En En Notice to Members

European Parliament 2014-2019

Committee on Petitions

7.6.2019

NOTICE TO MEMBERS

Subject: Petition 1606/2010 by Francisco Padrino Pérez (Spanish), on alleged broken promises by the Spanish government concerning investment in photovoltaic energy

Petition 0454/2011 by Guzzardo Baldassare (Spanish), on alleged distortion of the electricity market in Spain

Petition 0172/2013 by Eduard Rabal Vidal (Spanish), on the renewable energy sector in Spain

Petition 0430/2013 by Jorge Barredo (Spanish), on behalf of Unión Española Fotovoltaica, bearing 14 signatures, on the framework for renewable energy sources in Spain

Petition 0709/2013 by Miguel Ruperez Marco and Elena Caminero Muñoz (Spanish) on behalf of Dulcinea Solar 61 and 62, bearing 2 signatures, on the framework for renewable energy sources in Spain

Petition 1264/2013 by Alejandro Fernandes Lorenzo (Spanish), on behalf of public campaign on Change.org, on Renewable energy tax

Petition 1481/2013 by Piet Holtrop (Spain), on actions of the Spanish government contrary to the aims of the Directive 2009/28/EC

Petition 1552/2013 by O. S. (Spanish) on the use of solar panels in Spain

Petition 2229/2013 by Maria Jesus Caubilla Mallen (Spanish) on an attempt to charge for the use of alternative energy in Spain

Petition 2378/2013 by John Parsons (British) on taxation of solar power

Petition 2617/2013 by John Porro (British) on retroactive application of a law

CM\1184675EN.docx PE485.956v04-00

EN United in diversityEN in Spain in the field of renewable energy

Petition 1887/2014 by A. M. J (Spanish) against taxation on solar energy

Petition 2520/2014 by Miguel Angel Martínez Aroca (Spanish), on behalf of the Asociación Nacional de Productores e Inversores de Energías Renovables (ANPIER) [National Association of Renewable Energy Producers and Investors], on the situation of the photovoltaic sector and the legality of the changes made to the law by the Spanish government

Petition 0384/2015 by F. A. (Spanish) on tax regulations relating to solar power generation

Petition 0395/2015 by J.S. (German) on the reduction of the legal feed-in payment for electricity produced in Spain by solar energy

Petition 1228/2015 by Yaiza Garcia Rodriguez (Spanish) on the new tax on energy auto-consumption

1. Summary of petition 1606/2010 The petitioner says that he believed himself encouraged by the present Spanish government to invest in photovoltaic energy. He did so pursuant to Royal Decree No 661/2007, believing it was promised that he would derive financial benefit from this investment and that it was a means of making Spain less dependent on environmentally harmful energy sources. The legislation then adopted promised advantageous tariffs for the first 25 years of operation and approximately 80% in the following years. The petitioner complains that his expectations were frustrated by the subsequent legislation passed by the same government, notably Royal Decree No 14/2010, which revoked many of the previous objectives. He believes his savings have been invested to no avail. He adds that there are 50 000 investors in the sane situation and there is general discontent: the feeling is that in reality the rule of law does not prevail in Spain, where promises lead to nothing.

Summary of petition 0454//2011 By reference to several press articles the petitioner alleges that the electricity market in Spain is distorted and that the government and national regulator are failing to act. He also points to legal insecurity in his country

Summary of petition 0172/2013 The petitioner warns that energy companies and the Spanish Government are hindering the development of renewable energies in Spain. He asks the European Union to ensure that Spanish Royal Decree 1699/2011 is finally implemented.

Summary of petition 0430/2013 Petitioners denounce that the government of Spain has in recent years enacted legislation

PE485.956v04-00 2/25 CM\1184675EN.docx EN which infringes Directive 2009/28/EC on the promotion of the use of energy from renewable sources. Specifically, petitioners point to Royal Decree 1565/2010, Royal Decree Law 14/2010, Royal Decree Law 1/2012, Law 15/2012 and Royal Decree Law 2/2013, which they allege do not legitimately pursue the reduction of Spain's public deficit. Petitioners denounce that the overall framework does not promote renewable energy, does not guarantee legal security, and that it discriminates amongst technologies and investors in the electricity sector.

Summary of petition 0709/2013 Petitioners denounce that the government of Spain has in recent years enacted legislation which infringes Directive 2009/28/EC on the promotion of the use of energy from renewable sources. Specifically, petitioners point to Royal Decree 1565/2010, Royal Decree Law 14/2010, Royal Decree Law 1/2012, Law 15/2012 and Royal Decree Law 2/2013, which they allege do not legitimately pursue the reduction of Spain’s public deficit. Petitioners denounce that the overall framework does not promote renewable energy, does not guarantee legal security, and that it discriminates amongst technologies and investors in the electricity sector.

Summary of petition 1264/2013 The petitioner draws the attention to the tax imposed on those who decide to generate their own electricity through photovoltaic or wind energy. The tax (so called “backup toll”) would be so high that it would indeed be cheaper to have a contract with a large electricity supplier company. The petitioner is alleging the corruption of politicians as a reason for this. He claims that many of those who lose their political seat end up working for electricity or a gas company. Thus, the Spanish government is still more eager to help coal industry and remove the support to the renewable energies. The petitioner claims that at the time of writing there have been around 30.000 signatures supporting this petition on www.Change.org. He is asking for the EP’s support, too.

Summary of petition 1481/2013 In the petitioner's opinion certain measures taken by the Spanish government in the last years threatens the development of sources of renewable energy and are contrary to the principles of legal certainty and legitimate expectations. Therefore the steps taken by the Spanish government, damaging the legal security of investments in renewable energy and contrary to promotion of this kind of energy sources put at risk achieving by Spain the environmental objectives established by the Directive 2009/28/EC.

Summary of petition 1552/2013 The petitioner refers to a law in Spain which requires users of electricity from their own solar panels to use far more expensive electricity generated by the conventional central method. According to the petitioner, this law is contrary to the EU’s policy of reducing the use of fossil fuels and encouraging the use of renewables. The law also penalises people who seek to generate and use energy in a responsible manner. Moreover, the petitioner considers that he has the right to decide what energy source to use.

Summary of petition 2229/2013

CM\1184675EN.docx 3/25 PE485.956v04-00 EN The petitioner states that in Spain an attempt is being made to charge people if they wish to make use of an alternative energy source at their home or business. As a result, people are confined to using a single type of energy, whereas everyone should have the opportunity to choose their energy source for themselves and to decide how many different sources they wish to use. According to the petitioner, these measures are detrimental to environmental protection. Summary of petition 2378/2013 The petitioner, a British resident in Spain, states that, in Spain, people have started to remove their solar panels because a proposed new taxation of solar power has been introduced which will further undermine the ability of Spain to respect the EU renewable energy targets and which, according to him, will amount to taxing the sun even though in the past the same public authorities encouraged and sometimes subsidised households wishing to produce their own solar energy. The petitioner considers that such proposals could amount to a breach of EU rules anad objectives on sustainable energy anf reducing the carbon footprint of Member States. Summary of petition 2617/2013 The petitioner demands that the costs he has invested in the solar power equipment which result in losses be returned to him. He claims that a law has been introduced in Spain retroactively which undermines self-generated electricity from solar panels to be used as an alternative source of energy to the State provided one. He feels be is being discriminated against for generating his own electricity. He has invested in this system in good faith and now he feels being punished.

