During the first two decades of the twenty-first century, the introduction of policies that promote renewable energy in Western European countries facilitated a shift towards the production of cleaner energy and its decentralisation. Subsidies, incentive schemes, and declining installation costs—combined with rapid technology advances—made the investment in small-scale solar photovoltaic (PV) panels and wind turbines more attractive for individuals and small businesses. Simultaneously, we observe the emergence of citizen initiatives which aim to provide public services across various sectors, including renewable energy generation and distribution. These initiatives, started by citizens, often involve the participation of local residents and prioritise social and environmental goals. In some areas, governments and engaged citizens work together to achieve common goals through citizen–government co-production. In this article, we address the question: how can the co-production of government(s) and citizens, through local energy initiatives, contribute to the shaping of more sustainable places? Using the PlaCI model—a conceptual model of citizen initiatives and their role in shaping sustainable places—we conduct an analysis of WindpowerNijmegen, a citizen-led renewable energy cooperative in the Netherlands. We assess who the relevant stakeholders are, what are the enabling conditions for fruitful collaboration, which new arrangements are established, and how they contribute to shaping more sustainable places. The results indicate that local energy initiatives are place based, conditioned by the characteristics of the physical space needed for the production of renewable energy, specific institutional arrangements, place-based assets and people’s capacities characteristic for the place, and past collaboration.

Recently we have seen the emergence of citizen-led community initiatives and civic enterprises, taking over governmental tasks in providing public services in various sectors, such as energy, care, landscape maintenance, and culture. This phenomenon can be explained by a renewed interest in community, place, and ‘local identity’; the erosion of the welfare state; the privatization of public services; a re-emergence of the social economy; and tensions between ‘bottom-up’ initiatives and the changing role of the state. The co-production of governments and initiatives can potentially result in a shift from government-led to community-led planning. This, however, raises questions about their innovative potential, the democratic consequences, and the potential roles of governments in enabling these societal dynamics. This article discusses these issues theoretically, illustrated with empirical examples from Portugal, the Netherlands, and Wales, in a context of uncertainty regarding the future of the traditional European welfare state.