The long-awaited amendment to the regulatory framework applicable to renewable energy, approved by Decree-Law 99/2024 of 3 December ("DL 99/2024") was published yesterday.
The decree partially transposes (i) Directive (EU) 2023/2413 of the European Parliament and of the Council of 18 October 2023 ("RED III"), which amends Directive (EU) 2018/2001, (ii) Regulation (EU) 2018/1999 and Directive 98/70/EC, with regard to the promotion of energy from renewable sources, as well as amending (iii) Decree-Law no. 15/2022, of 14 December 2022 (“DL 15/2022”), which establishes the organisation and operation of the National Electricity System ("DL 15/2022"), and (iv) Decree-Law 151-B/2013, of October 31 ("RJAIA").
Almost three years after the approval of DL 15/2022, and following major legislative changes at European level (including the RePowerEU Plan and RED III) and national level (including Decree-Law 30-A/2022 of 18 April ("DL 30-A/2022"), the amendment to environmental and urban planning legislation - the “Simplex Ambiental” and the Simplex Urbanístico, respectively), an amendment to DL 15/2022 aimed at simplifying and speeding up the licensing of renewable projects, as well as promoting greater legal certainty for promoters in the sector, is long overdue.
The amendments address some of the concerns that have been expressed by players in the sector, although not all of them. On the other hand, there are some aspects foreseen in RED III that have not yet been transposed, such as the renewable energy acceleration areas (go to areas) and the guarantee of urgency for any judicial proceedings associated with the licensing of renewable energy projects. While the immediate non-transposition of the go to areas regime is understandable, given the implications (some positive, but others foreseeably quite negative) that such a regime will bring and, consequently, the care that the matter deserves, it would be crucial to ensure the urgency of disputes with administrative bodies regarding the implementation of renewable energy projects.
The changes enter into force on 18 December 2024.
Below are the main changes brought about by Decree-Law 99/2024.
Hybridisation can also be done through storage - which will thus follow the rules generally applicable to hybridisation, including the possibility of legal separation of titleholders.
What's New
Storage
The distinction between the concepts of "stand-alone storage" - i.e. storage with a direct connection to the public grid (“RESP”) and not associated with a power plant or self-consumption unit (“UPAC”) - and "co-located storage" - i.e. storage combined with a power plant or UPAC, connected at the same injection point to the grid - is clarified.
On the other hand, the concept of "hybridisation" is also amended to include the installation of new storage units, meaning that hybridisation can also be done through storage - which will thus follow the rules generally applicable to hybridisation, including the possibility of legal separation of titleholders, as well as the maintenance of injection capacity into the RESP in the event of the termination of the pre-existing control title. This change will unlock business models associated with storage.
For co-located storage installations, the licensing process for the installation and the award of charging capacity (i.e. capacity for consumption) is also unified, considering that the installation may also wish to charge from the grid. Thus, the charging capacity from the RESP is assessed in the installation's licensing process. This unification is not yet specifically foreseen for stand-alone storage facilities.
Repowering
The definition of repowering is now guided by the concept of "deployment area" instead of "deployment polygon". There are doubts as to what is intended by this new concept, since, like the deployment polygon, it also raises some questions (yet again, with greater uncertainty in the context of the repowering of wind power plants).
It is also determined that the repowering of a solar or wind power plant station is not subject to the prior assessment procedure and decision to submit it to environmental impact assessment (“EIA”) (regardless of the number of towers), or to EIA procedure established in the respective legal regime, although this will depend on the maintenance of the plant's area of implantation.
Security deposit in the modality of agreement with grid operator for obtaining grid injection capacity
The amount of the security deposit (caução) to be provided with the request for the award of grid injection capacity through an agreement with the grid operator is reduced to €10,000.00 / MVA of grid injection capacity to be awarded, with a maximum limit of €10,000,000.00. The diploma also foresees that the security deposit will be kept for a minimum period of 30 months and will be extended until the power plant, storage facility or UPAC enters into operation.
