Community energy is introducing the possibility of sharing electricity among employees, across their own properties, and with neighbors.

A new term has arrived in Czech legislation: community energy. From this year, it is possible to share electricity among multiple entities without necessarily having to establish administratively complex communities. For companies, the option to share electricity can also become a new employee benefit. However, the practical use of the advantages of community energy is currently hindered by missing implementing regulations. Read about the possibilities of sharing electricity, what the new law says about sharing, and what benefits sharing will bring.

With the start of 2024, the long-awaited amendment to the energy law, also known as Lex OZE II, has arrived. This amendment introduces new possibilities for sharing electricity into Czech law and practice. Since January this year, it is legally possible to establish so-called energy communities, which allow their members to jointly install and operate renewable electricity sources and, most importantly, to share electricity among themselves. However, those interested in the benefits of sharing electricity will have to wait a bit longer. The specific conditions for sharing are regulated by the decree on electricity market rules, which is currently in the consultation process.

Sharing electricity without establishing a community

Perhaps the most important thing that the amendment brings to Czech legal order is the possibility of sharing electricity even for citizens who would otherwise not have the opportunity to reap the benefits of their own resources. In the future, sharing electricity is expected to help diversify and decentralize the energy network. For the average consumer, this means both greater self-sufficiency and lower electricity prices. In addition, besides individuals and companies, municipalities can also participate in electricity sharing without necessarily establishing energy communities.

Sharing is possible in three main areas:

Sharing electricity within a residential building

Sharing electricity among a maximum of 11 "active customers"

Sharing within an energy community or a community for renewable sources

What does LEX OZE II bring?

Definition and conditions for establishing an energy community (effective from January 1, 2024)Possibility of sharing electricity (possible from July 1, 2024, practical aspects will be addressed by implementing decrees). Rights and obligations of energy communitiesThe amendment to the energy law, known as Lex OZE II.

Which form of electricity sharing to choose?

The simplest way is to share electricity within a residential building. The savings here can be significant - consumers draw electricity from renewable sources, most commonly solar in Czech conditions, and additionally, there is no obligation to pay distribution fees. A specific example could be the use of electricity from solar panels on the roof of the house in shared spaces or for operating an elevator. The regulated part of the payment for electricity, according to the decision of the Energy Regulatory Office (ERÚ) for 2024, accounts for 21% to almost 40% depending on the voltage level at which the consumer operates.

Another option is sharing electricity among active customers. This also includes the often-mentioned possibility of sharing electricity within a family or, for example, "sending" electricity generated by solar panels at a cottage to a city apartment. Electricity can also be shared by neighbors on the street. This sharing option is less advantageous than within residential buildings, as participants still have to pay distribution fees. However, they can agree among themselves on the payment for the actual electricity power, which is up to them. The group can include no more than 11 members, i.e., registration numbers of delivery points.

The most administratively demanding option for sharing electricity is the establishment of a community. This requires legal personality and, of course, compliance with the conditions of the community's operation. However, it could be an interesting option for municipalities. Even here, there is no exemption from paying distribution fees, and the community must also find funds for its own operation. There are also other rules; for example, a community can only share electricity that it has produced, and no member of the community can have more than 10% voting rights.

What does community energy offer to companies?

The current form of community energy could offer companies, for example, the possibility to share part of their production from their renewable sources with other consumers – residents within the municipality or even from more distant locations. Neighboring Austria has experience with community energy, and the first energy cooperatives around agricultural enterprises are already being established in the Czech Republic.

"In Austria, this model works on an almost micro-community level, where a person can choose in a mobile app how much energy they want to receive from a local bakery and how much from a car service – perhaps based on their personal experience with the companies and people in them," describes Simona Labudová, Executive Director of Columbus.

