Czech Industry Ministry grants distributors CZK 6.7 billion to strengthen regional grids

The state will distribute CZK 6.7 billion among energy distribution grid operators to modernise regional distribution systems. The Ministry of Industry and Trade (MPO) has now launched a new call under the National Recovery Plan to strengthen grid capacity. The aim is to create additional capacity for connecting renewable energy sources to distribution grids while mitigating the impact of the necessary investments on the regulated component of electricity prices. The MPO announced this in a press release today.

„Modernising the distribution system is an integral part of the development of renewable sources and the modernisation of our energy sector. This call will support investments by distribution grid operators while mitigating increases in the regulated component of electricity prices, which are occurring precisely because of investments in the system,“ said Minister of Industry and Trade Jozef Síkela (STAN).

The call aims to strengthen the capacity of distribution systems and increase their available connection capacity, not only for renewable energy sources, through conventional grid reinforcement. The funds can be used, for example, for new power lines, transformer stations or substations.

„Given that operators will receive a subsidy for these investments, they will subsequently not be able to claim a return on the value of the investment from the Energy Regulatory Office, which will mitigate the increase in the regulated component of electricity prices paid by consumers,“ said René Neděla, director general of the MPO's energy and nuclear section.

Operators of regional distribution systems with more than 90,000 customer supply points connected to them may apply for the subsidy. They have until the end of this year.

The regulated component of energy prices has risen sharply this year. For households, the electricity component will increase by 65.7% year on year, which should mean around CZK 1,077 more per megawatt-hour (MWh). The regulated component has risen even more sharply for large consumers.

Energy prices consist of a commercial component, set by suppliers, and a regulated component, managed by the state. This year, the regulated component of electricity prices accounts for more than 39% of the final price for households, while for gas it is around 20%. For large consumers, the regulated component accounts for a smaller share of the final price.