At the beginning of 2016 the first wind and biomass tenders ever launched in Spain were allocated. The problems with this first tender round is that projects that won the competitive auction have set the price to zero and that the tender excluded a pre-qualification stage, which is considered essential to determine the financial and technical viability of a project. In the absence of pre-qualification criteria and a price set to zero, there is no guarantee that developers will be able to deliver all the projects. The new Law on Climate Change and Ecological Transition expected to be passed by the Spanish parliament in 2019 addresses the issue of price-zero and proposes a realistic auction scheme including pre-qualification criteria, hence attracting participants that actually can execute their projects. However, the effort does not represent a signifcant incentive for the part that biomass should have. Biomass is expected to grow from 655 MW in 2015 to 1,677 MW in 2030. In order to establish a solid energy transition process, the part of biomass in the renewable energy mix should be much higher.

Next tender rounds should include a pre-qualification stage to determine the financial and technical viability of the projects that are going to be prensented.

The huge overcapacity in the Spanish electricity market (mainly based on new and old conventional/fossil power capacity) is an overarching barrier. The issue has been existing for a few years already, due to a lack of a development planning. In 2016, it was clearly aggravated due to the decrease in electricity demand because of the financial crisis. However in 2018, Spain has had record of imported energy on the first two months. For the first time in 5 years, generation does not cover demand, as generation has been increasing by 1%, while demand by 4%.

It would be necessary to set up a better planning for the electricity capacity and supply. Electricity capacity should grew according to demand grew projections and scenarios.

Spain is a (so-called) energy island. The interconnection ratio - meaning the ratio between the total installed power capacity of a country and the existing exchange/interconnection capacity with a neighbouring country – between Spain and its neighbour countries Portugal and France was still below 5% in 2016. While the minimum level suggested during the Barcelona (EU) summit in 2002 was 10% by 2020, some progress has been registered in the last years, especially in 2015. For example, in 2015 the interconnection capacity with France has been more than doubled, and also the same year Portugal, Spain and France signed a tripartite agreement during the Madrid Summit, establishing the agreement’s objectives and investment for the development of electricity and gas interconnections among the three countries. During this summit, it was agreed to establish a High-Level Group of Southwest Europe dealing with the interconnections of these countries to be implemented by the EC. As part of the gas interconnections, the Group will also evaluate the possibility of a bi-directional exchange of gas flows between the grids of the Iberian Peninsula and France, through the eastern axis. In addition, there is also a project to connect France and Spain on the Bizkaia Gulph, planned to be concluded in 2025. This increased quality in interconnection is important for Spain, as since 2016 it is no longer the traditional energy exporter it used to be. Thus, this increased interconnection would bring it more energy security.

While the minimum level suggested during the Barcelona summit in 2002 was 10% by 2020, some progress has been registered in the last years. In 2015 the interconnection capacity with France has been more than doubled, and also the same Portugal, Spain and France signed a tripartite agreement during the Madrid Summit, establishing the agreement’s objectives and investment for the development of electricity and gas interconnections among the three countries. During this summit, it was agreed to establish a High-Level Group of Southwest Europe dealing with the interconnections of these countries to be implemented by the EC. As part of the gas interconnections, the Group will also evaluate the possibility of a bi-directional exchange of gas flows between the grids of the Iberian Peninsula and France, through the eastern axis. The recommendation now is to comply with these tripartite interconnection agreements signed in 2015.

In some cases, the utility company could take many days to revise the connection point of the plant and connect it to the electricity network. Depending on the utility the project developer is dealing with, the response time can vary significantly.

The sooner the installation is verified by the utility, the better for having the PV installation ready to apply for the final authorization.

The main barrier for the development of the offshore wind energy technology in Spain is the lack of a specific and stable remuneration (option) for offshore wind energy projects. The lack of a specific remuneration is because the national government, particularly the competent Ministry has not issued a support scheme to promote offshore wind farms in the country, so far. The barrier affects the legal and technical levels.

Regarding the technical level, following effects can be observed:

-Lack of submarine electricity infrastructure (transmission) in areas of implantation of marine parks.

-High generation costs of the technology available for the offshore wind utilization.

-Lack of commercial offshore wind technologies adequate for deep water areas (most of the Spanish coast).

-Lack of offshore wind farms, experimental facilities and technology demonstration areas.

