58 minutes of power for one billion Czech crowns - a good deal for some

Bankwatch's Czech co-ordinator Ondřej Pašek takes time out from EU funds programming documentation digging to describe just one little alarming discovery.

Reading through the Czech Republic's 2014-2020 EU funds programming documents recently, I was mostly concentrating on assessing the main trends and most important budget lines. But by chance my gaze was diverted towards a minor specific target related to the application of 'intelligent measures' in smart grids.

As measuring intelligence is always tricky, and even more so in the case of these power grids, I was interested in trying to grasp the real impact and outcomes the Czech national authorities are looking to achieve in smart grid application – for this, approximately one billion Czech crowns (or 40 million euros) in EU budget money is to be disbursed, with the big energy distributor companies ČEZ and E.on lining up to tap these funds.

And I became a bit surprised.

In the Operational Programme (OP) Enterprise and Innovation for Competitiveness, this allocation is to be used in order to cut the annual average time of interruption in power supply per consumer (so-called SAIDI) by 58 minutes. Of course power interruptions and outages are a nuisance, and the Czech Republic is not the best performer in this regard. Yet is it really the case that the current 4.5 hours of interruptions per year for an average consumer is hindering the competitiveness of Czech enterprises, and will a one hour reduction change something?

Without detailed analysis, it's not easy to answer these questions.

However, this omission points to a much more serious issue: the strategy and the financing goals described in this particular OP point to the need for developing the capacities of the grid in order to deal with intermittent renewable energy sources, to enable more renewables connections and to improve local supply/demand balances. Yet no indicators are laid out in the OP that would enable measurement of how EU public funding will improve the Czech grid's ability to accommodate solar or wind energy.

The Czech Republic is seeking to secure EU funding for smart grids out of the newly established and widely trailed low-carbon envelope, within which 20 percent of the EU's total budget now resides. Yet were European Commission evaluators of OP Enterprise and Innovation for Competitiveness to look in detail at what changes are likely to be realised, they would have to reject use of taxpayers' money for measures that will not help to make the country's grid more equipped for the low-carbon energy generation set out in both the Europe 2020 strategy and the European Regional Development Fund regulation that governs much of the country's new EU spending.

Perhaps, though, they should be pointing to and insisting on the introduction of an indicator more appropriate for measuring the intelligence of the grid: the Hosting capacity for distributed energy resources in distribution grids, recommended by the Commission's own Task Force for Smart Grids.

Without such a tailored indicator, 40 million euros is at risk of being sunk into a very grey area. Indeed, in spite of the fine talk that liberally references 'low-carbon' and 'renewables', when it comes to hard numbers and indicators, the Czech approach is pretty clear – there is no interest in or intention to seriously invest into the development of renewables and smart grids. It's a familiar picture. Our purse-holders have become adept at following EU strategies on paper, while investment money is adroitly pushed in the direction of particular interests.

The upshot, as far as I can see, is that instead of making the grid smart and geared for greater uptake of renewable energy, the distribution companies – in this instance ČEZ and E.on – will receive supposedly low-carbon targeted EU funding for their bottom line business, with the funds simply improving the reliability of services that their customers pay for anyway.

As we come to the finalisation of all the Czech OPs in the coming weeks, it is clearly time to jump on the 'programming geek' bandwagon and check even the smallest details – they can count in the end and are likely to add up, overall, to significant sums.

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