
- From July 1, 2024, surplus electricity produced by photovoltaic modules will be settled based on hourly prices. Instead of adopting a single rate for surplus energy throughout the billing period, rates will vary depending on the hour at which energy was delivered to the network.
- In accordance with the signed contract, the DSO will be able to remotely turn off our photovoltaic installation or limit the production of electricity from renewable energy sources when hourly electricity rates are negative. Which is not a very favorable solution.
- If a renewable energy prosumer does not consent to a change or conclusion of an agreement allowing for limiting the production of electricity from photovoltaics, the seller may apply the market price of electricity for this renewable energy prosumer without taking into account the rule of replacing negative values of this price with a value equal to PLN zero.
- It is worth checking now (before July 1, 2024) our agreement regarding the settlement of electricity from photovoltaics in the net-billing system and possibly not giving written consent or questioning the seller's ability to limit the production of electricity from our photovoltaic installation.
- Another solution is a mandatory investment in energy storage, so as not to give away the electricity produced from our photovoltaic installation for PLN 0, i.e. for the proverbial nothing, and to sell the stored energy at a higher price from 8 p.m. onwards.
Until July 1, 2024, the principle in force was to settle electricity produced from photovoltaics at market monthly prices indicated in RCEm in the net-billing system.
Therefore, the changes do not apply to photovoltaic owners who stayed with the old discount system (net-metering). Now they are even more satisfied with their decision to stick to the discounted settlement of energy from renewable energy sources. Why?
Prosumers forced to switch to an hourly rate for billing energy from photovoltaics in the net-billing system
Well, the Ministry of Energy and Environmental Protection "did not have time" to introduce changes to the RES Act and give prosumers a choice whether they want to settle at hourly rates or remain in monthly settlements for energy produced from photovoltaics.
Unfortunately, unfulfilled promises will further reduce the profitability of electricity production from photovoltaics. Why? Because many prosumers did not have time to prepare for them or did not prepare at all, because they assumed that they would simply be billed monthly for electricity from renewable energy sources in the net-billing system, at least for some time.
Now, unfortunately, they will have to think about increasing their auto consumption at times when the prices of electricity from renewable energy sources are the lowest. Alternatively, they will have to invest in energy storage as soon as possible. Why?
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Hourly billing of electricity from renewable energy sources in net-billing. What is it?
From the beginning of the net-billing system, changes were planned regarding settlements in the form of the introduction of the so-called dynamic tariffs.
It is known that from July 1, 2024, surplus electricity produced by photovoltaic modules will be settled based on hourly prices. Instead of adopting a single rate for surplus energy throughout the billing period, rates will vary depending on the hour at which energy was delivered to the network. The rates will be set on the basis of a dynamic tariff, which will depend on current conditions on the energy market, such as energy demand and its prices at a given time. Therefore, in periods of peak energy demand, the rates will be higher, while in low demand – lower – emphasizes Krzysztof Dziaduszyński, an expert at Esoleo.
The switch from monthly to hourly prices means that the owners of home photovoltaics are billed in the net-billing system based on the amount of electricity fed into the network in a given hour, i.e. the electricity rate at the prices applicable in specific hours on the Day Ahead Market.
But what should a photovoltaic owner do when the hourly prices for settling electricity from renewable energy sources are negative?
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Negative electricity prices in hourly rates in RCE and electricity storage?
The most important thing for prosumers settling accounts is that the rate is determined every day on an hourly basis. Electricity consumption is already settled based on prices given for specific hours throughout the day. The profitability of the new renewable energy accounting system will depend on how much electricity we consume and how much we put into the grid in a given hour.
As we can see from the table below, RCE in hourly rates – from 10:00 a.m. to 4:00 p.m., i.e. for up to 6 hours, negative rates applied to the settlement of electricity produced from renewable energy sources, i.e. from home photovoltaics.
Observing individual days where electricity from photovoltaics is settled at the hourly RCE rate, there are many time intervals when prices are very low or even negative.
It is during these hours that it is best to increase the self-consumption of electricity from photovoltaics so as not to feed it into the grid. It turns out that such an unprofitable investment in energy storage is starting to make more and more sense from the point of view of photovoltaic owners settling in the net-billing system.
However, there are such days and such hours – especially from 18:00 to 24:00, where we will find hourly prices that are even two, three or even four times higher than the monthly RCEm price, which in September 2023 was only PLN 405, PLN 51/MWh (i.e. approx. PLN 0.40/kWh).
