Spanish government adopts a moratorium on the application for new access and connection points

published on 10th August 2020

Spanish government surprisingly adopts a moratorium on the application for new access and connection points. Already existing grid access and connection points must meet new deadline requirements. Auctions will be held in Spain yet in 2020.

On 24 June, the Spanish government issued the long-awaited Royal Decree Law (RDL) 23/2020, which, among other things, imposed extended requirements on holders of grid access and connection permits concerning milestones for the development of the power plants. These measures were already announced in 2019 but have been enacted only recently due to the Covid-related emergency situation in Spain.

However, a moratorium on the application for new grid access and connection permits, which has now been adopted in RDL 23/2020, was not expected.  The moratorium will remain in force until the law on the rules for granting access and connection permits referred to in Article 33 of the Law on Electricity Sector is approved. Under RDL 23/2020, the competent authorities have a deadline of 3 months for doing this.

The following new mandatory „milestones” were determined for power plants holding grid access and connection permits awarded before RDL 23/2020 was adopted:

Holders of the above-mentioned permits are required to provide evidence to the grid operator – by whom they have been granted access to the grid – that the milestones have been met, with deadlines starting to be counted from 25/6/2020.  If they fail to provide such evidence, they will be automatically refused access to the grid and furnished guarantees will be enforced. The only exception is the Environmental Impact Assessment. If it is not granted for reasons not attributable to the project developer, the guarantee will not be enforced. 

Project developers who are afraid of not being able to meet the mentioned milestones in due time may withdraw access and connection permits within 3 months and then get the guarantee back.

At the same time, the Ministry for Ecological Transition and Demographic Challenge (formerly the Ministry of Energy) presented a draft law for the upcoming auction. The system will be much simpler than that applied in 2017/2018. Here, installed capacity or electricity and installed capacity will be subject to bidding. It should be emphasized that auctions are intended to reduce electricity prices and, accordingly, the winning bidders of an auction will not participate in higher market prices if these prices are above the prices offered in their winning bid. Similarly, bilateral contracts for the electricity volumes will not be possible. The first auctions should take place yet in 2020.

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