The draft bill on fiscal and administrative measures from the Xunta has begun its parliamentary process. The wind sector believes that the text proposes a paradigm shift in relation to the repowering of wind farms, which clashes head-on with the fundamental principles of the existing legal system.
The wind sector, understanding that the spirit of the law may be to boost the repowering of wind farms, believes that the formula presented in the Bill is erroneous and detrimental to the interests of companies, society, the economy and the image of the country. The situation in the processing of wind projects in Galicia is dramatic and conveys legal uncertainty. This type of proposal can generate greater uncertainty for investors. Galicia has 3,874 MW installed (183 wind farms), of which 2,007 MW (86 farms) are 20 years old or older and could be forced to be repowered by this Law.
It is key to find a solution to streamline repowering without it being by mandate and thus avoid generating additional risks, judicialization of projects or unjustified losses to the promoters.
The Bill establishes that repowering will be mandatory for those parks that have either reached the end of their design useful life or have reached 25 years since their commissioning, in the absence of such provisions.
The concept of design useful life is not synonymous with equipment obsolescence, loss of operability or safety risks. “Useful life” refers to the manufacturer’s certificate that guarantees the performance of the machine, if certain wind resource conditions are met, for a number of years. In Spain, most wind farms that are reaching this period maintain their production within the highest standards of efficiency and safety.
At this point, developers can opt for life extension or repowering, and the moment to do so depends on each project; it cannot be generalised or imposed. Life extension is a productive, efficient and sustainable formula, since it maintains the wind production necessary for the mix without endangering any aspect of safety.
However, the repowering of the parks will eventually occur and from the sector we have been recommending the appropriate measures to achieve its activation at an appropriate pace and to meet the objectives established by the PNIEC. The acceleration of repowering must be based on implementing measures that facilitate it and reduce risk in the process, that help to prepare environmental impact studies with a differential perspective, and in complying with the European regulations in this regard, guaranteeing the maximum processing times.
The wind sector argues that in no case should repowering be carried out under a “mandate” and much less should it assume the threat that an owner may be deprived of access to the Grid if he does not activate repowering at the time that an Administration so decides.
Juan Virgilio Márquez, CEO of AEE, states: “The obligation to repower aggravates the already dramatic situation of legal uncertainty that exists in Galicia, where more than 2 GW of new wind projects are paralyzed by precautionary measures imposed by the TSXG or awaiting the solution to the preliminary question that the TSXG itself has raised to the CJEU. In Galicia, any development of a wind farm, whether new or repowered, faces enormous uncertainty. Currently, there are more than 2,000 MW of existing wind farms in Galicia that, if the Bill is approved, would be forced to consider their repowering automatically and almost simultaneously. Wind farms that are producing normally and providing competitive and decarbonised energy to the system would be forced to face an administrative process that offers no guarantees.”
The obligation to repower wind farms, as proposed in the PL, violates the following aspects, among others:
- The configuration of the generation of electric energy as a liberalised and free activity (article 2, Law 24/2013 of the electric sector – LSE) and the affectation of the principle of freedom of enterprise (article 38 – Spanish Constitution). The LSE is a basic state law (article 149.1.13 and 149.1.23) and in it renewable generation facilities that have operating authorisation can operate without a time limit. The possibility of modifying this authorisation or of forcing the closure of the facility is not contemplated. On the contrary, the closure of any facility is subject to authorisation, because generation is a basic service activity of general economic interest.
- The concept of regulatory life is only linked to the perception of a specific remuneration regime, but it does not prevent a renewable installation from continuing its operation once the end of the regulatory life has been reached. Moreover, the regulatory life is, in principle, shorter than the duration of the operational life of the installation, since the regulatory frameworks are designed to cover only a part of the operational life of the installations, that period of time in which it is deemed reasonable by the regulator that the debt can be repaid. An Autonomous Community cannot alter these basic principles of state regulation.
- The right to freedom of establishment according to the Treaty on the Functioning of the EU (TFEU) is violated by forcing a company that does not repower to close or not be able to operate due to losing access to the network. The Preamble of Directive 2019/944 states that “….(11) Only a fully open internal market that allows […] all suppliers to freely supply their customers is compatible with freedoms”.
- On the other hand, the legislative proposal presents the possibility of planning repowering in phases, which may be appropriate, but the details of the requirements that may be required by the Administration to promoters in the design of said phases are unknown.
- Additionally, it incorporates positive aspects such as the suspension of the period available to the promoter to start up the park in the event that there is a pronouncement by an administrative or judicial body that suspends the effectiveness of the resolution of the administrative Authorizations already obtained.
- The effort of the Public Administration and the promoters to try to accelerate the processing of renewable installations in Galicia may be penalized by proposals such as this one, which far from accelerating the start-up of repowering projects, can turn what should be a gradual, simple and natural process, with facilities on the part of the Public Administrations, into a kind of demands and compliance, with a lot of risk along the way, which can end up judicializing the projects.
- The Wind Energy Association (AEE) is the voice of the wind sector in Spain. With more than 350 member companies, it includes developers, manufacturers of wind turbines and components, national and regional associations, organizations linked to the sector, consultants, lawyers and financial and insurance entities, among others. Its objective is to represent an industrial sector that employs more than 40,000 professionals in Spain, has 250 industrial centres and generates 24% of the electricity in the country.
