NATIONAL ACTION PLAN SMART GRIDS (NAP SG) – A COMPREHENSIVE PLAN FOR SMART GRIDS IN THE CZECH REPUBLIC Conference “Trends in Power Industry in European Context X” 15 - 16 April, 2015 Špindler v Mlýn, Hotel Horal

Jan Kanta

NAP SG

WHY WE ARE DOING THIS?

The target solution of Smart Grids consists above all in the offer of services of system operators for the implementation of newly offered products exploited by: customers, producers, traders, while exploiting future ingenuity of Smart Grids.

Prosumer

The objective of Smart Grids is the integration of requirements, behaviour and activities of respective users of such Grids (i.e. customers, producers and traders) and other interested parties, together with effective provision of continuous, efficient, safe and reliable power supply service.

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NAP SG

THE WAY TO SUCH OBJECTIVE IS LONG AND REQUIRES TIME AND MONEY, ...

Key plan for the preparation and implementation of Smart Grids has been set up

íslo opat ení A1 A2 A3 A4 A5 A6

Part representing desirable state of the system from the point of view of Smart Grids in respective time periods Part representing “operational” measures (it includes the activities heading towards prearranged targets) and related “supportive” measures (these include in particular various analyses, preparation of initial documents for further decision-making, etc.) which together represent specific steps towards the target condition of Smart Grids Primární odpov dnost MPO MPO ERÚ ERÚ ERÚ MPO

A8 A9 A10

Opat ení Licence na akumulaci Zajišt ní legislativních úprav pro jednozna né odlišení off-grid systém Úprava/zm na tarifního systému ení OPM s výrobou v návaznosti na zjednodušený p ístup k malým zdroj m Nastavení plynárenských tarif ešení problematiky energetické chudoby Soubor opat ení k ešení potenciálního nedostatku výkonu ES R následn schválených vládou k ešení energetických pot eb Dispe erské ízení a regulace distribuované výroby, akumulace a DSR v ES R s vysokým podílem distribuované výroby Návrh a p ijetí opat ení pro integraci vysokého podílu distribuované výroby do ES R Tvorba a implementace „Sí ových kodex ENTSO-E“

MPO MPO MPO

A11 A 12 A 13 A 14

Podmínky provozu a rozvoje ES s distribuovanou výrobou v prost edí SG Zavedení regionální úrovn bilancování ES Úpravy za ízení a výpo ty investi ní náro nosti v ES Posouzení shody za ízení uvád ných na eský trh

MPO MPO MPO MPO

A 15 A 16 A 17 A 18 A 19 A 20 A 21 A 22 A 23

Zp tné vlivy výroben elekt iny a spot ebi na ES ení Q a ú iník u MOP ení dodávky a odb ru MOO a p íprava pro AMM idlo AMM/AMR s GPRS p enosem Zrušení p edchozího oznámení zm ny as p epínání tarif ASD a chrán ní v ES Bezpe nost v ostrovních provozech Informa ní bezpe nost a zákon o kybernetické bezpe nosti Fyzická bezpe nost

MPO MPO/ERU MPO MPO ERU MPO MPO MPO MPO

A7

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2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

MPO

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NAP SG

... WHEREAS THE WAY TO SUCH OBJECTIVE IS THE ACTION PLAN

The Action Plan for the development of Smart Grids has been set up for specific time periods / stages from the point of view of its implementation in several areas: Balance

Technique and technology Power generation – with the aim to integrate distributed power generation Power supply and metering – with the aim to provide sufficient data on

Power industry Heat

power consumption to customers for their decision-making Power System operation – with the aim to ensure safe operation of the system together with appropriate parameters of supplied power Power accumulation – with the aim to its future efficient application Research and development – with the aim to predict and eliminate

Market model and tariff system Market model Tariff system

negative impacts of physical characteristics of new technologies on the

Legislative

environment Periods: updo to

2019

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2020 - 2024

2025 - 2029

2030 – 2040 3

NAP SG

DECENTRALISED POWER GENERATION – REFERENCE SCENARIO OF FUTURE DEVELOPMENT

Další decentralizované výroby, o kterýwhich majíis zájem edevším prosumers, Furtherrozvoj development of decentralised power generation, watchedpclosely by Prosumers, will be crucial the development operation of grids bude klíforový pro rozvoj and a provozování sítí

Power source group

Reference scenario:

Biomass – total - of that HV, LV Biogas – total - of that HV, LV Biologically degradable waste (BDW) – total - of that HV, LV Fotovoltaic – total - of that HV, LV Wind power – total - of that HV, LV Micro-cogeneration – total - of that HV, LV Hydroelectric plants – total - of that small HPP into HV, LV Geothermal – total - of that HV, LV Reference scenario – total (without biomass and BDW) Reference scenario - HV, LV (without biomass and BDW)

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NAP SG

COMBINATION OF VARIOUS MEASURES ...

