Walking the Walk: A Memo Outlining Incentives for Women-Powered Energy Storage in the European Union

In Brief

Access to finance is crucial for renewable energy communities in Europe, as the grid requires more storage capacity, but key barriers are of a regulatory nature.

In this policy memo, a participant in this year's Financing and Deploying Clean Energy cohort argues for an EU approach that activates the European Green Deal and make finance more accessible to renewable energy communities, especially women-led ones. 

The author, after completing the memo, interviewed the representative of a female-led renewable energy community in Sweden. You can find that interview at the bottom of this page. 

Let's get this turning

The EU needs to open financing channels to more providers to support the intent of the Green Deal.(Photo from Qvinnovindar.)

Date: January 13, 2021

To: President Ursula von der Leyen and Executive Vice-President and Commissioner for Climate Action Frans Timmermans, European Commission, Rue de la Loi 200, Brussels

From: Esmeralda Colombo, Esq., Affiliate at CET (Norway) and female entrepreneur (Italy)

Subject: Financing and innovation mechanisms to support the critical role of prosumers in deploying energy storage in the European Union

In this policy memo, I recognize the leading role of the European Union (EU) in unlocking renewable energy investments. In my capacity as a lawyer and female entrepreneur, however, I see the lack of EU enabling frameworks to couple renewable energy investments with prosumers’ access to finance, especially for the deployment of energy storage. In this policy memo, I offer three concrete actions the EU can take to support the critical role of prosumers in achieving a clean energy transition: 1) prosumer access to finance in EU Member States; 2) prosumer access to finance at the EU level; and 3) strategic innovation policy.


Because it resolves the intermittency of renewable energy sources, storage technology is a key enabler of renewable energy.1 Still, inadequate regulatory and market guidelines are currently crippling investment,2 with storage underperforming in 2019, largely due to the uncertain regulatory environment for its deployment and use.3 Related to storage underperformance, global investment in renewable energy sources has not yet fulfilled its potential.4 Moreover, the growth of renewable energy will slow for the first time in 20 years as a fallout of the coronavirus pandemic.5

In this juncture, the role of the European Union is pivotal. The European Green Deal is meant to make Europe the first climate-neutral continent by 20506 and storage technology can transition the European power system to a cost optimal 100% renewable energy system, in accord with the Paris Agreement.7 A 100% renewable energy-based power system will not only require centralized grids, but will also depend on decentralized generation and storage such as that attributable to prosumers, who both consume and produce renewable energy.8,9 While in 2016 EU prosumers were 6 million, 264 million EU citizens can become prosumers by 2050, with the right legislation in place.10 Policymaking, however, has largely ignored the combined role of storage technologies and prosumers to attain the full supply of renewable energy in Europe.11 Not only does this “policy neglect” slow the EU attainment of its internal and external climate goals: it also fails to tackle outstanding inequalities in access to energy in the European Union, with more than 50 million people affected by energy poverty with a disproportionate impact on women.12

Among the regulatory and market barriers for deploying energy storage in the European Union,13 this policy paper centers on prosumers’ access to finance. I recommend the European Commission issue a White Paper by 2021—before the start of the next EU financial cycle—in which it clarifies the important role of prosumers in the clean energy transition and lays out three actions that address barriers to financing prosumer clean energy assets.14

1) Renewable Energy Communities for Prosumers’ Access to Finance in EU Member States

The White Paper shall propose to standardize financial contract templates and due diligence processes across banks in the EU to secure a level playing field for renewable energy communities.

The revised EU Renewable Energy Directive provides for renewable energy communities, an innovative form of prosumer. Energy communities have long existed, often in remote places or islands, but the energy transition requires their scaling up.15 On an equal footing, the Directive requires that energy communities have the right to consume, store, or sell renewable energy that is generated on their premises as independent legal entities.16 Member States shall implement the Directive by June 2021, and yet vague language prevents its policy effectiveness. In fact, the Directive mandates Member States to facilitate access to finance short of detailing how this can happen.17 Based on work undertaken by the International Renewable Energy Agency, the EU Commission shall take the initiative to at least reduce unjustified administrative barriers across the EU by standardizing financial contract templates and due diligence processes for the access of renewable energy communities to bank loans.18 Due diligence processes shall include best banking practices toward women, including reduced interest rates.19 Bank loans rank among the top financing strategies for prosumers,20 but display widely diverging practice across the EU,21 affecting women. Notably, EU female-led renewable energy communities may end up paying higher interest rates, even if they are not riskier borrowers.22

2) The European Banking System for Prosumers’ Access to Finance at the EU level

The White Paper shall propose that i) the Eurosystem (the European Central Bank and the 19 central banks in the euro area) revise the current haircut policy and apply lower haircuts to sustainable assets and debt instruments, starting with prosumers;23 ii) the European Investment Bank start a loaning program to prosumers, including best practices toward women (e.g., preferential rates), and offer credit guarantees.

