend to look at energy community business models as risky.

And Stanislas D’Herbemont says that looking at energy communities through profit-clouded glasses means that investors will fail to see their real potential in a long-term investment scenario.

D’Herbemont is development manager at energy cooperative network REScoop.eu, and he says that "financial profit is not the goal of energy communities, nor is it for most community organisations".

“That is something that needs to be really clear in investors' minds as well as banking partners.

"That said, the profile of corporate investors, and community investors in general, is mostly safe, mostly conservative, and therefore we’re looking at organisations that will be here for a really long time.

“That is how those investments should be considered – not necessarily performance, but as impactful at the local level for the long term, creating that community dynamic.”

Speaking during an exclusive interview at European Sustainable Energy Week, D’Herbemont highlights how, although energy communities might be associated with risk from a path-to-profit perspective, their value extends beyond that.

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The benefit for investors, rather, should be seen through the lens of impact investments. “When we talk about impact investing, that is where we see the benefit of the partnership between financial institutions and energy communities; those traditional investors and community projects.

“It’s looking at how to create the maximum amount of benefits at the local level: on ESG’s, democratisation, social inclusion, climate and transition, sobriety and efficiency; looking at those things we need for the energy transition while at the same time preserving a long term sustainable investment that will remain the base of your portfolio.”

This, for D’Herbemont, is where the value case for energy communities proves itself.

Not as a short-term return, but rather as a means for investors to place their money where the energy transition is heading. “That is something that energy communities are really good at delivering.

“The problem is to find that right balance between understanding that [investor’s] money needs to be safe and at the same time respecting that democratic governance is key to preserving the long term development of those organisations.”

Watch the full interview to find out more about the barriers that energy communities are facing and how REScoop is working with the European Commission to remove them.