Spain: New Regulatory Requirements On Grid Connection Points May Raise Investment Opportunities

Last Updated: 22 October 2018
Article by Javier Lasa and Mario Sáez

The Government has recently approved Royal Decree-Law 15/2018 ("RDL 15/2018") which, among other important provisions for the electric sector, is intended to finish with the shortfall in available connection capacity as a consequence of numerous developers having locked connection points all over the distribution and transmission grids, and thus increasing the selling price for greenfield projects.

New and tougher requirements are then imposed by the RDL 15/2018 for securing a connection point1.This may involve several consequences for investors and developers, as well as for the greenfield projects market itself:

Greenfield projects which have not obtained connection permits will require stronger financial backup to be developed:

The amount of the bank guarantee to be posted to secure a connection point has been increased by 4 times, from 10 €/kW to 40 €/kW of installed capacity. Such guarantee is reimbursed to the developer when the renewable asset is commissioned within an agreed term (otherwise the guarantee is enforced and the connection permits expire), but such a substantial increase in comparison to the projects currently under development, increases the financing cost of projects, as clearly shown in the examples below:

Type of project2/Installed capacit Amount of the guarantee (€) Difference (€)
Before the approval of RDL 15/2018/td> After the approval of RDL 15/2018
PV /25 MW 250,000 1,000,000 +750,000
WF /50 MW 500,000 2,000,000 +1,500,000
PV /100 MW 1,000,000 4,000,000 +3,000,000

Greenfield projects which have already obtained connection permits must meet additional requirements (even if the increasing cost of the bank guarantee does not affect them):

  • Anticipating 10% of the investment to enlarge the grid connection point. The developer shall pay in advance to the distribution/transmission grid operator 10% of the investment value of the new connection facility (i.e. works to be carried out by the grid operator to reinforce or enlarge the connection point). The payment must be made no later than 12 months after the connection permits have been granted. This requirement applies to connections over 36 kV, which in fact represents most of the projects. In case such payment is not carried out by the indicated term, both access and connection permits will expire automatically3.
  • Concluding an agreement for the enlargement of the connection point. The developer shall also conclude, no later than 4 months after he has obtained the administrative authorization, an agreement with the grid operator which captures both the works to enlarge/reinforce the connection point and the remaining payments due by the developer to fully finance such enlargement4.
  • Keeping the project as initially presented. The project must not differ from the one initially presented to the authorities in charge of granting the approvals. The Government must still regulate which (if any) modifications would be acceptable, but probably there will be little room for amending the type of technology, the installed capacity of the project, the type of evacuation facilities, etc.5

In case a project is modified beyond the regulatory limits, the petitioner should obtain new permits for the resulting asset, as those previously secured will no longer be valid for the modified facility.

  • Reporting the progress of the project's development. The promoter must report to the Authorities: (i) the dates in which both the environmental impact assessment and the administrative authorizations for construction and commissioning are applied for; and (ii) the dates in which such assessment and authorizations are finally obtained.

The term when such milestones are to be achieved, is still pending to be regulated by the Government. However, controversy might arise in case the new deadlines are not met due to the authorities' inaction (silencio administrativo), as developers should appeal such inaction before the Courts so as to protect themselves from potential negligence behaviour6.

New transactions of greenfield projects at an initial stage of development is expected in the short term.

Developers which have already obtained access and connection permits before the enactment of RDL 15/2018 but are not able (or are not willing) to fulfil the new requirements, in particular the advanced payment to the distribution/transmission grid operator, can waive such permits in 3 months and recover the posted guarantees. If otherwise any due payment is not made within the 12-month term set forth in the RDL 15/2018, the connection permits will expire and the posted guarantees will be enforced7.

It is therefore expected that a number of developers willing to abandon projects, offers such projects to investors at a discount over current market prices (rather inflated according to prior regulatory conditions), as an alternative to recover the guarantees posted and the loss of any other costs they may have incurred.

In the mid and long term, only investors with high financial capacity will be able to secure connection points.

In the future, securing connection points will only (or mainly) be feasible for investors and developers with high financial capacity. Medium and small-size developers may find it more difficult to start greenfield projects without such financial backup from financial third parties or strong developers.

Therefore, it is expected that the price of greenfield projects remain stable, as a consequence of lack of speculation in the connection capacity, since (much) less opportunist developers will be able to lock connection points with a speculative purpose (and therefore there should be no high increase in the price of greenfield projects due to lack of connection capacity).

Finally, the RDL 15/2008 makes connection to the transmission grid easier in case there is no previously planned capacity in the connection point.

As a general principle, any connection to the transmission grid which requires the enlargement of the connection point must be made either in an already existing facility or in a facility which enlargement is already included in the official planning. However, RDL 15/2018 allows energy production assets to connect to a transmission facility that must be enlarged (up to a maximum number of connecting positions), even though such enlargement is not included in the official planning, provided that (i) it is technically and physically feasible; (ii) it is not possible to connect the assets through already existing positions; and (iii) the developer funds the necessary investment.


1 Third additional provision of RDL 15/2018.

2 PV stands for photovoltaic solar project. WF stands for wind farm project.

3 Please note tha,t when connecting to the transmission grid, the existing regulations already set forth an advanced payment of 20% of the expected cost of reinforcing the connection point (section 54 of RD 1955/2000). Such payment must be done when the connection point was applied (i.e. much before than the 10% advanced payment set forth in RDL 15/2018). It remains unclear if under the new regulations either only 10% can be advanced by the promoter, or the 10% advanced payment applies only to connection to the distribution grid, or (more unlikely) the new advanced payment of 10% must be added to the already compulsory 20%.

4 The RDL 18/2015 states that, in case the promoter quits the projects, all the costs paid to the grid operator for the permitting and enlargement of the connection point shall be reimbursed, except those 'non-recoverable' costs, although the connection permits will then expire. It is unclear form the regulation whether expiration of permits also triggers the enforcement of the guarantees, as it may be the case according to section 59 bis.2 and 66 bis.2 of RD 1955/2000 or would be considered a part of the 'non-recoverable' costs.

5 It was not rare that connection permits requested, for instance, to connect a large wind farm project were later used to connect several PV solar projects (i.e. using the same connection capacity, several projects can be separately developed –and eventually sold). This will probably not be allowed anymore.

6 Authorities inaction results in the relevant authorization deemed dismissed. However, it is not unusual nowadays that legal deadlines are exceeded due to such inaction and authorizations are later granted (without need of any further appeal being filed). However, if the new regulations imply that exceeding deadlines involve that connection permits expire, the promoters will need to file an appeal against inaction so that permits remain legally in force until the appeal is judged, allowing the authorities time enough to grant the relevant permits in the meantime. A litigation problem will then arise where there was no need to.

7 3rd transitional provision of RDL 15/2018.

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions