Amendment to the Czech Energy Act is not enough for municipalities to share electricity with private companies

The groundbreaking amendment to the Energy Act, also known as “LEX OZE 2”, is intended to enable electricity sharing through so-called energy communities. However, this will initially be difficult for municipalities if they want to share electricity with a private entity. Another legislative amendment will therefore be needed.

The LEX OZE 2 amendment is currently at the consultation stage. It will make it possible to share electricity within associations whose members could include not only individuals but also, for example, small businesses, municipalities, or companies established or controlled by them.

The LEX OZE 2 proposal will be submitted to the Chamber of Deputies in a few weeks. The idea is, for example, that a municipal office generating electricity from solar panels on its roof will be able to send this energy to a nearby nursery school. Similarly, one neighbour will be able to receive electricity from another, and so on.

This amendment is highly beneficial. I believe it will help further increase interest in photovoltaics on the domestic market, enabling community energy to successfully build on its strong performance in 2022.

However, shortcomings remain that could undermine growing interest from investors. According to the SOLID LEGAL law firm, with which I discussed my observation, insufficient legislation could slow down development.

“We believe that the revolution of sharing public property with private-law entities may be ‘held back’ by insufficient legislation concerning the regulation of the disposal of municipal assets and their mixing with the assets of private persons. Municipalities are still only permitted to sell municipal assets at market price (i.e. the price customary in the given place and time), and any sale at a lower price must be properly justified; otherwise, such action is invalid,” said lawyers Leoš Brantál and Martin Števko, who specialise in energy law at SOLID LEGAL, on the issue of electricity sharing within energy communities.

According to the lawyers, the greater the deviation from the market price, the more detailed the justification for the transaction must be.

Alongside the amendment to the Energy Act, an amendment to the Municipalities Act should therefore also be prepared, so that local self-governing units are also ready to share electricity they own with private-law entities.

Republished from the online portal EkoNews.cz, a website covering business and sustainability.