Royal Decree 962/2024 regulates offshore energy production in Spain, establishing a competitive bidding procedure for the authorization of renewable installations.

On September 25, 2024, the Royal Decree 962/2024, of 24 September, regulating the production of electricity from renewable sources in offshore installations in Spain, (the "RD") was published in the Official State Gazette (BOE). Our experts analyze the main provisions introduced by this RD, which lays the foundations for the deployment of offshore renewable energy installations (including offshore wind installations) in Spain.

The RD, which came into force the day after its publication in the BOE, focuses on the establishment and development of a competitive tendering procedure necessary for the authorisation of electricity production from renewable sources in installations located at sea and introduces certain provisions in relation to innovative installations and installations located in ports of general State interest.

 

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Competitive tendering procedure

The General State Administration is responsible for authorising electricity generation facilities located in the territorial sea, establishing the remuneration system and setting the remuneration of those activities that have a regulated remuneration, as well as granting and revoking said authorisations.

In order to initiate the processing of these administrative authorisations (the so-called prior administrative authorisation -or AAP-, construction administratitive authorisation -or AAC- and operation administrative authorisation -or AAE-) provided for in Article 53 of Law 24/2013, of 26 December, offshore renewable energy installations must be linked to bids awarded in the competitive tendering procedure regulated in the RD, except in the cases provided for innovative installations and for installations located in ports of general State interest.

The following entitlements will be granted simultaneously through the above-mentioned competitive tendering procedure:

• the economic regime for renewable energies;
• the reservation of access capacity at a specific node of the electricity transmission grid, under the terms established in the RD; and
• priority in the granting of the concession for the occupation of the maritime-terrestrial public domain.

This shall be conditional upon registration in the electronic register of the economic regime for renewable energies in operation.

Phases of the competitive tendering procedure

The competitive tendering procedure will be carried out in the following stages: 

1. Ministerial order approving the bases of the competitive tendering procedure, which will include, among others, the following aspects:

• The power quota to be awarded.
• The area(s) where the generating farms will be located, which must be included in the high potential areas (or ZAP) for offshore wind energy development defined in the approved maritime spatial plans (or POEM).
• The technologies, characteristics and requirements to be met by generation facilities;
• In relation to each area, the access capacity and the specific nodes of the transmission network where the installation is to be connected.
• The term of the concession for the use of the maritime-terrestrial public domain.
• The parameters and the rest of the elements that configure and specify the economic regime for renewable energies to be applied.
• The amount of the guarantees to be submitted for registration in the electronic register of the economic regime for renewable energies in pre-assignment status, as well as the requirements to be met by the parties in order to be able to participate in this procedure, taking into account that:
  • these requirements may relate, inter alia, to the legal form, technical solvency, experience of the company, size or other economic-financial aspects (without prejudice to the economic guarantees that may also be applicable according to the RD);
  • the above implies that any change in the ownership of the rights conferred in the competitive tendering procedure must be authorised in advance by the Directorate General for Energy Policy and Mines (Dirección General de Política Energética y Minas), which reports to the Ministry for Ecological Transition and the Demographic Challenge (Ministerio para la Transición Ecológica y el Reto Demográfico), in order to assess whether the new holder meets the requirements; and that
  • after changing the ownership of the rights, the interested party must carry out the change of ownership procedures required by the applicable regulations for the different purposes, including access and connection permits to the transmission grid.
• The weighting criteria and other information necessary to carry out the competitive tendering procedure, including the composition and functioning of the technical assessment committee.

This ministerial order shall indicate the objective requirements to be met by the generating installations linked to the bids in order for them to be awarded in this procedure, which may be, for example, the following:

• Related to the design of the installation: space occupancy ratio, distance to the coast, number of wind turbines, contribution to innovation, etc.
• Related to the environmental impact of the installation during all phases (construction, operation and decommissioning).
• Related to the socio-economic impact of the installation during all phases (construction, operation and decommissioning).
• Emissions related to the decommissioning of the installation.
• Related to the ability to contribute to the quality and security of electricity supply.
• Related to national defence interests; impact on air safety and regularity, as well as on air traffic management and control; impact on maritime safety, as well as on the management and control of maritime traffic and routes; safeguarding of human life at sea, including rescue; maritime signalling and protection of the marine environment and pollution control.
• Related to the integrity and adequate conservation of the maritime-terrestrial public domain, always taking into account the criterion of minimum possible occupation.
• Likewise, the ministerial order will establish the details of the public dialogue phase and will specify the aspects, parameters or criteria of those approved by said order that will be subject to the public dialogue phase, and where appropriate, may also include prior studies relating to wind and sea energy resources, the presence of other uses and activities, environmental sensitivity, natural values and protection of the marine environment (if the administration has this information).

