New Generation Energy

New Energy

New Gener Energy

AFTER THE APPROVAL OF THE NEW EU STRATEGIES AND FINANCIALLY SUPPORTED RESOURCES (E.G. GREEN DEAL AND JUST FUND), IT IS ABSOLUTELY CLEAR THAT THE CZECH REPUBLIC NEEDS TO CREATE A BRAND NEW, LONG-TERM DEVELOPMENT AND INVESTMENT STRATEGY. ENERGY IS ONE OF THE KEY AREAS AND IF WE CAN MANAGE IT EFFICIENTLY, WE CAN ALSO BENEFIT FROM THE NEW FINANCIAL ARRANGEMENT. OTHERWISE THE SYSTEM WILL BE UNSUSTAINABLE.

This article represents a proposal of the energy concept with a long-term program that considers Europe´s new direction and its fi nancing, technological progress in energy sector, deployment of digital tools and work organization and cooperation, including projects preparation. It can become an applicable content of the forthcoming Community Energy Program fi nanced from the Modernization fund.

: Vision

Our energy sector lacks a long-term stable vision of development of the whole sector, considering not only „big“, i.e., backbone energy (stable sources and security), but also „small“ energy at the level of municipalities and their groups - the so-called Local Distribution Area (LDA). Moreover, there is no existing connection with other fi elds in the territory (transport, water management, waste, facility management etc.) and with community organization and citizen involvement programs. Representatives from Czech technical university (CVUT) and NGO CZECH.UP compiled the following vision of smart energy, new generation energy, that we present to the broad expert debate.

: Green Deal and the Modernization fund

At fi rst, it is necessary to specify some facts resulting from the agreement signed by the Czech Republic over the National plan of Recovery (Recovery and resilience facility) and Green Deal (the Modernization Fund and Just Transition Fund), which puts pressure on the behaviour of all Member States. Simply said, the EU has set aside huge fi nancial opportunities for green projects of the

ration

Member States, but at the same time it obliges them to repay them, even in the form of a joint debt. The focus of debt liability is thus shifted from the current main payers (Germany and the Nordic countries) to all countries, including the Czech Republic. Which leads to a simple outcome–everybody is obliged to make payments to the fund and to draw from the fund, only those who are prepared are eligible. The aim of this vision is to create jointly produced model projects that we could roll out across the municipalities of the Czech Republic and which would bring all fundamental changes - sustainability, energy savings and effi ciency, but also new products/innovation, money, digital economy and especially rural development, i.e. development of small municipalities.

: CO2 and emission allowances

CO2 and emission allowances should be viewed primarily from the economic point of view. CO2 has become a new currency within the EU strategy with expected infl ation and emission allowances has become a stable commodity that green energy producers can trade with, which also signifi cantly infl uences the view of the energy in municipalities as a potential source of local development funding.

: Threat of the uncontrolled decentralization

Stability and security of the energy network depends on the programme support of smart energy deployment with clear common rules. No unstable green resources can be delivered freely to distribution networks, as it would jeopardize its security and stability. The goal is, on the contrary, to consume the produced energy in the area, either by direct consumption by businesses or households, or a safe storage of the energy in the form of battery storage, water heating or produced hydrogen/gas. Since the threat of uncontrolled decentralization signifi cantly increased with the advent of the new EU green strategy, it is appropriate to build the so-called Local Distribution Area (LDA), i.e. energy units connecting local producers of energy from various sources (RES, gas plants, waste water treatment plants) in the area with local consumers, so that ideally they would not deliver green energy to the main network and they would optimize internal energy systems organized within the Local Distribution Area. This could even release the reserved power supply for the territory and enable establishment of additional consumption sites or promote electromobility. The current incentives for the acquisition of RES are signifi cantly accelerated by the new EU strategy, thus increasing the risk of uncontrolled decentralization, i.e. the acquisition of local RES systems producing green energy and delivering it to the distribution system in an uncontrolled manner. This is one of the reasons why a need arose to design a complex program to support the implementation of LDAs in towns and villages.

New generation Energy

responds strongly to the changes in EU funding and support for RES and addresses carbon neutrality targets and a logical increase in the price of emission allowances. This concept builds on two in the future equivalent and interconnected units:

Mutual cooperation

BACKBONE NETWORK (50%) - STATE

Backbone energy provides a stable wide area power sources, safety and network management. This type of network and related resources requires the purchase of emission allowances.

LOCAL NETWORKS (50%) - MUNICIPALITIES

Municipal and industrial local distribution are abased on local production from RES or other resources, local accumulation, decentralized networks, digital tools etc. This type of network enables production of emission allowances.

