Spain Approves Measures To Regulate Renewables Sector Development And Mobilise Investment

Spain's government's goal is to install 50,000MW by 2030

The Spanish government has approved a Royal Decree-Law with a set of measures to promote an orderly and rapid transition to an energy system based on renewables. There are currently applications for access and connection to the wind and solar projects grid totalling 430,000 MW, while the government’s goal is to install 50,000MW by 2030. It is estimated that 60% of these applications do not have a project behind them. In other words, they only want the access permit and then speculate with it. The government’s objective is to regulate access and connection of new power to the grid with a series of measures to achieve an orderly development of the sector:

1) Establish execution milestones for projects (technical and with deadlines). The licensees must show compliance with each of these milestones – amongst them, obtaining the favourable environmental impact statement and the administrative construction authorisation – within the specified time periods. Otherwise, the permits will automatically expire. Furthermore, where appropriate, the guarantees required when requesting the authorisation will be executed.

2) Provide a way out to be able to cancel the projects without any penalty. Within three months of the regulation coming into force, the project may be renounced, and the guarantees will be returned.

3) Moratorium on new applications for access. They may not be requested until a new regulation on these permits is approved.

4) New auction system. This aims to offer predictability and stability of income, facilitating financing for investors in new renewable plants. A license will be given to whoever offers to produce the cheapest electricity supply.

In the opinion of Bankinter’s experts, “the establishment of clear rules for the development of the sector will allow the ordering of permits according to their viability and how solid they are.” Renta4 analysts also view the plan as favourable for companies in the sector. “It is expected to attract investment that will allow the development of the renewable park to continue, bringing with it significant job creation.”

The new plan will favour the mobilisation of investments worth 90 billion euros and create 107,000-135,000 jobs per year over the next decade. The government maintains that with the orderly development of the sector, 74% of electricity in Spain will be renewable by 2030, reaching 100% by 2050.

The regulation presented by the government allows for the incorporation of new business models such as storage or hybridization, as well as declaring as a public utility the high capacity recharging points. They will speed up the development of ultra-fast recharging stations.

In addition, the figure of the independent energy aggregator has been created for greater market dynamism. Whatsmore, the limit on annual investment over GDP in networks is eliminated so that companies can continue with their investment plans already presented. At the same time, the Energy Efficiency Fund has been extended, which allows for subsidies for the development of energy efficiency.