The Minister Council has approved a Royal Decree-Law containing a series of measures to boost the energy transition to a 100% renewable electric system “in an orderly and swift manner” while also “favoring economic reactivation”. Furthermore, the move seeks to end speculation regarding the application for access to the grid.
The Government’s Fourth Vice President Teresa Ribera explained that the regulation is meant to “activate the levers to promote green investment”, in line with the measures being taken in Europe and Spain.
“Spain is ready for a new industrial revolution such as the green revolution”. This revolution will create jobs, improve economic resilience, reduce dependence on energy imports, and help in the pursuit of cleaner environment and air,” she added.
El #CMin aprueba un RDL con medidas para impulsar la transición energética y avanzar hacia un sistema eléctrico 100% renovable:
— La Moncloa (@desdelamoncloa) June 23, 2020
Four lines of action
The regulation promoted by the Ministry for the Ecological Transition and the Demographic Challenge has four main blocks:
- The norms for access and connection to the grid and creation for a new tender mechanism to provide a predictable and stable framework for renewables.
- Promoting new business models, such as demand aggregation, storage, hybridization, and renewable power regulation in communities.
- Energy efficiency helping make the National Energy Efficiency Fund more flexible.
- Measures to promote activity and employment in response to the COVID-19 crisis.
Guarantees for the energy transition
Article 1 of this new Royal Decree-Law focuses on a regulation for the permits for grid access and connection. Promoters need these two authorizations to commission their renewable plants. The main goal is to ensure that these permits are associated to real and firm projects and prevent speculative behavior that may be the result of the lacking current regulation.
Currently, there are a large amount of applications, for a total of more than 430,000 megawatts (MW) – 320 MW in 2019 and 108 MW in 2020. There are signs of a potential speculative component in many of these requests, given the projects’ scarce maturity.
This situation hinders and raises the price of commissioning solvent projects, set to install around 60,000 MW of renewable capacity in Spain over the next decade, according to the 2021-2030 National Integrated Energy and Climate Plan (PNIEC).
In order to avoid this, the Ministry established a series of successive administrative milestones that applicants must meet so that their permit will not expire. The licensees must meet these requisites within the established time frames. Otherwise, the permits will expire automatically.
— Transición Ecológica y Reto Demográfico (@mitecogob) June 23, 2020
New tender system
Another key aspect to favor the massive installation of clean energy over the next decade is to enable a new renewable tender system. This program should, on the one hand, offer predictability and stability in terms of income and financing to investors of new renewable plants. On the other hand, transfer the savings associated with the incorporation of renewables into the electricity system directly to consumers.
The new framework, which the government will develop, will be the variable on which it will bid the price of energy. The procedures must be oriented to cost efficiency. They can distinguish between different generation technologies based on their technical characteristics, size, level of manageability, location criteria, and technological maturity, among others.
They may also take into account the particularities of the renewable energy communities so that they can compete for access to the remuneration framework on an equal level with other participants, all in accordance with community regulations.
Easy and quick process
The Royal Decree-Law simplifies and streamlines the processing for renewable projects and the associated electrical infrastructure. It eliminates barriers to start-up. Among other issues, it regulates the cases in which the developer will not need to renew certain authorizations if they modify the project in a non-substantial way. The authorization procedure for mobile facilities that connect to the transmission and distribution network is also simplified.
This third set of measures, together with the organization of access and connection and the new auction framework, “will allow boosting investment in new facilities, generating economic activity and employment in the industrial value chain associated with the renewable sector, which is consolidated in Spain “.
New business models
Along the same lines of economic reactivation, the Royal Decree-Law incorporates new business models to Spain’s legal system. These models will be crucial in the energy transition. Moreover, they offer opportunities for economic boost, employment, and improving competitiveness.
This is the case of storage, now regulated through this norm. This will enable to manage and optimize the energy generated in new renewable plants; as well as through hybridization, which enables to combine several technologies – photovoltaic and wind, for instance – in one facility.
Hence, it optimizes the use of existing grids and minimizes environmental impact, by making the most of the plants’ location.
Reducing the impact of the crisis
To facilitate the expansion of EVs, the Royal Decree-Law granted the Declaration of Public Interest to electrical infrastructures associated with high-capacity recharge points (+250 kW). These are critical in allowing ultra-fast recharging stations to open on highways, expressways and freeways, increasing the possibilities for electric mobility.
Seeking to alleviate the effects of the health crisis provoked by the coronavirus and securing the liquidity of the electric system in the short term, the law habilitates the use of surplus revenue to cover the eventual discrepancies between income and costs in the system between 2019 and 2020. This will be implemented through a ministerial order.
Lastly, the creation of the Institute for Fair Transition will facilitate the financing of renewable energy projects that guarantee jobs and economic activity in areas where coal thermal stations are being closed.
For more information, check Energía16