CATALYST – Analysis of Royal Decree-Law 23/2020, of 23 June: its impact on renewable energy (Spain)

On 24 June Spain’s Official State Journal (Boletín Oficial del Estado) published Royal Decree-law 23/2020, of 23 June, which approves measures in relation to energy and other areas to stimulate economic recovery (“RDL 23/2020”). RDL 23/2020 entered into force on 25 June 2020, although it has yet to receive final approval from Spanish Congress.

RDL 23/2020 contains measures that affect a number of different sectors, but it primarily contains provisions for the electricity sector, with a particular focus on the regulations governing renewable energy generation facilities.

Some of the measures (such as the design of the new renewable energy auctions system, the regulation of hybridisation and storage and independent aggregation) were already included in the Bill on Climate Change and Energy Transition (Proyecto de Ley de Cambio Climático y Transición Energética) (the “Climate Change Bill”) , which was sent to Spanish Congress on 19 May (which we covered in another e-bulletin - see here). The approval of those measures in RDL 23/2020 means that they can be brought into effect immediately. This, in turn, means that regulations may be passed as necessary to implement them, which would otherwise have had to await completion of the parliamentary process in respect of the Climate Change Bill. Indeed, on 26 June, a draft royal decree to regulate the new remunerative framework for renewable energy facilities was put in motion with the opening of a public consultation process and a report sent to the Spanish National Markets and Competition Commission (Comisión Nacional de los Mercados y la Competencia, or “CNMC”). The aim is that the draft royal decree (which will be analysed in a separate e-bulletin) will be approved in the coming months, so that new auctions can be held in the latter half of the year.

Other measures are completely new: for example, provisions on the expiry of grid access permits awarded since 27 December 2013 or provisions that aim to simplify facility authorisation processes or that do away with the need to obtain authorisation for certain modifications to facilities that have been authorised or that are in the midst of a permitting process. The essential contents of the energy-related provisions are analysed here.

• Regulation and optimisation of access for renewable energy generation: hybridisation 
• Approval of a new framework of remuneration and auctions for renewable energy generation facilities: inclusion of a provision on new auctions from the Climate Change Bill 
• Grid access and connection permits 
• Application of the accumulated surplus to temporary deficits and deviations in 2019 and 2020 
• Simplification of authorisation procedures and removal of the requirement to obtain authorisation 
• New concepts: storage, aggregation and renewable energy communities 
• Investments in transmission and distribution networks: modifications to planning and increased limits of investment eligible to remuneration 
• Review of the Ro applicable during the state of emergency to facilities receiving the specific remuneration and whose costs are essentially dependent on fuel prices 
• Measure related to energy efficiency

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