Royal Decree 314/2023 of 25th April entered into force on 27th April 2023 pursuant to which article 38 of EU Directive 2019/944 of 5th June 2019 was transposed into Spanish law, with regard to closed electric power distribution networks (hereinafter referred to as “CEPDN”).

The implantation of these networks aims at reducing income through tolls (or access tariffs), by passing from various connections to the distribution and carrier networks, to just one large scale consumer, connected to a higher voltage, and for the owners thereof to be obliged to invest, operate and maintain the networks. Likewise, it also aims at obtaining a cost saving from the electric  grid.

The object of said provision consists of establishing the requirements and the procedure for the granting and revocation of the required administrative authorisation as well as the conditions and requirements which a CEPDN must have and the particularities of the subjects which connect to it.

The scope of application covers the CEPDN, the owners thereof, the owners and managers of the carrier and distribution networks of electric power to which they connect, as well as consumers and owners of connected electric power generation installations, the distributors and the representatives thereof.

A CEPDN is a network which distributes electric energy to industrial consumers, in an area not exceeding eight square  kilometres, provided that said network distributes electric power to the industrial companies located in said location through own networks. Industrial consumers are deemed to be those entities whose CNAE code (National Classification of Economic Activities) belongs to groups B, C, D, E and comply with at least one of the following conditions:

  • The functioning or the production processes of the users of said network are integrated, for technical or security reasons.
  • The network mainly distributes electricity to its owner or manager or to related companies.

Said networks cannot be connected to each other and must have a boundary solely with distributor companies which are not CEPDN or carriers of electric power and with the consumers connected to their networks, or, with connected electricity generation or storage facilities.

Said networks may be connected to one or various points of the distribution or carrier networks.

The consumers supplied by a CEPDN cannot be connected in cascade, but only via the distribution network itself and the clients may not be connected to the distribution or carrier networks.

The owner thereof may be a company or cooperative whose exclusive corporate purpose is the distribution of electric power in a CEPDN.

Such companies must be Spanish or from another member state of the European Union, with a permanent establishment in Spain and must have sufficient financial and technical capacity (immovable assets to the value of at least 50% of the gross value of immovable assets).

Said networks may supply up to a maximum of one hundred non-industrial consumers, provided that they:

  • Are located in the aforementioned geographical area.
  • They maintain or have maintained employment or commercial relationships with the owners or partners of said network or with other industrial consumers connected thereto.
  • They represent less than 2% of the total annual consumption of all of the connected consumers.
  • They are located in adjacent plots to those of the industrial consumers.

The holder of a CEPDN will be the manager and operator thereof. With regard to prices, the prices established in Royal Decree 1048/2013 of 27th December shall apply to non-industrial clients and the CEPDN holder will have the same general rights and obligations as an electric power distributor.

Said holder is not subject to the procedure of authorisation for the activity of distribution provided for in Royal Decree 1955/2000, of 1st December, pursuant to which carrier, distribution, marketing, supply and authorisation procedures for electric power installations are regulated, although they should be registered on the

Administrative Register of Electric Power Distributors.

The Spanish National Markets and Competition Commission will carry out the necessary inspections to verify the fulfilment of the requirements established by the Royal Decree at least once every three years and the non-fulfilment of the Royal Decree could generate sanctions, in accordance with Title 10 of Law 24/2013 of 26th December, of the Electric Sector.

Ultimately, this new regulation on the CEPDN means an advancement in the development of Energy Communities which may bring with it considerable savings in the cost of electric power for industry, even if surprisingly, it does not refer to the concept of the Citizens Energy Community, also introduced by the EU Directive 2019/94, both being able to be used for similar purposes and both being able to have as proprietor a management company incorporated in the form of an SME.

 

 

Mireia Bosch

Vilá Abogados

 

 

For more information, please contact:

va@vila.es

4th August 2023