Implementation of virtual net metering system by Energy Communities

Energy Community is the urban cooperative that operates exclusively in the energy sector. The purpose of the Energy Community, the object of its activity, the framework for its establishment and operation and the financial incentive and measure for its support are defined in Law 4513/2018 “Energy Communities and other provisions”, as in force.

Among the activities that an Energy Community can carry out is the production of electricity from RES or CHP stations. The energy produced may be netted against the energy consumed in installations of members of the Energy Community and vulnerable consumers or citizens living below the poverty line, irrespective of whether or not they are members of the Community. By definition, it follows that such netting is virtual and the production station is not connected to any of the consumption facilities to be netted. Therefore, the scheme of connection of the production station to the Network is that of an independent producer (connection via a new supply).

Production stations can be connected to the LV or the MV and may feature one of the following technologies: photovoltaic stations (with fixed photovoltaic on buildings or on the ground or with ground-based solar tracking systems), biomass/biofuel plants, biogas plants, small hydroelectric plants, CHP plants and small wind turbine plants. In particular, production stations connected to the MV alone may consist of two of the above technologies. The above mentioned stations for virtual net metering are exempted from the obligation to issue a Producer Certificate.

An Energy Community formed by five natural persons living in apartments of the same block of flats, installs a PV station on the roof of the block of flats which is connected to the Network via a new supply. In case the space of the roof is not sufficient, the PV production station may be installed in a remote location with respect to the apartment building. The energy produced is netted with the electrical consumption of the five apartments.

An Energy Community established by three local authorities and their enterprises (Municipal Water Supply and Sewerage Companies), installs a production station within the Region where its headquarters are located, which is connected to the interconnected Network through a new MV supply. The produced energy is netted against the consumed energy of MV and/or LV supplies, with load such as municipal building, water pumps and municipal lighting within the same Region. In addition, the Energy Community shall allocate part of the energy produced to be netted against the household consumption of vulnerable consumers or citizens living below the poverty line within its Region.

In virtual net metering by a self-producer, the same natural/legal person (i.e. the self-producer) owns both the production station and the consumption services involved in the netting. In the case of virtual net metering by an Energy Community, the operator of the station is the Energy Community and the users of the consumption facilities are persons other than the Energy Community (i.e. the natural and/or legal person holding the membership of the Energy Community, as well as vulnerable consumers or citizens living below the poverty line, if the Energy Community includes them in the appendix of the Virtual Net Metering Contract). Due to this difference, different methodologies are followed for the implementation of virtual net metering in each case.

According to the current legislation (Laws 4513/2018, 4546/2018, 4602/2019) and the relevant Ministerial Decision, there is no provision that prohibits an Energy Community from installing more than one production station (of the same or different technology) for the purpose of net metering the produced energy with consumption installations. However, the Ministerial Decision includes a restriction that the same consumption installation is not allowed to participate in more than one virtual net metering system. Therefore, in the case where an Energy Community has more than one production station, in order to implement virtual net metering, each production station of the Energy Community must correspond to a distinct group of consumption installations.
It is noted that each generation station of the Energy Community can be represented by a different Supplier. Therefore, for each production station, the Energy Community will enter into a Virtual Net Metering Contract with the respective Supplier who will represent the station and the consumption installations it corresponds to.

In the interconnected network, in the case of implementing virtual net metering by an Energy Community, it is required that the production station and the consumption installations for net metering must belong to the Region where the Energy Community’s registered office is located. Specifically, for an Energy Community with its registered office in the Region of Attica, the production station may be installed in any Region, provided it is connected to the interconnected network. In Non-Interconnected Islands (NIIs), the production station and the consumption installations for net metering must be within the same electrical system.

In mainland Greece and the interconnected islands (including the small Interconnected System of Crete), the capacity of each production station must not exceed the sum of the agreed power of all the consumption installations for net metering (in kVA) and the maximum limit of 3 MW.
Specifically, for small wind turbine generation stations or dual-technology stations, where one of the technologies is small wind turbines, the total installed capacity of the small wind turbines must not exceed the maximum limit of 60 kW.
Production stations under virtual net metering are exempt from the obligation to obtain a Producer Certificate

In the Non-Interconnected Islands (NIIs), the capacity of the production station may not exceed the sum of the agreed power of all consumption installations to be offset (in kVA) and the limits specified in the table below.

Especially for small wind turbine production stations or stations with two technologies, one of which is small wind turbines, the total installed capacity small wind turbines may not exceed the maximum of 60 kW.

It should be noted that the capacity of the production stations of the Energy Communities with virtual net metering is counted in the respective power margin of each Non-Interconnected Island power system. The power margin per technology and per power system is determined by RAE Decision 616/2016. The same Decision specifies that the margin for photovoltaic plants is allocated exclusively for stations of the Special Roofs Program and for stations with net or virtual net metering (self-producer or Energy Community).

For the stations in Rhodes with an installed capacity exceeding 100 kW and in the rest of the Non-Interconnected Islands with a capacity exceeding 50 kW, the rules of integration and operation provided for in the NII Code (Article 206) apply, and therefore the Operator can impose the limitation of the active power output of these stations or even their shutdown. To this end, these production stations shall be equipped with remote monitoring and control equipment in accordance with the requirements of HEDNO.