Summary of petition 1884/2014 The petitioner explains that her local government imposed a tax on people acquiring solar energy. She is outraged that she has to pay whereas she uses her own energy, from an inexhaustible source that is a common good, all the more as it respects the environment. According to her, this tax favours the electricity companies, which have agreements with the Spanish government.

Summary of petition 2520/2014 The petitioner wants the European Parliament to investigate the situation that has been created in the photovoltaic energy sector as a result of the changes made to the law in Spain in recent years. The most effective regulation for promoting renewable energies in Spain was that enacted under Royal Decree (RD) 661/2007, which effectively introduced the FIT “feed-in tariff” scheme of premiums for generating electricity. 2008 brought new regulations limiting the remuneration of renewable energies, initially only for solar photovoltaic (PV) power facilities, but subsequently extended to cover all renewable energy sources. In 2009 the cost of the premiums payable on solar PV energy accounted for 45 % of the total cost of special regime premiums, but solar PV energy was the source of only 9 % of the electricity generated with renewable energies. A first change was made to the legislation under RD 1578/2008, which regulates the remuneration of electricity generation for new solar power plants using photovoltaic technology. A second change was made to reduce the costs of the special regime under RD 6/2009 of 30 April 2009, which adopted a number of measures relating to the

PE485.956v04-00 4/25 CM\1184675EN.docx EN energy sector. This decree set up a register to control upcoming planned facilities and access to the electricity system. Facilities had to be registered in order to benefit from the financial system provided under the special regime, and had to meet a series of technical and economic criteria in order to be included on the register. There was also a technology criterion for registration until the installed capacity targets set in the Spanish Renewable Energy Plan PER 2005-2010 then in force were met. In 2010 a number of changes were made to the legislation between 19 November and 23 December, bringing in retrospective cuts in the remuneration for solar photovoltaic, wind and solar thermal power. These included a change to the remuneration of reactive power, a reduction of the remuneration period to 30 years in the case of solar PV energy, a restriction on the annual number of premium-remunerated hours for wind, solar thermal and solar PV power plants, a 35 % reduction in the premiums payable to wind power facilities in 2011 and 2012, and severe cuts for solar PV energy of up to 45 % of the remuneration. These restrictions were introduced in several Royal Decrees: RD 1565/2010 of 19 November 2010 limiting the period for the remuneration of solar PV energy to 25 years, and cutting the premiums for small rooftop installations by about 5 %, large rooftop installations by about 20 % and ground-mounted installations by about 45 %; RD 1614/2010 of 7 December 2010 regulating and modifying certain aspects of the generation of electricity using wind and solar thermal power; RD-Law 14/2010 of 23 December 2010 adopting urgent measures to correct the tariff deficit of the electricity sector. The biggest legislative change, bringing a complete reversal of the philosophy of special regime remuneration, was that enacted under RD-Law 1/2012, which applies to all new facilities and abolishes the economic regime regulated under RD 661/2007 (the FIT feed-in tariff scheme). The preamble to this urgent Decree refers to the high tariff deficit that could jeopardise the sustainability of the electricity system; the complex economic and financial situation for maintaining the incentives to renewable facilities; the excess installed generating capacity sufficient to ensure that demand is met; the fact that in 2010 a number of technologies (wind power, solar photovoltaic and solar thermal power) had exceeded the targets of Spain’s Renewable Energy Plan 2005-2010, and achieving Europe’s renewable energy targets for 2020 was possible. The Decree stresses the temporary nature of these measures. A number of regulations concerning special regime electricity generation were issued during 2012. These included a new tax on electricity generation levied on all sources of generation alike, and the abolition of the option to sell on the market for facilities covered by the special regime. On 14 September 2012, the Spanish government presented a bill of tax measures relating to the electricity sector. This draft legislation includes a tax on the sale of electricity at a fixed rate of 6% for all types of technologies, both conventional and renewable. The tax applies not only to new but also to existing facilities, and is therefore yet another retrospective measure. The latest regulation is described in yet another Royal Decree-Law, No 2/2013 of 1 February 2013, adopting urgent measures relating to the electricity system. The main changes are as follows: the option of sale on the market plus premium is abolished. The method for adjusting the remuneration of renewable energies is changed; the adjustment will be made by applying an index that does not include food and energy products, instead of the general consumer price index. Lastly, in the course of 2013 several drafts on the reform of the electricity sector envisaged various changes in the premiums on renewable energies, the reduction of the tariff deficit and the regulation of self-supply. Summary of petition 0384/2015 The petitioner complains about the bureaucracy and tax regulations which small-scale generators of solar power using photovoltaic panels have to deal with. He states that this

CM\1184675EN.docx 5/25 PE485.956v04-00 EN bureaucracy is counterproductive, and disincentivises environmental conservation. He asks that red tape be reduced and solar power generation encouraged.

Summary of petition 0395/2015 The petitioner invested, through a German company, in a Spanish solar energy investment fund, which manufactured and operated photovoltaic installations in Spain. The price/kWh was fixed and guaranteed by law. He complains that the price/kWh was dramatically reduced by legal stature and therefore his investment no longer generates profit. He is aware of the risks related to investment funds but he did not expect such a shift by Spain and he is currently disappointed. Summary of petition 1228/2015 The Spanish Ministry for Industry, Energy and Tourism has created a new tax to disincentivise the use of batteries and other energy storage systems by people who produce their own energy (through the use of solar panels, for example), but are also connected to the national grid. According to the petitioner, the new tax, approved under Royal Decree 900/2015 which regulates activity in the energy sector, will affect those who use batteries or have energy storage facilities in their solar panels. Under the new regulation, people who consume energy they themselves have produced (auto-consumers) will not only be unable to store it in batteries, they will also be penalised for using the energy storage systems which are incorporated into new solar panels. The only people who will be able to use such storage systems are those who are not connected to the national grid at all and therefore have an isolated and totally independent energy supply. The ministry will offer financial incentives to businesses connected to high-voltage power lines which redistribute electricity that they cannot consume themselves, although this will be subject to conditions. While this incentive scheme allows the businesses in question to make savings, the use of generators and batteries would make them ineligible.

2. Admissibility

Petition 1606/2010 declared admissible on 4 April 2011 Petition 0454//2011 declared admissible on 9 September 2011 Petitions 430/2013 and 172/2013, declared admissible on 5 November 2013. Petition 709/2013, declared admissible on 19 December 2013 Petition 1264/2013 declared admissible on 3 April 2014 Petition1481/2013, declared admissible on 8 May2013 Petition 1552/2013 declared admissible 19 May 2014 Petition 2229/2013 declared admissible on 18 September 2014 Petition 2378/2013 declared admissible on 25 September 2014 Petition 2617/2013 declared admissible on 6 November 2014 Petition 1884/2014 declared admissible on 17 June 2015 Petition 2520/2014 declared admissible on 20 July 2015 Petition 0384/2015 declared admissible on 22 February 2016 Petition 0395/2015 declared admissible on 2 December 2015 Petition 1228/2015 declared admissible on 9 May 2016

Information requested from Commission under Rule 216(6).

PE485.956v04-00 6/25 CM\1184675EN.docx EN 3. Commission reply, received on 16 March 2012

Petition 1606/2010

The petitioner highlights the recent decision by the Spanish Government to revise the regulatory framework applicable to Spanish photovoltaic (PV) energy installations in Spain (Decree 14/2010). He states that this will have a negative effect on those who have invested in this sector based on the previous legislation (Royal Decree 661/2007) which guaranteed a return on the investment from fixed tariffs for the first 25 years of operation of the solar plant, which would be reduced to 80% in subsequent years.

The Commission's comments on the petition

In Directive 2009/28/EC (the Renewable Energy Directive) the European Union and its Member States have committed themselves to binding targets for the share of renewable energy in the consumption by 2020. In this context, Spain has accepted an obligation to achieve a share of 20 % of their energy consumption from renewable sources by 20201.

In December 2010, the Spanish government approved the Royal Decree 14/2010 which revised the regulatory framework applicable to Spanish photovoltaic (PV) energy installations. The decree introduces limits to energy production (of already operating PV plants) which is eligible for remuneration under the feed-in tariff.

The new limits depend on the PV technology used and, from 2014, the plant's geographical location. However for the next 3 years (2011-2013), the limits are solely based on the technology and are set at a low level. The introduction of such limits is partially offset by a 3- year extension of the right to receive feed-in tariffs.

The Commission does not dispute that adjustments in the tariff levels and/or cost reductions due to the technical development might be justified over time.

The Commission has already expressed strong concern about the overall impacts of such changes on the investors' confidence in renewable energy markets and addressed a letter to Miguel Sebastián, Spanish Minister for Industry, Tourism and Commerce in this regard2 and responded to a significant number of Parliamentary Questions.

Conclusion

The Commission is continuously monitoring these developments with a view to considering further action at EU level if appropriate. On the basis of the information available to date, the Commission has not identified infringements of the Renewable Energy Directive. By transposing the Directive (required by 5 December 2010), the Spanish authorities and ultimately the Spanish courts have to ensure that the principles of EU law including legal certainty and the protection of legitimate expectations are respected.

1 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:140:0016:0062:EN:PDF Annex I 2 http://ec.europa.eu/commission_2010-2014/oettinger/headlines/news/2011/03/20110308_en.htm

CM\1184675EN.docx 7/25 PE485.956v04-00 EN 4. Commission reply, received on 30 May 2012

Petition 0454/2011

In Directive 2009/28/EC (the Renewable Energy Directive) the European Union and its Member States have committed themselves to binding targets for the reduction of greenhouse gas emissions and a minimum share of renewable energy by 2020. In this context, Spain has accepted an obligation to achieve a share of 20 % of their energy consumption from renewable sources by 20201.

In December 2010, the Spanish government approved the Royal Decree 14/2010 which revised the regulatory framework applicable to Spanish photovoltaic (PV) energy installations. The decree is highly controversial because it introduces limits to the energy production (of already operating PV plants) which is eligible for remuneration under the feed- in tariff.

The new limits for the period 2011-2013 are set at a low level and depend on the PV technology used. The introduction of such limits is partially offset by a 3-year extension of the right to receive feed-in tariffs. From 2014 the limits will depend also on the plant's geographical location.

According to financial analyses made by the international rating agency Fitch, for a typical Spanish PV project, the new rules will result in a revenue loss of approx 20-30% for the next 3 years, compared to 2010 (all else being equal).

The Commission does not dispute that adjustments in the tariff levels and/or cost reductions due to the technical development might be justified over time. However, changes to support schemes seriously compromising investor’s confidence must be avoided. Not only do they concern the affected installations, but they may well "spill over" and generate similar effects for other types of renewable energy installations and, in some countries, cause a loss of confidence in the renewable energy regulatory framework at national and European level.

The Commission has already expressed strong concern about these developments and it addressed a letter to the Spanish authorities in this regard2, and also responded to a significant number of Parliamentary Questions. More recently the Commission has also expressed concern at recent measures taken by the Spanish government suspending all new renewable energy projects and their potential negative repercussion on the investment climate for renewables in Spain and in the EU as a whole.

The Commission acknowledges that the suspensions are of a temporary nature, and they occur in Member States which are facing major fiscal constraints and who are also above their trajectory for achieving their 2020 targets. However, it is important for Europe's renewable energy industry and for the overall investment climate, that such reforms are managed carefully and do not create uncertainty.

1 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:140:0016:0062:EN:PDF Annex I 2 http://ec.europa.eu/commission_2010-2014/oettinger/headlines/news/2011/03/20110308_en.htm

PE485.956v04-00 8/25 CM\1184675EN.docx EN The Commission is also reflecting on the future role of renewable energy in a medium-term perspective, i.e. until 2030 and is preparing a Communication which will identify in more detail both the challenges to and possible solutions for a substantial increase in the share of renewables in the EU energy mix in the post-2020 period. All of this is meant to provide clear signals to Member States, investors, and citizens about the EU’s long-term commitment to the promotion of cost-effective development of renewable energy.

Conclusion

The Commission is continuously monitoring these developments with a view to considering further action at EU level if necessary. It is for the Spanish authorities and ultimately the Spanish courts to ensure that the principles of EU law including legal certainty and the protection of legitimate expectations are respected1.

However, on the basis of the information available to the Commission, no indication of infringement of the Renewable Energy Directive can be identified.

5. Commission reply, received on 30 April 2014

Petitions 430/2013, 172/2013, 709/2013 and 1481/2013 With Directive 2009/28/EC on renewable energy, the European Union and its Member States have committed themselves to a minimum share of renewable energy by 2020. In this context, Spain has accepted an obligation to achieve a share of 20 % of their energy consumption from renewable sources by 20202. Under Article 3.2, Member States shall introduce effectively designed measures, including support schemes, to ensure that they equal or exceed their national renewable energy targets, following the relevant trajectory (set out in part B of Annex 1). In various occasions, the Commission publicly expressed its concerns about the impact of the measures by the Spanish government on overall investor confidence. However, this in itself does not constitute a ground for an infringement procedure. In fact, the Directive mentions support schemes mainly as an instrument –amongst others– to achieve the binding national targets for the share of renewable energy in gross final energy consumption as well as in transport in 2020. According to Article 3(2) of the Directive, the main condition for the design of measures, such as support schemes, is that Member States ensure that the share of renewable energy equals, or exceeds, the indicative trajectory set out in Part B of Annex I of the Directive. According to the information received from Spain as part of their reporting obligations under Article 22(1) of the Directive, this condition is presently met as Spain has reached a 14.26% share of renewable energy in 2012. Article 13 of the Directive refers to rules governing authorisation, certification and licensing applying to renewable energies. It requires such rules to be objective, transparent, and

1 ECJ of 10 September 2009, case C-201/08, Plantanol, points 43 and following. 2 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:140:0016:0062:EN:PDF Annex I

CM\1184675EN.docx 9/25 PE485.956v04-00 EN proportionate, and not to discriminate between applicants. In our view this article is not relevant for the changes in support schemes for renewable energies that took place in Spain. In our opinion, a reduction in tariffs for PV is not relevant for this article, as Member States have the freedom to define the level of incentives per technology. Furthermore, this article do not oblige Member States to treat all different renewable energy technologies equally as a differentiation may apply for technical or economic reasons. Article 27 of the Directive requires Member States to transpose the Directive into national law by 5 December 2010. The Commission has taken legal action against the Kingdom of Spain for non-communication of national transposition measures.1 Regarding the principle of legal certainty and legitimate expectations, the Commission is of the opinion that the provisions relating to support schemes do not allow the conclusion that Member States have no discretionary power when designing and changing their Renewables Support scheme. This includes the right for Member States to enact changes to their support schemes, for example to avoid over-compensation or to address unforeseen developments such as a particularly rapid expansion of a precise renewables technology in a given sector. Therefore the Commission considers that in cases of changes to a support scheme, even if these changes impact to a certain degree existing installations, it is not possible to launch infringement proceedings based on the breach of legitimate expectations and legal certainty on the basis of this Directive. Moreover, the Commission is not in a position to judge (and to provide the necessary evidence) whether the national provisions on renewable energy were precise enough to create legitimate expectations for investors which might subsequently have been breached. If the complainant considers this to be the case, he/she should seek judicial review before a national court. Conclusion In the light of the above, the Commission cannot find a breach of the Directive 2009/28/EC on renewable energy. At the same time, it should be recalled that by implementing Directive 2009/28/EC, the Spanish authorities and ultimately the Spanish courts have to ensure that the principles of EU law including legal certainty and the protection of legitimate expectations are respected2.

6. Commission reply, received on 27 June 2014

Petition 1264/2013

1 See: http://ec.europa.eu/energy/infringements/doc/infringements_energy.pdf 2 ECJ of 10 September 2009, case C-201/08, Plantanol, points 43 and following and ECJ judgement in case C- 195/12 (IBV judgement). 3 2013 Country specific recommendations (CSR8).

PE485.956v04-00 10/25 CM\1184675EN.docx EN stakeholders (electricity producers and distribution companies, consumers and the state). The Commission understands that not all legal instruments of the electricity sector reform have yet been adopted, including inter alia the regulation of self-consumption and the new support scheme for existing renewable energy projects. However, the electricity sector reform needs to be legally compatible with EU legislation, including inter alia Directive 2009/28/EU on Renewable Energy Sources and Directive 2012/27/EU on Energy Efficiency. While EU legislation does not contain specific provisions on self-consumption, the Commission is of the opinion that self-consumption is an important tool in order to achieve EU climate and energy goals, in particular these targets established for 2020 regarding GHG emissions, renewable energy sources and energy efficiency. Thus, the Commission highlights the importance of regulating self-consumption in line with the spirit and provisions of EU legislation, which recognises the reduced network losses, avoidance of long term investments in new generation capacity and increased efficiency brought forward by self-consumption. Accordingly, networks tariffs and regulations should reflect cost savings in networks achieved from distributed generation and self-consumption. Regarding the economic support for renewables, the Commission has publicly expressed, on various occasions, its concerns about the impact of the measures by the Spanish government on overall investor confidence. However, under Directive 2009/28/EU, Member States have a wide discretion in designing their support schemes to achieve their binding national targets for the share of renewable energy in gross final energy consumption as well as in transport in 2020. According to Article 3(2) of the Directive, the main condition for the design of measures such as support schemes is that Member States ensure that the share of renewable energy equals or exceeds the indicative trajectory set out in Part B of Annex I of the Directive. According to current statistics and the information received from Spain as part of their reporting obligations under Article 22(1) of the Directive, this condition is presently met. Conclusion In the light of the above, further information should be provided by the petitioner in order for the Commission to assess whether there is a possible misapplication of EU law, including the Renewable Energy Directive and the Energy Efficiency Directive. The Commission also understands that not all legal instruments of the electricity sector reform have yet been adopted, including inter alia the regulation of self-consumption and the new support scheme for existing renewable energy projects. Therefore, the Commission is still assessing the legal compatibility of the electricity sector reform (Act 24/2013) with EU legislation and will consider if EU action is appropriate and necessary once the assessment is complete.

7. Commission reply, received on 29 September 2014

Petition 1552/2013

The reform of the Spanish electricity system aims to eliminate the large electricity tariff deficit and to ensure the financial stability of the system, in line with the country specific

CM\1184675EN.docx 11/25 PE485.956v04-00 EN recommendations1 and the 2013 Spanish National Reform Programme. The reform has the potential to bring the system into equilibrium and foresees contributions from all the main stakeholders (electricity producers and distribution companies, consumers and the state). The Commission understands that not all legal instruments of the electricity sector reform have yet been adopted, including inter alia the regulation of self-consumption. However, the electricity sector reform needs to be legally compatible with EU legislation, including inter alia Directive 2009/28/EU on Renewable Energy Sources and Directive 2012/27/EU on Energy Efficiency. While EU legislation does not contain specific provisions on self-consumption, the Commission is of the opinion that self-consumption is an important tool in order to achieve EU climate and energy goals, in particular the targets established for 2020 regarding GHG emissions, renewable energy sources and energy efficiency. Thus, the Commission highlights the importance of regulating self-consumption in a way that is in line with the spirit and provisions of EU legislation, recognising the reduced network losses, avoidance of long term investments in new generation capacity and increased efficiency brought about by self- consumption. Accordingly, network tariffs and regulations should reflect cost savings in networks achieved from distributed generation and self-consumption. Regarding the economic support for renewables, the Commission has publicly expressed, on various occasions, its concerns about the impact of measures taken by the Spanish government on overall investor confidence. However, under Directive 2009/28/EU, Member States have a wide discretion in designing their support schemes to achieve their binding national targets for the share of renewable energy in gross final energy consumption as well as in transport in 2020. According to Article 3(2) of the Directive, the main condition for the design of measures such as support schemes is that Member States ensure that the share of renewable energy equals or exceeds the indicative trajectory set out in Part B of Annex I of the Directive. According to current statistics and the information received from Spain as part of their reporting obligations under Article 22(1) of the Directive, this condition is presently met. Conclusion In the light of the above, further information should be provided by the complainant in order for the Commission to assess whether there is a possible misapplication of EU law, including the Renewable Energy Directive and the Energy Efficiency Directive. The Commission also understands that not all legal instruments of the electricity sector reform have yet been adopted, including inter alia the regulation of self-consumption. Therefore, the Commission is still assessing the legal compatibility of the electricity sector reform (Act 24/2013) with EU legislation and will consider if EU action is appropriate and necessary once the assessment is complete.

