• A new economic regime for renewable energy generation facilities has been approved.
  • The hybridisation of technologies, energy storage, and the extension or alteration of existing facilities is encouraged.
  • The first auction is likely to be convened before the end of the year, however, the auction method is yet to be approved.
  • Different auctions based on the type of generating technologies could be held.
  • The successful bidders will receive the price offered at the auction (pay-as-bid).
  • The Electronic Registry for the economic regime of renewable energy is created, with a registration regime of “pre-allocation status” and later of “in operation status”.


The Council of Ministers has approved Royal Decree 960/2020 of 3 November regulating the new economic regime for renewable energies for electric generation facilities, which will be carried out through auctions. It intends to provide a stable framework that attracts investment and promotes economic activity throughout the value chain of renewable energy in Spain, while allowing consumers to benefit directly from the reductions in generation cost of these technologies.

The rule implements Royal Decree-Law 23/2020, on energy measures for the economic recovery and boosts the commitments of decarbonisation undertaken by Spain under the Paris Agreement and the Integrated National Energy and Climate Plan 2021-2030 (PNIEC, as per its name in Spanish),which involves the installation of approximately 5,000 MW new capacity in renewables annually in the next decade.

The new remuneration framework, known as Economic Regime of Renewable Energies (REER, as per its name in Spanish), will focus on new renewable power and will enable the hybridisation of technologies, the extension or alteration of existing facilities and will be compatible with energy storage.

The auctions can be held separately for different generation technologies, based on their technical features, size, levels of manageability, geographical location criteria, technological maturity, innovative approach, among other factors. Nevertheless, small scale facilities, those that have an installed capacity under 5 MW, can be exempted from the competitive procedure that grants the above-mentioned remuneration framework.

In order to increase foreseeability of the auctions, a ministerial order will set out an estimated auctions timetable, for a minimum fiver-year period. This timetable will be updated annually.

With regard to the auction mechanism:

  1. Prior to an auction, the maximum energy and/or MW quota that will be auctioned shall be determined.
  2. Each auction shall be carried out in a closed envelop and lower price offers shall be awarded until the maximum quota is met.
  3. The price for each awardee shall be the offered price (pay-as-bid).

The facilities benefiting from REER shall participate in the day-ahead and intraday markets and shall receive the fix price awarded in the auction for the energy sold to the market. This price may be adjusted depending on the seller’s exposure to the market, up to a maximum energy volume and maximum term set in advance. Notwithstanding, the Royal Decree allows for corrections to the price with incentives for the awardee’s participation in the market, thereby “introducing certain exposure of the facilities to the energy market”.

This decree also creates the Electronic Registry for the economic regime of renewable energy, which purpose is to grant and follow up on renewables’ economic regime. It also regulates the process to register the facilities awarded at the auctions. Initially, awardees shall be registered under “pre-allocation status” and, once they begin selling energy to the market, they move on to “in operation status”.

Registration as “pre-allocated status” requires submitting an economic guarantee, the amount of which is yet to be determined by the same order regulating the auction mechanism. Withdrawing from construction of the facility or not meeting the requirements set at the auction shall entail the execution of the guarantee.

The Ministry for Ecologic Transition and Demographic Challenge (Ministerio para la Transición Ecológica y Reto Demográfico) may convene the first auction by the end of this year. For this, it must first approve a ministerial order regulating the auction mechanism (technologies, conditions and guarantees to participate in the auction, parameters and other elements and variables defined in the REER, etc.). The auction shall be convened by means of an Act issues by the Secretary of State for Energy (Secretaría de Estado de Energía).

Rocío Gros