Energy Spain Newsflash
CHANGES IN THE ELECTRICITY SECTOR
Amendment to special statute of electricity-intensive consumers
On 14 June 2023, Royal Decree 444/2023, of 13 June, was published, amending Royal Decree 1106/2020 of 15 December 2023 (RD 1106/2020), which regulates the special statute of electricity-intensive consumers (estatuto de consumidores electrointensivos).
This Royal Decree modifies the special statute of electro-intensive consumers to include the extractive industry in the list of sectors eligible for grants envisaged by RD 1106/2020, in accordance with the provisions of the new «Guidelines on State aid for climate, environmental protection and energy 2022». Likewise, the methodology for calculating grants is modified by distinguishing between (i) sectors at risk of delocalisation, where support is reduced to 75% of eligible costs (unless a number of obligations related to long-term consumption and contracting of renewable energy are met) and (ii) sectors at significant risk of delocalisation, maintaining a rate of 85%.
The Royal Decree also provides for the possibility of receiving additional grants above 85% of total eligible costs where the company in question has borne charges of the system of more than 0.5% of its gross value added (or 1% in the case of consumers at risk of relocation), provided that there is a surplus budget after all installations have received the maximum grants they are eligible for.
In addition, among other issues, new actions are added to comply with the obligation to make investments in energy efficiency. This Royal Decree also clarifies that the obligation of contracting electricity through forward hedging instruments must be calculated taking into account the energy consumed from the grid rather than the self-consumed, thus allowing industries that self-consume a large part of their demand benefit from the same subsidy schemes available to electricity-intensive consumers.
Finally, it is clarified that beneficiaries will not be required to provide guarantees.
The content of the Royal Decree 444/2023 can be accessed here.
PVPC
On 14 June 2023, Royal Decree 446/2023, of 13 June, was published, amending Royal Decree 216/2014, of 28 March, which establishes the methodology for calculating voluntary prices for small electricity consumers and their legal contracting regime, for the indexation of voluntary prices for small electricity consumers to forward signals and reduction of their volatility.
This Royal Decree introduces a price signal for forward products, defining this signal a basket of forward products with reference to the market managed by OMIP. This signal makes it possible, on the one hand, to index (at least partially) the Voluntary Price for Small Consumers (Precio Voluntario del Pequeño consumidor, "PVPC") to price signals with a clear long-term component, while at the same time it also introduces reference to shorter-term products that allow the regulated electricity traders (comercializadores de referencia) to adjust their energy portfolio more precisely to real supply needs.
In this regard, for the determination of the forward price signal, this Royal Decree provides for the following distribution among products: the monthly product accounts for 10% of the total, the quarterly product represents 36%, and the annual product constitutes 54%. This Royal Decree also foresees a transitional framework whereby the representativeness of the forward signal in the PVPC gradually increases from 15% to 55% for the period between 2024 and 2026.
In addition to the aforementioned, this Royal Decree introduces relevant amendments aimed at aligning the structure of the PVPC to other regulatory developments, as well as to adapt it to Directive (EU) 2019/944 of the European Parliament and the Council:
(a) Those related to the financing of the electricity social voucher (bono social). In this regard, companies characterised as regulated electricity traders are obliged to finance the electricity social voucher. Therefore, an element that takes into account the unit value of financing this cost is incorporated in the PVPC.
(b) Those related to the redefinition of the scope of the PVPC, which is limited to domestic consumers and micro-enterprises (i.e. those which employ fewer than 10 persons and whose annual turnover does not exceed EUR 2 million). The latter will evidence said status by means of a responsible declaration made to the reference retailer at the time of submission or renewal of the contract. The National Commission for Markets and Competition (Comisión Nacional de los Mercados y la Competencia, CNMC) may request any additional information from the applicant company in its role of supervising the retail electricity market.
The content of Royal Decree 446/2023 can be accessed here.
Electric vehicle charging
On 4 May 2023, Order TED/445/2023, of 28 April, was published, regulating the information to be sent by energy recharging service providers to the Ministry for Ecological Transition and the Demographic Challenge (Ministerio para la Transición Ecológica y el Reto Demográfico, MITERD), the Regional Authorities and the Cities of Ceuta and Melilla.
