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25 January 202311 minute read

Considerations on the effects derived from the expiration of the second milestone of Spanish Royal Decree-Law 23/2020 on 25 January 2023

Initial deadline for accrediting the compliance with the second milestone and legal consequences derived from non-compliance

1. As it is widely known in the renewable energy sector, on 25 June 2020, Royal Decree-Law 23/2020, of 23 June, on energy and other measures for economic reactivation (the “RDL 23/2020”) came into force in Spain.

2.  Among the most significant measures included at the time under RDL 23/2020 was the introduction in article 1 of a series of milestones and deadlines aimed at immediately releasing any capacity that was not linked to a minimally mature project and, also encouraging, henceforth, the processing of those firm and viable projects in an agile manner.

3. In this regard, for those projects with an access permit obtained after 31 December 2017 and before the entry into force of RDL 23/2020 (i.e. 25 June 2020), and in order to accredit compliance with the second milestone (consisting of accrediting before the transport or distribution grid operator that a favourable environmental impact statement had been obtained), a period of 22 months was initially granted as from 25 June 2020 (this period would expire on 25 April 2022)1.

4. Likewise, article 1.2 of RDL 23/2020 established the consequences derived from the failure to duly and timely accredit before the grid operator of the compliance with the administrative milestones, namely:

(i) Automatic expiry of the access and, where appropriate, access and connection permits granted;

(ii) Immediate enforcement by the competent Administration for the granting of substantive authorizations of the financial guarantees deposited for the processing of the application request for obtaining access to the transport and distribution grid (i.e. guarantees amounting 10 or 40 EUR/kW installed, depending on the date of deposit of the said guarantee); and

(iii) As a derivative effect of all this, the termination of the processing of the prior administrative authorization for the installation and, therefore, of the project.

5. The only exception to the enforcement of the financial guarantees (but not to the expiry of the access permits and the termination of the processing of projects) was the case where failure to obtain a favourable environmental impact statement within the deadline was due to causes not attributable to the promoter.

6. On this point, and although not clearly stated, by failure to obtain a favourable environmental impact statement, in addition to the cases of expressly unfavorable environmental impact statements, it could be considered as assimilated those cases in which the Administration had not resolved within the deadlines due to causes attributable to the Administration itself.

 

Widespread delay by the Administration in the processing of environmental impact assessments for the purposes of the second milestone of RDL 23/2020 and the central Government's decision not to grant a second extension of the deadline

7. Due to the existence of a high volume of Spanish potentially viable projects in the pipeline at the end of 2021 and the existence of widespread delays on the part of the Administrations in relation to the dates set for the expiry of the milestones, Royal Decree-Law 29/2021, of 21 December, adopting urgent measures in the energy sector to promote electric mobility, self-consumption and the deployment of renewable energies (the “RDL 29/2021”), was approved.

8. RDL 29/2021 led to the extension of the deadline for accrediting before the grid operator the fulfilment of each of the milestones by 9 additional months.

9. As a result of this extension, and with regard to the deadline for the second milestone consisting of obtaining the favourable environmental impact statement, the deadline was extended by 9 additional months to a total of 31 months (also from 25 June 2020)2. Thus, the deadline for accrediting compliance with the second milestone for those projects with an access permit obtained after 31 December 2017 and before the entry into force of RDL 23/2020 was definitively set at 25 January 2023.

10. This measure adopted in extremis provided some breathing space for the promoters of project affected by the administrative overload.

11. However, in view of the expiry of the second milestone on 25 January 2023, and unlike what happened at the end of 2021, this time the central Government has decided not to grant new extensions by means of a regulatory modification in RDL 23/2020, despite the persistence of delays in the Administration. This decision jeopardizes the continuity in the processing of a large number of projects when the deadline arrives.

 

Possible measures in response to the current deadlock situation

12. In this context of generalized delay and overload on the part of the different Administrations (State and Regional) involved in the environmental assessment of projects, certain measures have recently been approved that could help to unblock (at least in part) the resolution of projects affected by the expiry of the milestone on 25 January 2023.

13. Thus, a few weeks ago, it has been approved the suspension of the processing of certain procedures in nodes subject to future capacity tenders that have not yet been called (a measure approved in article 13 of Royal Decree-Law 20/2022, of 27 December, on measures in response to the economic and social consequences of the war in Ukraine and support for the reconstruction of the island of La Palma and other situations of vulnerability, which entered into force on 28 December), in order to free up resources of the Administration to continue processing and resolving, among others, projects affected by the expiry of the milestone on 25 January 2023. In relation to this measure, a notable acceleration in the resolution of environmental assessment procedures has been observed in the sector in recent weeks.

14. On the other hand, according to recent information appearing in some digital media3, the central Government (without ruling out an alignment with the Autonomous Regions) could be considering the possible granting of environmental impact statements issued after the expiry of the milestone, albeit with retroactive effects.