Dopad distribuované It has been recommended tovýroby solve theje impact of distributed doporu en ešit power generation at LV level: by adaptation of DS na hladin nn úpravou DS, at HV level: by combination of voltage na hladin vn kombinací ízení control and adaptation of DS nap tí a úpravy DS

Appropriate costs are above the framework of standard renewal of equipment When solving problems in specific areas and requirements for the connection of distributed power generation units, it will be always necessary to retain individual approach.

Voltage of DS Nap oválevel hladina Adaptation Úprava DS

Accumulation Akumulace

LV nn

Voltage ízenícontrol nap tí *

HV vn VHV vvn Full implementation Realizace v plném rozsahu Realizace v áste ném rozsahu Partial implementation * Realizace v áste ném rozsahu v delším Partial implementation within longerasovém periodhorizontu Nerealizovat Without implementation Zdroj: EZ

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COSTS FOR TARGET TO BE ACHIEVED HAVE NAP SG ... SUPPOSED BEEN MINIMISED Investments will be required in the following areas: AMM

Reference scenario: approx. CZK 143 mld.

ASDM Adaptation of DS Technical capacities of grids

Comment:

These costs include only AMM, adaptation of DS and ASDM (Automated System of

Short-circuit capacity

Dispatching Management) at the level of

U/Q

power distribution. Other costs will be

Resistance of grid

estimated later.

Related costs represent additional investments amounting to approx. CZK 4 mld. per year, i.e. approx. 20 – 40 % above the framework of current level of investments of operators. These additional costs should be assigned in maximally corresponding extent directly to those market participants, who will induce [i.e. prove] such investments. Tariff system should reflect such requirements, if possible ex-ante [in advance], so that these costs would not be successively passed [i.e.transferred] onto other users of grids. Zdroj: EZ

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NAP SG

FACTS IN RELATION TO NAP SG

NAP SG is one of 6 action plans, which are supposed to be prepared within the oncoming update of National Energy Concept [its endorsement is currently in progress]. NAP SG was considered by the [Czech] Government on March 4, 2015; Government Resolution No. 149 includes the following decisions: II. [The Government] assigns [the following tasks] to: 1. The Minister of Industry and Commerce a) to ensure the fulfilment of the Plan of Implementation of Smart Grids in the Czech Republic, as specified in the National Action Plan, b) to bring before the Government ba) before December 31, 2017: Report on Running Evaluation of Fulfilment of the National Action Plan, bb) before December 31, 2019: Proposal for the Update of the National Action Plan, 2. The Minister of Labour and Social Affairs: to continue in cooperation with the Minister of Industry and Commerce on the concept of solution of energy poverty within the framework of non-insurance social benefit systems, 3. 1. The Vice-premier for Economy and Minister of Finance, Vice-premier for Science, Research and Innovations, Minister of the Environment and Minister for Human Rights, Equal Opportunities and Legislative: to provide necessary cooperation for the fulfilment of the task according to item II/1 of this Resolution through their representatives in the bodies of the Council of Government of the Czech Republic for Energy and Raw Material Strategies; III. Asks the Chairwoman of the Energy Regulating Authority, Chairman of the Office for Personal Data Protection and Chairman of the Office for Economic Competition Protection to provide necessary cooperation for the implementation of those measures of the National Action Plan, which are within the responsibility of respective offices managed by each of them. Zdroj: EZ

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SPECIFIC “TANGIBLE” OUTPUTS Simplified connection of [power generating] micro-sources

SUPPOSED CONDITIONS FOR SIMPLIFIED CONNECTION OF NAP SG [POWER GENERATING] MICRO-SOURCES Only micro-sources with the installed capacity up to 16 A (10 A) on a phase, connected into the point of consumption (PoC) at the voltage level LV would comply with the conditions specified by the Rules for Distribution System Operation (RDSO), SN EN 50 438 (Czech / European standard) and other related standards and legal regulations Preclusion / provision of “zero” power supply into DS and other PoC at any moment at a customer – by a technical measure (control of active power, accumulation) or by the optimisation of its own consumption at a DSO – by other than technical measure (which would be the disconnection of respective PoC from the grid), but on the economic basis (a vindicatory charge with progressive rate for unauthorised power supply into DS) Grid impedance measured at the point of transfer (PoT) of a micro-source must be smaller than the limit value of relative impedance, as published by DSO An electricity meter recording respective power consumption and possible “unauthorised” power supply must be installed at any PoT. Zdroj: EZ

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NAP SG

PROCEDURE FOR SIMPLIFIED CONNECTION OF [POWER GENERATING] MICRO-SOURCES

DSO will publish the value of relative impedance (VRI) on its website Currently supposed VRI equals to: 0,47

(at 16 A) or 0,75

(at 10 A)

