Grid Connection
Contents
Submitting the connection request and DSO offer
Balancing group and supply relationship
Activating metering and starting settlement
Sharing energy within the community
Joining the electricity grid properly and lawfully is a cornerstone of a successful, long-term, and profitable energy community. It ensures that locally generated energy can be used on-site and, when there is surplus, fed into the central system and traded. Grid connection is not only a technical task; it is a complex administrative, legal, and engineering process that requires multiple parties to cooperate.
The steps below show how to connect an energy community to the grid under Hungarian regulation and technical requirements.
MEKH registration
Before starting operation, the community must register with the Hungarian Energy and Public Utility Regulatory Authority (MEKH). Registration allows MEKH to record the community’s legal status and type and to check the basic conditions: non-profit purpose, democratic governance, and local or regional character.
Registration requires submitting the documentation and data set by law, such as the statutes, member list, and the planned form of energy activity.
Preliminary grid assessment
Next comes the preliminary grid assessment, initiated by filing a pre-connection request to the distribution system operator (DSO). The DSO issues a preliminary technical opinion on whether sufficient capacity is available at the planned connection point and under what conditions connection is possible.
This information is critical for further planning and for estimating costs and technical requirements. The result determines whether the project can and should proceed, or whether alternatives are needed.
Submitting the connection request and DSO offer
After the preliminary assessment, the energy community can formally submit its connection request to the DSO. The request must include detailed technical content and the intent to connect, based on which the DSO prepares a connection offer. The offer sets the technical and financial conditions, required grid upgrades, estimated costs, and implementation schedule and deadlines.
This is a key step for feasibility: it reveals the concrete conditions on which the community can decide how to proceed.
Connection costs
Grid connection and use are not free because operating the public network has costs. Three main items make up the overall cost:
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Design and permitting costs. Creating an energy community requires thorough preparation: engineering design, legal framework, and permits from the competent authorities. This often involves several experts—engineers, lawyers, project managers. Costs vary by project size and complexity.
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Connection fee. Payable to the grid operator when a new generating unit connects. It covers the technical works needed for the physical connection.
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Grid reinforcement. If the existing grid capacity is insufficient to safely receive the planned output, the DSO may require upgrades (e.g., transformer replacement, stronger cabling). Depending on regulation and feasibility studies, these costs may fall partly or fully on the community.
Technical compliance
Connecting to the grid requires detailed technical design and the related permitting process. This multi-disciplinary effort typically includes:
- Equipment compliance. Inverters, PV panels, storage units, and other devices must meet applicable Hungarian and EU standards to ensure safe, reliable, regulation-compliant operation on the grid.
- Detailed design documentation. Full technical description of the generating system: layouts, wiring diagrams, equipment list, and connection-point parameters.
- Compliance with grid codes. The system must meet the DSO’s technical and protection requirements so it does not endanger grid stability, safety, or power quality.
- Voltage-level study. Determines at which voltage level the system connects and whether proper feed-in conditions are ensured for safe operation.
- Synchronization plan. Explains how the generating system will synchronize with the transmission/distribution grid frequency and voltage for smooth integration.
- Protection plan. Lists protection devices and settings that detect and handle faults, protecting people, equipment, and the grid.
Grid use agreement
If the community’s system meets current laws and requirements, the community must sign a grid use agreement with the competent DSO. The contract defines the conditions for physical connection, the technical and financial framework for feed-in and offtake, and the fees and obligations related to DSO services.
Permitting procedures
Required permits depend on system size. In Hungary the main categories are:
- Household-scale small power plant (HMKE). Inverter capacity up to 50 kVA. Typically simplified connection and permitting, most often residential PV systems.
- Small power plant. 50 kVA to 0.5 MW. Requires a more detailed permitting process, including environmental assessment, building permit, and submission of technical design documents.
- Power plant. Above 0.5 MW. Full permitting handled by MEKH.
Commissioning
The final phase is technical acceptance and commissioning; without this, the connection cannot go live. A trial run verifies compliance with technical rules and normal operation.
The community must submit all required certificates, reports, and documentation proving full compliance with the DSO’s requirements. The DSO may inspect on site, and only successful acceptance allows actual grid connection and commercial operation.
Balancing group and supply relationship
Because the community both produces and allocates energy among its members, it needs a balancing group to govern this process. The balancing group aligns members’ production and consumption and enables settlement of differences with grid participants. Two options:
- Create its own balancing group. Typical for larger or more mature communities. This brings significant administrative and financial responsibility: the community becomes the balance responsible party, must keep production and consumption in balance, and settles with the TSO (MAVIR).
- Join an existing balancing group. Operated, for example, by a licensed supplier or other balance responsible party. This is simpler and lower risk because the balancing responsibility sits with the chosen partner. Most communities, especially early on, choose this route.
Activating metering and starting settlement
After technical acceptance, connection is complete once the metering system is live and settlement starts. This ensures accurate, certified measurement of produced, consumed, and transited energy. With modern smart meters capable of remote reading, data becomes available online to the DSO, the balance responsible party, and community members.
From this point, official data for grid-use fees, energy offtake and sales, and intra-community settlement are recorded and processed.
Sharing energy within the community
Energy produced by the community can be allocated in several ways, depending on technical options and legal frameworks. The best model depends on local conditions, participants’ technical readiness, and regulation. As regulation evolves, new options open up for fairer and more efficient sharing.
- Virtual net-metering. Widely used. Each member has its own meter while a common system produces the energy. Settlement is based on the net of production and consumption, so everyone benefits without physically wiring between members.
- Gross settlement with proportional allocation. All produced energy is allocated among members based on predefined ratios, regardless of individual consumption. Ratios are typically set by investment contribution or internal agreement.
- Physical sharing. If members are physically interconnected (e.g., within a housing estate or industrial park), energy can flow directly between them. This requires substantial infrastructure and usually special permits.
- Blockchain-based settlement. In some countries, sharing and settlement are automated via smart contracts on a blockchain, enabling decentralized, secure, real-time accounting within the community.
- Peer-to-peer via a service provider. Members share or sell energy to each other through a platform with predefined terms. The provider supplies the technical and legal backbone and handles settlement.
Cost-reduction options
Grid connection brings significant financial and administrative challenges. Consider options that keep the community competitive and efficient from the start:
- Aggregator cooperation. An aggregator is a licensed professional partner contracted to support market participation. Beyond handling energy sales, an aggregator helps optimize production/consumption, provide flexibility services, and ensure regulatory compliance. This removes substantial administrative and financial burden and can speed market entry, improving payback.
- Grants. National and EU funding can reduce costs, especially during investment and grid-connection phases. Grants can cover engineering, metering infrastructure, or community-building costs. Track funding opportunities early and, if needed, use expert support for applications and delivery. A well-planned, grant-supported project can shorten payback and underpin long-term sustainability.
Grid connection is not only a technical step but a mindset shift in energy systems. Local production and community cooperation bring new actors into the energy market who actively shape supply.
Connecting to the grid lets communities move beyond isolated operation and become integral parts of the wider system, creating new partnerships, settlement mechanisms, and roles. In the long run this helps build a more balanced, decentralized, and sustainable energy landscape.
