ElWG Check: new opportunities for direct lines

Author: Mario Laimgruber

Not least due to the increasing decentralization of power generation facilities, direct supply concepts are becoming more attractive. The new ElWG aims to reduce the hurdles that have stood in the way of this development.

Current situation

Until now, the implementation of direct lines (and the associated advantages, such as the fact that no components of the system usage fee that require the use of a distribution network can be charged) was conceivable in two scenarios:

Island operation:

A line that connects a single production site with a single customer, without the producer or the customer being connected to the public grid (if the producer fed surplus electricity into the grid or the customer drew electricity from the public grid, the requirements for this application were already not met).
“Direct line” with connection to the public grid under certain conditions:

A line connecting a producer and an electricity supply company for the purpose of directly supplying their own facility, subsidiaries, and approved customers. However, in this case a direct line (in the legal sense of electricity law) existed only according to the rulings of the Supreme Administrative Court (see in particular VwGH, March 4th, 2008, 2007/05/0243) if “the line serves the purpose of direct supply; from this it follows that there must be no connection between the direct line and the public grid insofar as there is no immediate and direct exchange of electricity between the line and the public grid.” In this constellation, the electricity that was the subject of the electricity transport and physically delivered to the customer had to be identical to the electricity that was the subject of the electricity supply contract between the producer and the customer. These requirements had to be ensured through structural and technical measures, and additionally, if necessary, through contractual arrangements (e.g., power purchase agreements).

New situation

An expansion of the scope of application within the framework of EU law requirements under the new ElWG is now intended to ensure that the considerable potential of direct lines for the energy transition can be fully exploited. The new regulation proposed in the current draft expressly stipulates that connection to the public grid is not detrimental to the qualification as a direct line, provided that the necessary measures are taken to prevent loop flows. In any case, it must be ensured that system usage fees associated with transport via the public grid as well as levies associated with grid usage, are duly paid for electricity withdrawn from and fed into the grid. In addition, and deviating from the previous legal situation, it is now to be stipulated that the allocation of the metering point for feed-in to a third party is permissible, thereby securing under electricity law the possibility of surplus feed-in by third parties.

Section 50 of the ElWG, which deals with the new regulation of direct supply concepts, reads as follows in the current draft:

Direct lines

“Section 50(1) Power producers are entitled to construct and operate direct lines.

(2) The direct line may also be used for the transport of electrical energy that

1. is drawn from the public grid for the power generation plant’s own use, and

2. is fed into the public grid through the direct line and the facilities of the connected facility, subsidiary, or customers,

provided that the operator of the direct line takes the necessary technical or operational measures that prevent loop flows.

(3) Within the scope of para. 2, a metering point per energy direction must be assigned at the request of the grid user. The metering point for feed-in may be allocated to a third party operating the power generation plant. The specific conditions arising from the operation with two metering points assigned to one measuring device must be regulated contractually with the grid operator. In the event that a grid operator initiates a dunning procedure pursuant to section 30(1) against the generator or the customer supplied via the direct line, the other contracting party must be notified of this immediately by the grid operator. The same applies to breaches of contract and other grounds entitling the grid operator to suspend the execution of the contract or to disconnect as well as to immediate disconnections and the reasons for them.

(4) The operator of the consumption facility is considered a self-supplier, remains the contracting party of the grid operator with regard to network connection and network access, and is responsible to the grid operator for compliance with statutory and contractual provisions at the grid connection point, also with respect to the power generation plant. The operator of the power generation plant and of the direct line is considered a third party, who remains subject to the instructions of the self-supplier.”

And now?

When entering new legal territory, it cannot be predicted with absolute certainty whether authorities and courts will (fully) share the view taken by the project developer in implementing a project under the “new regime.” Especially if, as in this specific case, new regulations use terms that are open to broad interpretation (e.g., the rather vague reference to “necessary technical or operational measures that prevent loop flows”), the planning and support of a project should be carried out with the guidance of legal counsel. We are happy to assist you and look forward to hearing from you.

Disclaimer

This article is for general information only and does not replace legal advice. Haslinger / Nagele Rechtsanwälte GmbH assumes no liability for the content and correctness of this article.