8. Commission reply, received on 30 January 2015

Petition No 2378/2013

1 2013 Country specific recommendations (CSR8)

PE485.956v04-00 12/25 CM\1184675EN.docx EN The reform of the Spanish electricity system aims to eliminate the large electricity tariff deficit and to ensure the financial stability of the system, in line with the country specific recommendations1 and the 2013 Spanish National Reform Programme. The reform has the potential to bring the system into equilibrium and foresees contributions from all the main stakeholders (electricity producers and distribution companies, consumers and the state). The Commission understands that not all legal instruments of the electricity sector reform have yet been adopted, including inter alia the regulation of self-consumption. However, the electricity sector reform needs to be legally compatible with EU legislation, including inter alia Directive 2009/28/EU on Renewable Energy Sources and Directive 2012/27/EU on Energy Efficiency. While EU legislation does not contain specific provisions on self-consumption, the Commission is of the opinion that self-consumption is an important tool in order to achieve EU climate and energy goals, in particular the targets established for 2020 regarding GHG emissions, renewable energy sources and energy efficiency. Thus, the Commission highlights the importance of regulating self-consumption in a way that is in line with the spirit and provisions of EU legislation, recognising the reduced network losses, avoidance of long term investments in new generation capacity and increased efficiency brought about by self- consumption. Accordingly, network tariffs and regulations should reflect cost savings in networks achieved from distributed generation and self-consumption. Regarding the renewable energy targets, under Directive 2009/28/EU, Member States have a wide discretion in designing their support schemes to achieve their binding national targets for the share of renewable energy in gross final energy consumption in 2020. According to Article 3(2) of the Directive, the main condition for the design of measures such as support schemes is that Member States ensure that the share of renewable energy equals or exceeds the indicative trajectory set out in Part B of Annex I of the Directive. According to current statistics and the information received from Spain as part of their reporting obligations under Article 22(1) of the Directive, this condition is presently met with the available data of 2012, with a share of renewable energy of 14.3 % in gross final energy consumption. Conclusion In the light of the above, further information should be provided by the complainant in order for the Commission to assess whether there is a possible misapplication of EU law, including the Renewable Energy Directive and the Energy Efficiency Directive. The Commission also understands that not all legal instruments of the electricity sector reform have yet been adopted, including inter alia the regulation of self-consumption. Therefore, the Commission is still assessing the legal compatibility of the electricity sector reform (Act 24/2013 and subsequent developments) with EU legislation and will consider if EU action is appropriate and necessary once the assessment is complete.

9. Commission reply, received on 28 February 2015

Petition 2617/2013

12013 Country specific recommendations (CSR8) and 2014 Country specific recommendations (CSR7).

CM\1184675EN.docx 13/25 PE485.956v04-00 EN The reform of the Spanish electricity system aims to eliminate the large electricity tariff deficit and to ensure the financial stability of the system, in line with the country specific recommendations1 and the 2013 Spanish National Reform Programme. The reform has the potential to bring the system into equilibrium and foresees contributions from all the main stakeholders (electricity producers and distribution companies, consumers and the state). The Commission understands that not all legal instruments of the electricity sector reform have been adopted yet, including inter alia the regulation of self-consumption. The following initial observations can be made. First, the Commission notes that Directive 2009/28/EU gives Member States a wide discretion in designing their support schemes to achieve their binding national targets for the share of renewable energy in gross final energy consumption as well as in transport in 2020. According to Article 3(2) of the Directive, the main condition for the design of measures such as support schemes is that Member States ensure that the share of renewable energy equals or exceeds the indicative trajectory set out in Part B of Annex I of the Directive. According to latest Eurostat statistics and the information received from Spain as part of its reporting obligations under Article 22(1) of the Directive, this condition is presently met. From the information available, the Commission can therefore not identify a breach of the Directive stemming from changes in conditions of support for self-producers of electricity from PV panels in Spain. Nevertheless, in its Guidance for the design of renewables support schemes adopted in November 2013 (SWD (2013) 439 final) the Commission has recommended to Member States to abstain from changes to support schemes that alter the return on investments already made. A well-designed, predictable and cost-effective policy framework for renewable generation remains central in lowering the overall financing cost for renewable projects and facilitating the achievement of the 2020 renewable energy targets. Finally, the question whether changes to national renewable energy support schemes comply with EU General Principles of Law, such as the principle of legitimate expectation and legal certainty, needs to be assessed on the basis of relevant domestic legal frameworks and conditions, and thus by national courts in the first place. When applying Union law, national courts are expected to conduct an appropriate judicial review of domestic measures taking into account the fact that, under Union law, Member States have a wide margin of discretion in the design of their renewable energy support schemes. Reform of the grid tariff regime for consumers While Union legislation does not contain specific provisions on self-consumption, the Commission is of the opinion that self-consumption is an important tool in order to achieve EU climate and energy goals, in particular the targets established for 2020 regarding greenhouse gas emissions savings, renewable energy sources and energy efficiency. Thus, the Commission highlights the importance of regulating self-consumption in line with the spirit and provisions of Union legislation, which recognises the reduced network losses, avoidance of long term investments in new generation capacity and increased efficiency brought forward by self-consumption. Accordingly, the national self-consumption regulatory frameworks and

1 2013 Country specific recommendations (CSR8) and 2014 Country specific recommendations (CSR7)

PE485.956v04-00 14/25 CM\1184675EN.docx EN the networks tariffs should reflect cost savings in networks achieved from distributed generation and self-consumption. Conclusion In the light of the above, further information should be provided by the complainant in order for the Commission to assess whether there is a possible misapplication of EU law, including the Renewable Energy Directive and the Energy Efficiency Directive. The Commission is still assessing the legal compatibility of the electricity sector reform (Act 24/2013 and subsequent developments) with EU legislation and will consider if EU action is appropriate and necessary once the assessment is complete.

10. Commission reply, received on 30 March 2015

Petition 2229/2013

The reform of the Spanish electricity system aims to eliminate the large electricity tariff deficit and to ensure the financial stability of the system, in line with the country specific recommendations1 and the 2013 Spanish National Reform Programme. The reform has the potential to bring the system into equilibrium and foresees contributions from all the main stakeholders (electricity producers and distribution companies, consumers and the state). The Commission understands that not all legal instruments of the electricity sector reform have been adopted yet, including, inter alia, the regulation of self-consumption. The following initial observations can be made.

First, the Commission notes that Directive 2009/28/EU gives Member States a wide discretion in designing their support schemes to achieve their binding national targets for the share of renewable energy in gross final energy consumption as well as in transport in 2020. According to Article 3(2) of the Directive, the main condition for the design of measures such as support schemes is that Member States ensure that the share of renewable energy equals or exceeds the indicative trajectory set out in Part B of Annex I of the Directive. According to latest Eurostat statistics and the information received from Spain as part of its reporting obligations under Article 22(1) of the Directive, this condition is presently met.

From the information available, the Commission can therefore not identify a breach of the Directive stemming from changes in conditions of support for self-producers of electricity from PV panels in Spain.

Nevertheless, in its Guidance for the design of renewables support schemes adopted in November 2013 (SWD (2013) 439 final) the Commission has recommended to Member States to abstain from changes to support schemes that alter the return on investments already made. A well-designed, predictable and cost-effective policy framework for renewable generation remains central in lowering the overall financing cost for renewable projects and facilitating the achievement of the 2020 renewable energy targets.

Finally, the question whether changes to national renewable energy support schemes comply

1 2013 Country specific recommendations (CSR8) and 2014 Country specific recommendations (CSR7).

