Introduction to the New Electricity Regulation Instrument
The new regulatory instrument, stemming from the Electric Sector Law, brings much-needed clarity to energy storage and the separation of activities for private entities working alongside the government. However, it is the Dispositions Administrative of General Character (DACG) that will solidify how electricity is operated within the country across various activities.
Expert Opinion on the New Regulations
Jerónimo Ramos, a partner at Pérez-Llorca in the Projects, Energy, and Infrastructure department, emphasizes the importance of adapting to new regulations in this dynamic sector. “We cannot have rigid, unchanging rules in such a rapidly evolving industry,” Ramos says. “We must carefully review new dispositions issued by authorities to avoid stifling innovation and investment while preserving the guidelines of a well-planned, ordered policy that is currently being implemented.”
Clarified Aspects of the Electricity Regulation
The National Energy Commission (CNE) will grant the following types of electricity-related permits: generation, commercialization in basic supply, last-resort and qualified supply modes, as well as energy storage. The Secretariat of Energy will authorize imports, exports, and social impact declarations.
Explicit Regulations on Autoconsumption
Article 23 clarifies the existence of autoconsumption groups, distinguishing them from self-sufficiency and their partners who were previously clients creating a secondary market. The regulation mandates explicit network identification, allowing for independent or interconnected (preferably renewable energy-based) generation and storage if needed.
Autoconsumption, applicable to demands between 0.7 megawatts and 20 megawatts, is exempt from permits and can be obtained through a simplified process.
Private Participation Schemes in the Electricity Sector
The regulation outlines private participation schemes in the electricity sector through mixed development models between private entities and the government, as well as long-term production—similar to Power Purchase Agreements (PPAs)—with no specified temporal limits, determined by individual contracts.
The State-owned Enterprise’s participation in mixed investment can occur through liquid contributions, in-kind contributions, intangible assets, or any other agreed-upon modalities between parties.
Pending DACG in Key Areas
Although the new regulation provides clarity on several aspects, there are still missing DACG in areas such as tariffs, instruments, requirements, and dispositions for the energy transition, supply of all types, autoconsumption, social impact, and energy storage.
Key Questions and Answers
- What is the new regulatory instrument for the electricity sector? The new tool, stemming from the Electric Sector Law, provides clarity on energy storage and the separation of activities for private entities working alongside the government. However, it is the Dispositions Administrative of General Character (DACG) that will solidify how electricity is operated within the country across various activities.
- Who provided insight on the new regulations? Jerónimo Ramos, a partner at Pérez-Llorca in the Projects, Energy, and Infrastructure department, emphasized the importance of adapting to new regulations in this dynamic sector.
- What types of electricity-related permits will the CNE grant? The National Energy Commission (CNE) will grant permits for generation, commercialization in basic supply, last-resort and qualified supply modes, as well as energy storage.
- How are autoconsumption groups regulated? Article 23 clarifies the existence of autoconsumption groups, distinguishing them from self-sufficiency and their partners. The regulation mandates explicit network identification, allowing for independent or interconnected (preferably renewable energy-based) generation and storage if needed.
- What are the private participation schemes in the electricity sector? Private participation schemes involve mixed development models between private entities and the government, as well as long-term production—similar to Power Purchase Agreements (PPAs)—with no specified temporal limits, determined by individual contracts.
- What areas still lack DACG? Despite the new regulation’s clarity on several aspects, there are still missing DACG in areas such as tariffs, instruments, requirements, and dispositions for the energy transition, supply of all types, autoconsumption, social impact, and energy storage.
