Charter for the Efficient Transformation of Poland’s Power Distribution Networks – another meeting of the Steering Committee chaired by the President of the Energy Regulatory Office
On 31 May, URE hosted another meeting of the Steering Committee of the Task Force established in October 2021 to work out a Common Agreement of the Sectoral Regulator and the Distribution Sector known as the “Charter for the Efficient Transformation of Poland’s Power Distribution Networks”.
The changes taking place in the Polish energy sector, including the intensive development of renewable energy sources, pose a challenge to all market participants. The activities undertaken by the President of URE are aimed at implementing a transparent and predictable regulatory policy, acceptable to the government, businesses and the public alike. The idea to work on the Agreement dates back to 2020 and stems from the cooperation between URE and DSOs. The wide range of issues the sector is confronted with regard to network planning and development has prompted the Regulator to give this cooperation a more formal structure. This background and assumptions are the starting point for the work of the Task Force responsible for the drafting of the “Charter for the Efficient Transformation of Poland’s Power Distribution Networks” headed by a Steering Committee.
The work carried out by the Task Force is expected to enable the optimum, most efficient use of distribution networks, which must be ready for the accelerated development of distributed power generation.
As usually, the meeting was opened by Rafał Gawin, President of URE, and the participants included, among others, Ireneusz Zyska, Secretary of State at the Ministry of Climate and Environment, Government Plenipotentiary for RES.
The main topic of the third Steering Committee meeting revolved around the sources and methods of financing the investment projects required for the transformation, and the need for alignment of the network infrastructure, as well as the impact of these investments on distribution tariffs between 2023 and 2030.
- In the face of Russia’s aggression against Ukraine, it is essential to take action to strengthen security and energy sovereignty. Renewable energy sources have a key role to play in this process, so it is extremely important to ensure conditions for their further sustainable development in order to ensure operational security of the power grid. At the same time, it is vital that adequate funds for investments in modernisation and construction of networks are secured to enable continued uptake of electricity from RES generation - said Minister Ireneusz Zyska when opening of the meeting.
- The necessary investments are estimated at nearly PLN 100 billion. We want to ensure that these funds are spent as effectively as possible. This is the purpose of the draft sectoral agreement. Thank you to everyone involved. The work on the Charter is going in the right direction, and we should have it completed by the end of June or early in July this year - said Rafał Gawin, President of URE, wrapping up the meeting.
The meeting was also attended by the representatives: of:
- Ministry of Development Funds and Regional Policy,
- Ministry of State Assets,
- Ministry of Development and Technology,
- Government Plenipotentiary for Strategic Energy Infrastructure,
- Polish Power Transmission and Distribution Association,
- small distribution system operators - members of the Polish Association of Independent Power Distributors,
- Polskie Sieci Elektroenergetyczne (Polish Power Grid),
- independent market experts, including academics and industry practitioners.
- On 6 October 2021, the President of URE inaugurated the Project Team to work out a Common Agreement of the Sectoral Regulator and the Distribution Sector known as the “Charter for the Efficient Transformation of Poland’s Power Distribution Networks”.
- The project objectives are:
- diagnosis of key needs related to network operation, resulting from formal and legal requirements applicable to DSOs in the 2030 time horizon and related to the growing number of renewable sources connected to the DSO networks
- identification of appropriate instruments to meet these needs
- identification of financing methods and sources and assessment of their impact on the tariffs (society)
- redesign of the DSO regulatory model to support DSO’s investment activity, in particular projects enhancing the flexibility of network operation (including optimisation of RES connections and maximisation of RES power consumption)
- implementation of legislative changes to facilitate the implementation of network investments and access to aid measures.
- To date, the Task Force has completed the following:
- identification of the formal and legal requirements resulting from legal regulations applicable to DSOs in the time horizon until 2030, including proposals for necessary legislative changes to facilitate the implementation of investments;
- assessment of the current level and feasibility of achieving the above requirements by 2030;
- developing proposals for investment scenarios for the period 2023-2030:
- Scenario 1 “Essential investments” – driven by the implementation of formal and legal requirements;
- Scenario 2 “PEP 2040 investments” – ensures full implementation of the provisions of the PEP 2040 national energy policy, and with regard to connections of new generators – by through the allocation of significant funds by DSOs to network development – enables the increase of capacity available to RES and gradual transformation of a passive (one-way) network into an active (two-way) network.
- In November, individual Task Groups started working on the definition of solutions relevant to the national network infrastructure in the context of sectoral transformation. The groups included representatives of distribution system operators.