: Sustainability, stability and security

The importance of big (backbone) energy in our economies is obvious and forms a stable pillar of the energy system and its security. In the view of EU strategies however, the second pillar of the future Czech energy must also be supported, that is a decentralized controlled local energy system (LDA), standing on the activation of local resources and using massive production of green energy from already built public or private areas. The symbiosis of these two pillars is clearly benefi cial; one produces nationwide stability and security, but also emissions and needs emission allowances, the second one builds on RES, energy consumption optimization, complements energy mix, produces emission allowances and meets commitments to the EU, i.e. it is a source of funding from the EU. Moreover, the second pillar also serves as the transfer of

Investment program Czech Green Deal

in the fi eld of energy could look like this:

After a preparatory fi ve-year phase with a gradual launch is the annual investment at a stable amount of CZK 80-100 billion. It is assumed that after 6 years of investment it is possible to obtain fi nancing for annual investments/co-fi nance from already operating LDAs in the form of revolving. Investment of 650 billion CZK in LDA

Billion CZK

120

100

80

60

40

20

0

2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Years 2021-2030

knowledge closer to local governments, organizations, and citizens. The goal of this vision is to support these two pillars equally, i.e., if the state wants to invest hundreds billion of CZK into the completion of nuclear units, it should invest similar amounts in „Smart local energy“. Furthermore, we need to set up synergies of both the pillars. We will pay the EU funds with the money from emission allowances, the price of which is rising and will continue to rise (nowadays it is approx. 25-30 Euro for 1 ton of CO2), so it is reasonable to support the second pillar, which will even generate money, at least as much as the fi rst one.

In this respect it is necessary to also consider adequate grants and public resources for support of local area networks. How much funding is planned for the backbone network and how much for local networks now?

: Vision 2025

The aim of the whole program is to use the subsidy full-scale by all municipalities so that nationwide innovations, signifi cant energy savings and one energy market could arise. The fi rst year (2021) should be devoted to the preparation of the whole program, which consists of: · Solar register of all municipalities · Promotion of the Czech Green Deal programme · Gaining the interest of municipalities for scalability of investments and planning of the use of EU grants · Processing and issue of the legislatively correct and standard lease contracts between landlord and tenant and its digital form (see below) · Design and launch of pilot model projects (so-called demonstrators) for three types of municipalities – a small municipality (up to 500 inhabitants), a larger municipality (up to 5000 inhabitants) and a large municipality (40 000inhabitants) · Identify the potential of the counselling and training centres network in the form of community co-working centres (see Humpolec town demonstrator), as centres for innovation and knowledge support in the area

: Solar potential of the Czech Republic

Theoretical potential of electric power production from solar energy in the Czech Republic was determined by a study of the Ministry of Local development to approx. 80,000 TWh, which is of course the maximum potential production. The potential of areas for obtaining solar energy in the Czech Republic is 50.2 million m2. The sun shines on average 17 % of the time, i.e. about 1,500 hours per year. Municipal solar power plants, unlike wind power, are very promising sector in the Czech Republic, also regarding innovations enabling higher energy gain (e.g., perovskite solar cells), or use of other areas (e.g., use of new noise walls along urban roads). According to the International Energy Agency (IEA), coronavirus could lead to big changes for global energy sector and solar energy is supposed to become an energy market hegemon. For the success of the program, it is pivotal to build local power plants, i.e., territorially interconnected systems (LDA), not only to address the end users individually, as the Czech Green savings program support snow.

The Czech Republic covers an area of 78,864 km2. In 67% its altitude does not exceed 500 metres above sea level. In areas with heavily polluted atmosphere it is necessary to presume a global radiation

Source: Global Solar Atlas

decrease by 5-10%, in extreme cases up to 20%. On the other hand, 5% global radiation increase can be expected in areas with an altitude of 700 or more up to 2,000 metres above sea level.