The procedure to be followed when applying for the connection of an Energy Community for a production station with virtual net metering is as follows:

• In the Interconnected System and on the island of Crete, for installations connected to the LV Network, the application for connection of PV stations is submitted to the competent local unit of HEDNO (Region), while for PV stations with a capacity exceeding 100kW connected to the MV Network, the application for connection is submitted to the headquarters of the competent Region Department of the HEDNO. Applications for stations featuring other technologies, regardless of the level of connection, are submitted to the Network Users Department (NUD).
• In the Non-interconnected Islands, applications for PV stations, regardless of the level of connection, will be submitted to the competent Region of HEDNO. For other technologies, applications will be submitted to the Islands Management Department.

The connection offer shall be issued within the next two (2) months following the submission of the application.

The offer is valid for a total period of two (2) months from the date of its issuance and includes the description of the works to be carried out by HEDNO for the connection and the total relevant expenditure, as well as the works to be undertaken by the interested party for the implementation of the connection. Within the aforementioned period, the interested party must submit its acceptance in writing. Any failure to do so within the two-month period will result in the automatic termination of the connection offer.

At the same time as the acceptance of the final offer, the interested party submits an application for the signing of the Connection Contract to the competent unit of HEDNO (Area/Region/NUD), providing the additional supporting documents required for this stage. The competent unit notifies the interested party of the procedure for payment of the connection fee and signing of the Connection Contract.

The conditions for inclusion of consumption supplies in the virtual net metering should be met both upon signing the Energy Community Virtual Net Metering Contract and throughout its duration. The conditions are controlled by the Supplier and are as follows:

•  Completeness and accuracy of the data of supplies declared by the Energy Community.
• They are located in the same Region as the headquarters of the Energy Community, belong to the same power system (NII) and to the distribution network of the same Operator.
• All supplies are represented by the same Supplier as the supply to which the production station is connected to the Network. Particularly in the case of virtual net metering by the Energy Community in the Non-interconnected Islands, the supply of the production station and/or the corresponding consumption supplies to be netted may be represented by different suppliers.
• If the production station is connected to the LV then it is mandatory that all the supplies to be netted should be connected to the LV. There is no corresponding restriction if the station is connected to the MV. The supplies to be netted can be connected either to the MV or the LV.
• They do not participate in any other netting scheme (“Special Roofs Program”, net or virtual net metering).
• The terms and conditions of the Supply Contracts and Connection Contract of the services to be netted are observed (e.g. the case of electricity theft implies a violation of the terms and conditions of the Contracts).
• The Supply Contract has not been terminated for any reason (e.g. due to termination of representation by the Supplier, termination of the contract or voluntary termination).
• Any other conditions in the effective legal framework, such as the inclusion in the Environmental Residential Tariff, the right to join the virtual net metering is lost (Ministerial Decision ΥΠΕΝ/ΥΠΡΓ/26359/4101 – GG Β’ 1936/30.5.2018).

The Supplier is not obliged to check whether the supplies to be netted actually belong to members of the Community or whether the other beneficiaries are vulnerable consumers or citizens below the poverty line. Moreover, Law 4513/2018 and the relevant Ministerial Decision do not specify the conditions that must be met in order for a consumer to be considered a “citizen living below the poverty line”. The responsibility for the inclusion of and exclusion from the supplies in the virtual net metering lies with the Energy Community.

It should be noted that the Ministerial Decision regulates the contractual relationship of the Energy Community with the Supplier and the Network Operator and not the relationship of the Energy Community with the members or other beneficiaries whose supplies are subject to virtual net metering.

The Energy Community signs a Connection Contract with HEDNO for the production station and a Virtual Net Metering Contract with the Supplier of its choice (hereinafter referred to as the Netting Contract).

Step 1: The Energy Community submits a statement to the Supplier with the supplies that are included in the net metering. The declaration shall be attached to the Netting Contract, notified to HEDNO and shall include at least: a) the supply numbers of the consumptions, the level of each supply and its address; b) the consumer of each supply (VAT number and name or surname); and c) the percentage by which the energy injected into the Network is offset for each supply.
Step 2: HEDNO (after activating the connection of the production station with the Network) counts the energy injected into the Network, according to the metering cycle of the supply, and sends the readings to the Supplier.

Step 3: The Supplier, after verifying the eligibility of the declared consumption supplies for inclusion in the virtual net metering, allocates the injected energy to each supply based on the percentage declared by the Energy Community, in order to be offset against the consumption of each supply, whenever it is metered.

Step 4: HEDNO counts the energy consumed by the declared supplies, following the existing metering cycle, and sends the readings to the Supplier.

Step 5: For each metered supply and provided that the conditions for inclusion continue to apply, the Supplier shall net meter the energy allocated to the supply in question in Step 3 against the consumed energy of the supply, as known from the application of virtual net metering in self-producers.

The procedure repeats from Step 2 unless the Energy Community wishes to modify the supplies to be offset, in which case the procedure repeats from Step 1.