The European Investment Bank (EIB) and the European Local ENergy Assistance (ELENA) currently offer renewable energy loans only to large corporations and groups,24 undercutting a level playing field for prosumers’ participation in the electricity market. The EU is an internal market for capitals and has developed a Taxonomy Regulation, whereby access to renewable energy sources through energy storage and prosumers features as an activity substantially contributing to climate mitigation,25 which should be boosted. Still, prosumers face EU loaning policies that do not account for the public role of their investment. Moreover, women are underrepresented in prosumerism26 and lack facilitated access to finance. Areas of intervention are bank loans conditions: for instance, haircut policies (“the percentage difference between an asset’s market value and the amount that can be used as collateral for a loan”),27 guarantees, and interest rates.

3) Innovation Snowballing Through Prosumers’ Access to Finance

The White Paper shall i) propose a “snowball” strategy on energy storage for prosumers to be included in the EU Strategic Energy Technology Plan;28 and ii) launch a public consultation on an harmonized innovation platform for prosumers’ deployment of the most strategic energy storage technologies.

In new economics research, innovation is found to build over time (as a snowball), creating path dependencies whereby past innovations make present ones more valuable.29 Because our economy has historically been fueled with “dirty tech,” cleantech can count on a smaller snowball effect, prompting the case for support schemes for cleantech,30 e.g., through prosumers’ deployment of energy storage. Globally, current policies favor large-scale energy storage, not often deployed by prosumers, and create path dependency in the technology mix.31 In Europe, the main energy storage is pumped hydro storage, while new batteries projects are starting to spread due to lower prices.32 By facilitating access to finance for prosumers, the EU shall also provide a platform for innovation through transparent disclosures of cleantech metrics so that the most efficient cleantechs can form a “snowball” for clean energy. Such strategy shall facilitate prosumers’ choice, shall be regularly updated, shall be tailored to EU geophysical traits, and shall include a gender perspective. Because of its interdisciplinarity, in fact, innovation through energy storage can exert an appeal on women that the fossil fuel industry has lacked, boosting women green employment.33

4) Challenges and opportunities

From 2015 to 2050, total EU storage requirements include up to 3320 GWhe of batteries, 396 GWhe of pumped hydro storage, and 218,042 GWhgas of gas storage (8% for synthetic natural gas and 92% for biomethane), depending on the scenario.34 Not implementing the proposed three actions means that:

  • The Commission is failing to support prosumer access to harmonized bank practices, which will make the role of renewable energy communities for energy storage nugatory as they will compete on an unequal footing with brown assets that will not enable the EU to achieve its energy and climate objectives
  • The Commission is failing to make the Taxonomy Regulation real in order to support prosumers’ sustainable investment for energy storage, and the Eurosystem and the EIB risk losing trust and credibility at a time when it is most needed for the energy transition and green recovery.
  • The Commission is failing to snowball innovation through prosumer deployment of energy storage, and the European green recovery package post COVID-19 will miss one of its most important components.
  • For all three policy recommendations, the Commission has the opportunity to include an interlocking, gender-based perspective to better include women in the renewable energy and innovation job market.

The EU Commission maintains that the future of energy will be citizen-oriented35, but key barriers to prosumerism and energy storage are of a regulatory nature.36 (See this interview for a case study in citizen-led energy.) Due to the vastness of EU legislation, such barriers will stack up if action is not taken now. The risk is that important policies and targets set in the European Green Deal will likely be delayed or become obsolete if they are not spelled out and unleashed.37


Esmeralda Colombo, Esq., Centre for Climate and Energy Transformation, Fosswinckelsgt. 6, Bergen

[We're happy to note that a version of this memo now appears on Blogging for Sustainability, a project of the University of Oslo's Faculty of Law. You can read that version here.) 


1 A. Gailani and others, “On the Role of Regulatory Policy on the Business Case for Energy Storage in Both EU and UK Energy Systems: Barriers and Enablers” (2020) 13 Energies 1080, p. 1.

2 World Energy Council, Energy Storage Monitor: Latest trends in energy storage 2019 (2019), p. 4.

3 IEA, Energy Storage (2020). https://www.iea.org/reports/energy-storage. Accessed: Aug 31, 2020. See also the barriers to energy storage in Europe, Gailani and others (n. 1), p. 2.

4 Frankfurt School-UNEP Centre/BNEF, Global Trends in Renewable Energy Investment (2019), pp. 38ff. IRENA, Unlocking Renewable Energy Investment: The Role of Risk Mitigation and Structured Finance (2016), p. 16.

