The Government approves a Royal Decree-Law to boost renewable energy in 2020

The Government has announced the approval of a Royal Decree-Law containing measures to promote renewable energy and thereby support economic recovery.

On 23 June 2020, the Council of Ministers approved a Royal Decree-Law containing a set of measures to promote the energy transition towards a 100% renewable electricity system, supporting economic recovery in line with the European Green Deal. 

The Decree is divided into four blocks. The first includes access and connection regulations and establishes a new auction mechanism, providing renewable energy with a predictable and stable framework. The second focuses on promoting new business models that will be key in the future. The third block addresses the promotion of energy efficiency and, finally, the fourth establishes a series of sector-specific measures to boost economic activity and employment in response to the Coronavirus crisis.

Under this new auction system for the deployment of renewable energy, the variable on which bids will be made will be the price of energy. Procedures must focus on cost efficiency and may distinguish between different generation technologies. Whereas in 2013 the generation cost of one renewable KWh was higher than its market sale price, now, due to the need to update the system, the opposite is true. Passing these economic savings on to consumers and industry will improve the competitiveness of the Spanish economy.

The Royal Decree-Law introduces into the Spanish legal framework new business models that are key to the energy transition and offer opportunities to boost the economy, employment and competitiveness, optimizing the use of existing electricity grids and minimizing environmental impacts while making the most of plant locations. The Government is authorized to regulate a special procedure for approving facilities whose main purpose is R&D&I, representing a technological, energy and industrial opportunity that constitutes a strategic factor for economic growth in both the short and medium term. 

The new regulation extends the validity of impact declarations and streamlines the procedure for determining the scope of environmental impact studies. This new Royal Decree-Law therefore gives more conventional technologies greater opportunities while allowing new companies to participate in Spain’s energy mix.