August 2015
Royal Decree 738/2015, of July 31, which regulates the activity of electrical energy production and the dispatch procedure in the electrical systems of non-peninsular territories
On August 1, it was published in the Official State Gazette (hereinafter, “BOE“) Royal Decree 738/2015, of July 31, which regulates the activity of electrical energy production and the dispatch procedure in the electrical systems of non-peninsular territories (hereinafter, “RD 738/2015“).
In accordance with the provisions of its article 1, the object of this Royal Decree constitutes: (i) the regulation of the activity of production of electrical energy intended for the supply of electrical energy in the electrical systems of non-peninsular territories; (ii) the regulation of the legal and economic regime of pumping installations whose main purpose is to guarantee supply, system security and the integration of non-manageable renewable energies in the isolated electrical systems of non-peninsular territories; and (iii) the regulation of the economic and technical management of each of the electrical systems of the non-peninsular territories, in accordance with the provisions of Law 24/2013, of December 26, on the Electrical Sector (hereinafter, the “LSE“) and in Law 17/2013, of October 29, for the guarantee of supply and increase of competition in insular and extra-peninsular electrical systems (hereinafter, the “Law 17/2013“).
Below we present the main new features introduced by RD 738/2015, which consists of 78 articles and is structured into seven titles, twelve additional provisions, twelve transitional provisions, one repealing provision and seven final provisions.
1.- Scope of application.
RD 738/2015 is applicable to all subjects defined in article 6 of the LSE (namely, the producers of electrical energy, the market operator, the system operator, the transporter, the distributors, the marketers, the consumers, the system load managers), who carry out their activities in any of the electrical systems of non-peninsular territories. For the purposes of this Royal Decree, non-peninsular territories are considered to be those of the Autonomous Communities of the Canary Islands and the Balearic Islands and those of the cities of Ceuta and Melilla.
Specifically, in order to determine its scope of application, RD 738/2015 distinguishes two types of installations:
(Yo)Category A facilities: This category includes non-flowing and thermal hydroelectric generation groups that use coal, hydrocarbons, biomass, biogas, geothermal, waste and residual energy as energy sources from any installation, machine or industrial process whose purpose is not the production of electrical energy, as well as cogeneration facilities with a net power greater than 15 MW; and
(ii)Category B facilities: This group includes generation facilities not included in category A facilities, which use renewable energy sources and cogeneration facilities with a net power less than or equal to 15 MW.
2.- Production office
Without prejudice to the provisions of Royal Decree 1623/2011, of November 14, which regulates the effects of the entry into operation of the link between the peninsular electrical system and the Balearic Islands, and modifies other provisions of the electrical sector for the isolated Mallorca-Menorca electrical system partially connected to the peninsula, an office for variable costs is established in each of the isolated systems of the non-peninsular territories, in which the production facilities will participate, direct marketers and consumers, directly or through their representatives. The dispatch will consist of weekly, daily, intraday and real-time deviation scheduling, which will result in a final production dispatch schedule. The production dispatch and the settlements related to it will be carried out by the system operator in the terms provided in Title VI of RD 738/2015.
3.- Economic regime of electrical energy production facilities in non-peninsular territories.
For the purposes of determining the economic regime of energy production facilities, RD 738/2015 distinguishes the following assumptions:
(Yo)Additional remuneration regime: This regime constitutes the remuneration for investment and exploitation of the electrical energy production activity carried out in the electrical systems of non-peninsular territories and will apply to all category A facilities that have said regime recognized. The granting of the additional remuneration regime will be carried out through competitive bidding procedures, which will be called when the installation of new power is necessary to cover a power deficit in the long term. New facilities and facilities registered in the administrative registry of electrical energy production facilities that either make new investments or, at the end of their regulatory useful life, seek to be granted the additional remuneration regime again because they represent savings for the system without making new investments may participate in this competitive procedure. The groups that obtain a favorable resolution of compatibility will have the right to receive the additional remuneration regime, in the terms regulated in Title IV of RD 738/2015. In general, the groups that have been granted the additional remuneration regime will receive remuneration for fixed costs and remuneration for variable costs. The additional remuneration regime applicable in each case will be determined based on the assignment to each group of one of the standard facilities established in RD 738/2015, to which will correspond a set of remuneration parameters that will be calculated by reference to the activity carried out by an efficient and well-managed company. The set of technical and economic parameters of each typical installation will be determined based on regulatory periods of six years in duration and will be used throughout the regulatory period. Without prejudice to the above, by order of the Minister of Industry, Energy and Tourism, tenders may be called for the granting of the additional remuneration regime, with the purpose of reducing the costs of the electrical system;
(ii)Economic regime of category B facilities with the right to receive the specific remuneration regime: category B facilities that, in accordance with the provisions of Royal Decree 413/2014, of June 6, which regulates the activity of producing electrical energy from renewable energy sources, cogeneration and waste (hereinafter, the “RD 431/2014“), have a specific remuneration regime recognized, will receive the following concepts: a) the product of the hourly sale price of energy in the dispatch of the isolated system j, Phventa(j), defined in Annex I of RD 738/2015, multiplied by the energy sold in hour h by the generating set, measured in power plant bars; b) the specific remuneration regime established in title IV of RD 431/2014; c) if applicable, the economic considerations that are established for their participation in adjustment services;