A party interested in the installation of a [power generating] micro-source shall provide the measurement of VRI at the point of transfer (PoT), where such micro-source is to be connected to the grid, performed through a qualified specialist In case that the measured value of impedance

VRI, then the party interested must apply at DSO

for the connection in compliance with the existing [standard] rules In case that the measured value of impedance < VRI, then the party interested can continue in the preparation of installation of such micro-source in a simplified way according to the following steps The applicant shall install such micro-source and shall have an installation inspection report done 5 days before the requested date of putting the parallel connection to DS in operation, the applicant shall file an application for the conclusion of an amendment to the contract for connection [to the grid] Within 15 working days after receiving a complete application, DSO shall install a new electricity meter metering power consumption and possible “unauthorised” power supply [into DS]

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SPECIFIC “TANGIBLE” OUTPUTS Net metering

NAP SG

NET METERING – WHAT ACTUALLY IS?

In those EU countries, where Net metering is already in use, it generally concerns an operational support of de-centralised power generation – an alternative to [ordinary] operational support In majority of such EU countries, the costs connected with the use of Net metering are transferred to end customers / consumers of power (also to those who do not use Net metering) According to the available information from analysed EU countries, it is impossible to combine Net metering with any other form of support Customers are motivated to the use of Net metering by savings resulting from variable components of power price (related to power consumption) and also by tax reduction The biggest differences are in the systems of positive surplus settlement (surplus of power generation) Italy is the EU country closest to the functioning of Net metering on market principle, without transferring resulting costs to other power consumers In case of Italy, there is no balancing / settlement between power generation and consumption, but the credit assigned for the power supply is deduced from the payment for power consumption Self-suppliers in Italy pay also a fixed annual charge to cover related administrative costs of Distribution System Operator

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NAP SG

NET METERING – POSSIBILITY OF ITS IMPLEMENTATION IN THE CZECH REPUBLIC

In the Czech Republic, it is possible to use Net metering only on purely economic basis (while balancing only power electricity) The use of Net metering will be based on the commercial relations between a self-supplier and a trader who is responsible for the deviation at the appropriate point of consumption (PoC) The principal condition for the use of Net metering is the readjustment of regulated tariffs (power distribution, system services and other “flowing” price components) with the aim to implement unambiguous addressable payments of grid users for the exploitation of grid services, to prevent “socialisation” of respective costs The second condition for such use is the consideration of tax-related issues, in particular in the area of VAT and tax from power [consumption] to prevent any ambiguities and problems in application of tax laws (it may be necessary to refine or amend respective tax legislative) The third condition is the installation of continuous electricity meter with hourly profile If a power generation source is connected [to grid] in a simplified way, it would be impossible to use Net metering

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SUMMARY

NAP SG

WHY?

The implementation and exploitation of Smart Grids will be essential for the assurance of reliable operation of the power grid system. It would be impossible to cope with the integration of big volume of power generated in intermittent sources into the energy systems of the Czech Republic as well as with the expected increase of power generation based on small local sources without the implementation of new methods of management of such systems in the form of Smart Grid. The exploitation of Smart Grid environment will be also indispensable for the development of the market with power and for the exploitation of such market by active power consumers as well as by power generating consumers. In addition to that, Smart Grids will provide technological support to consumers for the improvement of power utilisation efficiency.

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NAP SG

HOW?

NAP SG supposes that Smart Grids will be implemented gradually in several stages, together with other measures. The investments into Smart Grids are mainly investments into the infrastructure, which will be reflected in the regulated components of power prices. It is therefore necessary to adapt the way and speed of implementation of Smart Grids to actual benefits for power consumers, especially when NAP SG takes in consideration the cost optimisation. The integral part of NAP SG is the proposal of measures, which provides the preparation and implementation of necessary modifications in the optimal way, together with time schedule, which represents also a program for the realisation of individual measures. The additional costs for the implementation of Smart Grids will be covered through the tariffs (by appropriate payments of end customers for consumed power) and possibly also through the endowment resulting from the Operational Program Entrepreneurship and Innovation for Competitiveness (OP EIC).

The implementation of NAP SG represents “a long distance run” and to prevent its putting to “back cooking stove”, it will be necessary to set up a control structure, which would monitor its fulfilment and resolve open and emerging questions

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WHAT TO SAY AT THE CONCLUSION?

NAP SG It is impossible to stop the development and to prevent Prosumers from longing for more freedom and independence At the same time, there will be always a significant group of customers, who prefer simplicity expressed by the words “I do not want to care for electricity” We are here to take care of both groups of customers … and to prepare the world of Smart Grids for Prosumers; the world, which will not be available for free, and its users, primarily Prosumers, must fairly share its costs and to prepare a “simple” world for other customers; the world, which will not require a lot of care, but will not be so costly as the world of Smart Grids …

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THANK YOU FOR YOUR ATTENTION…