15. However, with regard to this possibility (retroactivity), it should be stressed that, although it could effectively serve to save the processing of projects that were truly viable and that would only not have obtained a favourable environmental impact statement for reasons (i.e. delays) attributable to the Administration, it is not however an option that is completely free of controversy in terms of legal feasibility.

16. In this regard, the content of Article 39 of Law 39/2015, of 1 October, on the Common Administrative Procedure of Public Administrations, should be brought up. This provision establishes:

(i) As a general rule, administrative acts shall produce their effects only from the date on which they are issued (prospective effect); and

(ii) Only exceptionally, administrative acts may be given retroactive effect provided that (a) they are acts that produce favorable effects to the interested party; (b) the necessary factual circumstances already existed on the date to which the effectiveness of the act is retroactive; and (c) such retroactivity does not harm the rights or legitimate interests of other persons.

17. That being said, in the light of this provision, a possible granting of environmental impact statements in a “generalized manner” after the expiry of the milestone and with retroactive effects could raise certain doubts as to whether those would been in accordance with the law.

18. In this regard, although it is not disputed that a favourable and retroactive environmental impact statement would produce a favourable effect for the interested party and that the factual assumptions for this would already exist on 25 January 2023 (which could occur when the problem derived from a simple delay attributable to the Administration), the issue would in fact lie on the following grounds:

(i) An exceptional measure would be articulated to solve a problem of general scope deriving from the ex lege effects of Article 1 of RDL 23/2020 (and affecting a plurality of subjects), and

(ii) The retroactive effect, at least in theory, could harm the legitimate rights or interests of other promoters who would be deprived of the benefits derived from the hypothetical automatic release of capacity in the nodes advocated by article 1 of RDL 23/2020, in those cases in which the fulfilment of a milestone is not accredited within the deadline.

19. Consequently, it cannot be ruled out that a retroactive measure may not be exempted from potential claims from third party promoters, should the case arise.

 

Potential liability claims for the economic consequences derived from the delays attributable to the Spanish Administrations in the processing of environmental impact statements

20. In the event that, on 25 January 2023 and during the following weeks (and especially before the expiry of the third milestone), the affected Administrations had not articulated mechanisms to save the processing of viable projects (e.g. retroactive environmental impact statement), it could be considered whether the promoters have the possibility of bringing a claim against the Administrations, when those are responsible for the delay4.

21. On this issue, the Spanish Constitution (Article 106.2) and Articles 32 et seq. of Law 40/2015, of 1 October, on the Legal Regime of the Public Sector include the right of individuals to be compensated by the corresponding Public Administrations for any injury they suffer to any of their property and rights, provided that the injury is a consequence of the normal or abnormal functioning of public services, except in cases of force majeure or damage that the individual has a legal duty to bear in accordance with the Law.

22. Based on these provisions, and depending on the specific case, it would be possible to file a claim for requesting the Administration's liability (to recover project processing costs) in those cases in which the failure to issue a favourable environmental impact statement before 25 January 2023 was due to causes attributable to the Administration itself.

23. In any case, the possibility of articulating a claim with a higher probability of success would require demonstrating that the project was environmentally viable (from a technical and legal point of view) and that, nevertheless, the Administration involved did not carry out its processing and resolution in time, despite the fact that the initial request of the promoter would have been formulated in sufficient time and any incidence in the processing would also have been resolved by the promoter in time, in accordance with the applicable environmental assessment regulations. The likelihood of success could be higher in cases where it is possible to demonstrate a particularly negligent behaviour of the Administration at the processing stage.

24. On the other hand, it should be borne in mind that only accredited, economically assessable and individualized actual damages will be compensable, and that the claim must be filed within 1 year from the date of the event or act giving rise to the compensation or of the harmful effect of such event or act (i.e. expiry of the access permit ex lege on 25 January 2023).

25. As a final note, and in view of a potential flood of claims for financial liability by the promoters affected by the expiry of the deadline, it cannot be ruled out that some Administrations may choose to issue unfavourable environmental impact statements on a massive scale, before the deadline expires, all with the sole purpose of trying to avoid potential future Administration liabilities.


1The calculation of the term for the accreditation of the second milestone will depend on the date on which it is understood that the access permit was obtained. On the other hand, the date on which it is understood that the access permit was obtained will also depend on whether the project is connected to the transport grid or the distribution grid and other factors.
2
Note that, the calculation of the period for the accreditation of the second milestone will depend on the date on which the access permit is deemed to have been obtained, depending on whether the project is connected to the transport or distribution grid and on other factors.
3
Link to the article: https://www.eleconomista.es/energia/noticias/12108150/01/23/El-Gobierno-usa-una-triquinuela-para-salvar-40000-millones-en-renovables.html
4This could be the case of projects which, although formally and materially feasible under the environmental assessment regulations, for reasons attributable to those Administrations, have not obtained a favourable environmental impact statement within the established deadline.

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