2. Public dialogue phase, through which interested parties affected by offshore renewable energy generating facilities may submit comments or proposals for improvement in relation to the aspects, parameters or criteria established in the order approving the bases of the competitive tendering procedure, within the deadlines and in the manner established in said order.

• Subsequently, developers interested in developing projects in the designated areas may submit to the Secretary of State for Energy (Secretaría de Estado de Energía) their comments, motivation and alternative proposals in relation to the published comments and proposals.
• The order convening the competitive tendering procedure may incorporate all or part of the proposals and alternatives received in the public dialogue phase. To this end, it will be assessed whether the proposals are concrete, feasible and adequately justified.

3. Ministerial order convening the competitive tendering procedure, which will be published in the BOE, and which will include, among others, the following aspects:

• The timetable for the competitive tendering procedure.
• The information and documents to be included in the application for participation in the competitive tendering procedure.
• The reserve price (or maximum price of the financial offer) and, if defined, the risk price (or minimum price of the financial offer).
• Where appropriate, the modification of the aspects, parameters or criteria that the order approving the rules of the competitive tendering procedure has foreseen as being subject to the public dialogue phase.

Features of the competitive tendering procedure

The applications (which have previously been submitted exclusively by electronic means, with an electronic certificate) that obtain the highest score in the competitive tendering procedure will be awarded, until the quota of power to be awarded is reached. This procedure may include non-economic criteria up to a maximum of 30% of the weighting. These non-economic criteria may be, among others, those mentioned above in relation to the objective requirements of the installations or be related to the participating parties.

For the assessment of the economic criteria, the application shall include the price offered per unit of electrical energy relating to the renewable energy economic regime, expressed in euros/MWh to two decimals, which may not be modified throughout the procedure.

To this end, the order convening the competitive tendering procedure shall set the reserve price, it may set the risk price (or minimum price of the financial offer) and it shall establish the criteria for the tie-breaker between different applications whose joint award exceeds the power quota to be awarded , as well as, where appropriate, a system that allows the award of the quota not covered by the selected bids, even if this entails a moderate increase in the quota to be awarded.

In order to assess the applications, a technical assessment committee will be set up, which will submit to the Directorate-General for Energy Policy and Mines (Dirección General de Política Energética y Minas) the proposal of applications that are eligible for the evaluation phase and those that are excluded, as well as the scores resulting from the application of the weighting criteria.

The order approving the bases of the competitive tendering procedure will establish the functioning of this committee and its composition, on the basis of the provisions of the RD.

Pubilcity and transparency

The administrative acts relating to the competitive tendering procedure (including the resolution of the competitive tendering procedure and the registration of the successful bidders in the electronic registry of the renewable energy economic regime in pre-allocation status) will be published in the BOE (or in the alternative means that may be established in the calls for proposals). On the other hand, the information provided to the applicants, the results of the public dialogue phase, the results of the competitive tendering procedure and the progress of the projects will be available for consultation or download through the Internet portal of the Ministry for Ecological Transition and the Demographic Challenge (Ministerio para la Transición Ecológica y el Reto Demográfico).

Economic regime

The specific remuneration of each installation benefiting from the economic regime shall be obtained on the basis of its award price, the remuneration parameters of the technology to which it corresponds, the characteristics of each installation and its participation in the electricity market.

Fee for the occupation of the maritime-terrestrial public domain

Installations linked to bids awarded in the competitive tendering procedure are declared by the RD as electricity infrastructures of general interest for the purposes of calculating the fee for occupying the maritime-terrestrial public domain, and the provisions of Article 84.3.1.b of Law 22/1988, of 28 July, are applicable to them.

More specifically, when the occupation takes place in territorial waters , these installations will be considered to be intended for the exploitation of energy resources, and the provisions of Article 84.3.1.d of Law 22/1988, of 28 July, on Coasts, will therefore be applicable.

Access and connection to networks

The nodes reserved for tendering may be used for the evacuation of energy generated by offshore renewable energy installations.

