Photovoltaic power plants from the perspective of the Energy Act

9. 11. 2022

The second article concerning the implementation of PV power plants (photovoltaic power plant) is devoted to PV power plants from the perspective of Act No. 458/2000 Coll., on the conditions of doing business and on the exercise of state administration in the energy sectors and on amendments to certain acts (“Energy Act”). In relation to the installation of PV power plants and the production of electricity, the Energy Act generally stipulates that the production of electricity is the subject of business in the energy sectors. According to the Energy Act, a licence is required to conduct business in the energy sectors. However, from the obligation to obtain a licence, the Energy Act also provides for cases where a licence is not required for electricity production.

A licence is not required
Obtaining a licence for electricity generation is not required in two cases. The first is the situation where the PV plant is not connected to the distribution or transmission system (hereinafter referred to as the “electricity system”) at all. If the PV plant is not connected to the electricity system, the installed capacity is not limited. The second is the situation where the PV plant is connected to the grid, but its installed capacity does not exceed 10 kW and the electricity generated is primarily used for self-consumption.

Representative of the first example are e.g. manufacturing companies with more demanding electricity consumption, for which the electricity generated by the PV plant will reduce their total electricity consumption from the electricity grid. The second case is typically represented by the installation of PV plants on family houses, which primarily consume the generated electricity and supply only the surplus of such generated electricity to the electricity grid.

Necessity of a licence and legal requirements
It follows from the above that it is necessary to obtain a licence for electricity production in a situation where the intended PV plant is to have an installed capacity exceeding 10 kW and at the same time the PV plant is to be interconnected with the electricity grid.

The conditions for granting the licence and the subsequent conditions for applying for it are regulated by the Energy Act in Section 5 et seq. The conditions laid down in the Energy Act are: full legal capacity; integrity; professional competence or designation of a responsible representative; fulfilment of the technical prerequisites; fulfilment of the financial prerequisites from an installed capacity of 200 kW and proof of the ownership or use right to the PV plant.

In the case of a legal person, the first two conditions shall be demonstrated by all members of its statutory body. Professional competence shall be understood as a completed university degree in a technical field and 3 years’ experience in the field or a completed secondary education in a technical field with a school-leaving certificate and 6 years’ experience in the field. If the installed capacity of the PV power plant is up to 1 MW, the professional competence requirement is fulfilled if the applicant has an apprenticeship in the field and 3 years of experience, or if he/she has a certificate of retraining in the operation of small energy sources. Professional competence is not required for PV plants up to 20 kW installed capacity. If the applicant is a legal entity, it must have an appointed responsible representative who meets the conditions of Section 6 of the Energy Act.

Technical competence means that the PV installation has all the necessary inspections, certificates and permits that prove its safety and entitle the applicant to use it.

Another requirement listed is the fulfilment of financial requirements, which, however, only apply to applicants wishing to be issued a licence for the production of electricity from a source with an installed capacity of 200 kW and above. Compliance with the financial requirements means demonstrating the ability to ensure the operation of the PV plant to meet all obligations for a period of at least 5 years. The Energy Act also states that anyone who has registered arrears of taxes, duties and fees, social security contributions, state employment policy contributions or general health insurance contributions and fines is not financially eligible.

The conditions for fulfilling the technical and financial prerequisites set out in the Energy Act are further regulated in more detail in Decree No 8/2016 Coll., on the details of granting licences for business in the energy sector.

The last condition, i.e. proof of ownership or use rights, is demonstrated if the applicant submits documents proving that the installed PV power plant belongs to its property, e.g. an extract from the land register together with a contract for work on the construction of the PV power plant, or proves that it has use rights to the constructed PV power plant, e.g. a concluded lease agreement.

Rights and obligations of the licence holder
If the application for a licence for the generation of electricity is successful and the applicant receives a licence from the Energy Regulatory Authority, the applicant is entitled to the following to the extent of the licence granted:
to connect its equipment to the Electricity System under the terms of the Transmission System Operation Rules or the Distribution System Operation Rules; to supply the generated electricity to third parties using the Electricity System Operation Rules; to supply the generated electricity to third parties using the Electricity System Operation Rules. system or by direct line; to supply the generated electricity for its own use and for the use of controlled companies; to offer and provide support services to ensure the operation of the El. system; to limit, interrupt or terminate the supply of electricity to third parties in case of unauthorized consumption of electricity; and to purchase electricity for the technological self-consumption of its electricity generation plant.

In addition to the authorisations, the granted electricity generation licence also entails obligations. These obligations can be divided into technical and administrative obligations. The technical obligations can be understood as those related to maintaining the PV plant in an operational and safe condition and to having sufficient qualified personnel. Administrative obligations include in particular obligations towards third parties to whom the electricity is supplied and regular information obligations of the electricity producer towards the electricity system operators, the energy authority, the MIT and the market operator.

The conditions for electricity generation are regulated by the Energy Act, which stipulates that it is only necessary to obtain a licence for electricity generation if the PV plant has an installed capacity of more than 10 kW and the PV plant and the electricity grid are interconnected. If the installed capacity of the PV plant is up to 10 kW or if the interconnection of the PV plant of any capacity and the electricity grid does not take place, it is not necessary to apply for a licence.
The licence for electricity generation also implies specific rights and obligations for the holder. Among the most important authorisations is the right to supply the generated electricity through the electricity grid either to other own consumption points or to third parties. The obligations include, in particular, the obligation to maintain the PV plant in a safe technical condition and a regular information obligation towards other persons ensuring the operation of the electricity system.

Author: Pavel Kubíska