The addition of new renewable energy capacities requires additional investments in networks
Over the past year and a half, there has been a significant increase in applications for connecting new RES capacities to the ENERGO-PRO distribution network, which predetermines the future development of the networks in order to adapt them to the new operating conditions, rehabilitation and expansion. Investor interest in the construction of photovoltaic facilities in sparsely populated and depopulated regions of the northeastern part of the country, where electricity consumption is greatly reduced, even absent, and there is practically no available capacity for transformation and transmission of energy has been increased.
In order for the rapid integration of new generation facilities that produce electricity for transmission on the grid to be efficient and possible, it is necessary, at the same pace and intensity, to make new investments to provide the capacity of the facilities for the transformation and transmission of the energy produced. These are the additional capital costs that are predestined by the so-called “green transition” in the sector. The lack of synchrony and planning between the accession of small renewable energy producers and the provision of funds for investments and their real investment in the network is the main factor in slowing down the transition to environmentally friendly production.
At present, grid operators are increasingly required to join the networks of new producers, but neither the regulatory price framework nor the current legal procedures allow the timely and rhythmic renewal of the network infrastructure in the direction of distribution of the generated renewable energy. This is where the great risk to the energy security of the country lies, as well as the quality and uninterrupted supply of energy to customers.
As a network operator on the territory of North-East Bulgaria, ERP North operates under the conditions of regulated revenues and control of investment costs, combined with time burdens caused by the implementation of long and cumbersome PPP procedures. Calculations show that the investments required for the replacement of network elements and the rehabilitation of existing ones, as a result of the applications submitted for the connection and inclusion of new renewable energy production capacities, are about 14 times higher than the investment programme approved by the Regulator. These investments in distribution networks, which will be entirely the result of the need to connect renewable energy capacities, will lead to an additional financial burden for all distribution network users, in the form of an inevitable increase in network tariffs for all end-users against the backdrop of the ongoing crisis related to electricity prices and high inflation.
In order to limit the financial impact on end-customers, political will and leadership are needed to ensure grant funding for electricity distribution companies, as well as a balanced and consistent regulatory policy. The envisaged regulatory changes should be two-way: not only to speed up and facilitate the process of investors joining the networks, but also aimed at the security of the networks and the additional costs that are caused by the process of joining new manufacturers.
The proposed amendments to the EIA are aimed solely at facilitating the connection of new renewable energy facilities, which includes shorter deadlines for accession, as well as the creation of administrative contact points at the municipalities to provide guidance throughout the application and permitting process. The proposed shorter connection deadlines do not correspond in any way to the need to reconstruct the grid or build new connection facilities, which would lead not only to serious disturbances in the quality of the electricity supplied but also to the depletion of network capacity.
Last but not least, it is necessary to provide for price increases and tariff structures for network operators, which will continue to be regulated and paid for by all users.
In this regard and in the current context of planned changes in the Law on Energy from Renewable Sources, this scenario is an occasion for ENERGO-PRO to signal the existence of prerequisites for overloading the grid due to planned legal facilities for the construction of solar installations for own needs.
