Royal Decree-Law 18/2022 of 18 October approves measures to reinforce the protection of energy consumers and to reduce natural gas consumption in "Plan + Security for your energy" ("RD-Law 18/2022")

1. Measures to promote renewable gases and digitization

RD-Law 18/2022 amends Law 34/1998 of 7 October 1998 on the Hydrocarbons Sector ("LSH"), excluding direct lines intended for the exclusive supply of a consumer (through the establishment of a direct connection to the transmission network) from hydrocarbon planning and from the application of the provisions on expropriation and easements provided for in the LSH, as they are not declared to be of public utility.

On the other hand, direct connection lines from a renewable gas production plant for gas injection into the gas system are declared to be of public utility and are excluded from hydrocarbon planning.

The declaration of public utility is extended to all facilities intended for the supply to users of gaseous fuels through pipelines. This extends the previous provision which limited such declaration only to facilities for the transport and distribution of natural gas through pipelines and their auxiliary facilities.

In addition, smart natural gas meters' implementation is approved for customers with a consumption of 50,000 kWh or less.

2. Promotion of self-consumption

• Increasing the permitted distance for self-consumption through the grid to 1,000 metres for power plants located on rooftops.
• Concerning collective self-consumption, the possibility of setting up renewable energy communities for the implementation of this type of self-consumption is envisaged, with the community being able to act as a representative of consumers.
• Law 24/2013, of 26 December, on the Electricity Sector ("LSE") is amended in relation to direct lines for self-consumption that connect renewable generation plants with consumers, including the elimination of the requirement that the generator and consumer belong to the same company or the same business group.
• It is envisaged that facilities of up to 500 kW (the previous limit was ≤100 kW) may be exempt from obtaining prior administrative and construction authorization.

3. Access and connection modifications for rapid injection of energy into the grid

RD-Law 18/2022 introduces certain measures relating to (i) the granting of temporary injection permits; (ii) the modification of the conditions of capacity tenders; and (iii) the processing of certain requests for the granting of access and connection permits.

Granting of temporary injection permits

The system operator is authorized to issue exceptional injection permits that will allow the incorporation into the transmission grid of an active power greater than that included in the access permits granted, and less than or equal to the installed power of the production facility.

These exceptional permits may only be granted to facilities connected to the transmission grid that meet the following requirements:

• The facility has obtained a definitive operating permit.
• The facility is connected to a node reserved for access contests, or to one of the transition nodes.
• Reserved access capacity exists at the junction.
• Where applicable, the applicant has provided the declaration of compliance with the technical requirements established in Royal Decree 647/2020, of 7 July, which regulates aspects necessary for the implementation of the grid codes for the connection of certain electrical facilities and its applicable implementing regulations.

The notification and resolution period shall be two months from the permit application. The resolution of the tendering procedure in the nodes in which exceptional injection permits have been granted shall automatically expire on the first working day of the month following publication of the resolution of the tendering procedure in the BOE (Spanish Official State Gazette).

The procedure and requirements for the granting of exceptional injection permits may be developed by Order of the Minister for Ecological Transition and the Demographic Challenge.

Any discrepancies shall not considered as access or connection conflicts.

Modification of the conditions for capacity tenders

Royal Decree 1183/2020, of 29 December, on access and connection to the electricity transmission and distribution networks ("RD 1183/2020") is amended, now establishing that the nodes reserved for tendering by Resolution of the Secretary of State for Energy will remain reserved, whether or not the capacity reserved for tendering at the nodes has been reduced below the limit of 100 MW for nodes in the peninsular electricity system or 50 MW for nodes located in the non-peninsular territory, and whether or not the conditions that led to this reservation have ceased to be met after the reservation was agreed.

Processing of certain requests for granting access and connection permissions

A new seventh additional provision is introduced in RD 1183/2020 which establishes that when an facility awarded in tender procedure results from a facility with an operating authorization already granted, access and connection applications will be treated as updates to the access and connection permits already granted.

4. Administrative simplification for the construction of small power plants

RD-Law 18/2022 amends Article 115 of Royal Decree 1955/2000, of 1 December, which regulates the activities of transmission, distribution, commercialisation, supply, and authorization procedures for electricity facilities, enabling the possibility of exempting production facilities of up to 500 kW of installed power from the need to obtain prior administrative and construction authorizations.

5. Measures to strengthen the protection of natural gas and electricity consumers

Among others, we highlight the following measures:

• With regard to the price reviews the last resort natural gas tariff ("TUR") corresponding to 1 April 2022, 1 July 2022, 1 October 2022, 1 January 2023, 1 April 2023, 1 July 2023, and 1 October 2023, the application of the limitation of 15% of the maximum increase in the cost of the raw material is extended.
• Creation of a new TUR for homeowners' associations.
• The amount of the minimum aid for the benefit of the thermal social voucher is increased, rising from 25 euros to 40 euros.
• The temporary extension of the measures to make natural gas supply contracts more flexible is extended until 31 December 2023 as a maximum limit, allowing the self-employed who have natural gas supply points under their ownership to take advantage of this measure.
• The temporary extension of the measures to make electricity supply contracts more flexible is extended until 31 December 2023.
• All electricity retailers are obliged to include information on the average consumption of consumers sharing the same postcode on electricity invoices for a contracted power of 15 kW or less.
• Exceptionally and until 31 December 2023, the extension of application of the social electricity bonus is extended and the discount percentages are increased to 65% for vulnerable consumers and 80% for severely vulnerable consumers, as well as the maximum consumption limits.

If you wish to know more about the new regulation contained in the Royal Decree-Law and its possible repercussions, please do not hesitate to contact one of our experts mentioned below or your usual contact at Osborne Clarke.