CM\1184675EN.docx 15/25 PE485.956v04-00 EN with EU General Principles of Law, such as the principle of legitimate expectation and legal certainty, needs to be assessed on the basis of relevant domestic legal frameworks and conditions, and thus by national courts in the first place. When applying Union law, national courts are expected to conduct an appropriate judicial review of domestic measures taking into account the fact that, under Union law, Member States have a wide margin of discretion in the design of their renewable energy support schemes.

Reform of the grid tariff regime for consumers

While Union legislation does not contain specific provisions on self-consumption, the Commission is of the opinion that self-consumption is an important tool in order to achieve EU climate and energy goals, in particular the targets established for 2020 regarding greenhouse gas emissions savings, renewable energy sources and energy efficiency. Thus, the Commission highlights the importance of regulating self-consumption in line with the spirit and provisions of Union legislation, which recognises the reduced network losses, avoidance of long term investments in new generation capacity and increased efficiency brought forward by self-consumption. Accordingly, the national self-consumption regulatory frameworks and the networks tariffs should reflect cost savings in networks achieved from distributed generation and self-consumption.

Conclusion

In the light of the above, further information should be provided by the petitioner in order for the Commission to assess whether there is a possible misapplication of EU law, including the Renewable Energy Directive and the Energy Efficiency Directive. The Commission also understands that not all legal instruments of the electricity sector reform have yet been adopted, including inter alia the regulation of self-consumption. Therefore, the Commission is still assessing the legal compatibility of the electricity sector reform (Act 24/2013 and subsequent developments) with EU legislation and will consider if EU action is appropriate and necessary once the assessment is complete.

11. Commission reply (REV), received on 26 August 2015

Petitions 1264/2013, 1552/201, 1887/2014 and 2617/2013

The Commission is aware that article 9 of the Spanish Law 24/2013 on the electric sector sets broad principles on self-consumption, which need to be further developed through specific regulation. The Commission also is aware that there is a new draft royal decree on self- consumption which was released for public consultation in Spain on 5 June on which the National Regulator (CNMC) has published its Opinion1 on 17 July. However, the Commission cannot make a final assessment of the petition as Spain has not yet approved the new regulation on self-consumption. The Commission policy is not to comment on drafts.

1 http://www.cnmc.es/CNMC/Prensa/TabId/254/ArtMID/6629/ArticleID/1337/La-CNMC-publica-su-informe- sobre-el-Proyecto-de-Real-Decreto-que-regula-el-autoconsumo-el233ctrico.aspx

PE485.956v04-00 16/25 CM\1184675EN.docx EN Generally speaking, the Commission is of the opinion that, as grids and markets become smarter, the emerging model of renewable energy self-consumption is set to play a growing role in the medium to long term in reducing consumers' energy bills, particularly of commercial consumers such as SMEs, and promoting cost-effective market integration of variable renewable electricity. Member States should proactively anticipate and accommodate the emergence of the renewable energy self-consumption model, while promoting energy security, efficiency and decarbonisation, as self-consumption can make an important contribution to finance the energy transition. Within the context of the Energy Union Framework Strategy, the Commission has published on 15 July 2015 a Guidance on best practices on renewable energy self-consumption schemes1 as a staff working document of the Retail Market Communication2. Some selected best practices on self-consumption included in the guidance are inter alia:

 Allowing renewable energy self-consumption and decentralized storage;

 Establishment of simplified authorisation procedures, including through simple notification, for small-scale renewable energy projects;

 Avoidance of discriminatory charges for self-consumption projects;

 Aknowledging the different national conditions, ensuring that possible future grid tariff reforms promote both renewable energy and energy efficiency objectives, are based on objective and non-discriminatory criteria and reflect the impact of the consumer on the electricity grid, while guaranteeing sufficient funding for grid and system costs;

 Ensuring predictable conditions by announcing caps of installed capacities after which grid cost exemption are revised;

 Monitoring of market developments and overall system impacts in order to ensure cost-effectiveness and avoid overcompensation;

 Preference for self-consumption schemes over net-metering schemes;

 Avoidance or retroactive changes to existing self-consumption projects to guarantee investment security.

Conclusion While the European Commission is aware that self-consumption is an issue that has drawn a lot of attention in Spain since the publication of a draft Royal Decree back in July 2013, it is not the Commission's policy to comment on draft regulations of Member States before their

1 http://ec.europa.eu/energy/sites/ener/files/documents/1_EN_autre_document_travail_service_part1_v6.pdf 2 https://ec.europa.eu/energy/sites/ener/files/documents/1_EN_ACT_part1_v8.pdf

CM\1184675EN.docx 17/25 PE485.956v04-00 EN adoption. Once adopted, the Commission will analyse its compatibility with EU legislation and will communicate to the Spanish authorities its concerns in case a breach of EU legislation was found. The Commission would like to refer to its Guidance on best practices on renewable energy self-consumption schemes in order to help guide Member States policies in this area.

12. Commission reply, received on 29 February 2016

Petition No 0395/2015 and Petition No 2520/2014

In previous 'EU semester' recommendations to Spain, the Council emphasised the need for Spain to make the structural and comprehensive reforms to the electricity sector necessary to address this 'tariff deficit. Through its November 2013 Guidance on support schemes, the Commission has outlined best practices in the design of support schemes including, inter alia, that support schemes should be limited to what is necessary, be flexible and able to respond to falling production costs in order to ensure certainty for investors. In addition, support schemes need to be compatible with the Guidelines on State aid for environmental protection and energy in as far as they constitute state aid. The Commission has considered the petition carefully and does not believe that under Directive 2009/28/EC there are grounds for the Commission to take legal action against Spain with regard to the changes in their legislation affecting the level of support given to investors in renewable energy projects. In particular, pursuant to Article 3(3) of Directive 2009/28/EC, support schemes are but one instrument that can be chosen by Member States to achieve the binding national targets established by the Directive for the share of renewable energy in gross final energy consumption as well as in transport in 2020. Member States retain full discretion over whether they use support schemes or not and, should they use them, over their design, including both the structure and the level of support. This comprises the right for Member States to enact changes to their support schemes, for example to avoid over- compensation or to address unforeseen developments such as a particularly rapid expansion of a precise renewables technology in a given sector. In addition, according to Article 3(2) of Directive 2009/28/EC, the main condition for the design of measures such as support schemes is that Member States ensure that the share of renewable energy equals or exceeds the indicative trajectory set out in Part B of Annex I of the Directive itself. According to the data made available by Eurostat, Spain is meeting this condition as its renewable energy share is above the one determined in the relevant indicative trajectory. Therefore, in cases of changes to a support scheme as such, there is no breach of Directive 2009/28/EC. If investors consider that their legitimate expectations have been breached, they may seek judicial review before the national courts.

Conclusion

The Commission considers that there is no breach of Directive 2009/28/EC regarding changes to a support scheme as such.

PE485.956v04-00 18/25 CM\1184675EN.docx EN 13. Commission reply (REV), received on 30 March 2016

Petition 1606/2010

Through its November 2013 Guidance on support schemes, the Commission has outlined best practices in the design of support schemes including inter alia that support schemes should be limited to what is necessary, be flexible and able to respond to falling production costs in order to ensure certainty for investors. In addition, support schemes need to be compatible with the Guidelines on State aid for environmental protection and energy in as far as they constitute state aid.

