Support for cogeneration, faster renewable permits, and lower fuel VAT

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1. Cogeneration facilities located in peninsular Spain may give up their specific remuneration scheme in order to join the gas cost adjustment mechanism of Royal Decree-Lawroyal decree-law A rule with the force of law that the Government passes because it is urgent. It applies from its publication, but the Congreso must validate it within 30 days or it lapses. 10/2022. During the waiver they will not receive that remuneration, but they can ask to end the waiver early.
2. Permit processing for renewable power plants is streamlined: the power margins that do not require a new permit are widened, the CNMC will have 15 days to issue its report and may issue favorable reports without detailed analysis in certain cases, and the consultation period with other administrations is cut in half.
3. For preliminary registration in the registry, small differences of up to 5% between the declared capacity or power and the permits will be accepted, without requiring the documents to be amended before the final operating notification.
4. New criteria are set to calculate allowable load levels on the electricity transmission grid, allowing a move from seasonal limits to monthly, daily or even hourly values, to make better use of the grid and avoid curtailment of renewable energy.
5. From October 1 to December 31, 2022, the VAT on natural gas, biomass briquettes and pellets, and firewood drops from 21% to 5%.
6. A demand response service is created for the peninsular electricity system, awarded through an annual auction and operating from November 1, 2022. In addition, if the electricity system closed 2021 with a surplus, that money will be used to cover 2022 imbalances, and until October 24, 2022, people affected by the La Palma eruption can again apply to suspend loan payments.

Who it affects

• Companies with cogeneration facilities in peninsular Spain: They can waive their remuneration scheme to join the gas cost adjustment mechanism.
• Renewable power plant developers: Faster permit processing and fewer requirements to modify their projects.
• Household consumers of natural gas and heating fuels: They pay less VAT on their bills until December 31, 2022.
• Large electricity consumers connected to the peninsular grid: They can take part as providers in the new demand response service.
• People affected by the La Palma volcanic eruption: They can apply again to suspend loan and credit payments until October 24, 2022.

Words worth knowing

Cogeneración (cogeneration)

A facility that produces electricity and useful heat at the same time, making better use of energy.

Régimen retributivo específico (specific remuneration scheme)

A regulated payment certain facilities receive for producing energy efficiently, under Royal Decree 413/2014.

Mecanismo de ajuste de costes (cost adjustment mechanism)

A temporary system that caps the electricity price by compensating gas-fired plants for the extra gas cost.

Vertido (curtailment)

Renewable energy that cannot be carried by the grid and is lost.

IVA (VAT)

Value Added Tax: the percentage added to the price of goods and services.

royal decree-law

A rule with the force of law that the Government passes because it is urgent. It applies from its publication, but the Congreso must validate it within 30 days or it lapses.

decree-law

A rule with the force of law that the Government passes because it is urgent. It applies from its publication, but the Congreso must validate it within 30 days or it lapses.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries