LIVE BLOG, COUNCIL OF MINISTERS, 9th of October 2015 – Approval of Royal Decree on Self-Consumption

At 13:30 the press conference starts following the Council of Ministers held on the 9th of October 2015. Presumably, Royal Decree on Self-Consumption has been approved during the Council meeting. Let's see if that`s true. Minister Soria has joined the press conference; that could be a sign confirming the rumours. In this precise moment, Vice-President Soraya Saenz de Santamaría is explaining other Government measures. 

At 13:26 Minister Soria announces the approval of Royal Decree on Self-Consumption. Allegedly, such Decree is conceived to promote the renewable energies. The first modality of self-consumption does not supply energy to the grid; for the second modality, electricity generated for self-consumption can be effectively supplied to the grid. Therefore, the existence of two modalities is now acknowledged: on the one hand, there are the facilities conceived for only self-consumption (with a capacity not higher than 100 kw); for this modality, the additional kw generated can be discharged to the grid but cannot be sold. The second modality consists in the self-consumption and supply of energy to the grid. This latter modality includes those facilities with a capacity higher than 100 kw, which shall be registered in the Register of Electricity Producers. 

According to Soria, the question is whether self-consumers have to pay. The Minister has clarified that self-consumers will not pay for the electricity, without taking into account the fact that the self-consumer has to borne the costs of purchasing and operating the assets that generate energy. Afterwards, Minister Soria has explained that the electricity tolls and the supporting costs shall be borne by the self-consumer. Under the Royal Decree, Self-consumers will not pay for the energy, nor will pay the electricity tolls and taxes when self-consumers are not connected to the grid. Soria states that, regarding the electricity tolls, self-consumers shall pay as much as they consume, contributing to and encouraging the renewable energies as any other consumer. 

Minister Soria explains that the report issued by the Council of Ministers endorses the contents of the Royal Decree, which complies with the current legal framework. Given that such report has not been made public, this specific issue cannot be verified yet. At Holtrop S.L.P., we are now studying the draft leaked yesterday by the newspaper "El Economista" and we will issue our first analysis on this matter as soon as possible. 

With this brief intervention, the Minister's explanation on the Royal Decree has concluded. At the moment, he is answering the questions regarding DieselGate. 

At 13:55, the press conference has concluded without any additional explanation on the Royal Decree on Self-Consumption. We shall await for the issuance of the Royal Decree in order to analyse it together with the aforementioned draft. 

From the date in which the Royal Decree on Self-Consumption is released and made public in the State Official Gazette (Boletín Oficial del Estado), one counts with two months to appeal such Royal Decree and submit any preliminary references on the compatibility of the Royal Decree with the European legal framework. 

The reference of the Council of Ministers on this issue has already been published: 

THE REGULATION OF ELECTRIC SELF-CONSUMPTION HAS BEEN APPROVED

A legal frame has been established to allow the development of self-consumption in an orderly manner, guaranteeing the security of the electricicity system. 

Self-consumption offers great benefits: it allows the penetration of technologies which do not emit CO2 and reduces the losses associated with electricity transport, since it consists in a distributed source of production. 

The Council of Ministers has approved a Royal Decree which regulates the administrative, technical and economical conditions for the supply and production of electricity by self-consumers. The Royal Decree establishes a normative frame where the economical sustainability of the system and the correct distribution of the system's fees are guaranteed. 

The self-consumer, who could also be called "self-generator", is a consumer who produces part of the energy consumed by it. Self-consumption offers important benefits: the usage of renewable energies, the avoidance of oil import, a greater respect for the environment and the reduction of CO2 emissions. 

This Royal Decree regulates for the first time an activity bound to the progress of a technology which nowadays allows small self-consumers to produce and consume their own electricity, using renewable energies instead of fossil fuels. 

Self-consumption does not mean energy efficiency, since consumption as a whole stays the same; nonetheless, energy can be generated in a more distributed way. 

Appropiate distribution of the system's fees:

The new regulation states that those who produce and consume their own energy without being connected to the grid, do not have the obligation to pay any cost of the electricity system, as they do not use it.

In case one is connected to the grid, it will always have the supply guaranteed, even when the self-produced energy was not enough; for instance, when the sun does not shine or the wind does not blow. A self-generator connected to the electricity system will neither pay for the self-produced electricity, nor for the associated taxes and the system's losses. However, this self-generator will have to contribute to the general costs of the system mainly arisen from: the solidarity with the extra-peninsular systems, where production is more expensive; the past-generated debt; the bonuses to renewable energies; and the supporting costs.

Should self-consumers not contribute to the general system's costs, those costs would have to be distributed between the rest of the consumers who do not self-consume, increasing significantly the bill. That would create an unfair situation, since the general costs of the system have nothing to do with self-consumption. Moreover, such would be a regressive situation where the most vulnerable consumers are those ones with more obstacles to practice self-consumption.

Nevertheless, the principle stating that all consumers shall contribute in the same way to the general costs of the system has two exceptions: 

On the one hand, consumers located in the islands. In these territories, self-consumption does allow to reduce the production costs, providing great savings to all consumers. 

Secondly, small consumers of a contracted capacity not higher than 10kW. 

Guarantee of the security in the electricity system for all consumers: 

The wording of the Royal Decree completes the creation of a register of self-consumption facilities for all operators and the distributing companies. This register provides information on the production facilities connected to the grid and guarantees the right operation of the electricity system in safe conditions. 

The Royal Decree gives a period of six months to consumers, facilities and other agents to adapt to this regulation.

Energy production technologies, and specially the renewable energies, will continue decreasing their costs. The Royal Decree enhances the progressive introduction of self-consumption into the market, making it an everyday more essential part of the electricity system.