However, by failing to amend the remaining rules of article 13 of DL 15/2022, a double inconsistency is created: on one hand, the rule foreseeing that this bond is released upon conclusion of the agreement is maintained; on the other hand, the rule foreseeing that a new bond for the same amount is provided upon request for the production licence is also maintained.
Such inconsistency could eventually, at least in part, be resolved with the help from the general law transitional rules offset out in the law.
Procedural deadlines
The regime of procedural deadlines for issuing licences for the production and operation of renewable energy projects has been reformed with the general intention of reducing deadlines while highlighting deadlines attributable to the licensing authorities. However, this has been done in a way that is expected to generate, in practice, a number of doubts.
In line with RED III, it is foreseen that the time limits for issuing licences may not exceed 2 years (or 3 years for offshore renewable energy projects). The possibility of extending deadlines is limited and should always be subject to the occurrence of extraordinary circumstances.
It also stipulates that the procedural deadlines no longer include the periods of (i) construction of the plant and connection to the grid, (ii) implementation of significant grid modernisations (a concept that seems to include grid reinforcements) and (iii) administrative and judicial challenges (which, according to RED III, should always be urgent, although national law has not yet been revised to provide this urgency). The law does not provide full clarity on the start and end times of the periods of suspension of the deadlines, especially with regard to the construction of the project.
The deadlines for prior registration procedures for power stations subject to this regime have also been reduced, as have the deadlines for deciding on requests for retrofitting and overpowering.
The procedural deadlines regime for licensing procedures is reformed with the intention of reducing deadlines and only considering deadlines attributable to the licensing entities, but in a way that may create doubts in the practical application of the law.
Contrary to the simplifying intention expressed in DL 99/2024, it becomes mandatory to submit to the EIA authority a proposal for defining the scope (PDA) of the EIA.
Presumption of public interest
For the purposes of the regimes set out in Decree-Law 140/99 of 24 April, as amended (the “Rede Natura 2000” Regime), and Law 58/2005 of 29 December, as amended (the Water Law), the presumption of public interest for public health and safety is now provided for in the planning, construction and operation of renewable power plants and/or storage facilities, including their connection to the grid. The national legislator has not gone beyond RED III in this respect, namely by providing that the presumption of public interest extends to other environmental national legal regimes, namely the National Ecological Reserve regime and the protection of cork oaks and holm oaks (which does not, however, preclude a request for recognition of the public interest whenever possible under such regimes).
Compensation to Municipalities
The regime for compensation to municipalities has been amended in order that, for power plants and storage facilities with a connection power above 1 MVA, the municipality can always opt for a payment in kind (through the installation of a UPAC or electric charging station, which must now have an installed power corresponding to 1% of the capacity of the power plant or storage facility) or a cash payment, which remains at € 1,500 per MVA of capacity.
Proposal for defining the scope (PDA) of the EIA
In the case of renewable energy power plants and infrastructure subject to EIA, it is now mandatory to submit an EIA scoping proposal (“PDA”) to the EIA authority, following the procedural steps set out in the RJAIA. Such PDA was already possible under the terms of the law, although rarely submitted by interested parties. This is the only provision of this law that seems to run against the simplification expressed in it, although it is possible that the intention is to dismiss any doubts about the scope of the EIA that could arise from particularly complex projects from the outset.
Areas within the National Agricultural Reserve (RAN)
It is now envisaged that areas integrated into the RAN can be used for renewable energy production under the following conditions: (i) the perimeter of implementation of the power plants, including their internal lines and connection to the RESP, includes areas in the RAN; (ii) these RAN areas represent less than 10% of the total contracted area; and (iii) the RAN areas are less than 1 hectare in size.
On the other hand, there is also a presumption of compliance with the requirements set out in article 22 of the RJRAN when the use of areas integrated in the RAN for the installation of electric poles, the passage of internal lines and the connection of power plants to the RESP does not impose restrictions resulting from the constitution of the line easement that harm the dominant crop in the affected area.