If in October this year, hypothetically (only on November 11 this year we will find out what the RCEm is for October), the RCEm price would be, for example, PLN 400/MWh, there are already hours in which the prosumer could get up to PLN 966.59/MWh from the sale.
I think everyone will agree that, according to the table below, it is best to store electricity from photovoltaics during hours when electricity prices are negative. And everyone agrees to consume this surplus or put it into the network when electricity prices reach e.g. PLN 418 or more per MWh at 8 p.m.
It cannot be said that photovoltaics in the net-billing system will be completely unprofitable after July 1, 2024.
It will certainly not be profitable if we provide energy from photovoltaics when it is the least profitable – during peak production hours, and buy electricity after 8 p.m. when hourly prices will be the most expensive.
Example prices for electricity production in the commercial era. Some prices are negative in the hourly RCE rate. How are photovoltaic owners billed after July 1, 2024? Photo. TGE
Okay, but what happens when we transfer electricity from renewable energy sources in the net-billing system to the grid when negative hourly electricity prices apply?
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How will electricity from photovoltaics be billed at an hourly rate?
How will electricity from renewable energy sources be settled legally at negative prices?
Photovoltaic owners settling in the net-billing system do not have to worry that they will have to pay extra for the electricity produced.
They are protected by the Renewable Energy Act, which introduces a number of mechanisms protecting them against negative electricity prices in the hourly RCE settlement. This does not mean that these are financially beneficial solutions.
It is worth checking our agreement regarding the settlement of electricity from photovoltaics in the net-billing system before July 1, 2024, and possibly not express written consent or question the seller's ability to limit the production of electricity from our photovoltaic installation.
This is precisely regulated by the provisions contained in Art. 4b section 12 and 17 of the RES Act. Pursuant to Art. 4b section 12 of this Act:
A renewable energy prosumer who is not also a collective renewable energy prosumer or a virtual renewable energy prosumer, generating electricity in a micro-installation and subject to the settlements referred to in Art. 4 section 1a, may authorize in the comprehensive contract or in the sales contract the seller referred to in Art. 40 section 1, to:
- turning off this micro-installation or limiting the amount of electricity generated in this micro-installation so that this energy is not introduced into the electricity distribution network during the period when the price of electricity referred to in section 4, is negative , and
- install, maintain and use the devices controlling this micro-installation for the purposes referred to in point 1.
This means that the DSO, in accordance with the signed contract, will be able to even remotely turn off our photovoltaic installation when hourly electricity rates are negative. Which is not a very favorable solution.
To put it simply, a prosumer of renewable energy is obliged to cover 50% of the cost of purchasing devices used to control the micro-installation, and the seller billing the prosumer is obliged to cover the second 50%.
Much more important is the provision of the Renewable Energy Act, Article 4b, section 17:
The seller referred to in Art. 40 section 1, may apply to the renewable energy prosumer referred to in section 12, to amend or conclude a comprehensive contract or a sales contract containing the provisions referred to in section 12 points 1 and 2. If the renewable energy prosumer does not consent to the change or conclusion of the contract referred to in the first sentence, the seller referred to in Art. 40 section 1, may apply the market price of electricity referred to in section 2 point 2, for this renewable energy consumer, without taking into account the rule of replacing negative values of this price with a value equal to zero , in order to determine the value of electricity introduced into the electricity distribution network.
Therefore, if there are hours with negative RCE prices, the DSO will have a legal obligation (if it enters into a legal dispute with us) to at least accept the value of electricity purchased from us equal to PLN 0 or limit the intake of electricity into its network.
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If we do not agree to another form of electricity management (e.g. turning off photovoltaics and limiting the production of electricity from renewable energy sources), we can reach an agreement in the net-billing system to purchase electricity from renewable energy sources at the market price per 1 MWh specified in the contract. The seller may not agree to this solution.
What if we enter into a legal dispute with the DSO regarding the settlement of electricity at an hourly rate in the net billing system?
Pursuant to Art. 4b section 18. Act on RES:
If a renewable energy prosumer applies to the Negotiation Coordinator referred to in Art. 31a of the Energy Law , with a request to resolve a dispute regarding the application of the market price of electricity, taking into account section 17, then until the dispute is resolved by this Coordinator by applying the market price of electricity referred to in section 2 point 2, for this renewable energy consumer , the rule of replacing negative values of this price with a value equal to zero is taken into account in order to determine the value of electricity introduced into the electricity distribution network.
Another much better solution is to invest in energy storage, so as not to give away the electricity produced from our photovoltaic installation for the proverbial zero zlotys, i.e. for nothing, and to sell the stored energy at a higher price from 8 p.m. onwards.
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