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Renewable Energies Plan and Royal Decree essential to self-consumption approved in extremis

19-11-2011

During its last two cabinet meetings, Zapatero's government approved Spain’s Renewable Energies Plan for the period 2011 to 2020 and a Royal Decree regulating the administrative and technical conditions for grid connecting small renewable energy and cogeneration facilities – key legislation paving the way for self-consumption.

Compliance with the Indicative Energy Planning Document (PEI) and the 2011-2020 Renewable Energies Plan (PER) approved by the Council of Ministers on 11 November will see renewable energies covering 20.8% of energy demand in Spain by 2020. Something that few took for granted just a while back. The planning document provides an energy roadmap for the whole system up to 2020, while the PER is intended to ensure, in line with the EC Directive, that at least 20% of gross final energy consumption in Spain comes from renewables by 2020.

The PEI estimates that final energy consumption in Spain in 2020 will be only slightly higher than at present – 102,220 ktoe (thousand tonnes of oil equivalent). Heavier gas and renewable energy use by end users will offset a sharp decline in the consumption of petroleum products to generate electricity. According to these estimates, a sharp rise in the proportion of renewables in the energy mix is forecast, which the PER states will give rise to a contribution of 13.2% in 2010 and 20.8% in 2020; meaning that an increase in fossil-fuel fired generation will not be needed.

According to the PEI, "the progressive ramping up of renewable energy in the Spanish energy mix, along with the reduction in our imports of fossil fuels (coal, oil and gas) from 77% today to 70.9 % in 2020, will help lessen our dependence on foreign energy, continuing the process of replacing foreign energy with indigenous sources which began in the period 2005-2007, and improving the level of self-sufficiency by somewhat more than 6 points to 31.5% in 2020".

87 proposals for action

In order to progress in the different areas and meet the targets set, the 2011-2020 PER includes 87 proposals for action, of which nearly half are horizontal, i.e. they involve different technologies, and other sectors. Two novel proposals stand out:

- Renewable Heat Incentive Scheme (ICAREN) for renewable heat energy applications: a system of direct support for generation that is incompatible with receiving investment grants, which is specific to projects developed through energy service companies (ESCOs). Therefore, a producer must exist who performs an economic activity involving supplying energy to a consumer.

- Strengthening of self-consumption of electricity generated using renewable sources, through net balancing mechanisms: defined as a power netting system which allows a consumer to cover part of their energy use by generating their own electricity, and use the electricity system to "store" their surpluses. This system is especially interesting for power generation facilities using renewable sources that cannot be managed, such as wind or solar, as it avoids the need for the plant itself to be fitted with energy storage.

Breakthrough in self-consumption
A week after approving the PER, at its last cabinet meeting on 18 November, the Government approved a Royal Decree regulating the administrative and technical conditions for grid connecting small renewable energy and cogeneration facilities. This legislation paves the way for distributed generation, setting the stage for self-consumption. The new Royal Decree transposes the European Renewable Energy Directive into Spanish law, and is designed to simplify permitting procedures to accelerate the entry into the electricity system of small-scale facilities. The same day, a draft Royal Decree on self-consumption was put on the desk of the President of Spain’s National Energy Commission (CNE).

The regulation will allow homeowners and SMEs access to small-scale power generation so that, once the net balancing regulation (currently being drafted) is enacted, any energy produced can be used for self-consumption. This procedure will be approved in the coming months, as established in the Royal Decree approved last month. The net balancing system will calculate the difference between what each small generator (residential, commercial, etc.) consumes from the electricity system and the surplus from its own energy generation facility that is evacuated to the grid.