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Possible elections might tumble the ecological plan of the Government of Pedro Sanchez

The ecological plan of the Government of Pedro Sanchez to promote the energy transition in Spain is enormously damaged after the veto to the General State Budgets and the foreseeable call for general elections in the coming months. The big electricity companies consider that now a new phase of dialogue is opening with all the political forces to study again the way and propose modifications to the strategy that the current Executive intends to send to the European Commission next Friday 22 February. This draft, which will set the country’s energy policy objectives for the next decade, establishes, for example, the closure of the entire nuclear park between 2025 and 2035. The document will be returned to Spain in the coming months for approval of the final text at the end of the year, when there will already be a new government in the Palacio de la Moncloa, the submission of the Energy and Climate Plan to Brussels will be accompanied by the draft Law on Climate Change and Energy Transition, which will be submitted to Congress for parliamentary processing, and the plan for a just transition, which will go out for public consultation.

But not everything might be lost, the Royal Decree-Law 15/2018, of 5 October, on urgent measures for the energy transition and consumer protection, which was validated in Congress, would remain in force. The complete text approved by the Government would be valid because it would not give time to incorporate the amendments of the different parliamentary groups, as well as the RDL of urgent measures for coal mining and the development of mining regions. According to legal sources consulted, the Royal Decree of Self-consumption could also go ahead.

However, there are a number of projects that would remain in the draft. If the elections are called for April 28, it would force the government to dissolve the Cortes on March 5 and call elections next week, February 19, to fulfill the 54 days established by law.

The renewables sector will be the most affected by this process. The RD of Access and Connection to grids, a regulation that waited like water in May to give free rein to all its projects and start with its construction, would be suspended. This would approve the criteria for granting access and connection permits for new renewable projects.

It would also leave unregulated future auctions of renewables that the government sought to convene every year to reach the figure of 50,000 megawatts (MW) ‘green’ by 2030 and thus achieve the goal of 35% renewable energy final for that year.

The other measure that would be affected would be the suspension of the Impuesto al Valor de la Producción de Energía Eléctrica (IVPEE), the 7% tax on the value of active electricity production for six months (from October 2018 to March 2019). Thus, on 31 March, with a government in office, it should decide whether to maintain or terminate the suspension. Everything indicates that the collection of CO2 emission rights would allow the suspension to continue until further notice.

And finally, there is still pending the retribution to renewables. In January, the government gave back to Competence the faculty to approve the retributions of transport and distribution of gas and electricity, and precisely yesterday, the Congress of Deputies validated this royal decree law to adapt the competences of the National Commission of the Markets and the Competence (CNMC) to the European norm, that establishes that the regulators of the internal markets of natural gas and electricity are totally independent. Therefore, “it remains in the hands of Competition to define what will be from 2020, and therefore we will not be affected by changes of government,” add the sources of the electricity sector.


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