Fair shares or smart savings? Exploring business models, justice and efficiency trade-offs in Portuguese energy communities

Energy communities are increasingly playing an important role in citizen engagement during energy transitions. However, the functional benefits for participants are heavily reliant on how energy and profits are shared, which are dictated by regulations. While optimizing trade-offs can prove significant in making energy community projects viable, related techno-regulatory innovations on energy-sharing mechanisms still require in-depth analysis. A key unresolved issue is how to balance justice considerations with model attractiveness by aligning members’ perceptions of fair redistribution with optimal energy utilization. This study investigates the interplay between sharing and metering mechanisms and their respective advantages and disadvantages, using the Portuguese case study as an example. Four hypothetical scenarios related to the implementation of European directives into Portuguese national law are analysed to quantify trade-offs between self-consumption, self-sufficiency, and participant equity. The findings demonstrate how different energy-sharing and metering mechanisms can influence resource allocation, benefit distribution, and financial sustainability. Each of these scenarios reveals that there is no one-size-fits-all solution. The consumption-proportional sharing maximizes self-consumption and self-sufficiency indexes at the community level but fails to uphold principles of energy justice, as it disproportionately benefits high-consuming members. In contrast, the fixed coefficients sharing ensures a distribution proportional to each member’s monetary investment but leads to lower efficiency. These findings underscore the socio-economic implications of techno-regulatory innovations and the need to reconcile equity and efficiency. The study offers guidance to policymakers in designing fair and effective frameworks, reducing the risk of unintentionally obstructing energy community development due to impaired economic viability. • Portugal's role in implementing EU directives on renewable energy communities (REC) • Analyzes efficiency vs equity trade-offs in four hypothetical energy-sharing scenarios in REC • REC-sharing models have implications for justice and accountability principles. • Dynamic energy-sharing models are promising but face significant operational challenges • Recommendations for the change of REC policies to manage justice, efficiency and equity tradeoffs