Directive on the promotion of the energy from renewable sources

a) Union binding overall target for 2030 (Article 3 of Directive)

The CEZ Group finds as more appropriate to enable all Member States to choose their own national trajectories (e. g. in the proposal of the Governance Regulation) instead of an obligatory defined linear trajectory to maintain the development of RES on their territory to reach the Union binding overall target for 2030.

The CZE Group also declines a launching of the EU financial platform for Member States´ contributions if they fail to reach their national targets. This additional obligation would lead to the financial transfers from the Czech Republic to other Member States with the direct budgetary impact.

b) Financial support for electricity from renewable sources (from Article 4 to Article 6)

The CEZ Group appreciates the new possibility of Member States to apply support schemes for electricity from renewable sources subject to State aid rules (Article 4 paragraph 1). With regard to the fact that the designed support scheme are a general measure to reach the proposed Union binding overall target for 2030, the revision of the RES Directive should be accompanied by the revision of Guidelines on State aid for environmental protection and energy 2014 - 2020 at least for the period after 2018 as well. This revision together with new support schemes under the proposed Directive would help all entities subject to the State aid rules to get necessary legal certainty.

c) Simple notification procedures (Article 17 paragraph 1)

According to the Article 17 paragraph 1 a notification procedure to the distribution system operator (DSO) should apply for the connection to the grid of demonstration projects and small installations with an electricity capacity of less than 50 kW. The proposed measure of simple notification of these two categories of renewable sources should decrease an administrative burden of the connection of new RES to the grid.

However, the simplification of procedure may have a negative impact on the DSOs due to the need of additional measures such a preparedness of distribution system for unlimited increase of new RES, including high expenses on development of distribution system and smart grids.

d) Guarantees of origin of electricity, heating and cooling produced form RES (Article 19)

CEZ Group identified many substantial changes in part related to Guarantees of Origin, which is appreciated , especially when changes are pro-consumer oriented. As one of the consumer target is higher level on standardization on Guarantee of Origin (GoO), which would provide an easier orientation in fuel mix disclosure activities. On the other side there are some proposals, which seems to have rather confusing impact on consumer and their intentions are not understood by CEZ Group. In the Article 19 we recognize four provisions (paragraphs) which could have such impact.

  • Article 19 paragraph 2 (capacity limitation of issuance of GoO and restriction of support for GoO of producer of renewable energy who receives financial support for RES)

CEZ Group does not see any value added to block issuance of GoO from sources below the minimum capacity limit. If there is a customer demand for small scale sources, there should not exist any barrier to issue GoO from them. CEZ Group recognizes the word “may”, however this exception can be applied by some Issuing bodies.

We see a potential risk in the introduction of the GoO auction organized by Member states. This will bring the State into GoO scheme and may decrease final consumers’ willingness to participate in guarantees of origin and slow down further development of the guarantees of origin scheme. A very good trade-off could be that producers could issue and sell guarantees of origin from supported sources same as now, but e. g. 50% of these additional revenues would be reducing their subsidies.

  • Article 19 paragraph 7 (simplified information of GoO from small scale installations)

The different approach to small scale and larger scale installations may cause an information inconsistency and confuse the customer in the end. How is the small scale defined? CEZ Group is not the opinion that information like location, installed capacity are not available or hard to provide for small scale units.

  • Article 19 paragraph 8 (requirement to trade GoO and electricity separately)

Sometimes CEZ Group still identifies a demand for coupling guarantees of origin and power purchase, therefore CEZ Group proposes to incorporate this sentence in the main article 19. The advantage of trading guarantees of origin independently from electricity is even more important when electricity trading is more anonymous via exchanges and additional electricity tracking would significantly increase the costs of fuel mix disclosure.

  • Article 19 paragraph 12 (objective, transparent and non-discriminatory criteria for GoO)

In this paragraph we recommend to closer specify to what purpose the Member State would introduce the criteria.

e) Increasing of the renewable energy´s share in the heating and cooling (Article 23)

The obligatory requirement for increasing the share of renewable energy supplied for heating and cooling by at least 1 pp every year influences the Member States´ right to determine the conditions for exploiting their energy resources, their choice between different energy sources and the general structure of their energy mix (Article 194 paragraph 2 TFEU).

The CEZ Group prefers other alternative measures to reach the target in heating and cooling, e. g. support schemes instead of this obligatory requirement.

f) Right to be disconnected from the inefficient district heating and cooling system or to switch a supplier (Article 24 paragraph 2)

This obligation would grant a wide independence to all customers of district heating and cooling systems. As mentioned in paragraph 3, the Member States may restrict the right to disconnect or switch supplier to customers who can prove that the designed new solution is a significantly better energy performance. However, this general provision of Article 24 primarily aims at customers; however, it do not reflect expenses of suppliers of district heating and cooling on building, operating and maintenance of existing central district systems of heating in the Czech Republic that differs from other Member States.

The CEZ Group believes that this general provision should be reformulated in order it better reflects the regional conditions existing in different Member States (e. g. regulation of final prices of heating, impact on air pollution, security of supply).

g) The obligation of DSOs to assess the potential of district heating and cooling systems (Article 24 paragraph 8)

The assessment mentioned in the paragraph 8 shall be carried out at least biannually and it should check the potential of district heating or cooling systems in the respective area of DSO to provide system services of electricity produced form renewable sources (balancing, demand response and storage) from the view of their resource- and cost-efficiency.

Despite the fact that this provision aims at evaluation of above specified possibilities of district heating or cooling systems DSOs would face additional administrative burden by this reporting obligation.

This proposed measure would be more effective if it is limited by capabilities of district or cooling systems of a specific Member State. In case of objective impossibility of to use this energy in the Member State, DSOs should be released from this obligation.