Octavio Llinás: Electrical energy production at sea

Octavio Llinás: Electrical energy production at sea

Since the publication of the POEM Marine Space Management Plans of the five marine demarcations of the Spanish State (February 28, 2023), it was essential to be able to continue advancing in the deployment of Marine Renewable Energies, particularly for floating offshore wind, to establish the procedure and criteria for awarding interested parties the possibility of producing electricity at sea.

This week, practically a year after having published the POEM, the Royal Decree Project that regulates the production of electrical energy in facilities located at sea has been opened to public information, which is the next necessary step for it to be may at some point produce electrical energy in the sea in Spain.

In the continuity of this process, it must be considered that, by greatly accelerating the Ministry in its procedures, in the best of cases there is at least another year before some awards can be made.

The central axis of the Decree is to establish and regulate the competitive competition procedure for the award: of the economic regime for renewable energy, conditioned on compliance with the relevant requirements and the reservation of the access capacity to a specific node of the transportation network. electric power.

In the detailed description that the Draft Decree includes, it is seen that a classic administrative procedure approach has been chosen, maintaining the ‘multi-window’ as a channel of the proposed procedure, which will most likely result in the tendency for the process shares the traditional temporality and slowness in this type of procedures in Spain, clearly jeopardizing the possibility of achieving the stated objective of making 3 GW of offshore wind operational in 2030.

The established competitive competition procedure will be regulated by a specific Order, introducing a significant ‘novelty’ that makes it possible that after the approval of this Order a public-private dialogue ‘can’ be carried out in which the sectors affected by the marine renewable facilities, whose purpose will be to complete the definition of the characteristics and requirements that the facilities must meet, as well as the details of the competitive competition procedure, so as to favor their social acceptance and their integration with other uses of the sea by increasing its positive externalities and promoting the industrial development of the affected areas.

To ensure that public-private dialogue can specifically achieve social acceptance and integration with other uses of the sea, attention is focused on issues related to:

-The space to be occupied, distance from the coast, the number of wind turbines, the environmental impact and measures proposed to minimize it, the landscape impact…

-The potential socioeconomic impact, the development of local, regional, national and community industry.

-The impact on employment, participation of small and medium-sized companies and compatibility with other uses and activities of the marine environment such as fishing.

-The ability to contribute to the quality and security of the electrical supply.

-The impact on maritime safety, traffic management and maritime routes.

-Efficient dismantling.

The Order may include, in addition to the economic regime, aspects such as: the power quota, the area or areas where the facilities will be located (which must be included in the zones defined for this purpose in the delimited Maritime Space Management Plans). , technologies, characteristics and requirements that the awarded facilities must meet, in addition to the reserved access capacity and the specific connection nodes of the transport network where that capacity is set.

The Draft Decree establishes that there will be a maximum economic offer price known as the ‘reserve price’ and a minimum price called ‘risk price’ may be set (both may or may not be confidential), which will influence the treatment and approach to the economic offer.

The term may or equivalent, is used more than twenty times throughout the document, leaving a very important number of necessary specifications that will be regulated in the Order, which is not of great help to facilitate the previous work of the bidders. nor to obtain the best possible proposals, maintaining a significant degree of uncertainty in the real possibility of achieving the planned objective.

It is important to note that the establishment of an economic range as a price reference has been a clear and classic approach until now, however, it is beginning to show problems (as a consequence of the context of the post-pandemic and the crisis of the war in Ukraine). , which are unequivocally materializing in business crises in the sector and in the withdrawal of important marine park projects, leading to losses of specific guarantees and, what is worse, of trust.

These circumstances are perfectly known and have been objectified in the so-called European Wind Charter (signed last December by 26 ministers from Member States of the European Union and more than 300 of the most important European companies in the sector), where it is indicated as a summary diagnosis that:

-The administrative procedures for authorizing new parks are not adequately designed.

-Processing procedures continue to be difficult and slow, often with a lack of personnel and efficient processes.

-The starting prices in the auction have been evidently low and especially rigid in economic environments that are very difficult to predict.

The Spanish State has been one of the signatories and promoters of this letter and yet the vision and projection of its content only slightly permeates the text of the recently published Draft Decree, in particular there is no reference to how to directly address the price, in the current scenario of unquantifiable uncertainty, nor in a generic way opening the possibility of some type of indexation to the changing reality.

In particular for the Canary Islands (along with the other so-called non-peninsular territories), a very general reference is made to the provisions of Royal Decree 738/2015 of July 31, which regulates the activity of electric energy production and the Dispatch procedure for electrical systems in non-peninsular territories.

The effects of the general regulation in the Canary Islands are known and have not been a stimulus for the development of the RES (in general or in the marine ones in particular), in the Draft Decree no specific reference is made to using the cost differential of electricity production on the islands as a stimulus for a particular regulation, which makes possible the reduction of prices and greenhouse gas emissions (with the objective of being a contribution to the improvement of the socioeconomic conditions of the Archipelago and of achieving 0% GHG emissions).

The open public information period can be a real opportunity to try to make a more efficient adaptation to the needs, it will depend on the sectors involved putting forward the best proposals and that the Ministry takes advantage of the opportunity to advance in the materialization of its strategy in measures. practical and concrete, that allow for progress with greater security and speed in the objectives planned and shared in the EU.

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