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Spain Update: Energy and contracting measures introduced by Royal Decree Law
08/11/2022On August 2, 2022, Royal Decree Law 14/2022, of August 1, on economic sustainability measures in the field of transport, on scholarships and study grants, as well as savings, energy efficiency and reduction of energy dependence on natural gas, was published in BOE nº 184.
It is a new “catch-all” rule, which includes a battery of measures that affect different areas of social, economic and business life to try to mitigate the difficulties that the Spanish economy is going through as a result of the war in Ukraine, the health crisis, the extraordinary rise in the prices of certain raw materials, intermediate goods, energy and fuels, high volatility in electricity prices and difficulties in the supply of certain essential products and materials.
In this document we make a brief analysis of the measures contained in this royal decree law in relation to the energy sector and public procurement (the latter related to energy improvements, as will be seen), contained, mainly, in Title V of the standard.
Measures to promote energy saving and efficiency
The first set of measures stipulated in Royal Decree Law 14/2022 refers to the modification and reinforcement of certain obligations contained in the Regulation of Thermal Installations in Buildings (“RITE”), with entry into force seven calendar days after the publication of the Royal Decree Law and valid until November 1, 2023, only for buildings and premises within the scope of application of RITE IT 3.8 (buildings and premises for administrative, commercial use, and public premises for cultural use, shows, catering and transport).
Specifically:
(i) The limitation of heating and cooling temperatures is modified to 19 and 27ºC, respectively.
(ii) The venues must inform of the application measures, through the use of informative posters or screens visible from the entrance or access to the buildings.
(iii) Enclosures and premises with access from the street must have a door closing system to prevent doors from remaining permanently open (for example, the use of a self-closing arm).
(iv) The above obligations of temperature and closing of doors will also apply to buildings and premises that are heated with renewable energy, which until now were exempt from these obligations.
(v) The lighting of shop windows and public buildings must be switched off from 10 p.m.
(vi) In those buildings required to carry out energy performance inspection whose last inspection is prior to January 1, 2021, a new inspection must be carried out before December 1, 2022.
Measures to promote the electrification and deployment of renewable energy
A) Promotion of electrification and self-consumption
Royal Decree Law 14/2022 establishes new measures to facilitate the penetration of renewable generation and promote self-consumption.
In line with Royal Decree Law 29/2021, of December 21, which introduced the obligation for electricity distributors to maintain specific information channels for the files of self-consumption facilities and a specific sanctioning regime for non-compliance, Royal Decree Law 14/2022 goes a step further in the burden of responsibilities of the distributor and thus:
(i) A maximum period of two months is established for the activation of self-consumption facilities with surplus power of less than 100 kW and connected to low voltage. This activation time will compute from the receipt by the distributor of the necessary documentation to modify the access contract, that is, from the communication of the electrical installation certificate (CIE) by the Autonomous Community in compliance with article 8 of Royal Decree 244/2019, of April 5, which regulates the administrative conditions, techniques and economics of self-consumption of electrical energy, and until the moment in which the communication of the start of discharge to the network is received and this is included in the billing.
(ii) If this deadline is missed for reasons not attributable to the consumer or the Administration, the consumer will be entitled to an automatic discount on the bill as a “discount for delay in activation of self-consumption”. The amount of this discount will be calculated in a similar way to the amount of the simplified compensation, that is, the consumer is compensated for the delay in processing taking into account the surpluses that are not being compensated for reasons not attributable to the consumer or the Administration.
This discount will be borne by the distribution company, which will not be able to incorporate it into the remuneration borne by the system. Nevertheless:
- The distributor may pass this cost on to the marketer, if the delay is attributable to it. To do this, it must be accredited to the marketer and to the National Commission of Markets and Competition (CNMC) through the information system established in letter u) of article 40.2 of Law 24/2013, of December 26, on the Electricity Sector (LSE).
- If the delay in processing is attributable to the consumer or the Public Administrations, the discount will not be applicable. Also in this case, the distributor must justify it through the information system of letter u) of article 40.2 LSE before the CNMC and before the competent body in energy matters of the autonomous community. In addition, to increase the flexibility of self-consumption, the Royal Decree Law modifies the minimum period of permanence in a modality of self-consumption, which goes from one year to four months.
Given that the electrification and promotion of renewable energies requires a parallel increase in investment in electricity transmission and distribution lines, the Royal Decree Law modifies Royal Decree 1955/2000, of December 1, which regulates the activities of transport, distribution, marketing, supply and authorization procedures of electrical energy installations, in the following aspects:
(i) The installations of the transmission network that can be considered as unique from the point of view of remuneration may begin their processing even if they have not obtained such cataloging.
(ii) A period of fifteen days is established for the issuance of a report by the CNMC on authorizations of transport facilities, with a positive effect of administrative silence.
