Climate change and energy transition bill
On 20 May 2020, the Spanish Government passed a bill on climate change and energy transition. The bill has been sent to Parliament for processing and is expected to become an Act of Parliament by the end of 2020 / beginning of 2021.
The bill reflects Spain's commitments at the international and European level, puts the battle against climate change and energy transition to reach the climate neutrality objective by 2050 (at the latest) at the centre stage of political action, and aims to achieve a systematic improvement in the energy efficiency of the economy.
The bill contains the following targets for 2030:
- Reduction of greenhouse gas emissions across the entire Spanish economy: at least 20 % (compared to 1990).
- Penetration of renewable energies in final energy consumption: minimum 35 %.
- Electricity generation from renewable energy sources: minimum 70 %.
- Improvement of energy efficiency by reducing primary energy consumption: minimum 35 % (with respect to the baseline under EU legislation).
The bill includes two basic planning instruments (National Integrated Energy and Climate Plan (PNIEC) and the 2050 Decarbonisation Strategy) and requires all sectors to contribute to the decarbonisation of the economy: sectors participating in the Emissions Trading Scheme, large industries and the electricity sector, and diffuse sectors, including agriculture, forestry, transport, residential, institutional and commercial, and fluorinated gases.
The fulfilment of the above targets requires an unprecedented commitment to installing new generation capacity based on renewable sources, the introduction of mechanisms (auctions) for allocating this capacity that are appropriate for the intended purposes, and specific budgetary measures to foster their implementation.
The bill: (i) regulates non-flowing hydraulic technology (in particular, reversible plants) and includes an amendment to the Electricity Sector Act to regulate storage systems in general, not necessarily hydraulic, to maximise the integration of renewable production technologies; (ii) envisages the participation of demand, distributed generation and self-consumption in the markets, including balancing and adjustment services, by providing for a new type of electricity sector entity: the independent aggregator, and (iii) updates the provisions applicable to the hybridisation of electricity generation facilities with renewable energy sources or storage facilities in terms of access and connection to the electricity grid.
As far as fuels are concerned, the bill places restrictions on new hydrocarbon exploration and exploitation projects and provides for measures to promote renewable gases, including biogas, biomethane, hydrogen and other alternative fuels.
In the area of transport, the bill includes measures to reach a fleet of passenger cars and light commercial vehicles with no direct CO2 emissions by 2050, introducing an obligation for operators of petrol stations of a certain size to install electricity recharging facilities and for municipalities with a population of more than 50,000 and island territories to implement urban planning measures to reduce mobility caused emissions (low-emission areas).
The bill establishes a framework to ensure a fair transition to a decarbonised economy that takes into account the most vulnerable groups and geographical areas, including rural areas (Fair Transition Strategy and fair transition agreements).
Finally, the bill contains certain measures in the area of governance and to direct public spending towards achieving the energy transition targets, introducing the climate variable into sectoral policies for the purpose of monitoring and evaluating public policies, and the need to draw up risk reports.
The government expects that, once passed, the bill, will generate more than €200,000 million in investment in the next decade and create up to 350,000 new jobs annually. The act is expected to drive the recovery from the Covid-19 crisis.