-Lack of national Spanish offshore wind turbines.

As far as the legal level is concerned, it is possible to observe that there are no remuneration schemes as well as long and expensive administrative processing times for even potential pilot offshore wind projects. Additionally, Spain has a natural barrier, since most of the continental rock bottom is much deeper than other parts of world. This means that some miles into sea is already enough for the bottom to become quite deep, which makes floating offshore wind (one of the most expensive offshore wind technologies) one of the most viable options. The new Law for Climate Change (2019) addresses the need of a strong, long term and reliable support scheme, which would be attractive for investors. However, there should still be concrete measures regarding each sector. Also, the Integrated National Plan for Energy and Climate 2021-2030 only briefly mentions offshore wind power as a source that should be exploited but it does not mention concrete measures. In spite of all this, the regional government of Canarias together with the private sector are currently (as of May 2019) testing a floating wind power two turbine device. It is important to mention, that this barrier is likely to stay in place since offshore wind power is not seen as a prioritiy as are onshore wind and photovoltaic sources.

In Spain, a regulatory and policy framework with adequate incentives and remuneration’s level is required to promote offshore wind energy. As long as no legal incentives and no promotion measures have been set, it is impossible to develop the sector. Moreover, Spanish coasts are very deep (deeper than other EU countries like UK) and this imposes even higher upfront investments in the country.

The main barrier for the development of small PV and wind energy projects in Spain is the lack of a specific and sufficient remuneration. The Real Decreto (RD) 900/2015, approved on October 2015, which regulates the self-consumption regime in Spain, in theory includes small-scale wind and solar PV installations, but in practice it affects mostly the PV sector. RD 900/2015 encounters three main problems. First, RD 900/2015 can not be applicable in practice because the procedure to measure the meters has not been approved yet. Second, there is a lack of specific and unified connection rules for self-consumption (in low and medium tension voltage). Finally, the decree blocks the development of the small-scale technology due to its negative consequences (back up toll) on the remuneration and imposed taxes (including the so called 'sun tax', a financial obligation for self-consumption generators), which affect the profitability of the small scale projects: Amortization period of these technologies increases from 4-5 years to about 11-12 years. Currently, only installations that have a capacity of more than 100 kW need to pay an extra fee ("peaje de respaldo''), not all of the installations per se. However, the fee has a really bad reputation and people have the idea RES projects are impossible to have/install. But this is false for low capacity installations, thus impacting mostly industries. The new government said publicly it intends to improve this regulation. This barrier affects the legal, technical and operational levels. The procedure for measuring the meters as well as specific and unified connection rules for self-consumption in low and medium tension voltage are addressed in Royal Decree 244/2019 and the so-called sun tax has been lifted by Royal Decree Law 15/2018. However, it still remains to be seen how the operational dimention of the decrees will play out. The incentives for small PV and wind energy projects might show in the upcoming tender round legislation but most likely, the incentives will rather look like administrative easements or targeted subsidies and will not necessarily be part of the tender round legislation.

Small PV and wind energy projects should be recipients of specific support incentives such as administrative easements and targeted subsidies, otherwise most incentives go to big projects.

The realisation of (small) hydropower projects in Spain are confronted with very long permit and construction periods which mainly impacts the legal and operational level

The main problems encountered in the grid connection phase are the significant connection costs that, in some cases, may constitute an excessive upfront cost and thus discourage the RES-E investment. In case the grid upgrade benefits several electricity producers, these costs have to be shared and the system developer can negotiate its share with the DSO.

The issue of high connection costs arises especially in the case of RES-E plants connected to the medium voltage grid, as there is a lack of specific and unified interconnection rules for medium voltage electricity lines. In low voltage grid the problem may currently arise due to the outdate of the „Instruction BT 40“. The problem also appears when RES-E developers attempt to develop plants in areas with good natural resources but insufficient distribution grid hosting capacity or electricity demand.

In order to decrease the interconnection costs, the connection conditions and criteria for medium voltage electricity grid should be unified. In the case of self-consumption installations, the electricity operators should set up bidirectional meters at their expenses.

The fulfilment of the technical requirements established by the Spanish grid codes (P.O.) constitutes a problem. The technical solutions required in Spain, though available on the market, have been too heterogeneous, and that’s why it has been very difficult for foreign developers to comply with the technical requirements when implementing their projects. However, Spain is currently working on the adaptation and coordination of the grid codes (P.O.) to the EU requirements and the harmonisation of them.