The procedure shall be completed by termination of the Netting Contract. The Netting Contract shall be automatically terminated (a) upon expiry of twenty-five (25) years, (b) in the event of a change of supplier of the production station, (c) in the event of termination of the Supply Contract or the Connection Contract of the production station, for any reason whatsoever, and (d) in the event of termination of the Energy Community in accordance with par. 1 of Article 9 of Law 4513/2018. Finally, the termination of the Netting Contract shall occur upon termination.

In case the production station is connected to the MV and one or more consumption supplies are connected to the LV then Step 3 is modified as follows:

Step 3: The Supplier, after verifying the eligibility of the declared consumption supplies for inclusion in the virtual net metering, allocates the injected energy to each supply based on the percentage declared by the Energy Community, and in case the supply is connected to the LV, the Supplier reduces energy corresponding to it from the MV level to the LV level.

The reduction coefficient is calculated annually by HEDNO on the basis of the estimation study approved by RAE on the loss factors of the Network. Only the technical losses of the LV Network are taken into account for the calculation. Indicatively, for the calculation of the reduction factor to be applied in the year 2019, the value of the factor ΣΠΑ_ΧΤ= 4.34% was used, which was calculated based on the data of the 2018 study, after considering zero non-technical losses. The reduction factor was found to be equal to 95.84%, i.e. 1000 kWh injected from a production station in the MV is equivalent to 958 kWh in the LV.

The reduction factor shall be applied to the Interconnected Network. The same coefficient will be applied to the NII systems until the RAE Decision on the determination of the loss factor in each system is issued.

The declaration of the supplies to be netted shall be attached to the Netting Contract entered into by the Energy Community with the Supplier of its choice. The Energy Community reserves the right at any time to amend the Netting Contract as set out in the Appendix by submitting a new declaration of supplies to the Supplier. The declaration shall be duly notified to HEDNO by the Energy Community.

If the declaration is submitted to the Supplier in time, the Supplier shall take the declaration into account for the purpose of apportioning the injected energy of the next metering cycle of the production station. The point in time up to which the declaration is considered to have been submitted on time shall be determined by the Supplier and may not be later than seven (7) days before the next metering cycle of the production station.

The method of communication for amending this declaration shall be determined by the Supplier concerned. Therefore, the Supplier will determine whether the communication with the Energy Community will be done by paper or electronic mail or whether a form of electronic platform accessible by the Energy Community will be used to modify the declaration data.

If at the time of signing the Netting Contract the Supplier finds that conditions for inclusion of a supply to be netted are not met, then it shall request the Energy Community to amend the declaration of supplies. The supply that does not qualify for inclusion should either be replaced or removed from the declaration with a simultaneous modification of the sharing rates of the remaining supplies so that the energy injected into the Network by the production station is fully available for netting, i.e. the sharing rate should add up to 100%.

During the time the Netting Contract is in force, if the Supplier determines that one or more of the services to be netted have lost the right to be included, then it shall not allocate energy to these services and the energy that was allocated to them shall remain as surplus energy in the Energy Community and shall be added to the injected energy of the next metering cycle of the production station. Therefore, the netting process proceeds normally for the remaining supplies that continue to meet the integration conditions.

It is recommended that the Energy Community informs its members and other supplies of the conditions of inclusion so that there is no case of unintentional violation of the conditions which would result in exclusion of their supplies from the group of supplies participating in the virtual net metering. As an example, the members of the Energy Community and other supplies, should be informed that they should not change their Supplier, that they should be consistent in their financial obligations to the Supplier and that in the event of a “succession” (change of user in the supply) they should inform the Energy Community in a timely manner so that, if approved, the Energy Community may proceed to amend the supply declaration with respect to the user element of the supply. It should also be noted that in the case of an exclusion of a supply, energy that has been allocated to the supply and has not yet been netted against the co-metered energy of the supply is returned to the Energy Community, i.e. it is added to the injected energy of the next metering cycle of the production station in order to be allocated to the remaining consumption supplies that continue to meet the integration requirements.

In addition, the members and other supplies must agree that the Energy Community can be informed by the Supplier for the energy netted and any surplus remaining in their supplies.

Finally, members and other supplies should be aware that the Supplier can impose a fixed charge on each of their supplies that are included in the net metering up to 0.25 € per month, to cover the administrative costs.

For the supplies that are subject to virtual net metering, the Supply Contract with the Supplier or the Connection Contract with HEDNO does not change, as the way these supplies are connected to the Network does not change. Furthermore, the metering cycle of the supplies is not modified.

With the inclusion of a supply in the virtual net metering by an Energy Community, the regulated charges (ΧΧΔ, ΧΧΣ, ΕΤΜΕΑΡ, ΥΚΩ) do not change. The benefit to the consumer results from the reduced charge on the competitive part of the bill (commission charge).

The number of supplies to be netted can be smaller than the number of members of the Energy Community (as not all members are obliged to include their supplies in the virtual net metering), or larger (if for example the Energy Community chooses to include more than one supply of the same member or in case it includes supplies of vulnerable consumers or citizens below the poverty line).