Czech energy companies tighten rules: large firms must adjust reserved capacity

Czech companies connected to the distribution system at high-voltage (HV) and extra-high-voltage (EHV) levels must adjust their reserved capacity to match their actual needs by the end of the year. Otherwise, they will also have to pay for the unused portion. The Energy Regulatory Office (ERÚ) and the Czech Energy Association drew attention to this today. They also highlighted forthcoming tighter rules for electricity producers applying to connect to the distribution grid. The new rules are intended to help curb increases in the regulated component of electricity prices.

The change to reserved capacity applies to large electricity consumers, including larger companies and power plants. It does not affect households or smaller businesses connected at low voltage.

Until now, companies connected to the HV and EHV systems have not had to pay for unused reserved capacity, so the costs were shared among all consumers. Under the new rules, the full reserved capacity will be charged for, even if companies do not use it. The changes should encourage companies to request only the capacity they will actually use. According to the Czech Energy Association, this could free up as much as 3300 megawatts (MW) of capacity, equivalent to 15 percent of the systems’ capacity. The Energy Regulatory Office estimates that this could reduce annual regulated charges by three percent.

“We must use the system efficiently. That is the only way we can minimise investments related to the transformation of the entire energy sector and direct them where they are truly needed, thereby easing pressure on regulated charges. Especially in the current situation, as market prices are rising again, we must do everything we can to keep increases in the regulated component of prices as low as possible and prevent them from adding further to rising energy costs,” said Jan Šefránek, chairman of the Energy Regulatory Office.

The Energy Regulatory Office and the Czech Energy Association also drew attention today to changes to applications by electricity producers to connect to the distribution system. Until now, producers applying for a connection had paid a refundable deposit as part of their contribution to eligible costs. This will now be a non-refundable security deposit, which will be forfeited if the applicant does not proceed with the connection.

According to the Czech Energy Association, distribution companies currently have tens of thousands of connection agreements in place, reserving more than ten gigawatts (GW) of generation and demand capacity. Distributors have no certainty that these projects will actually be completed in the near future, but they must still invest in modifying distribution networks in case the generating facilities are connected.