Smarter Grid, Safer Future

At least 23 GW of reserved capacity on the grid in the Czech Republic is  reserved by contracted but unrealised solar and wind projects. The right incentives to exit the connection queue can  release up to 10 GW of reserved capacity on the network in the Czech Republic.

Best practice from the United Kingdom

Experience from abroad shows that it is important to put the right incentives in place in the connection process. A path worth following has been chosen in the UK, where they have combined positive and negative incentives. In total, they expect to release  up to 86 GW of reserved capacity from this measure.

The regulator Ofgem first gave RES projects the opportunity to leave the  so-called connection queue without recovering the costs that  network operators had already  spent on connection-related energy infrastructure modifications. This amnesty was used by projects with a total capacity of 8.2 GW  from October 2022 to the end of April 2023.
The second step already consisted of negative incentives and introduced mandatory  milestones in  new and existing connection contracts. If the  project fails to meet these milestones  within set deadlines, the  capacity reservations will be cancelled and the  project  must also pay a  charge  that takes into account  costs already incurred for the connection  (the so-called cancellation fee).

What do we recommend to do in the Czech Republic?

Audit existing connection agreements (analyse the extent of the problem. We have general information so far, but projects in practice face various obstacles to connection. We need to find out exactly what these are).
Use the amnesty for leaving the grid connection queue  (positive motivation). Introduce mandatory milestones in connection agreements (in consultation with representatives of the investors).
Cancel  capacity reservations in case of non-achievement of milestones within the set deadlines .

Want to know more?

Check out the first chapter on  Release of unused capacity reservations.

Download the study

The right incentives to exit the connection queue can  release up to 10 GW of reserved capacity on the network.

Dynamic network tariffs incentivise users to adjust  consumption according to  network load, e.g. by shifting EV charging to off-peak hours. They can thus react to the current state of the network. Their operation requires  the installation of a smart meter.

Dynamic network tariffs are  so-called time-of-use tariffs, which vary according to the time of consumption. They are differentiated into:

static, which fix the price for a longer period (e.g. day, week, year) well in advance, e.g. in the tariff  system;
dynamic, where consumers receive  information  on the price closer to the time real time, e.g. a few days or only a day in advance.

In the Czech Republic, so far only static tariffs are used,  which take into account  network load  calculated long in advance. Users can choose a  two-tariff split into a high and a low tariff.

Best practice from Switzerland

Dynamic network tariffs are  being tested in Switzerland. The  local DSO Group E offers the Vario product, where the tariff price  varies every 15 minutes according to the expected network load.

Prices are calculated and published by 6 p.m. each day for each 15-minute interval of the following day. Prices are available on the website and  through an online interface  (WEB-API), which allows  the data  to be automatically used  in the consumption management system of  the customers.

Group E offers  this option to all consumers with consumption up to 100 MWh per year,  especially  smart households that can manage their consumption or electricity generation in real time.

The deployment of this product is part of the  NeDeLa research project,  which  is investigating dynamic network tariffs as a tool for decentralised  management network load.

What do we recommend to do in the Czech Republic?

he introduction of dynamic network tariffs should be part of the new tariff structure under preparation. The tariffs are supported by the Energy Regulatory Office (ERO) and the National Climate and Energy Plan (NCEP).
The advantage is that we do not need to change the Energy Act to revise the tariff structure and introduce flexible tariffs. It is only done by amending Decree No. 408/2015 Coll., on electricity market rules, in combination with the modification of ERU price decisions that set prices for related service in the electricity sector.

Want to know more?

Take a look at the  sixth chapter  Dynamic network tariffs.

Download the study

Benefit:  Thanks to dynamic distribution tariffs, we will learn to understand the grid better and optimize its use.

Smarter Grid,
Safer Future

What measures do we need to put in place?

Downloadable materials

The launch of the study took place on 15 April in Prague's Truhlárna

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