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Endesa - Electricity, Gas, People

This is how the new energy transition law will affect your company

Published on October 15, 2018

The Royal Decree of urgent measures for energy transition eliminates the so-called ‘sun tax’ and seeks to moderate the price of electricity. But how will it affect your business?

Royal Decree Law 15/2018 has generated enormous expectations. One of the points most discussed in the media is removing the charge put on self-consumers for the energy generated and consumed in their own installation (the so-called ‘sun tax’).

But how will this package of measures impact small and medium companies? We’ll break down the Official Spanish Gazette into 4 key points:

1. Free path to the sun

The Decree-Law recognises the right to shared self-consumption and implies the right to electricity self-consumption without tolls or fees. Because the photovoltaic technology is modular, it can be developed in a collaborative manner.

Several companies will be able to share ownership of a photovoltaic installation and share the energy generated at the same time. It must be taken into account that thanks to R&D in sustainable energies, the costs of the solar installations are increasingly lower.

Another of the advantages of repealing the ‘sun tax’ for the companies revolves around the greater control and efficiency of consumption, in addition to the reduction of energy costs (because there will be fewer losses from the grid).

The Decree Law also contains the need to simplify the administrative processes and technical requirements of the installations, especially in those with less power. If your company’s installation has a power lower than 100 kW, you don’t even need to register it.

The experts point to other collateral benefits, such as greater energy independence and the development of the photovoltaic industry, which will promote job creation.

Finally, we must not lose sight of the sustainable impact of this measure: companies will significantly reduce their carbon footprint.

Several companies will be able to share both the ownership and the energy generated by a photovoltaic installation.

2. A boost for renewable energies

The Decree Law grants an exceptional extension to the access licenses and connection to renewable energies granted prior to the approval of Law 24/2013. It addresses licenses that were set to expire at the end of this year.

This extension until 31 March 2020 will allow around 9,000 megawatts of power to start functioning in 2020 that were awarded in the recent tenders for renewable energies and earlier processes.

To date, only 100 megawatts have been installed, far from the international objectives set for Spain. Without this extension, new requests would have to be submitted, and new processes and tenders would have to be developed, extending the process and making it impossible to reach 9,000 megawatts.

In this regard, the Royal Decree establishes measures to prevent speculation and ensure that the projects granted with rights of access to the grid are completed. To do so, the requirements have increased and advance reporting obligations for projects have been created, with the objective of reducing costs. This reduction of costs must result in decreasing electricity prices.

3. Commitment to electric vehicles

The new standard addresses one of the main obstacles for the growth of the electric fleet of vehicles in Spain: the scarce availability of public charging points. For that reason, eliminating the figure of the charging manager has been written into law (established in the Electricity Sector Law). It is understood that this figure did not facilitate the creation of charging points and their legal requirements were too complex.

One of the objectives of the Decree Law is to simplify and facilitate the installation of charging points for electric vehicles.

According to the new law, the charging points must comply with the specific standards established for these installations, with a register in the public administrations to monitor them. In addition, it establishes that information about these points must be available to citizens and that, in the future, the European Union will create a large database with the public charging points throughout the entire territory.

For those reasons, now is the time to commit to electrical vehicles for your SME.

4. Power a la carte

If your company has a digital meter, you’ll be able to contract power in multiples of 0.1 in order to adjust it to your consumption needs. Until now, the levels of contracting power were divided by multiples of 1.1 kilowatts. This initiative is expected to enhance efficiency and savings.

On the other hand, when a consumer with a power contracted above 15 kW has a consumption of reactive energy greater than 1.5 times that of the active energy in three or more readings, the distributor company will report this to the competent body of the Autonomous Region, which will be able to indicate a deadline for the consumer to increase their power factor and even order the right of access to the grids to be suspended.

In addition, suppliers will be obliged to indicate on bills with a regulated tariff (PVPC) what the amount of their bill would be if they had applied a time restriction tariff. In this way, your company would be able to evaluate whether or not there would be savings, and decide whether or not it is worth it to change your tariff and commit to a more efficient consumption.

These improvements will promote energy efficiency at your business.

Accepting pre-established levels of power is no longer necessary to contract power. It is possible to choose it in multiples of 0.1.