Author David Delgado Country Managing Director, Spain

Spain is on the cusp of a significant stride in its renewable energy journey with the unveiling of a comprehensive regulatory framework for offshore wind projects. 

This was highly anticipated as the preceding Royal Decrees (Decretos) that regulated the administrative procedure for processing authorisation requests for electric power generation installations in the Spanish territorial sea were no longer capable of encompassing the advancements in the offshore wind industry and the emergence of floating technologies which have expanded the potential and reach of wind energy in the country. Also, the new European and national frameworks made it necessary for Spain to update its legal framework and establish new regulations as it pursues its target of achieving 3GW of production from offshore wind this decade.

The new Royal Decree1 (proposed on 26 February) establishes the regulation of electricity production in installations located in the sea, delimits the administrative authorisations applicable to them, as well as the economic regime, mechanisms, and procedures necessary for their granting. The proposed guidelines, encapsulated in this ambitious decree, promise to revolutionise the nation’s energy landscape, and reinforce its commitment to sustainability and innovation.

The proposal is now officially in the consultation period during this month, with a deadline for submitting objections by Monday 25 March 2024. This article delves into the key elements of the proposed regulatory framework, shedding light on its potential impact and applauding the strides towards a greener, more resilient future.

*Approved offshore wind development zones. Source: Spanish Ministry for Ecologic Transition (MITECO).

At the heart of this regulatory overhaul is the establishment of an economic regime for renewable energies, underpinned by a competitive process delineated in the Real Decreto 960/20201. The award structure is intricately designed with relevant factors such as pricing, technology specifications, installation attributes, and market engagement, all of which should foster a dynamic environment that encourages efficiency and innovation.

In Article 6 the proposal underscores the effects of the competitive bidding procedure, emphasising the simultaneous granting of rights to the economic regime for renewable energies and access capacity reservation in the electric power transmission network.

Merging these different areas into one bidding process is a positive element to get to a faster realisation of projects; although compliance with timelines, regulations, and obtaining necessary permits, including environmental impact assessments, are still crucial in this process.

The following articles highlight the call for the competitive bidding procedure initiated by the Ministry for the Ecological Transition and the Demographic Challenge following an agreement by the Delegated Government Commission for Economic Affairs. A public-private dialogue is encouraged post-approval to define characteristics, requirements, and details of the bidding procedure, fostering social acceptance and integration with other marine uses.

The meticulous attention to detail extends to retribution parameters, ensuring a balance between economic viability and environmental sustainability. The regulation outlines specific metrics such as availability deadlines, delivery periods, operating hours, market adjustments, and control milestones. The proposed approach aims to provide transparency for stakeholders to navigate the burgeoning offshore wind sector.

The proposal also highlights that an approved maritime spatial plan is required; to that effect, it introduces a ‘Public-Private Dialogue Phase’, allowing interested parties to submit comments and improvement proposals related to the bidding procedure. As progressive as this intention is, this could also come with a cost of delaying the entire process to reach a resolution.

Grid access is key
Further requirements for participants and requirements and criteria for projects are defined in this proposal. Legal form, technical solvency, company experience, and size are established for participants, while objective project requirements and criteria cover various aspects, including design, environmental and socio-economic impact, dismantling, and contributions to power supply quality and safety.  Further to the economic criteria, the bidding process highlights the significance of non-economic criteria and the role of a technical evaluation committee.

The proposal contains a remarkable recognition of efficient access to the grid as the cornerstone to maximizing the potential of offshore wind projects. The framework strategically allocates capacity at designated nodes, prioritising energy coming from marine renewable installations (i.e. offshore windfarms). This strategic approach, coupled with a thorough assessment of capacity, estimated spills, and connection feasibility, aims to streamline the integration of offshore wind into the existing energy infrastructure. The assessment of the latter should facilitate the selection of projects to be awarded.

The proposal also recognises the importance of fostering innovation. The regulatory framework offers a pathway for novel marine renewable installations. Those not predefined in maritime plans may secure exemption from competitive processes if they meet stringent criteria and gain confirmation of their innovativeness from authoritative bodies. This provision underscores Spain’s commitment to nurturing cutting-edge technologies in the renewable energy sector. It must be said that this element may have a larger impact in tidal and other forms of ‘marine renewable energy’ than in offshore wind since, in our opinion, what the floating offshore industry needs to succeed is the standardisation of technologies that enable commercial-scale projects.

As Spain embarks on this transformative journey, the proposed regulatory framework for offshore wind projects emerges as a beacon of progress.

The proposed framework ensures a fair and transparent competitive landscape, with certain exceptions catering to specific nuances of offshore wind projects. To participate in competitive processes, stakeholders are required to furnish guarantees upon registration. These guarantees play a pivotal role in determining the final deposit necessary for securing maritime-land public domain concessions, thereby fostering accountability and commitment. By addressing economic, environmental, and administrative facets, the country is laying the groundwork for a robust and sustainable offshore wind sector.

The intricate balance struck in this framework not only encourages investment and innovation but also positions Spain as a frontrunner in the global race towards a cleaner, greener future.

David Delgado is the Country Managing Director for JUMBO Consulting Group Spain, a highly specialised advisory offering strategic services and project delivery consultancy for offshore wind, offshore transmission systems and energy island projects, covering the entire project lifecycle from early development, procurement, construction to O&M. Headquartered in Denmark, JUMBO Consulting Group’s services are founded on deep sector knowledge and delivery of contractual and commercial solutions within its core disciplines, development services, supply chain development, category-, procurement- and contract management and advisory.