(iii) In order to promote the processing of facilities that are necessary for the evacuation of renewable generation, a new paragraph is introduced in article 115.2 to exempt from obtaining a new prior administrative authorization, requiring only administrative authorization for construction, modifications of transmission and distribution facilities that meet all the following conditions:
a.That they should not be subject to an ordinary environmental assessment, in accordance with the provisions of article 7.1 of Law 21/2013, of December 9, on environmental assessment.
b. That they do not cause changes that exceed the conditions established in the prior administrative authorization and in the environmental impact statement.
c. That they do not involve alterations in the safety of both the main installation and its auxiliary facilities in service.
d. That its realization does not require declaration, in particular, of public utility.
and. In the case of modification of substations, which involves exclusively the equipment of reserve positions if they already have administrative authorization, or the renewal of equipment without changing technical characteristics.
f. The repowering of lines by retensioning or changing conductors, screed of supports or installation of electronic devices.
To modernize existing hydraulic power plants, they will be allowed to add electronic equipment in electromechanical groups without this implying a modification of the generation technology and, therefore, the need to obtain new access permits.
Likewise, the definition of hybridization type 3 of Royal Decree 413/2014, of June 6, which regulates the activity of production of electricity from renewable energy sources, cogeneration and waste to incorporate storage facilities is modified and clarifies the obligation related to the measurement equipment necessary in these hybridizations for the determination of the energy generated, as well as the consequences of its non-compliance.
Finally, the release of an amount of 1,360 million euros to the electricity system is authorized to comply with the provisions of Royal Decree Law 29/2021 due to the reduction in income that has occurred due to the suspension of the IVPEE.
B) Renewable gases
In the development of the “Hydrogen Roadmap: a commitment to renewable hydrogen” and to facilitate the development of projects favored by the aid lines of Components 7 and 9 of the Recovery, Transformation and Resilience Plan (PRTR), a series of measures are implemented.
In particular:
(i) The modifications of the connection positions to adapt them to the injection into the network of renewable gases will have a minor modification character and their processing may be carried out without the need for administrative authorization or approval of the execution project.
(ii) Articles 55 and 56 of Law 34/1998, of 7 October, on the hydrocarbons sector, are amended in order to exempt all direct lines from the need to be authorised (until now it was only provided for direct lines aimed at a single consumer). Therefore, direct connection lines from a renewable gas production plant to the gas system, intended for the injection of gas into it, may be freely executed.
(iii) A new article 12 bis is added to Royal Decree 1434/2002, of December 27, which regulates the activities of transport, distribution, marketing, supply and authorization procedures of natural gas facilities, to establish a series of basic principles for the injection of renewable gases into the transmission and distribution networks. The connection management procedure must be approved by the CNMC, which may modify or establish new deadlines for transporters, distributors and producers of renewable gases.
(iv) Government procurement measures
In addition to amending Royal Decree Law 3/2022, of March 1, to include AENA in the exceptional price review mechanism and to allow the application of this to contracts of less than twelve and more than four months, Royal Decree Law 14/2022 establishes that, on a transitional basis until December 31, 2022, Contracts for works, supplies or services to be carried out by public sector entities for the energy improvement of their buildings and facilities will be subject to the negotiated procedure without publicity due to imperative urgency, with a series of specialties, among which it is worth highlighting:
a. The contracting authority will not be subject to the general deadline for submission of proposals (not less than thirty days) established in article 164.1 of Law 9/2017, of November 8.
b. If the contracting authority considers that it will not be possible to negotiate, it may reserve the right not to do so, provided that it has indicated this in the invitation to submit tenders.
c. Any action that is not strictly essential to respond to the need for urgent urgency to attend will be excluded from the object of the contract and must be processed by the corresponding procedures in accordance with Law 9/2017, of November 8.
d. The beginning of the execution of the contract must take place in any case within a period not exceeding one month from its formalization.
and. Need for the contracting authority to issue an explanatory memorandum before the conclusion of the contract, in which, inter alia, it must justify the concurrence of a ‘circumstance of imperative urgency motivated by events unforeseeable for the contracting authority and not attributable to it arising from the situation existing after the invasion of Ukraine which does not make it possible to use in that contract the urgent procedure regulated in the Article 119 of Law 9/2017, of 8 November, or of another tendering procedure provided for in said law’.
f. The filing of the special appeal in procurement matters, when the contested act is the act of award, will not entail the automatic suspension of its processing.
For the purposes of this transitional arrangement, energy improvement shall mean:
a. The energy rehabilitation works of buildings and facilities. Licación of B
b. The replacement of indoor or outdoor lighting systems with more efficient alternatives.
c. The installation of electricity generation systems from renewable sources for self-consumption.
d. The replacement of air conditioning or domestic hot water production systems or equipment with systems or equipment that exclusively use renewable energy sources.
By José Antonio Rodríguez and Pablo García and published at Obras Urbanas., Marimón Abogados, Spain, a Transatlantic Law International Affiliated Firm.
For further information or for any assistance please contact spain@transatlanticlaw.com