Energy communities can also be an interesting option for municipalities. In December 2023, the Ministry of the Environment (MŽP) announced a call for the establishment of energy communities, funded by the National Recovery Plan with a total allocation of 98 million crowns. By the end of January 2024, when the call ended, a total of 83 applicants had registered, which according to the MŽP indicates a high interest in community energy.

Energy Community or Community for Renewable Resources?

Included in Lex OZE II is the term energy community and community for renewable resources. What is the difference between them? The main difference is their scope of operation – the energy community can only deal with electricity, whereas the community for renewable resources has a broader scope, possibly dealing with heat or new technologies such as hydrogen. Both types of communities, however, must have legal personality in the form of an association, cooperative, or other corporation, and must be registered with the Energy Regulatory Office. Members can be individuals, small or medium-sized enterprises, or territorial self-governing units.

Neighbors Can Share Electricity from Heat Pumps or Biomass

Community energy concerns renewable electricity sources—solar and wind power plants, biomass, and for example, heat pumps or hydrogen production through renewable sources. In Czech conditions, there is the greatest interest in solar power plants, and in the case of residential or family homes, they are the easiest solution.

The key to more efficient use of renewable resources is their active, controlled integration with consumption or accumulation.

"Thanks to the integration of electricity sources and consumption or accumulation, users can proactively and automatically respond to current supply opportunities. When a cheap energy source is available, for example from photovoltaics, the user can carry out as much of their consumption as possible—either directly or, for example, using accumulation. Conversely, when the cheap source is unable to deliver energy, for example at night when photovoltaics do not produce, it is advantageous to block consumption and shift it to the next available cheap slot or use accumulated energy," explains Radek Fiala, product manager at FLOWBOX.

The steep increase in the number of solar installations began in the Czech Republic in 2022 and was even extreme in 2023. According to data from the Solar Association, 1 gigawatt of new photovoltaic power plants were built last year, totaling nearly 83,000 installations. The highest number of installations is currently in the Central Bohemian Region.

Maximizing the Benefits of Sharing Through Smart Consumption Management

Electricity sharing can be applied without further changes in consumption. However, the effectiveness of all investments and measures is significantly lower than if, in addition to simply sharing electricity, we can also manage its consumption. For maximum utilization of all the possibilities that renewable energy sources offer, there are intelligent systems that can not only selectively turn on or off individual appliances or accumulation elements but also obtain data from external sources, such as weather forecasts or information about spot electricity prices.

For consumers, this means in practice that the system itself can turn on appliances when cheap electricity is available and delay consumption if there is a shortage of electricity.

"An intelligent control system must also be able to calculate the necessary consumption and, if cheap electricity is not available at the moment, use at least a slot with a price lower than the maximum. The ideal solution is a flexibly programmable system that can respond to market price developments. A truly advanced system can coordinate multiple individual consumers among themselves and thus maximize savings in community energy. All this can be achieved by the energy modular platform FLOWBOX," adds Radek Fiala.

When Will We Actually Use Community Energy?

The current form of community energy has a number of shortcomings and barriers at this moment. Missing are the subsequent decrees – on the rules of the electricity market, on billing, and the amendment to the decree on connection, which should be approved in the first half of this year. "In practice, this means that, for example, electricity produced at one consumption point can be accounted for consumption at another location (within the same 15 minutes) at the earliest in the second half of 2024. It will not be possible, for example, to consume energy produced at a cottage during the day in an apartment in another region in the evening," says Simona Labudová. The energy market also lacks a legal framework for accumulation or aggregation of flexibility, which are necessary for the efficient functioning of the energy market. These will be addressed by another long-awaited amendment to the energy law, known as Lex OZE III.

So far, the so-called Energy Data Center, which is to serve for dynamic allocation of energy among individual entities, is also missing. It is expected to be established in 2026. Therefore, it cannot yet be expected that the current form of community energy will lead to general energy independence and self-sufficiency—at least until sufficiently large communities with a complex production mix and accumulation options are established. Nonetheless, the ability to share electricity is still a positive step.


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