How the EU Supports Positive Energy Districts (PEDs)
Europe’s path toward a climate-neutral future is being built not only in national capitals or corporate boardrooms but right here in our neighborhoods. Across the continent, citizens, cities, and innovators are joining forces to create Positive Energy Districts (PEDs) , local areas that produce more renewable energy than they consume.
These energy-positive communities are at the heart of the EU’s strategy for a greener, fairer, and more resilient Europe. Through a strong mix of regulations, incentives, and funding, the European Union is helping cities like those in the HARMONISE project turn ambitious climate goals into everyday reality.
A Strong EU Regulatory Foundation
The EU has developed a robust legal framework that makes PEDs possible, guiding how countries, cities, and citizens can generate, share, and save energy together.
1. European Climate Law (2021): Setting the 2050 Vision
This law commits the EU to climate neutrality by 2050, making PEDs a key tool for cutting greenhouse gas emissions. It’s the foundation for all other EU climate and energy actions.
2. Fit for 55 Package (2023): The Green Transition in Action
Adopted in 2023, this package aims to reduce EU emissions by at least 55% by 2030 compared to 1990 levels. It updates crucial directives ensuring buildings, transport, and industry all contribute to the climate goals.
It includes updates to:
- The Energy Performance of Buildings Directive (EPBD)
- The Renewable Energy Directives (RED II & III)
- The Energy Efficiency Directive (EED)
3. Renewable Energy Directives (RED II & III): Empowering Energy Communities
The REDs define how EU countries must expand renewable energy use and empower Renewable Energy Communities (RECs) and Citizen Energy Communities (CECs). These allow citizens, small businesses, and local authorities to jointly produce, share, and trade renewable energy, a principle at the core of many PEDs.
4. Energy Performance of Buildings Directive (EPBD): Greener, Smarter Buildings
Buildings account for around 40% of the EU’s total energy use. The EPBD ensures that by 2030, at least 49% of the energy used in buildings comes from renewables. PEDs bring this to life through community-scale building retrofits and on-site renewables.
5. Energy Efficiency Directive (EED): Energy Efficiency First
The EED gives legal weight to the principle that the cleanest energy is the one we don’t use. Every EU country must consider energy efficiency first in major decisions from infrastructure to housing making PEDs’ efficient design even more impactful.
6. Internal Energy Market Directive (2019/944): A Fair Market for All
This directive ensures that all Europeans, including small communities can actively participate in the energy market. It allows energy trading between citizens and across borders, turning consumers into prosumers (producers + consumers) and promoting fair, transparent, and flexible electricity markets.
Together, these regulations create a Europe-wide framework that ensures:
- Citizens can participate directly in the energy market.
- Communities can share renewable energy fairly.
- Energy can flow freely across borders.
- Every EU country works toward the same clean-energy vision.
EU Incentives and Funding for PEDs
To turn policy into practice, the EU provides powerful financial tools that support PEDs from research and innovation to local implementation.
1. Horizon Europe: Research and Innovation Funding
Through Horizon Europe, the EU supports research and demonstration projects that test and scale up PEDs, like the HARMONISE project, which brings together European partners to develop smart, citizen-centred energy districts.
2. European Regional Development Fund (ERDF): Greener Local Economies
The ERDF strengthens regional cohesion and supports low-carbon, digital, and resilient communities. It helps cities invest in sustainable buildings, mobility, and infrastructure — key ingredients for PEDs.
3. InvestEU: Financing the Green Transition
Running from 2021 to 2027, InvestEU offers loans, guarantees, and investment grants for sustainable infrastructure. This programme helps public authorities and private investors fund clean energy projects at district scale.
4. European Investment Bank (EIB) and ELENA: Technical and Financial Support
The EIB provides project financing, while its ELENA facility offers technical assistance to local authorities and energy communities. ELENA can even help cover development costs (DEVEX) for creating a PED.
5. Citizen-Led Renovation (CER): Communities in the Driver’s Seat
The CER initiative helps citizens renovate their buildings collectively from insulation and smart systems to rooftop solar panels. It supports communities with technical advice, financial planning, and legal guidance to make energy renovations easier and more accessible.
6. Energy Communities Facility & Social Climate Fund: Inclusion and Empowerment
The EU Energy Communities Facility (2024–2028) offers small grants, training, and business support to help energy communities get started.
Meanwhile, the Social Climate Fund (2023) ensures that vulnerable households can participate in — and benefit from — Europe’s green transition through funding for local renovations and energy projects.
From Policy to People: What It Means for Citizens
PEDs are not just about technology, they’re about people. Thanks to EU laws and incentives, citizens can:
- Form or join local energy communities.
- Produce and share renewable energy within their neighbourhood.
- Save on energy costs while contributing to climate goals.
- Access EU funding, expertise, and technical support for local projects.
Every positive energy district brings Europe closer to a carbon-neutral, community-powered future and every citizen can play a role.
HARMONISE: Shaping Europe’s Energy-Positive Future
At HARMONISE, we’re working with cities and citizens to demonstrate how PEDs can become the beating heart of Europe’s green transition. By combining innovation, participation, and policy alignment, we’re helping turn EU climate ambitions into real, thriving communities that power themselves and inspire others.