Most data on average solar irradiance, its intensity and exposure time from diff erent sources vary widely. For these reasons, all data can be summarized and formulated as follows:

· The total volume of the potential amount of usable energy in the

Czech Republic is 80,000 TWh · In the Czech Republic, about 9501,100 kWh energy falls on 1 m² of horizontal area · Annual number of hours of sunshine ranges from 1331 to 1792 hours (a long-term average from years 1961–90, see CHMU, values including clouds), literature states an average range 1,000–1,550 hours

: Solar register

Solar register is a web tool created ideally from the state resources as a nation wide service for municipalities in the Czech Republic. Operation of the service complements expert assistance for mayors or other interested parties, provided by the Association for innovation of territorial public services CZECH.UP, the network of community coworking centres, regions, unions of municipalities and local action groups. The solar register consists of GIS tool for property records, potential surface area of surfaces/ roofs, and mathematically calculated solar gain per area, which serves both the municipality management and the designers and prospectively also citizens. Solar register, for example, gives an answer about solar gainof a specifi c object parcel number. The service is designed for its users free of charge. Static characteristics of those objects in municipalities that were already selected are the subject and the cost in EU projects proposals that are no longer paid by the EU and therefore it is necessary to provide resources from national resource programmes.

: Czech Green Deal

Proposed new program focuses in the energy sector on building Local Distribution Areas (LDA) mainly for smaller towns. Its goals for 2025 are:

· Involve 200 small municipalities (up to 500 inhabitants) with minimum criteria of 500 m2 of solar areas, or more than 50% of all areas in the municipality in the program · Involve 200 larger municipalities (up to 5,000 inhabitants) with minimum criteria of 5,000 m2 of solar areas,or more than 50% of all areas in the municipality in the program · Involve 50 large municipalities (up to 40,000 inhabitants) with minimum criteria of 50,000 m2 of solar space in the program

The program will support creation of groups of cooperating towns and cities and their cooperation on pilot projects (demonstrators). The program will support building solar sources only on real estate and built-up areas, i.e., buildings owned by the municipality, industrial areas, personally owned buildings or in shared ownership, and parking areas. Solar panels are not to be placed at random, but as a part of an integrated local production, distribution and accumulation system, which can „cover up“ fl uctuations and eff ectively store surpluses. Thus, priority should be given to the projects that design the local distribution areas eff ectively as a whole (connecting objects along the line routes) and which also include others services (replacement of public lighting cabling, heat pipes, High speed internet etc.).

Proposed monitored parameters

· Number of inhabitants in the municipality and the share of inhabitants involved · Number of entities involved · Total number of properties in the municipality and the share of connected properties · Number of m2 of areas involved · Amount of MW/h of green produced energy and the number of emission allowances produced · Number of streets concerned and their proportion in the total number of streets in the municipality (does not apply to municipalities up to 500 inhabitants) · Combined investment with other networks (hot water, high speed

Internet), (yes/no and possibly proportion in the total), see more below · Connection with public lighting renovation (yes/no) · Bonus parameter is also the amount of rainwater in m3 retained from theseareas (applies to public areas)

: Case studies

The program is designed for communities that can choose from two solutions. In the fi rst case, the initiator and possible owner of the solar system is the municipality or a company owned by it; in the second case, the municipality creates a company with a private investor and keeps a share of at least 35% of the company. The state provides two types of incentives under the program. The fi rst of them is a one-time subsidy of 50% for deploymentof the fi rst implementation project (fi rst LDAs), which with its monthly output does not exceed 1 MW. This incentive is designed in order to fulfi l the above Vision 2025, i.e. a massive involvement of Czech municipalities, which means hundreds of projects instead of a couple of megaprojects. This incentive also has the aim of supporting the birth of the LDAs, the expansion and funding of which each municipality would later decide on its own. The second incentive arose in order to motivate municipalities in further spreading of LDAs and thus producing emission allowances and local electricity from RES and at the same time involving large numbers of citizens. Since the solar system owner, responsible for its operation, safety and maintenance (including insurance) is the town, it rents the solar panels from the involved owners. Lease contract, the form of which is stipulated by the program, states not only obligations, but also performance on the part of the tenant (the municipality) to the lessor. In this contract, the municipality agrees to pay rent (or off er reciprocal services) corresponding to the amount of energy produced, with unit price of CZK 2 per kW/h. In order to reduce administration, annual billing model is set up, including the annual breakdown of energy produced. This incentive includes a crucial condition, though. Together with the connection of interested parties to the LDA, the municipality is also obliged to connect the interested parties to high-speed Internet, which means that together with the new cable line it also leads optical cables. The municipality does not operate the service, but leases the optical lines to service providers.

In both cases, we propose to compensate the creation of “demonstrators”, i.e. the pilot project sites verifying a specifi c type of service together with the emergence of management systems, on which other local governments will participate. The “demonstrator” outputs will be further shared and developed. This is also a way to deal with high fragmentation of territorial division in order to utilize full capacity and possibilities of current technologies and organizational systems. The whole LDA concept envisages digitization, at least with remote readings of the energy produced (netmetering). Therefore the proposed state aid is also an investment in digitization and education and encourages superstructure innovations and services.

