The Position of ČEPS, a.s. on the “Winter Package”

6/29/2017

The ČEPS Company has long been endorsing the ideas of European energy cooperation and it realizes its benefits. Who, if not the transmission system operator in the middle of Europe, should be most aware of the need for mutual international cooperation, communication and coordination? The proposed legislation of the so-called Winter Package takes this cooperation to the new level, but some of its parts do not take into account the existing “natural” development. It introduces new rules that do not respect the specifics of individual countries by applying
the same principles to the island of Ireland and the whole European continent from Portugal to Turkey. At the same time, some of the decision-making powers are transferred. A TSO thus loses the ability to influence the essential areas of operation of the transmission system.

The Winter Package introduces a new institution called a Regional Operational Center (ROC). Its establishing and operation costs are to be borne by the national transmission system operators, which shall be reflected in the end-user electricity bill.

Regional Operations Centers are to take over some of the competencies that have so far been the responsibility of individual network operators. Ultimately, this may lead to a situation where the Czech consumer will literally pay for the instability of the generation sources of another state, and will jointly bear part of the costs associated with securing a balance between consumption and generation in another country. At times when our system does not require any special measures, measures to support the transmission system of another state may be enforced. Since the so-called Winter Package does not provide a cost-sharing key, such measures might be paid by the Czech customer. And vice versa, if a neighboring state requests assistance, it will again be the Regional Operating Centers that will order what capacity and from which sources can be offered. The free choice of the national energy mix will be pushed away.

Also relevant are concerns about the sufficiency of regulatory power — the electrical power necessary to regulate the deviations caused by the imbalance between generation and consumption. It is now ensured by the relevant transmission system operator, which is responsible for its network and customers. This is also to become the domain of the Regional Operating Centers, which, in the event of a lack of power in the system caused by, for example, low generation from renewable sources, could decide to shut down customers in the region, including the Czech Republic. Such measures will have to be, almost exclusively, respected by the transmission system operator, the ČEPS Company.

These situations can be demonstrated at the example of driving a car. In a regular car, there is one driver who determines both the speed and direction because he or she knows where to go. But how would such a car drive look like if one person was turning the steering wheel and
the other was pedaling, or if someone else was turning the wheel for the driver from a distance? It would probably lead to a road accident. However, this is exactly what the so-called Winter Package offers. In the case of an electricity system, an accident means a blackout, i.e. a total collapse of the system.

We realize that a power grid is a complex mechanism to manage. Therefore, we fear that
the transfer of competencies without clear responsibility, as well as ignorance or disregard of
the specifics of individual networks, may lead to lower reliability of supply of electricity involving the mentioned outages.

Our point of view is shared by our partner network operators, the Ministry of Industry and Trade of the Czech Republic, as well as the Czech, Hungarian, Polish, German, Romanian and Spanish Parliaments, which issued a reasoned opinion or a so-called yellow card with regard to parts of this legislation.

The Position of ČEPS, a.s. on the “Winter Package”