Spain: A wave of new bids for PV and wind power projects with environmental permits granted in 2023 is expected to flood the market.

According to estimates, projects of about 80,000 MW (80GW) which were granted a feed-in point but did not receive an environmental permit by the end of 2022 were affected. This follows from the figures published by Red Eletrica de España (REE) relating to allocated access points and projects actually connected. 

The reason for the delay in issuing the permits is that the Spanish authorisation authorities are swamped with work and could not cope with the flood of applications. The industry had already warned earlier that the Spanish state could become liable for damages if projects became worthless on 25/01/2023 due to overworked authorities failing to issue DIAs. The government in Madrid has probably still very fresh memories of the ECT lawsuits brought against Spain before arbitration tribunals, a large number of which is still pending, and has thus chosen a creative way. Instead of extending the deadline one more time, the authorities resorted to issuing environmental permits as part of fast-track procedures. The authorisation authority in Central Spain alone (competent for projects of more than 50MW) issued permits for 118 large-scale projects on 23/01/2023. Local authorities acted similarly in December and January. In addition, further permits will be issued in February and will become effective retroactively (!) as of 25/01/2023.

Since under the Act on Service of Documents in Administrative Procedure the authorisation authority is given one month time for servicing a decision, the deadline is extended until 25 February 2023, i.e. the date until which the decision may be delivered (and thus, indirectly also, issued). A very Spanish solution for giving the Spanish authorities one more month for issuing the decisions. 

According to press releases of project developers, positive decisions were indeed issued for nearly all 80,000MW of projects before 25/01/2023. It remains to be seen whether this is a fact or whether project developers will now start to lodge claims against the Spanish state based on the liability of public authorities. 

It is evident that the assessments of many a permit application may contain qualitative defects. To what extent this will affect further permits yet to be issued will have to be assessed on a case-by-case basis. Another issue that will have to be examined is whether retroactive coming into force is legal at all as the notification was then delivered outside the deadline set in RDL 23/2020.

Besides, the next deadline to be kept according to RDL 23/2020 is July 2023; by then,  the operation permit for the installation must be issued. (autorización administrativa de construcción). 

Apart from the question mark regarding the quality of the permit procedures, the number of projects for which permits have now been issued  is very positive, of course. It can be expected that the market will ease and the price rally will end for now. 

Connecting more than the usual annual 3 GW to the grid in Spain would of course immediately give rise to a new “debate about cannibalisation”. And probably with reason, since on the second Sunday in January, for the first time in Spain many wind power plants were shut down for a longer period of time. More specifically, on Sunday afternoon wind power plants with a capacity of 5GW were stopped for several hours until 6 p.m.  Moreover, 6GW of electricity was exported to France, which means that a capacity of 11GW was not needed in the Spanish electricity grid on Sunday.