: Savings, recovery, and business opportunities

Investments in the energy of industrial sites which by their nature may bethe heart of local distribution areas, arenowadays the logical choice of every real householder/businessman. The restoration of old substations, transformers, switchboards or power cables is meaningful itself from the economical point of view. With the example of industrial sites it can be eff ectively shown what the local distribution area consists of.

From a holistic perspective we will individually decide not only about energy systems, but also about infrastructure and availability of local services (e.g., high-speed internet).

Reducing loss

Energy savings of up to 50%, which for manufacturing plant represents annual savings in hundreds of thousands or even millions of CZK, can be achieved by simply optimizing the operation of transformers and replacing the old ones (optimal service life is about 30 years).

Installing a new source

A signifi cant elimination of peak performance of an industrial site can be achieved by a new solar power plant connection point in the outlet cabinet supplemented by, for example, a cogeneration, and thereby signifi cantly reducing payments for today‘s expensive power input. The form of the national distribution system is directly related to it, which can be to a large extent cleared of peak consumption.

Business opportunities

The surpluses produced can be either directly traded, or stored in batteries or in hydrogen, or used to provide local services, such as chargers of self-accumulating electric vehicles/ hydrogen refuelling stations on the border of the manufacturing site cadastre. In addition to the potential of sharing own parking spaces with residents in the given area at night and the carsharing services, recharging services can be off ered, thus speeding up both the deployment of electromobility services and local usage/storage of energy in batteries, which does not need to be bought or owned by the given manufacturer. This will support the emergence of local innovative industry operationally enabled by emerging demand.

: New generation energy

It follows from the foregoing that a simple installation of RES will not lead to the successful outcome and that in any new generation energy project it is necessary to do the following key steps:

· Energy equipment passport (transmission capacity, short circuit resistance, equipment technical

parameters and settings of facility management process) · Renovation of existing energy facilities and distribution (if applicable) · RES installation · Accumulation (hydrogen, VRFB, lithium battery) · Optimization on the side of the final energy consumption · Digitization (digital system, i.e., digital twin and smart grid, remote readings, big data processing,

mathematical models and algorithms network management) · Considering possible investments of other fields (other pipelines management, blue-green infrastructure and microclimate, internet connectivity, Internet of Things connectivity) when setting up projects · Expert support and coordination, creation of exemplary projects (demonstrators)

#David Bárta et al.

Division of municipalities according to advances in approach and strategy in energy

• Vision of the city and energy specifi c plans and projects • Digital registry of energy production, distribution, and consumption in the territory of the city • Energy manager (a city employee, appointed consultant, external expert) • Urban Innovation Consortium (ability to work together outside the fi eld and with other local entities) • Energy purchase

The municipality at this level is preparing for future investments in energy. Its goal is to manage basic activities and achieve political agreement on the direction of the municipality.

BASIC

Energy digital champion who builds on digital twins of production, energy distribution and consumption and can trade the energy produced at the right time or store it in batteries or hydrogen and reduce energy on the consumption side. A key feature of this level is the ability of the municipality to enable its citizens to trade energy.

VERY ADVANCED

• Urban energy distribution system - smart grid consisting of digital twins of energy sources, distribution systems and accumulation, and optimization of energy consumption • Peer2Peer platform - a tool for electricity trading, energy price map, a mobile/web application „save“ for consumers and a mobile/web application „produce/ sell“ for local small producer of RES and other players • Energy surpluses are not sent to the grid but stored (batteries, hydrogen…) • Systematically supports the reduction of energy consumption in buildings and facilities throughout its territory • At least partial netmetering (sectional) • New development is conceived as zero or plus energy balance with emphasis on optimizing energy consumption • There is an energy distribution company which the municipality either owns, has a stake in it, provides a license or leases • Municipality has one urban Local Distribution Area and its transformer station, energy storage and potentially RES

ESTABLISHED

The municipality uses digital technologies, new development or reconstruction are designed with emphasis on carbon neutrality, the municipality has its own company for energy management or a contractual partner with whom it implements pilot local distribution area.

ADVANCED

The municipality has made a progress in building energy ecosystem, off ers consumers a variety of local energy sources and reduces consumption energy throughout its territory. It is able to produce and trade emission allowances and the whole territory is already covered by digital technologies; eff iciency is manifested by the operation of public lighting from its RES sources.

• Municipality operates a local energy resource marketplace • Municipality produces emission allowances • Complete netmetering and Big data for network management • Urban public lighting powered by RES (LDA)