The Commission services have considered the petition carefully, also together with further developments affecting the renewable sector in Spain occurred after the petition was submitted in 2010, and do not believe that under Directive 2009/28/EC there are grounds for the Commission to take legal action against Spain with regard to the changes in their legislation affecting the level of support given to investors in renewable energy projects. In particular, pursuant to Article 3(3) of Directive 2009/28/EC, support schemes are but one instrument that can be chosen by Member States to achieve the binding national targets established by the Directive for the share of renewable energy in gross final energy consumption as well as in transport in 2020. Member States retain full discretion over whether they use support schemes or not and, should they use them, over their design, including both the structure and the level of support. This comprises the right for Member States to enact changes to their support schemes, for example to avoid over-compensation or to address unforeseen developments such as a particularly rapid expansion of a precise renewables technology in a given sector.

In addition, according to Article 3(2) of Directive 2009/28/EC, the main condition for the design of measures such as support schemes is that Member States ensure that the share of renewable energy equals or exceeds the indicative trajectory set out in Part B of Annex I of the Directive itself. According to the data made available by Eurostat, Spain is meeting this condition as its renewable energy share is above the one determined in the relevant indicative trajectory.

Conclusion

Therefore, in cases of changes to a support scheme as such, there is no breach of Directive 2009/28/EC.

If investors consider their legitimate expectations to have been breached, they may seek judicial review before the national courts.

14. Commission reply, received on 29 April 2016

CM\1184675EN.docx 19/25 PE485.956v04-00 EN Petition No 0384/2015

The Commission is aware that administrative procedures applied to renewable energy projects, from power plant construction to household solar installations, can raise costs and hamper renewable energy development. The existence of such administrative barriers was recognised in the Renewable Electricity Directive of 20011 and Article 13 of the Renewable Energy Directive2 lays down some requirements to simplify them.

In addition, in the "Best practices on Renewable Energy Self-Consumption"3 published by the Commission, it is acknowledged that "complex and burdensome administrative and authorisation procedures still represent an important barrier for the competiveness of small- scale self-consumption projects".

As stated in the 2015 Renewable Energy Progress Report4, the Commission has already in the past identified the slow progress in simplification of administrative procedures for renewable energy producers in Member States as an important challenge to the growth of renewable energy in Europe.

In consequence, in the revision of the Renewable Energy Directive planned for this year, the Commission intends to strengthen the provisions aimed at removing administrative barriers in order to facilitate the deployment of all renewable projects, including decentralised ones.

Conclusion

As part of the ongoing work for the revision of the Renewable Energy Directive for the post 2020 period, the Commission is looking inter alia at how to facilitate self-consumption of renewable energy and remove administrative barriers.

15. Commission reply, received on 31 July 2017

Petitions 1606/2010, 0454/2011, 0172/2013, 0430/2013, 0709/2013, 1264/2013, 1481/2013, 1552/2013, 2229/2013, 2378/2013, 2617/2013, 1887/2014, 2520/2014, 0384/2015, 0395/2015 and 1228/2015

The European Commission is aware of the concerns raised relating to Spanish legislation on renewables. Two of the petitioners have also filed a complaint with the Commission.

There are three main topics reported by petitioners: changes on support schemes for renewables, Spanish legislation on self-consumption and the situation in the Canary Islands. i) Changes to support schemes for renewable energy:

The petitioners claims that the measures taken by the Spanish government modifying the

1 Directive 2001/77/EC of 27 September 2001 on the promotion of electricity produced from renewable energy sources in the internal electricity market 2 Directive 2009/28/EC of 23 April 2009 on the promotion of the use of energy from renewable sources. 3 Best practices on Renewable Energy Self-consumption, SWD(2015) 141 final, Brussels, 15.7.2015. 4 Renewable energy progress report, SWD(2015) 117 final.

PE485.956v04-00 20/25 CM\1184675EN.docx EN support schemes in place are incompatible with Directive 2009/28/EC (Renewable Energy Directive) and the EU law principles of legal certainty, legitimate expectations and non- retroactivity.

When assessing whether there is a breach of the current Renewable Energy Directive, the conclusion is that there is no such breach. The reason is that the Renewable Energy Directive enables the use of support schemes, but does not prescribe at all their design, the relevant levels of remuneration (which are in any event subject to State aid rules) and the relationship between the Member States and the beneficiaries of support. Member States have the obligation to meet their national target for renewable energy consumption in 2020 and the obligation to introduce measures effectively designed to ensure that the share of energy form renewable energy sources equals or exceeds their indicative trajectory, but there is no obligation to apply support schemes. Pursuant to Article 3(3) of the Renewable Energy Directive, support schemes are but one instrument that can be chosen by Member States to achieve the binding national targets established by the Directive for the share of renewable energy in gross final energy consumption as well as in transport in 2020. Member States retain full discretion over whether they use support schemes or not and, should they use them, over their design, including both the structure and the level of support.

The Commission services have also analysed whether the modifications of the Spanish support schemes breach the general principles of Union law of legal certainty, protection of legitimate expectations and non-retroactivity. EU law principles can be invoked by individuals to challenge conflicting national laws whenever they fall within the scope of EU law. The Commission considers that those principles are applicable when assessing the support schemes introduced and changed by Spain. These schemes would be within the scope of EU law because the Renewable Energy Directive allows Member States to adopt them as a possible method to meet their national renewable energy targets. However, according to the ECJ case-law (Industrie du bois1), these principles cannot be interpreted on their own, with no link to the EU legislation behind the application of the national measure. Therefore, the Commission has to interpret these principles in this case according to what has been established in the Renewable Energy Directive.

As explained earlier, this Directive does not oblige Member States to establish support schemes and does not regulate their design (type and level of support, duration…). It just gives Member States the possibility to use them, but they can apply other measures in order to meet their targets. The Directive does not contain provisions which, when implemented by Member States, could have created a legitimate expectation that a Member State could not change its support schemes, for example, to avoid over-compensation or to address unforeseen developments such as a particularly rapid expansion of a specific RES technology in a given sector. The Directive does not oblige Member States to create support schemes or to keep a certain level of support. In addition, the Court of Justice of the European Union has explained that economic operators are not justified in having a legitimate expectation that an existing situation which is capable of being altered by the national authorities in the exercise of their discretionary power will be maintained (Plantanol2). Hence, the Renewable Energy Directive has not created any legitimate expectations.

