grid connection costs

Ministry, RAAEY, IPTO discuss grid-connection cost coverage

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Officials of the energy ministry, RAAEY, the Regulatory Authority for Waste, Energy and Water, and power grid operator IPTO held a meeting yesterday to discuss details concerning a ministry plan requiring electricity producers (RES producers, gas-fueled power stations) to cover half the amount of their grid connection costs.

The focus of the meeting was on IPTO as distribution network-related amounts, which concern DEDDIE/HEDNO, the distribution network operator, are minimal.

RAAEY officials reiterated concerns that the energy ministry’s formula could force IPTO to significantly increase network usage surcharges.

However, according to the ministry, a formula requiring grid users to cover 50 percent of grid connection costs does require further examination as this approach may end up being regarded as incorporating state aid and could trigger complaints to the European Commission, which has not approved the plan.

The energy ministry will submit a related enquiry to KEMKE, the finance ministry’s Central State Aid Unit. Should this agency deem that the energy ministry’s formula represents a form of state aid, the ministry could inform Brussels for clarity on whether its plan breaches EU law.

Producers’ even share of grid-connection costs unchanged

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The energy ministry intends to keep unchanged a formula limiting power grid operator IPTO’s cost coverage of projects connecting electricity producers to the grid to 50 percent of the cost, ministry officials have told energypress.

In doing so, the ministry has backed IPTO following a challenge by RAAEY, the Regulatory Authority for Waste, Energy and Water, over the formula evenly splitting the cost of grid-connection projects between the operator and electricity producers.

IPTO contends the ministry has opted for a 50-50 formula as part of its effort to accelerate RES investments, increase the energy-mix share of renewables, and achieve national energy-transition targets.

The energy ministry plans to implement a stricter cost-control monitoring system for these projects, as they are carried out by the users, themselves. A formula designed to objectively determine the cost of grid-connection projects is expected to be introduced as a key tool in this monitoring plan.

In July, 2022, the government ratified legislation requiring electricity producers to cover 50 percent of the cost of their grid-connection projects.

This 50 percent cost-coverage requirement concerns renewable energy projects, development of transmission lines connecting thermal power plants, energy storage units, as well as high-voltage consumers.