Legal Alert: New solution for RES installations – cable pooling

Cable pooling is the sharing of connection (connection infrastructure and grid connection capacity allocated to a given grid connection point) by power generation installations, typically - with different operating characteristics. The aggregation of installations using different types of primary energy at a given grid connection point through cable pooling enables more efficient use of connection capacity and can improve the security of grid operation by flattening the energy production profile at the connection point. Although the model example here is the connection at a given location of a wind and photovoltaic installation, which statistically produce most efficiently at different times of the day and year, the legislator allows this solution to be used for all renewable energy source installations - which, in light of the statutory definition of a renewable energy source installation, also means energy storage facilities or agricultural biogas connected to these installations.

Until now, joint connection to the grid of two or more installations was possible, but was associated with a number of regulatory burdens and was therefore not more widely used. Indeed, it was necessary to establish a so-called OSDn, i.e. a distribution network operator not connected to the transmission grid, and required not only obtaining a concession for the distribution of electricity (and consequently, inter alia, the payment of a concession fee and the fulfilment of obligations under the concession), but also obtaining a decision from the President of Energy Regulatory Office (ERO) to appoint a distribution system operator (DSO).
 

Based on the adopted regulations, two configurations will be possible:

1. Investors planning to build two or more installations of renewable energy sources will be able to apply for a shared connection to a grid with a rated voltage higher than 1 kV, or
2. It will be possible to connect a new RES installation(s) next to the existing installation, at the same point of connection to a network with a rated voltage higher than 1 kV.

Cable pooling, however, will not be possible in the case of RES installations for which the end user's installation is the place of connection to the grid.

Importantly, the legal titles to the installations connected as part of cable pooling may belong to different entities. In such a case, the operators of the connected installations will have to conclude an agreement containing, among others:

1. determination of the party to the agreement that will conclude, on its own behalf, an agreement for connection to the grid and an agreement for the provision of electricity transmission or distribution services for all installations connected and planned to be connected,
2. principles of joint implementation of rights and obligations arising from the connection conditions, grid connection agreement and agreement on the provision of electricity transmission or distribution services,
3. principles of joint implementation of rights and obligations arising from the connection conditions, grid connection agreement and agreement on the provision of electricity transmission or distribution services,
4. principles of cooperation with the entity that is a party to the contract for the provision of electricity transmission or distribution services in the implementation of its obligations regarding participation in system balancing and management of system constraints as well as other obligations of the connected entity resulting from the provisions of law and relevant regulations of network operators (including grid traffic and operating instructions);
5. rules for the distribution of funds received as financial compensation in the event of redispatching by the TSO/DSO;
6. determining the location of measurement points appropriate for individual installations.

This agreement will constitute an annex to the application for grid connection conditions. Importantly, the operator will conclude a grid connection agreement with only one entity that is a party to the joint grid connection agreement. Said party will be additionally authorized to represent all parties to said agreement before the TSO/DSO or the ERO President in matters arising from the content of the agreement. At the same time, all parties will be obliged, pursuant to appropriate declarations attached to the application for connection conditions, to:

1. installation of devices that prevent the connection capacity from being exceeded;
2. compliance with relevant regulations of grid operators (including grid traffic and operating instructions);
3. accepting, together with the other parties to the agreement, joint and several liability towards the grid operator for exceeding the connection capacity;
4. consent to the verification by the relevant grid operator of the technical parameters of the renewable energy source installation, as well as the content of the documents attached to the application for connection conditions

This shape of regulation is dictated primarily by considerations of grid operation security - relevant operators will be able to effectively enforce compliance with the provisions of grid connection agreements in relations with one entity, while liability (in particular for exceeding the connection capacity) will rest with all generators of the RES installations connected in a given place of connection.

Each of the installations connected to the grid through cable pooling will be equipped with separate metering and billing systems to measure the amount of electricity fed into and taken from the grid. As a result, each generator will be able to conclude a separate power purchase agreement or independently trade the power it generates on the power exchange.

If the connection capacity is determined at a level lower than the planned total installed capacity of all installations connected in a given place of connection, the grid connection agreement will have to include a detailed description of how to secure the technical capacity not to exceed the connection capacity:

1. with the cost of purchasing and installing devices used to secure the technical capacity not to exceed the connection capacity is the responsibility of the entities connected to the grid, and
2. supervision over the operation of devices used to ensure the technical ability not to exceed the connection capacity is exercised by the grid operator, who is in particular responsible for securing these devices in a way that prevents them from changing their settings.

A possible threat related to cable pooling from the perspective of grid operators is the potential to exceed the connection capacity specified for a given connection point. If such an exceedance occurs, the relevant grid operator:

1. collects fees for exceeding the connection capacity by the generator, in the amount corresponding to the fee for illegal consumption of electricity in relation to the excess electricity that was introduced into the grid by the generator as a result of the excess;
2. may introduce restrictions on the supply of electricity to the grid by this producer or completely suspend the supply of electricity to the grid, without paying compensation and without being liable for the effects of these restrictions or disconnection; in such a case, the supply of electricity is resumed after the generator implements the method indicated by the operator to secure the technical capacity not to exceed the connection capacity.

What is controversial in the industry, are the provisions concerning the use of support schemes (green certificates, FIT, FIP, auctions) by installations connected to the grid through cable pooling. According to the legislation passed, only one of the energy generators connected at a given connection point will be able to benefit from the support instruments.

In general, obtaining support under any of the currently existing support is conditional on the installation having a separate set of equipment for power output exclusively from the installation in question to the grid. Pursuant to the new provisions, this requirement does not apply to an installation connected to the grid through cable pooling, if further installations are planned to be connected at the same connection point, provided that with regard to these new installations:

1. no certificates of origin (green certificates) are due;
2. the ERO President has not issued a certificate to sell unused electricity at a fixed purchase price to an obligated seller or to a selected entity;
3. the ERO President has not issued a confirmation of acceptance of the declaration of participation in the auction;
4. The entity holding the legal title to the installation does not hold a valid certificate of admission to participate in the auction;
5. the entity holding the legal title to that installation did not win the auction.

In practice, therefore, only one of the installations connected by cable pooling at given connection point will be able to benefit from the support instruments provided for in the RES Act. Additionally, if a literal interpretation of the regulations is accepted, the installation that is to benefit from the support mechanisms will have to be connected first. In the case of installations that are yet to be built, it will be necessary to first submit an application for connection to the network of the installation that is to benefit from the support mechanisms, and in the second step - take actions to connect subsequent installations. Undoubtedly, the legislator's priority in this case was to ensure that installations that were already connected to the network and received support could be used as part of cable pooling without the risk of losing the support granted.