1 Case C-195/12 Industrie du bois de Vielsalm & Cie IBV SA v Région wallonne 2 Case C-201/08 Plantanol GmbH&Co.KG v Hauptzollamt Darmstadt

CM\1184675EN.docx 21/25 PE485.956v04-00 EN The Commission has also verified whether the changes to the Spanish legislation on support schemes for renewable energy may have breached the general principles of EU law referred to by the petitioners. First, there is no breach of the principle of legal certainty. That principle requires that legal rules enable those concerned to know precisely the extent of the obligations which are imposed on them, and that those persons must be able to ascertain unequivocally what their rights and obligations are and take steps accordingly.1 That principle is complied with in the present case, as the legislation changing the support schemes set out precisely the new support scheme for installations. Second, there is no breach of the principle of non- retroactivity. As the Spanish Supreme Court has found in a series of judgments2, the modifications concern only future payments, but do not concern payments made in the past. Hence, the changes are of immediate application to ongoing situations, but do not affect existing legal situations that took place in the past. Third, there is no violation of the principle of legitimate expectations. Indeed, as already set out in the previous paragraph, economic operators are not justified in having a legitimate expectation that an existing situation which is capable of being altered by the national authorities in the exercise of their discretionary power will be maintained. In the present case, it would seem furthermore that both past and future payments constitute non-notified State aid, which means it was not examined and authorized by the Commission prior to its implementation. According to the case-law of ECJ, a recipient of State aid cannot, in principle, have legitimate expectations in the lawfulness of aid that has not been notified to the Commission.3 In that context, the Commission also recalls that beneficiaries have no legal means available to enforce payment of such unlawful aid.4

ii) Self-consumption:

The petitioners argue that the Spanish legislation on self-consumption (Royal Decree 900/2015) is contrary to EU law because self-consumers are subject to very high network tariffs and other charges (to cover the costs of the energy system and for other services of this system) which make self-consumption economically unviable. The Commission has analysed the compatibility of these network tariffs and other charges with EU law. Neither of them has a fiscal nature, which makes Directive 2003/96/EC on the taxation of energy products and electricity inapplicable.

Regarding network tariffs that self-consumers have to pay in accordance with the energy they consumed from the grid, several Directives, such as Directive 2012/27/EU on energy efficiency, Directive 2009/28/EC on renewable energy and Directive 2009/72/EC on the internal market in electricity, contain related provisions. No breach of these provisions has been found.

In relation to the other charges, aiming at financing, inter alia, support schemes for renewables, capacity payments and the extra costs of producing electricity in non-peninsular territories, and which self-consumers have to pay in accordance not only with the energy consumed from the grid but also with the energy they consume from what they self-generate,

1 Case C-345/06 Heinrich, paragraph 44 and the case-law cited 2 In this regard, please see STS 2559/2016 3 Case C-24/95 Land Rheinland-Pfalz v Alcan Deutschland, paragraph 25 4 Case C-672/13 OTP, paragraphs 66 to 78

PE485.956v04-00 22/25 CM\1184675EN.docx EN EU law does not regulate their establishment or configuration. The Commission has proposed a revised Renewable Energy Directive which introduces an EU right to produce, self-consume, store or sell renewable electricity without being subject to disproportionate procedures and charges that are not cost-reflective. This proposal is under discussion in the European Parliament.

The petitioners also argue that Royal Decree 900/2015 infringes the provisions on priority access or guaranteed access to the grid of Article 16 of the Renewable Energy Directive. However, the Royal Decree does not include any provision on priority or guaranteed access, which is regulated in other pieces of Spanish legislation (Law 24/2013 on the Electricity Sector and Royal Decree 413/2014 on electricity production from renewables, cogeneration and waste).

Finally, with regard to Article 13 of the Renewable Energy Directive on administrative procedures, the provisions of the Royal Decree establishing an administrative procedure for those self-consumers who do not intend to inject energy to the grid are being addressed by the Commission in the dialogue with the Spanish authorities to receive further explanations about the procedure and ensure compliance with the provisions of the Renewable Energy Directive. iii) Situation in the Canary Islands:

Petition 1481/2013, which related to the measures taken by the Spanish government regarding the renewable sector and which focused on the specific situation of the Canary Islands, is also part of a complaint the petitioner has filed with the Commission.

For the reasons explained under point 1 of this reply, the Commission considers that the reforms to the Spanish legislation on support schemes for renewable energy have not breached Directive 2009/28/EC or the general principles of EU law referred to by the petitioners.

Regarding the alleged infringement of Article 3 of Renewable Energy Directive arguing that Spanish legislation makes it practically impossible to achieve the target for renewable energy in the Spanish energy mix in 2020, the Commission notes that, with a share of renewables of 16.2 % in 2015, Spain is well above the trajectory defined in the Directive in order to achieve its 20 % target for 2020. The Commission will continue to monitor Spain's progress towards its target in the following years until 2020.

Specifically, with regard to Article 16 of the Renewable Energy Directive on priority dispatch, the Commission considers that the new regime in Spain which establishes priority of dispatch for renewables only in case of the same economic conditions could be in contradiction with the Directive, which allows restrictions to priority of dispatch for renewables only for reasons of security of supply. The Commission has asked the Spanish authorities for an explanation as to the reason for this measure and is in contact with them to discuss this issue.

Concerning the alleged breach of Article 13 of the Renewable Energy Directive by the Spanish legislation on tendering of new capacity, the Commission considers there is no such a

CM\1184675EN.docx 23/25 PE485.956v04-00 EN breach. Article 13 of the Renewable Energy Directive contains provisions related to the administrative procedures to authorise renewable projects, but does not regulate support schemes. Therefore, this article does not apply to legislation regulating the remuneration to be received by installations producing renewables.

Regarding the alleged breaches of Directive 2009/72/EC1, the Commission believes that the prohibition of discrimination in Article 3(1) of this Directive aims to facilitate the entry of newcomers and to make sure that all operators can have access to the market and networks under the same conditions. The petition fails to explain the link between this provision and the regulatory changes referred to in the petition.

Conclusion

The Commission has concluded that the measures adopted by the Spanish government modifying the support schemes in place were not contrary to the Renewable Energy Directive or the EU law principles of legal certainty, protection of legitimate expectations and non- retroactivity.

The Commission has also analysed the Royal Decree 900/2015 and is in contact with the Spanish authorities to discuss the administrative procedure required for self-consumers who do not inject energy into the grid.

Finally, the Commission is in contact with the Spanish authorities to discuss the application in Spain of the priority dispatch obligation set out in the Renewable Energy Directive.

16. Commission reply, received on 07 June 2019

Petitions 1606/2010, 0454/2011, 0172/2013, 0430/2013, 0709/2013, 1264/2013, 1481/2013, 1552/2013, 2229/2013, 2378/2013, 2617/2013, 1887/2014, 2520/2014, 0384/2015, 0395/2015 and 1228/2015

In its last reply to these petitions, the Commission indicated that it was in dialogue with the Spanish authorities regarding the administrative procedure set in Royal Decree 900/2015 (on self-consumption) for those self-consumers who do not intend to inject energy to the grid, in order to receive further explanations about the procedure and ensure compliance with the provisions of the Renewable Energy Directive2.

This dialogue is no longer in place since Royal Legislative Decree 15/2018 and Royal Decree

1 Directive 2009/72/EC of the European Parliament and of the Council concerning common rules for the internal market in electricity

2 Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC (Text with EEA relevance), OJ L 140, 5.6.2009, p. 16–62.

PE485.956v04-00 24/25 CM\1184675EN.docx EN 244/2019 have simplified the procedure for self-consumers who do not inject electricity into the grid. This modification is in line with the requirements set in the Renewable Energy Directive for the administrative procedures put in place for renewable energy projects.

Conclusion

The Commission considers that Spanish current rules on the administrative procedure for self- consumers comply with the Renewable Energy Directive.

CM\1184675EN.docx 25/25 PE485.956v04-00 EN