(iii)Economic regime for electrical energy production facilities with a primary economic regime granted prior to the entry into force of Royal Decree-Law 9/2013, of July 12, by which urgent measures are adopted to guarantee the financial stability of the electrical system and facilities with a specific remuneration regime under the protection of the fourth additional provision of RD 413/2014, of June 6: these facilities will receive the following remuneration concepts: a) the product of the energy sold in hour h measured in power plant bars by the generating set times the price resulting from calculating the weighted average of the hourly marginal price of the daily market and the hourly marginal prices of each of the sessions of the intraday market; b) where applicable, the specific remuneration regime established in title IV of RD 413/2014; c) if applicable, the economic compensation established for participation in the adjustment services of these systems; and
(iv)Economic regime of the facilities without the right to receive additional or specific remuneration regime: the generation facilities located in the isolated electrical systems of the non-peninsular territories that have not been recognized by the additional remuneration regime or the specific remuneration regime, will obtain for their generated energy measured in power plant bars the hourly price of sale of the energy in the office of the isolated system j, Phventa(j), defined in Annex I. Likewise, those installations that are not entitled to the perception of the additional or specific remuneration regime will receive said price because they have exceeded their regulatory useful life or because they have said right has been revoked. In particular, in accordance with the provisions of the eighth additional provision of RD 738/2015, this remuneration will be received by those production facilities that have completed their regulatory useful life upon its entry into force and whose owners have not requested the General Directorate of Energy Policy and Mines to be granted the additional remuneration regime again within a period of two months from the publication of the first resolution of the Secretary of State for Energy by which the call for the granting of favorable resolution of compatibility and establishes the necessary power referred to in the first transitional provision.2 of this Royal Decree.
3.- Administrative regime for electrical energy production activity in non-peninsular territories.
In general, the production facilities included in the scope of application of RD 738/2015, regardless of the economic regime that applies to them, must: a) obtain the administrative authorizations for the start-up, modification, transmission, temporary closure and definitive closure that apply to them, whose procedures will be established by the competent administration; b) once the operating authorization has been obtained, register in the administrative registry of electrical energy production facilities, in the terms defined in Title III of this Royal Decree; c) the owners of the facilities must request recognition of their technical and, where appropriate, economic data, which will be used in the production dispatch.
Regarding the registration in the administrative registry of electrical energy production facilities in non-peninsular territories, a distinction is made between (i) prior registration, which will be a necessary condition to be able to carry out the tests of gross, net power, technical minimum and performance of the plant and (ii) definitive registration, which will proceed as long as, in relation to the electrical installation that wants to be registered, the technical and, where appropriate, economic data have been previously approved in accordance with the provisions of RD 738/2015.
4.- Economic and administrative regime of pumping facilitiesassigned to the system operator in non-peninsular territories
In accordance with the provisions of Title VII of RD 738/2015, when the need to install pumps in an isolated electrical system is detected for guarantee of supply, system security or integration of non-manageable renewable energies, the system operator will request it from the General Directorate of Energy Policy and Mines. Once the need to install pumps owned by the system operator has been declared by the Council of Ministers in accordance with the provisions of article 5 of Law 17/2013, by order of the Minister of Industry, Energy and Tourism, the power of the installation, the particularities of its remuneration and the remuneration parameters will be approved (namely, the value of the investment of the installation in the year of its commissioning, the unit value of variable operation and maintenance and the unit value of the annuity of fixed operation and maintenance costs). The access and connection rights as well as the administrative authorization regime established for the rest of the pumping installations will apply to the pumping facilities that are assigned to the system operator in the non-peninsular territories, in accordance with what is established in this title. The energy corresponding to these pumping facilities will be integrated as an adjustment service to guarantee supply and security in each system. The system operator will declare in its settlements, separately, the costs of these facilities and the body in charge of settlements in the electricity sector will integrate said cost into its settlements as an extra cost of the production activity in the electrical systems in non-peninsular territories.
5.- First settlement period
The first regulatory period will begin upon the entry into force of RD 738/2015 and will end on December 31, 2019, in accordance with the first additional provision of this Royal Decree.
6.- Regulations repealed and modified by RD 738/2015
In accordance with the provisions of the single repealing provision of RD 738/2015, the following are expressly repealed: a) Royal Decree 1747/2003, of December 19, which regulates insular and extra-peninsular electrical systems; b) Order ITC/913/2006, of March 30, which approves the method of calculating the cost of each of the fuels used and the procedure for dispatching and settling energy in insular and extra-peninsular electrical systems; and c) Order ITC/914/2006, of March 30, which establishes the method of calculating the power guarantee remuneration for generation facilities in the ordinary regime of insular and extra-peninsular electrical systems.
On the other hand, this Royal Decree modifies certain aspects: a) of Order ITC/1559/2010, of June 11, which regulates different aspects of the regulations for insular and extra-peninsular electrical systems; and b) RD 413/2014. This, in the terms provided in the third and fifth final provisions of RD 738/2015.
7.- Entry into force
In accordance with the provisions of the seventh final provision of RD 738/2015, it will come into force on the 1st of the month following that of its publication in the BOE (that is, next September 1, 2015).
The content of this Alert is for informational purposes only. Any decision or action based on its content must be subject to appropriate professional advice.