Solution to this problem would be to complete the work on the harmonisation of all the European technical rules concerning the transport, consumers, and distributors. It should be noted that this task takes time because it is not only about changing the P.O. but it also includes the change of the electricity sector law. Legal changes take time.

In 2014, a legislative package was presented (RD 413/2014 and MO IET/1945/2014), including a new economic regime for existing RES-E plants based on economic estimated parameters and standardised installations. Although the legislative regime entered into force on 11 June 2014, it applied retroactively from 14 July 2013. It undertook a deep review of the support scheme. On the one hand, Royal Decree 413/2014 eliminated the concept of "special regime" (FiT) used before for the electricity production from renewable energy sources (RES), combined heat and power (CHP) and residual wastes. On the other hand, it introduced a concept of what might be a “reasonable" return of investment (ROI), based on some estimations such as the average yield of Spanish 10-year Government Bonds in the secondary market, plus a spread of 300 basic points which should lead to an average ROI of 7.5% before taxes. Other parameters were also introduced. This new calculation method for the ROI applies for the overall lifetime of existing RES-E installations, meaning that for existing installations which might have reached higher profit margins in the past for being more efficient or because they benefited from good entrepreneurship of their owners (i.e. for using innovative and very efficient technology, etc.), those additional revenues generated thanks to this efficiency would be subtracted from the financial support the plant had received since 14 July 2013 and for the future. Moreover, it was highlighted that it is not realistic to estimate the profits in advance and apply these profits for all plants. Following the publication of this regulation, more than 6,000 appeals have been presented to the Spanish supreme court.

The RES-E projects had been planned and developed in the past according to other rules that were changed in the middle of the process, imposing severe financial losses and seriously jeopardising the legal security in the RES sector. Thus, project developers are claiming to keep the initial legal rules to continue receiving the profits that they had received before July 2013, and in doing so they are pledging for the re-establishment of the legal security. The Government should maintain the original laws, under which projects were developed and control that there are no retroactive legal changes for projects that are in implementation phase. This will reduce the financial risk and the problems to access to financing.

The Electricty Laws, approved in 2013 and 2014, include a formulation that restricts priority access and dispatch for RES-E to "equality of economic conditions in the market", which means that such priority would be granted only in times that RES-E producers would offer their electricity in the market at lower or equal prices as conventional players (except for large hydro and nuclear that still have priority). This is unfair for RES in comparison to conventional sources like nuclear and coal.

In consequence this means a clear breach of article 16 of the European RES Directive (2009/28/CE) which stipulates priority access and dispatch for RES-E independently of the price offered in the wholesale power market or the (degree of) dispatchability of certain power sources. In 2019, the soon to be approved draft law on climate change and ecological transition addresses this issue.

Regarding the priority dispatch for RES-E, it is essential to distinguish between existing facilities and facilities to be built in the future. In the future and once the inland RES-E market would be almost complete, it is understandable that it may arise the suppression dispatch priority because renewable energy will become so cheap that won’t need any priority. However, it must still be guaranteed the priority dispatch right for existing facilities that were developed when technology was not yet matured, relying on certain rules that can’t be thus abruptly changed.

The Spanish Energy Agency (IDAE) started in 2007 to elaborate a method for the certification and traceability of biomass which in theory after its finalisation should have been published by the Ministry of Industry. However, neither the method nor any other rules for the sustainaibility criteria has been published so far as of 2019.

The government should issue and approve a method and rules that promote some sustainable criteria or lists for the biomass and biogas sectors.

Currently, banks are reluctant to new investments. This is due to the adoption of electricity laws with retroactive changes on the economic returns. As a consequence, there is a lack of confidence in the goverment's legal agreements, as this decision has affected the legal security in the country. The banks revise their refinancing options (sometimes with no other option than repossess or sell the installation at a loss). Also, the frequency of these past changes in regulations generated uncertainty, which now is one of the biggest barriers for RES installations. Because of that, consumers' trust and investments have been negatively impacted and it will be hard to restore it. Moreover, no new investors are interested in starting new projects in Spain. Only vulture funds are pushing for buying projects that have a risk of bankrupcy. A boost of the sector, regarding legal security, is expected to occur with the entry into force of the new law for climate change and ecological transition that is currently on hold in parliament waiting for approval. The government should push to speed the process and work on a speedy implementation of the law once it has been approved.

