Developments in renewable energy and storage during January 2024

January 2024 witnessed significant legislative changes and procedural updates in Spain with regards to the latest advancements in renewable energy and storage. From extended administrative milestones to revamped access procedures and taxation adjustments, this comprehensive overview delves into the evolving landscape of sustainable energy initiatives, offering insights into regulatory shifts, participation possibilities, and emerging opportunities in the renewable energy sector.

1. By agreement of the Spanish Parliament on January 10, 2024, Royal Decree-Law 8/2023 of December 27 has been validated. This decree-law adopts measures to address the economic and social consequences arising from conflicts in Ukraine and the Middle East, as well as to mitigate the effects of drought. The main novelties in the field of renewable energy production installations are as follows:

A) Access and Connection to the Grid.

• Extension of the administrative milestones established in Royal Decree-Law 23/2020 for installations with access and connection permits obtained after December 31, 2017, and before the entry into force of Royal Decree-Law 8/2023 (December 29, 2023), is extended to 49 months (i.e., an additional 6 months).
• Once the administrative construction authorization is obtained, promoters may request an extension of the deadline to comply with the accreditation of obtaining the administrative exploitation authorization for a total maximum period of 8 years (9 years for hydraulic pumping and offshore wind installations). This request must be submitted within 3 months from December 29, 2023 (or from obtaining the administrative construction authorization if later).
• The requirement for accreditation of the administrative exploitation authorization may also be considered fulfilled when the promoter proves that, at the relevant time, they have timely and properly documented to the connecting network operator, having obtained the provisional exploitation authorization for tests, provided that it includes both the generating installation and the evacuation infrastructure up to at least the last 100 meters to the transport or distribution substation where its connection point is located (in cases requiring connection to substation positions).

B) Storage

• There is currently a public information procedure for the new version of the circular project establishing the methodology and conditions for access and connection to the transport and distribution networks of electricity demand facilities before the CNMC.
• Contests are planned to allocate access capacity at transport nodes with a voltage equal to or greater than 220kV. o These contests will be activated upon receipt by the network manager of a demand access request, and they must publish this fact on their website for a period of one month, allowing the submission of other requests, which, if incompatible, will result in the calling of a contest. However, there is no set deadline for the Administration to proceed with such a call. o A new guarantee of €20/kW is established, but only when it concerns an installation that does not inject into the grid. In cases where injection is possible, a guarantee of €40/kW is required. The need to provide this guarantee is imposed retroactively for access and connection permits already obtained but that have not yet resulted in the corresponding access contract for at least 50% of the granted capacity. Nothing is indicated regarding pending applications. o Additional points will be granted to projects that have an environmental impact statement and do not have access and connection permits.

C) Water Concessions (including reversible hydraulics): The general preference order for water concessions is changed, placing hydraulic energy storage third and establishing its priority over other industrial uses.

D) Self-consumption:

• Release of 10% capacity for self-consumption at nodes reserved for contests for two years (not applicable in nodes where capacity has already been released under Royal Decree-Law 6/2022). The allocation will be made following the general criterion of temporal precedence.
• In the case of demand access applications for self-consumption connected to generation positions on the transport network with previously granted generation access permits, the demand access permit cannot be granted for a capacity exceeding 50% of the access capacity of the generation installation.

E) Extension of Operational Notification Deadlines

• The extension until October 2, 2024, has been granted for electricity generation modules with a Limited Operational Notification (LON) to obtain a Definitive Operational Notification (FON).
• As of February 2, no new LONs can be issued, and small generation installations that have obtained the LON and are registered in the corresponding registry are exempt from obtaining the FON.

2. Fair Transition Nodes: The procedures for public information are currently open to submit objections to the terms of the access contest for renewable installations at the Fair Transition Nodes La Pereda 220 kV, Meirama 220 kV, and Narcea 400 kV, as well as the regulatory order for the public contest for the concession of access capacity to the electric power grid at the Lancha 220 kV node.
    
3. Taxation

• The Electricity Production Value Tax is gradually reinstated.
• Certain electricity supplies (contracted power equal to or less than 10 kW and recipients of the social bonus) are subject to the reduced rate of 10% from January 1 to December 31, 2024.
• Natural gas is subject to the reduced rate of 10% from January 1 to March 31, 2024.
• Pellets, briquettes, and firewood, ecological substitutes for natural gas from biomass intended for heating systems, are subject to the reduced rate of 10% from January 1 to June 30, 2024.