The Government authorizes the urgent processing of two royal decrees to activate the deployment of renewable energies in Spain

On the one hand, the processing of the Royal Decree that regulates the new system of renewable auctions, whose project is in public information, is streamlined. The objective of this standard is to provide security and income stability to investors, and allows consumers to pass on the savings involved in renewable production, the cheapest source of generation.

On the other hand, the Government authorizes the urgent processing of the draft Royal Decree that will regulate the new criteria for granting access and connection permits, guaranteeing that they are granted to firm and solvent projects.

These rules will provide certainty and legal certainty to the Spanish energy framework, preparing it for the installation of some 60 gigawatts of renewable energy in the next decade. This massive deployment will have a driving effect on the industrial value chain and the country’s competitiveness, generating economic activity and sustainable employment.

July 7, 2020- The Council of Ministers, at the proposal of the Ministry of Just Transition and Demographic Challenge (MITECO), has authorized the urgent processing of the royal decrees that regulate the new regime of renewable energy auctions and the procedure and general criteria of access and connection to the electricity transmission and distribution networks. With this, the Government speeds up the processing of two regulations, which contribute to providing certainty and legal certainty to the energy regulatory framework, preparing it for the orderly deployment of renewable energies that the Spanish energy system will experience in the coming years. This massive renewable penetration – some 60 are planned until 2030 – will have a driving effect on the industrial value chain and the country’s competitiveness, generating economic activity and sustainable employment, in the context of the economic reactivation after COVID-19.

The Royal Decree regulating the economic regime of renewable energies for future electricity generation facilities, which keeps its public information period open until July 17, specifies the new auction system to facilitate the orderly penetration of renewables in the Spanish energy system. This system offers predictability and income stability to investors of new renewable plants and, at the same time, allows to transfer directly to consumers the savings of greater renewable generation, given that it is the cheapest source of energy today.

The new auctions, which will be convened by ministerial order once the Royal Decree is approved, may use, as an auctioned product, the energy that the new plant has to deliver to the system, the installed power or a combination of both concepts. In any case, the participants will bid by offering the price they are willing to charge for the energy generated by the installation.
In the case of the second Royal Decree regulating the procedure and general criteria for access and connection to electricity transmission and distribution networks, the urgency of its processing responds to the mandate formulated by Royal Decree-Law 23/2020, of 23 June, approving measures in the field of energy and in other areas for economic reactivation. This regulation has addressed the current situation of access and connection permits granted in order to avoid movements of a speculative nature, which hinder and make firm and solvent renewable projects more expensive.

In addition to establishing temporary milestones that, if not met, cause the expiration of the permits already granted, the Royal Decree-Law established a moratorium so that new access and connection permits cannot be awarded until a new regulation on this type of authorizations is approved, which must link its concession to the firmness of the project. To this end, the regulation gives a period of three months to both the Government and the National Market and Competition Commission (CNMC), both with competence in this area. In order to comply with this deadline, the Council of Ministers authorizes the urgent processing of the Royal Decree that MITECO is already preparing on this matter and that will be submitted to public exhibition, for the reception of contributions, soon.

EUROPEAN CONNECTION NETWORK CODES

The Council of Ministers, on the other hand, has approved today the Royal Decree regulating aspects necessary for the implementation of the so-called connection network codes (CCRR), a set of European Union Regulations that establish the minimum technical requirements that certain energy generation and demand facilities must meet to connect to the electricity grid.

The aforementioned EU Regulations are directly applicable in the Spanish system. However, some of the technical requirements set out therein are not fully defined (open requirements) and their implementation requires that they be approved by the Member State on a proposal from the system operators.

For the definition of these open requirements, several working groups were created under the coordination of the electricity system operator, in which the network operators, representatives of the agents of the sector, MITECO and the CNMC intervened. In addition to defining these technical requirements, the work of these groups highlighted the need to specify some aspects that are not fully detailed in the EU Regulations. The legislation adopted today emanates from this conclusion and therefore serves to define these specific issues. Additionally, it serves to approve the power thresholds and the voltage level that define the groups established in the CCRR in which the generation plants that are connected must be included. Depending on the group in which each plant is integrated, it must meet different requirements, more demanding at higher power and voltage level.

This Royal Decree must subsequently be complemented by the ministerial order that defines the open technical requirements and that has been processed simultaneously.

On the other hand, the Royal Decree also makes technical adjustments to the regulations applicable to non-peninsular territories, given the special characteristics of their energy systems. Among other issues, greater flexibility is provided in the production dispatch to optimize the use of the groups that are subject to operating limitations by environmental regulations, maximizing the security of supply and respecting in any case the environmental protection.