By means of Royal Decree-Law 8/2023, adopting measures to deal with the economic and social consequences of the conflicts in Ukraine and the Middle East, and to alleviate the effects of the drought, approved on 27 December, the government extended for six months certain temporary energy measures that were due to expire on 31 December.

The protection of families and businesses is strengthened:

1. The ban on cutting off basic electricity, water and gas supplies to vulnerable consumers in case of non-payment is maintained.

2. It extends the three categories of vulnerable consumers who receive the social electricity voucher and the discounts of 40%, 65% and 80%.

3. The limit on the growth of the regulated gas tariff (TUR), the existence of the specific TUR for residents’ associations and the maximum price of a cylinder of butane at 19.55 euros are extended.

4. Reduced taxation is established for electricity, natural gas and biomass fuels used for heating:

• In the case of electricity, the Value Added Tax (VAT) will be 10% throughout 2024; the Special Electricity Tax (IEE) will be 2.5% during the first quarter of the year and 3.8% during the second quarter; and the Tax on the Value of Electricity Production (IVPEE) will have a rate of 3.5% until March, rising to 5.25% until June.
• For natural gas supplies, VAT will be set at 10% for the first three months of 2024, while it will remain at the same level for biomass fuels for six months.
• Heat supplies will follow the same pattern, depending on their fossil or renewable origin.

5. Electricity system charges are maintained at the same current levels, 55% below pre-war levels, and the 80% discount on tolls for electricity-intensive companies is maintained.

These protection provisions will be financed from the surplus registered in the electricity system during 2022 - and that which may be registered in 2023 - as well as from specific items included in the next General State Budget.

Provisions are included for the promotion of renewables and the competitiveness of industry, including self-consumption:

1. It strengthens the value chain of the European green industry, modifying the steps for the processing of new renewable projects established by Royal Decree-Law 23/2020, voluntarily extending the processing period for new renewable projects to eight years.
This amendment also encourages an orderly incorporation of new installations to increase the visibility of the pathway to meet the national clean energy production targets set for 2030. The deadline for obtaining the Administrative Authorisation for Construction of the project is increased by six months, to 49 months. Furthermore, developers will be able to extend the deadline for obtaining the Administrative Authorisation for Operation from five to a maximum of eight years; they will only have to indicate the six-month period in which they expect the facility to enter into service, which will be binding.
In the case of offshore wind farms and pumped hydro power, the maximum total processing time becomes nine years.

2. Qualitative criteria are included in renewable auctions that recognise the social and environmental added value of European industry. In other words, auctions to award the Renewable Energy Economic Regime may include non-economic award criteria with a maximum weighting of 30%, such as the contribution to resilience, environmental sustainability, innovation, the socio-economic impact of the project or other aspects that improve the integration of renewables into the electricity system.

3. More grid capacity is granted for self-consumption. This measure particularly favours large-scale installations linked to industrial activity. 10% of the capacity of all nodes of the electricity transmission grid reserved for access tenders is in turn reserved to guarantee the evacuation of surpluses from self-consumption installations.
Moreover, access to funds for self-consumption under the Recovery, Transformation and Resilience Plan will be facilitated through specific modifications to Royal Decree 477/2021, which approves the granting of aid linked to self-consumption and storage, with renewable energy sources, enabling the autonomous communities - responsible for the distribution of territorialised funds - to reduce the documentation accrediting compliance with the award criteria.

4. Hydraulic energy storage is promoted as one of the keys to the energy transition. Among the uses of water, hydraulic energy storage is placed in third place in the order of preference established, behind the supply to populations and agricultural use and ahead of the production of electrical energy and other industrial uses. It also adapts the concessions for pumped hydro power stations so that they are considered as hydraulic energy storage facilities and their repowering is encouraged.

Finally, actions to tackle the effects of the drought are inlcuded, particularly notable in the southern and eastern basins - such as the Guadalquivir or the internal basins of Catalonia - and with the intention of avoiding water supply problems, new urgent measures of a tax and administrative nature are adopted to alleviate the impact of the lack of water and to distribute the resource in a supportive and equitable manner among all the sectors affected:

1. Hydrographic confederations are empowered to reduce supplies and modify priority criteria in the use of water to allocate resources, while the sanctioning regime for infringements related to these measures is reinforced.

2. During 2024, 50% and 100% exemptions are granted on the regulation levy and the water use tariff for agricultural holdings benefiting from hydraulic works with reductions in water provision.

Sonsoles García
Energy Area