New CNMC circular on access and connection to grid for electricity demand installations
On 11 October 2024, Circular 1/2024, on 27 September, of the Spanish National Markets and Competition Commission (CNMC), was published in the Official State Gazette (Boletín Oficial del Estado) (BOE), approving the methodology and conditions for the access and connection of electricity demand facilities to the transmission and distribution electricity grids (Circular 1/2024). In particular, this regulation defines the methodology and conditions for the access and connection of electricity demand facilities that need obtain access and connection permits (e.g. for consumption facilities, those new grid extension facilities needed for new supplies or enlargement of existing supplies up to 100 kW at low voltage or 250 kW at high voltage -under certain conditions – are exempt from obtaining access and connection permits).
For these purposes, Circular 1/2024 (i) aims to establish clear and well-defined principles governing the access and connection to the electricity grids for distribution companies and final consumers, while taking into consideration electricity system safety as well as quality of service, and (ii) preserves the third party access right existing principle. Furthermore, it also seeks to improve the efficiency of the access and connection procedure by means of harmonising the information to be provided by the relevant applicants.
A notable aspect of those introduced by Circular 1/2024 is that demand facilities will be able to opt for flexible access to the grid, while as until the enactment of this circular, the electricity sector regulations were based on firm and continuous guaranteed supply of electricity to consumers. Therefore, the introduction of flexible access capacity entails a significant change on the basis of these regulations.
Likewise, Circular 1/2024 expressly includes within its scope storage facilities and closed electricity distribution grids, which are regulated in Royal Decree 314/2013, of 25 April, developing the procedure and requirements for the granting of administrative of authorisations for closed electricity distribution grids.
Please find below a summary of some of the most relevant measures introduced by Circular 1/2024:
Access capacity modalities
Circular 1/2024 provides for two modalities of access capacity for demand facilities consisting of:
(a) Firm access capacity: the maximum active capacity whose supply can be guaranteed during all the hours of the year.
(b) Flexible access capacity: it corresponds to capacity which is subject to potential consumption reductions and whose supply is not guaranteed during all the hours of the year. It will be granted to a relevant facility if the results of the capacity analysis which are to be carried out determine whether it is possible to grant this flexible capacity. The request for flexible access capacity is voluntary for the applicant and may be complementary to a request for firm access capacity.
Content of the access and connection permits' requests and assessment criteria
Schedules I and II of Circular 1/2024 set out the content (including the related technical information) that shall need to be included in the request for access and connection permits, both for the ordinary and for the fast-track procedure (procedimiento abreviado).
The request forms for new access and connection permits, as well as for the capacity increase of existing installations, shall be available on the website of the corresponding grid operator.
Additionally, Circular 1/2024 also sets out the main criteria to be considered for assessing a request for demand access and connection capacity, which, among others, include the following:
(a) criteria for assessing whether an access and connection request impacts on a different grid to the one to which access is requested;
(b) criteria for assessing whether access capacity is available or not; and
(c) criteria for assessing the connection feasibility.
Once the existence of access capacity and the connection feasibility has been verified, the grid operator shall accept the request and submit a preliminary proposal to the applicant.
Content of the preliminary proposal submitted by the grid operator
The abovementioned preliminary proposal to be submitted by the grid operator, shall include, at least, the following information:
(a) Technical information: (i) access capacity, with a distinction between firm and flexible capacity; (ii) connection point; (iii) technical parameters of the connection point (among others, voltage level or location); (iv) technical requirements of the work required for the proposed connection; and (v) potential temporary supply restriction circumstances.
(b) Financial information: (i) financial budget of the connection proposal; (ii) payment agreement document; and (iii) where applicable, reference to any compensation agreement affecting the installations involved by the proposed technical solution.
Content of access and connection permit
Circular 1/2024 provides the minimum content to be included in the demand access and connection permits as well as the additional information that shall need to be mentioned in access permits which convey the granting of flexible capacity. These flexible capacity permits shall include, among others, an express mention of the expected operation percentage and a description of the grid congestion circumstances under which capacity access shall be limited.
All demand access and connection permits shall include, at least, the following information: (i) access capacity (both firm and flexible); (ii) detailed location of the connection point; (iii) voltage level; (iv) technical parameters to ensure quality of supply; and (v) technical and economic connection conditions.
Refusal of access and connection requests
(a) Access capacity requests shall only be refused in case of lack of access capacity in accordance with the assessment criteria set out in Schedule III of Circular 1/2024.
(b) Connection permits requests shall only be refused in case of connection unfeasibility according to the criteria set out in Schedule IV of Circular 1/2024.
Disputes and discrepancies
Access conflicts and connection discrepancies arising at any phase of the procedure shall be solved in accordance with the procedures and the deadlines provided for in article 29 of Royal Decree 1183/2020, of 29 December, on access and connection to the electricity transmission and distribution grids. For these purposes, the corresponding authority shall be the CNMC, except for those connection conflicts relating to facilities whose administrative authorisation shall be granted at an Autonomous Community level, in which case, the competent body of the corresponding Autonomous Community shall decide, following a report from the CNMC.
Actions after obtaining the access and connection permits
Circular 1/2024 also determines the content of the project commissioning agreement (contrato de encargo de proyecto) and the technical access agreement (contrato técnico de acceso) which shall be executed once the corresponding administrative authorisations have been granted to the consumption facility. Note that, connection to the grid shall only be executed once the aforementioned agreements have been executed and the administrative authorisations and operational notifications required by applicable legislation have been obtained, in addition to compliance with several technical requirements.
Amendment to the Circular 1/2021 of the CNMC
Finally, Circular 1/2024 amends the Circular 1/2021 of the CNMC, of 20 January, on the methodology and conditions for the access and connection to the transmission and distribution grids of the electricity generation facilities, in order to regulate the obligation to publish relevant information within the access and connection procedure of these generation facilities by integrating their files on the web platform devoted to the management of demand access and connection requests.
Coming into force and transitional provisions
In general, Circular 1/2024 shall enter into force three months after the day following its publication in the BOE (i.e. on 11 January 2025).
However, as per the first and second transitory provisions of Circular 1/2024:
(a) Flexible access capacity permits shall not be requested or granted until the approval, by resolution of the CNMC, of the regulatory development required for its full implementation.
(b) The criteria for assessing the existence or not of access capacity, the feasibility of the connection point and the potential impact on a different grid to the one to which access is requested; for requests made prior to the approval of the detail specifications regulated in article 18 of Circular 1/2024, shall consist of the technical criteria set out in article 33.2 of Law 24/2013, on the Electricity Sector.
