The lack of transparency and increased administrative barriers in Royal Decree 1699/2011

RD 1699/2011 has in part implemented the European Directive 28/2009/CE in Spain, and doing so reinforces the possibilities for distributed generation.

This is the first post in a series critically discussing this law. Upfront: The law is yet to be completed with a net metering scheme, which is already behind on schedule. 

Each draft of the Ministry got progressively worse as they introduced endless administrative barriers undoubtedly proposed by UNESA (The top 5 Spanish Utility companies), and completely overlooked the spirit and suggestions made by the European directive.  

We have found three themes in particular that encapsulate the epitome of the Ministry´s progressively inefficient drafts, including opacity, exclusion of judicial and administrative remedies, and an introduction of costly bank guarantees.  


The first draft states that the applicant would be notified about the capacity of the power that is available to them if they want to connect to the grid, whereas the second draft is more diluted and does not specify the amount of available power unless the consumer surpasses this amount upon installation. Therefore, it is clear this system is opaque because the applicant will not be able to know how much power is available to them for repowering or resizing their installation. 

2.Exclusion of Judicial and administrative remedies:

The first draft states that the administration must give information concerning the availability of power within 15 days of the petition to access the grid, or else it will be considered an administrative infraction.   The second draft, however, alleges to no such sanction.   In short, neither the distribution companies nor the distributors are required to report the maximum power available to consumers. 

As more drafts of this EU directive are created, more administrative barriers are introduced, especially concerning dispute procedures.   Whereas the second draft included a dispute procedure with specific requirements, there is no dispute procedure in the new regulation.    In this regulation, if there is a dispute upon request to access the grid, the petitioner can initiate a claim to the CNE however there is no reference to a procedure to resolve the dispute.  

3.Bank guarantees. 

The first draft in art.20 stated that the installations covered by the law would be excluded from having to get bank guarantees covered in art 66 of the RD 1955/2000, December 1st.  In other words, the bank wouldn´t be responsible for covering the cost if the applicant fails to pay for the installation.  

The second draft and final regulation only excluded those installations smaller than 10 KW.  For those installations higher than 10 KW, a bank guarantee of 20€/KW is required.  

The above 3 themes—opacity, an exclusion of judicial and administrative remedies, and the introduction of bank guarantees—are interrelated and very significant.   If the first draft of the directive had been kept, it would have been a more transparent system, easier for the consumer to access the grid.   Costly bank guarantees would not have been introduced to prevent consumers from easily accessing the grid.  Unfortunately, the final version introduces some red tape—it excludes the judicial remedies for those interested, denies essential information about the capacity of the grid, and makes it all around more difficult for consumers to access the grid by introducing bank guarantees.   Ultimately, the result of this work is a less transparent, inefficient arrangement that undermines the idea behind a free market and distributed energy system.

The second post in this series will be available tomorrow.