Operation certificate for UPAC
A new article is added to Decree-Law 15/2022, which foresees that the operation certificate for UPACs is issued automatically within 10 days of the submission of the inspection report confirming installation's compliance. When the issuance of the operation certificate has not been refused, it is deemed to have been granted and the final connection to the grid is authorised.
However, it is the DGEG's responsibility to verify compliance with the procedures and conditions required to obtain the operation certificate, and it may audit any procedures up to 2 years after their conclusion. If the DGEG identifies any irregularities in the certification procedure, it must notify the certificate holder to correct the irregularity within a maximum of 30 days, the breach of which entails the certificate to be revoked. This deadline can be extended once at the request of the certificate holder.
The concept of proximity in collective selfconsumption
The concept of proximity between the UPACs and the utilisation facilities ("UI") for self-consumption via the RESP has been altered to require alternatively (and not cumulatively, as was the case until now) electrical proximity or geographical proximity for UPACs connected to the National Distribution Grid and National Transportation Grid (i.e. all UPACs except those connected at low voltage).
Alternatively, it is now required that both are connected to the same substation or that the maximum geographical distance in the law (which is maintained) is respected.
The maximum distances between UPACs and UIs located in low-density territories (identified by order of the members of the government responsible for energy and territorial cohesion) are also doubled.
Municipal interest waived
In an attempt to eliminate the growing difficulties in licensing power lines in some of the municipalities, it has been clarified that the implementation of these public service infrastructures does not require the demonstration of municipal interest. It seems that this applies also to lines of evacuation of electricity by generating plants to the grid, by reference of article 54 of DL 15/2022.
Electro-intensive Consumer Status
The Electro-intensive Consumer status regime is amended to (i) reflect the replacement of the previous Guidelines on state aid for environmental protection and energy 2014-2020 with the new Guidelines on state aid for climate and environmental protection and energy 2022 and (ii) to be able to include low voltage grid connections as well.
The reduction of grid access tariffs for electro-intensive consumers is also reviewed, in order to adapt national law to the maximum reductions provided for in the European state aid regime. As a result, grid access tariffs may be reduced by an amount corresponding to a maximum percentage of 85% of the costs and general economic interest (“CIEG”) included in the system use tariff (tarifa de uso global do sistema) in the electricity consumption component through the RESP (excluding costs with capacity mechanisms), but the reduction cannot lead to the payment of CIEG charges of less than 0.5 EUR / MWh. This regime applies only to electro-intensive consumers who purchase electricity through bilateral contracts, since the full exemption from CIEG for the self-consumed energy component is maintained in the case of selfconsumption through the RESP.
In certain cases, the 85% reduction in the CIEG is made conditional on demonstrating that at least 50% of electricity consumption comes from renewable energy sources, part of which is from bilateral contracts or self-consumption, without which the reduction will only be 75% of CIEG.
The effects of the various tariff reductions for electro-intensive consumers are still dependent on approval by the European Commission, and it is hoped that these changes will enable this approval to be obtained quickly.
Registration and bilateral energy contracting activity
Provisions have been added to Decree-Law 15/2022 regarding the activity of registering and bilateral contracting energy, which consists of registering all transactions of bilaterally contracting energy and/or power of mandatory or voluntary adherence, in which at least one of the parties is a market agent.
The activity of registering and bilateral contracting energy shall be managed by the entity responsible for managing the forward market (OMIP).
ERSE is responsible for regulating this activity. It must approve the Manual of Procedures for the activity of, which must be proposed by the management entity to ERSE, and it is also responsible for monitoring and supervising its application.
Finally, it should be noted that the terms and conditions of the energy registration and bilateral contracts activity will be approved by order of the member of the Government responsible for the energy sector, within 120 days of the law entering into force.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
