Electricity grid connection conditions for companies – what is the difference to individuals?

Article 7 of the Energy Law is one of the key provisions of the Energy Law in terms of ensuring market access for users of the electricity system. In accordance with Article 7(1) of the Energy Law ‘An energy undertaking engaged in the transmission or distribution of gaseous fuels or energy shall be obliged to conclude a network connection agreement with entities applying for connection to the network, on the basis of equal treatment and giving priority to the connection of renewable energy installations, provided that the technical and economic conditions for grid connection and the supply of such fuels or energy exist, and the party requesting the agreement meets the conditions for grid connection and supply; however, in the case of connecting an electricity generation source or storage facility, the connection capacity of that source or storage facility may be less than or equal to its installed electrical capacity.”

Importantly, the above provision does not classify or distinguish between entities applying for connection to the distribution network, in particular with regard to whether a given entity is a natural person, a legal person or an organisational unit without legal personality to which the Act grants legal capacity, nor does it distinguish based on whether the entity is a consumer or carries out economic activity. The Energy Law, however, classifies entities applying for connection to the network according to the following criteria:

• network parameters;
• quality standards for gas fuels or energy;
• the type and size of the equipment, installations and networks to be connected.

Article 7 of the Energy Law imposes a public law obligation on undertakings engaged in the transmission or distribution of gas fuels or energy to conclude a grid connection agreement. It is irrelevant whether the application for the issuance of connection conditions and the conclusion of a connection agreement is made by a consumer, i.e. an entity intending to draw energy from the electricity distribution network, or whether such an application is made by an entity intending to carry out economic activity consisting of the generation of electricity and its injection into the distribution system.

Article 7 of the Energy Law imposes a statutory obligation on energy companies engaged in the transmission or distribution of gas or electricity to conclude a distribution network connection agreement “with entities applying for connection”.

This means that the obligation to conclude a grid connection agreement may arise both when an application for connection terms is submitted by an energy consumer and when it is submitted by an investor intending to carry out business activities consisting, for example, of generating electricity and feeding the generated electricity into the distribution network of a given distribution system operator. Both categories of entities have equal rights to request connection to the grid, which follows directly from the wording of Article 7(1) of the Energy Law, as in this provision the legislator uses the term ‘entity applying for connection to the grid’ rather than ‘consumer’. The same view is also held in legal doctrine, according to which the right of all entities to be connected to the grid constitutes the foundation of the electricity system’s operation.

Article 7(1) and (1a) of the Energy Law grant ‘priority’ in concluding a contract for connection to the distribution network to renewable energy installations. The relevant literature emphasises that this means an entity wishing to connect a renewable energy installation takes precedence over an entity wishing to connect another installation, in a situation where simultaneous connection of both would be impossible (see: P. Lissoń, J. Pokrzywniak, Act on Renewable Energy Sources, 2016, commentary on Article 179). It should be noted that the priority treatment of renewable energy installations stems from the need to implement Directive 2009/28/EC of 23 April 2009 on the promotion of the use of energy from renewable sources, amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC.

It should be emphasised that the obligation to conclude a connection agreement, which applies to energy companies engaged in the transmission or distribution of gaseous fuels or energy with an entity applying for connection to the electricity distribution network, exists only if the entity applying for connection to the network meets the requirements set out in Article 7(1) of the Directive. These are:

• the existence of technical conditions for connection to the network and the supply of fuels or energy;
• the existence of economic conditions for connection to the network and the supply of fuels or energy;
• the entity requesting the conclusion of a contract meets the conditions for connection to the network and for supply.

In addition to the above, it should be noted that, in accordance with Article 7(3) of the Energy Law, a further condition is that the entity applying for connection to the distribution network must hold a legal title to use the property, facility or premises to which gas or energy is to be supplied.

The existence of technical conditions for connection to the network is one of the conditions set out in Article 7(1) of the Energy Law. The Energy Law does not define what constitutes the ‘existence of technical conditions for connection to the network’, which potentially implies that energy companies are free to interpret this concept as they see fit. Undoubtedly, the technical conditions for connection to the network relate to the possibility of connecting to and receiving energy via the existing network.