The government should launch promotion and diffusion programs to promote the use of the solar thermal energy more. This is even more important for the industry sector than for the residential sector, as industries need solar thermal energy more than houses.

Since 1997, when the Goverment has started the electrical reform, with the purpose of liberalising the system, no major changes have occured until now. The number of companies has increased, but with no major changes in the market structure, as it is still dominated by the incumbent electricity utilities in an oligopoly (mainly three incumbent companies are dominating generation, distribution and marketing, i.e. Iberdrola, Endesa and Gas Natural-Fenosa). This has influenced that electricity prices have not decreased. In 2014, the oligopoly was investigated by the National Commission on Markets and Competition (CNMC) for the "anomalous and unjustified movements in setting the wholesale prices". In November 2015, the National Commission found that Iberdrola (owner of 23 hydropower plants) had speculated over the price. The National Commission issued a fine of € 25 million but the company appealed and the National Audience (an exceptional high court) suspended the fine.

Concrete steps should be undertaken in order to boost the markets with more competitors, which would have an impact in pricing. These measures should go along a clear regulation and checking of the prices by the regulating authority in order to guarantee both fair prices and security for consumers and investors.

Renewable energy sources generating electricity (RES-E) require several permits that might even differ among regions. There are too many laws and regulations for dealing with the installation authorisation such as building codes, construction codes, environmental impact assessment (EIA), applications for certificate of commissioning, etc., which are different in each municipality.

Establish homogenous procedures and requirements in the municipalities and among the specialists.

Since several departments are involved in the enviromental impact assessment, the process can take several months and even years to conclude.

For different reasons, immature technologies like ocean energy or offshore wind have no clear regulation. Under these circunstances, technicians from public administrations cannot give their administrative authorisation and that is why these two technologies are confronted with several technicals barries that slow down the administrative authorisation process in an indefinite way.

To promote offshore wind energy and ocean sources, a regulatory and policy framework with adequate incentives and remuneration’s level is required .

Delays coming from the grid operators to accept and connect RES to the network, especially concerning small scale installations, are in place. This is the effect of the lack of a unified and clear interconnection code for self-consumption (in low and medium tension voltage) in the electricity sector. A proposal of Royal Decree 244/2019 is pending in parliament and is expected to be approved by the Parliament by mid, end 2019. This decree will directly address issues of self-consumption.

A unified and specific grid interconnection code for self-consumption installations in low and medium tension voltage should be updated and approved, respectevely. This will avoid any delay, problem or barrier imposed by the grid operator.

Due to the absence of a clear and unified interconnection regulation for Self-Consumption and Net Metering, the Administrations delegate interconnection procedures and deadlines to the utilities. The latter work with their own rules, without clear deadlines and, thus, the final approval is delayed. Consequently, Net Metering and Self Consumption is almost blocked, as it is not possible to implement.

The procedure for measuring the meters as well as specific and unified connection rules for self-consumption in low and medium tension voltage should be updated and approved, respectively.

In cases where the grid is not sufficiently developed, project developers have to reinforce the existing networks to connect new RES-E plants to the grid, adding extra costs that may be too high for the promoter.

The suggestion to minimise the costs of RES project developers is that grid operators should carry the costs for the reinforcement of the exising networks; not project developers. Or developers could very well carry the costs and receive other incentives in terms of market access, for instance, which would represent less costs for the operator. Also, clear regulations should establish that costs for the reinforcement of the grid are carried by developers while they receive other incentives in terms of market access. Additonally, the network condtions should be more transparent and uniform, so developers have a clearer undertandings of the costs, in case they should reinforce the electricity grid. Currently, each grid operator has their own tariffs for this and, thus, reinforce costs are different between grid operators. Clear regulation should establish a norm regarding the costs for reinforcements of the grid, if they happen and are carried out by developers, otherwise this can have a negative impact for consumers.

There is a lack of transparent information related to energy evacuation capacity and grid connection points, as utilities are the only ones having the available grid data and the calculation programmes, which are not available to connection point applicants.

Provide transparent information to the applicants of grid connection on what is the present capacity of the grid and stepwise connection procedures. Information should also be easy accessible (for example through an internet portal) to any connection point applicant.