The resolution of the competitive tendering procedure and the entry in the pre-allocation register shall entail the reservation of access capacity in favour of the successful bidders.

This reservation shall be made, for each successful bidder, at the specific node of the electricity transmission grid, with the maximum access capacity awarded being that defined in the invitation to tender.

The reservation of access capacity will not grant the successful bidder either the right to access or the right to connect to the electricity grid. Therefore, successful bidders must apply for the corresponding access and grid connection permits (in accordance with the provisions of Royal Decree 1183/2020, of 29 December), without the time priority criterion applying in these cases.

The order approving the terms and conditions of the competitive tendering procedure may include a maximum time limit for successful bidders to submit the corresponding application for the granting of access and connection permits to the transmission system operator, as well as the consequences of not submitting such an application in due time.

Administrative authorisations

Likewise, the owners of installations linked to tenders awarded in the competitive tendering procedure must subsequently process them: 

• the administrative authorisations required, such as those provided for in Article 53 of Law 24/2013 of 26 December (AAP, AAC, AAE);
• the concession of occupation of the maritime-terrestrial public domain; and
• administrative procedures relating to the electronic register of the renewable energy economic regime.

Guarantees required under the competitive tendering procedure

Parties wishing to participate in the competitive tendering procedure must deposit the guarantees specified in the ministerial order approving the bases of the competitive tendering procedure for registration in the electronic registry of the renewable energy economic regime in pre-assignment status.

These guarantees will be taken into account as part of the definitive deposit required in the processing of the concession for the occupation of the maritime-terrestrial public domain and the installations linked to awarded tenders will also exempt the presentation of the guarantees provided for in Article 23 of Royal Decree 1183/2020, of 29 December, provided that:

• a copy of the receipt from the General Deposits Fund (Caja General de Depósitos) certifying that the aforementioned financial guarantee has been deposited; and
• the security referred to in the paragraph above is maintained at least until the final operating permit for the installation is obtained.

Enforcement of guarantees

Withdrawal from the construction of the installation will entail the cancellation, due to non-compliance, of the registration in the electronic registry of the renewable energy economic regime in pre-assignment status, as well as the waiver of the concession of the maritime-terrestrial public domain, the automatic expiry of the access and connection permits granted and of the reservation of access capacity to the electricity transmission grid granted in the competitive tendering procedure and the execution of the guarantees deposited.

The Directorate General for Energy Policy and Mines (Dirección General de Política Energética y Minas) may exempt the execution of the guarantee deposited if the withdrawal is motivated by a report or resolution of a public administration that prevents such construction, and this is requested by the promoter.

In the event of withdrawal, the developer shall be obliged to dismantle the works and installations, ensuring the safety of navigation, and shall bear the costs of such dismantling.

The RD also states that cancellation due to non-compliance with the registration in the electronic registry of the renewable energy economic regime in pre-assignment status will entail, among other things, the automatic expiry of the access and connection permits granted and of the reservation of access capacity to the electricity transmission grid granted in the competitive tendering procedure, which will also result in the execution of the guarantees deposited.

Administrative procedures applicable to facilities not participating in the competitive tendering procedure

As an exception to the above, the following facilities may initiate the processing of administrative authorisations (AAP, AAC, AAE) provided for in Article 53 of Law 24/2013, of 26 December, without the need to be linked to bids awarded in the competitive tendering procedure:

• innovative offshore renewable energy installations located outside the areas of high potential for offshore wind energy development defined in the approved maritime spatial plans (or POEM), included in any of the following cases:
  • offshore wind installations with an installed capacity not exceeding 50 MW; and
  • offshore non-wind renewable installations with an installed capacity not exceeding 20 MW.
• facilities located in zones I and II of ports of general State interest (defined in Article 69.2 of Royal Legislative Decree 2/2011, of 5 September, approving the Consolidated Text of the Law on State Ports and the Merchant Navy).

Repeal of legislation

Upon entry into force of the RD, Royal Decree 1028/2007, of 20 July 2007, which established the administrative procedure for processing applications for authorisation of electricity generation facilities in the territorial sea, is repealed, together with any provisions of equal or lower rank that oppose the provisions of the RD.

Applications for offshore wind installations submitted prior to the entry into force of the RD under Royal Decree 1028/2007 of 20 July 2007 will also be closed due to the loss of their purpose.