5 IEA, Renewable Energy Market Update Outlook for 2020 and 2021 (2020), p. 3.

6 European Commission, The European Green Deal Sets out How to Make Europe the First Climate-Neutral Continent by 2050, Boosting the Economy, Improving People’s Health and Quality of Life, Caring for Nature, and Leaving No One Behind [Press Release, Dec 11 2019].

7 See, e.g., M. Child, D. Bogdanov, and C. Breyer, “The Role of Storage Technologies for the Transition to a 100% Renewable Energy System in Europe” (2018) 155 Energy Proced. 44.

8 M. Child and others, “Flexible Electricity Generation, Grid Exchange and Storage for the Transition to a 100% Renewable Energy System in Europe” (2019) 139 Renewable Energy 80, p. 98.

9 Ibid, pp. 92ff.

10 D. Hendricks and R. Mesquita, PV Prosumer Guidelines for Eight EU Member States (European Renewable Energies Federation 2019), p. 6.

11 Child and others (n. 8), pp. 83 and 98.

12 S. Hall, D. Brown, M. Davis, M. Ehrtmann, “Business Models for Prosumers in Europe” in Zenodo [Prosumers for the Energy Union: mainstreaming active participation of citizens in the energy transition, Horizon 2020], p. 21.

13 See also Gailani and others (n. 1), passim.

14 By no means do the three action areas undermine the importance of the centralized grid (under 1); investment schemes different from bank loans, such as joint ventures or project financing (under 2); or innovation incentives different from support schemes (under 3). Such a focus is justified by existing EU legislation on energy communities, which has yet to be fully implemented; bank loans among the top financing strategies for prosumers; and non-harmonized support schemes for energy storage in EU Member States, short of innovation policy directions.

15 J. Lowitzsch, C. E. Hoicka, and F. J. van Tulder, “Renewable energy communities under the 2019 European Clean Energy Package – Governance model for the energy clusters of the future?” (2020) 122 Renewable and Sustainable Energy Reviews 109489, p. 2.

16 Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources (recast) (Text with EEA relevance) (RED II), Art. 22.

17 RED II, Article 22 (4) (g).

18 IRENA (n. 4), p. 15.

19 J. Berfond and others, Global Best Practices in Banking for Women-led SMEs (European Bank for Reconstruction and Development, 2014), pp. 30-31.

20 H. Lanka and others, “Collective Renewable Energy Prosumers and the Promises of the Energy Union: Taking Stock” (2020) 13 Energies 421, p. 11.

21 M. Darracq Paries and others, The Retail Bank Interest Rate Pass-Through: The Case of the Euro Area during the Financial and Sovereign Debt Crisis (European Central Bank, 2014), p. 7.

22 On female-led businesses in Italy, see A. Alesina, F. Lotti, and P.E. Mistrulli, “Do Women Pay More for Credit? Evidence from Italy” (2013) 11 Journal of the European Economic Association 45, passim.

23 European Banking Federation, Encouraging and Rewarding Sustainability Accelerating Sustainable Finance in the Banking Sector (2019), p. 9.

24 https://www.eib.org/en/products/loans/private-sector.htm. Accessed: Aug 31, 2020.

25 Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (Text with EEA relevance), Art. 10(1)(a).

26 Lanka and others (n. 20), p. 4.

27 https://www.investopedia.com/terms/h/haircut.asp. Accessed: Aug 31, 2020.

28 https://ec.europa.eu/energy/topics/technology-and-innovation/strategic-energy-technology-plan_en. Accessed: Aug 31, 2020. 29 Z. Liscow and Q. Karpilow, “Innovation Snowballing and Climate Law” (2017) 95 Wash Univ L Rev 387, p. 389.

30 Ibid, p. 393.

31 IEA, Energy Storage (2020). https://www.iea.org/reports/energy-storage. Accessed: Aug 31, 2020.

32 Directorate-General for Energy Internal Energy Market, Study on Energy Storage – Contribution to the Security of the Electricity Supply in Europe (2020), p. 26.

33 IRENA, Renewable Energy: A Gender Perspective (IRENA, 2019), p. 10.

34 Child, Bogdanov, and Breyer (n. 7), pp. 44 and 52.

35 European Commission, “A Framework Strategy for a Resilient Energy Union with a Forward-Looking Climate Change Policy” COM (2015) 80 final 2.

36 I. Campos and others, “Regulatory Challenges and Opportunities for Collective Renewable Energy Prosumers in the EU” (2020) 138 Energy Policy 111212.

37 F. Simon, LEAKED: Full list of delayed European Green Deal initiatives. Euractiv.com (22 Apr 2020).

An earlier version of this memo was written for the Policy Course of the Financing and Deploying Clean Energy Certificate at the Yale Center for Business and the Environment. This memo has benefited enormously from the comments received within the Policy Course by research assistant Jonathan Silverthorne, as well as cohort peers Kim H. Erle and Lalrinpari Sailo.

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