This Order establishes the information to be sent (i) by companies providing energy recharging services for electric vehicles acting as operators of public access charging points and (ii) by companies providing electric mobility services; to the Regional Authorities or to the MITERD, as appropriate, by means of the electronic procedures determined by them.
The first submission of information to both the Regional Authorities and the MITERD must be performed within a period of three months from the moment these aforementioned reporting procedures for the submission of information have been made available to the interested parties.
The content of the Order can be accessed here.
Access capacity tender
On 9 June 2023, a Resolution of the Secretary of State for Energy was published ordering a call for an access capacity tender for a node of the transmission grid.
The Resolution prescribes the calling of an access capacity tender at the TRIVES 220 node (Galicia), in accordance with the provisions of Royal Decree 1183/2020, of 29 December, on access and connection to the electricity transmission and distribution grids.
The content of the Resolution can be accessed here.
Conditions for access and connection to the grid
The CNMC has presented a draft Circular determining the methodology and conditions of electricity demand installations for access and connection to the transmission and distribution grids.
The content of the draft Circular can be accessed here.
Energy storage
The MITERD has published a draft Ministerial Order providing a regulatory framework for granting public funding to innovative energy storage projects under the scheme of the Recovery, Transformation, and Resilience Plan; along with a Resolution for the first call for grants.
The draft defines the types of eligible storage projects: (i) stand-alone projects, (ii) projects hybridised with renewable energy production facilities, (iii) reversible pumping projects (proyectos de bombeo reversible) in pre-existing facilities or (iv) thermal storage projects. All eligible projects must be completed and operational before 30 June 2026, except in the case of reversible pumping, whose term, subject to compliance with certain conditions, may be extended until 31 December 2030.
Likewise, the first call for grants is proposed, which will be focused on the financing of:
(a) stand-alone storage projects connected to the electricity transmission and distribution grids with a maximum of 150 million euros; and
(b) thermal storage projects, characterised by the fact that the stored energy must be used in its final use as thermal energy (heating or cooling), with a maximum of ten million euros.
The content of the draft Ministerial Order can be accessed here.
CHANGES IN THE HYDROCARBON'S SECTOR
Rules of the organised gas market and the adhesion contract (contrato de adhesión)
On 16 June 2023, the Resolution of 9 June 2023, of the Secretary of State for Energy was published, approving the rules of the organised gas market and the adhesion contract.
This Resolution aligns the rules of the organised market with the provisions set forth in Circular 2/2020 of the CNMC regarding the enabling and removal procedure of the gas system users' balance portfolio, as well as the methodology to be used for calculating daily imbalances. Additionally, a comprehensive consolidation of the aforementioned market rules is carried out (eliminating Annexes III to IX that included various market resolutions previously approved). Likewise, other modifications are introduced to make these rules compatible with those applied in MIBGAS Derivatives, recently approved, and two new indexes are added (MIBGAS PVB Last Price Index (LPI) Day-Ahead and MIBGAS PVB Average Price Index (API) Day-Ahead) to facilitate comparisons with other markets.
Another significant change is the removal of references to the Portuguese operator, as these rules now only apply to products with delivery at the Virtual Balancing Point (PVB) of the Spanish gas system. Lastly, certain functions of the Central Counterparty Entity are incorporated into this consolidated version of the organized gas market rules.
The content of the Resolution can be accessed here.
Access tolls; interruptible capacity
On 2 June 2023, the Resolution of 30 May 2023, of the CNMC was published, establishing the access tolls to the transport grid, local grids and regasification for the gas year 2024.
In addition to the tolls, the Resolution also determines the zones and the specific values of interruptible capacity to be contracted, in accordance with CNMC Circular 6/2020.
The content of the Resolution can be accessed here.
Guarantees
On 1 June 2023, the Resolution of 11 May 2023, of the Secretary of State for Energy was published, amending the rules for managing guarantees in the gas system.
This Resolution establishes new models of bank guarantee contract and surety insurance certificate (contrato de aval bancario y certificado de seguro de caución) applicable when the guarantees are accredited electronically and replacing those previously established by the Resolution of 2 August 2016, of the Secretary of State for Energy.
On the other hand, A.M. Best is incorporated as a rating agency for insurance entities and credit cooperatives and branches in Spain of non-resident entities in Member States are authorised to provide guarantees, irrevocable lines of credit (líneas de crédito irrevocables), as well as surety insurance certificates.
The content of the Resolution can be accessed here.
