Community Energy

Key Advantages of Community Energy:

• Self-sufficiency and independence from fossil fuels and central suppliers, resilience to fluctuations in energy prices on the market;

• Reducing emissions, including greenhouse gases, and thus having a positive impact on the environment;

• Economic benefits for the community – savings on energy costs, the possibility to sell surplus energy, new job opportunities for locals;

• Strengthening cooperation and engagement among residents.

We already wrote about this topic in our blog post "Komunitní energetika" from March 2023 (in the Czech language). Since then, there have been legislative changes, some of which we will discuss below.

Current Situation in the Czech Republic (as of January 17, 2025)

The sharing of electricity using the distribution network was made possible by an amendment to the Energy Act (Act No. 458/2000 Coll., on Business Conditions and Public Administration in the Energy Sectors and on Amendment to Certain Laws), known as "Lex OZE II", which came into effect in December 2023. It introduced terms such as energy communities and renewable energy communities, with a requirement for their registration with the Energy Regulatory Office (ERO). It also extended the rights of electricity customers and producers to share electricity under certain conditions, either with or without using the distribution network.

Currently, it is possible to share electricity within a group or community, with the electricity produced (at the production site) having to match the electricity consumed (at the consumption site) within the same 15-minute evaluation interval. In the case of sharing within a (renewable) energy community, groups can have up to 1,000 members, which can include "individuals, small businesses, medium-sized businesses, municipalities, voluntary associations of municipalities, or other organizations of local government units" in the case of renewable energy communities; in the case of an energy community, there is no limit on membership [2a]. The aggregated sites must be within the administrative districts of a maximum of three “municipalities with extended powers”, forming a continuous area, or within the territory of the capital city of Prague.

A simpler option is sharing under the active customer regime, which does not require registration with the ERO. However, this option limits the group to 11 members if using the distribution network, or up to 1,000 members without using the distribution network – within a residential building (behind a single main fuse box). Members can include households and legal entities (e.g., companies, municipalities, schools, cooperatives, etc.). There are no geographical restrictions for active customers – they can operate within the entire distribution network of the Czech Republic.

In any case, it is crucial to define how the group will operate, especially: 1. how electricity will be allocated among consumption points (the so-called allocation key), 2. in what order electricity will be shared from the individual power plants to each consumption point, 3. how the price for electricity consumption will be set. All connected sites must have metering devices installed. The group must register in the information system of the “Electroenergetic” Data Centre (EDC) [2b, 3]. The EDC is responsible for collecting, managing, and sharing data within the energy market.

However, energy storage (for later use) is not yet sufficiently anchored in legislation. This is expected to be addressed by the amendment to the Energy Act "Lex OZE III". This amendment was primarily intended to implement the EU directive on the storage, aggregation, and flexibility of renewable energy. The process has significantly delayed compared to the EU's deadline, and the amendment has been expanded with a number of proposals, such as shortening subsidies for older solar power plants, which has triggered mixed reactions [4]. At the time of writing this article (January 2025), the amendment has passed the third reading in the Chamber of Deputies (of the Parliament of the Czech Republic). It is now heading to the Senate and then to the President for signing.

In addition to the aforementioned amendments to the Energy Act "Lex OZE", electricity sharing in the Czech Republic is regulated by Regulation No. 408/2015 Coll., on Electricity Market Rules, Regulation No. 540/2005 Coll., on the Quality of Electricity Supply and Related Services in the Electricity Sector, Regulation No. 359/2020 Coll., on Electricity Metering, and the Rules of the “Electroenergetic” Data Center [5, 6].

Challenges and Pitfalls of Community Energy

• Initial investments, technological and infrastructure demands (increased capacity of the distribution network, development of data centers, etc.)

• Administrative and regulatory barriers (need for new legislation)

Currently, electricity sharing is 'temporary' and has its limitations, such as a single sharing project being limited to 1,000 connection points within three “municipalities with extended powers”, and the participation of medium and large companies with more than 50 employees is excluded. No member of the energy community, regardless of their share in the assets, may have voting rights exceeding 10 percent of all votes in the community, and consumers can only be members of one community. According to critics, these and other similar limitations create barriers to the faster development of community energy in the Czech Republic [7]. The temporary solution is set to be replaced by the 'final' version in the second half of 2026, which should coincide with the full operational launch of the EDC functions.

Conclusion

Community energy is essential for addressing current energy and environmental challenges. With the further planned development of technologies and legislation in this area, we expect the growth of energy sharing. In Enerfis, we can help you with more efficient energy use and energy management, which is beneficial not only for community energy projects. Feel free to reach out to us.

Sources (in the Czech language):