The existence of economic conditions for grid connection and the supply of fuel or energy is a further condition that must be met for the obligation to conclude a grid connection agreement to arise on the part of an energy company engaged in the transmission or distribution of energy.

Similarly to the technical conditions for connection, the economic conditions for grid connection have not been defined by the Energy Law, which means that it is incumbent upon the energy company to demonstrate their existence. The Supreme Court, in its Judgment of 22 May 2014, ref. no. III SK 51/13, LEX No. 1738509, ruled that both technical and economic conditions should be linked to the individual characteristics of a specific facility. Economic conditions relate to situations requiring significant expenditure on connection, e.g. due to a great distance from the distribution network.

It should be noted here that Article 7(9) of the Energy Law provides for a provision enabling an entity applying for connection to the network to conclude a connection agreement in a situation where the energy company refuses connection to the network due to a lack of economic conditions. According to its wording,“Where an energy company refuses to connect to the network due to the lack of economic conditions referred to in paragraph 1, it may conclude a network connection agreement, setting in that agreement a connection fee in an amount agreed with the entity applying for connection to the network. The provisions of paragraph 8(1) and (2) and paragraph 8(3)(a) shall not apply.” The provisions of Article 7(8)(1) and (2) and (3)(a) of the Energy Law concern the rules for determining the grid connection fee. The regulation of the so-called ‘commercial connection agreement’ allows the amount of the connection fee to be determined in any manner, and thus in a manner exceeding the framework regulated by the Energy Law.

Pursuant to § 3(1) of the Regulation of the Minister of Climate and Environment of 22 March 2023 on the detailed conditions for the operation of the electricity system, entities applying for connection to the grid are divided into groups according to the following criteria:

• Connection Group I – entities whose equipment, installations or networks are connected directly to a network with a rated voltage higher than 110 kV;
• Connection Group II – entities whose equipment, installations or networks are connected directly to a network with a rated voltage of 110 kV;
• Connection group III – entities whose equipment, installations or networks are connected directly to a network with a rated voltage higher than 1 kV but lower than 110 kV;
• Connection group IV – entities whose equipment, installations or networks are connected directly to a network with a rated voltage of 1 kV or less and a connection capacity greater than 40 kW;
• Connection Group V – entities whose equipment, installations or networks are connected directly to a network with a rated voltage of 1 kV or less and a connection capacity of no more than 40 kW;
• Connection group VI – entities whose equipment, installations or networks are connected to the network via a temporary connection, which will, in accordance with the terms of the network connection agreement, be replaced by a permanent connection, or entities whose equipment, installations or networks are connected to the network for a fixed period, but not exceeding one year.

Facilities belonging to entities such as residential buildings, housing estates, small service establishments, etc. are connected to the distribution network with a voltage of up to 1 kV. These are mass – typical connections to the low-voltage network. Medium-voltage networks (networks with a voltage above 1 kV and below 110 kV) connect medium-sized industrial plants, large service establishments, shopping centres, etc., whilst the 110 kV network is connected to large industrial plants with installed equipment capacity in the range of several or several dozen megawatts.

In summary, it should be noted that the Energy Law, as well as other legal regulations, under the current legal framework do not introduce any differences regarding the issuance of connection conditions and the conclusion of a contract for connection to the distribution network for individuals and businesses. Both individuals and businesses, by which are meant: natural persons conducting sole proprietorships, legal persons and organisational units without legal personality but possessing legal capacity – have equivalent rights regarding the request for connection to the grid, as is clear from the wording of Article 7(1) of the Energy Law, which forms the foundation of the electricity system’s operation.

Author

Adrian Łukasik

Radca prawny, Senior Associate

He gained his professional experience in one of Lublin's renowned law firms, dealing with civil and business law in its broadest sense. At the law firm Hewelt Wojnowski i Wspólnicy spółka komandytowa, he deals on a daily basis with current counseling in the field of business and the development of corporate documentation of companies, such as. Company agreements, bylaws of company bodies, agreements regulating relations between shareholders, resolutions of company bodies, M&A transactions. In addition to…

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