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Legal challenges of renewable energies in Spain and Portugal

Legal challenges of renewable energies in Spain and Portugal Publicado: 26-02-2023

Where do Spain and Portugal stand in renewable energies? What are the legal challenges facing the renewable energy market in Spain and Portugal? At Gentile Law, expert lawyers in advising companies, we tell you all the legal developments in the energy sector adopted by the Ministry of Ecological Transition and Demographic Challenge.

During the years 2021 and 2022, the energy crisis led to a series of legal measures in the energy sector, some of great significance. Among the most outstanding are the mechanism for reducing excess remuneration.

It is true that the measures adopted during the crisis of the previous years had a temporary vocation, and the Minister of Ecological Transition and the Demographic Challenge, Teresa Ribera Rodríguez, has already announced her intention to extend the "gas cap" (expires on May 31, 2023) until the electricity market is reformed or, at least, until the end of 2024.

 

Legal developments in the energy sector in Spain and Portugal

What are the main energy developments in Spain and Portugal? What are the legal challenges facing the renewable energy market in Spain and Portugal? In Spain, offshore wind power is expected to be one of the main sources of renewable energy soon, and important measures are being taken to promote its development. At the beginning of this year, the regulatory framework for offshore wind power should be defined and the first auctions should be called for it. In addition, a lot of activity is expected in the renewable project financing market given the large number of projects received.

On the other hand, in Portugal, the government is making significant efforts to accelerate the development of renewable energy projects, especially in the solar and offshore wind fields. The Decree-Law on simplification of environmental licensing procedures (Simplex Ambiental) has recently been enacted, which will allow the development of the megawatts auctioned and under development to be accelerated in a timely manner. Likewise, the legal framework for offshore wind power is expected to be approved around September and the first auction to take place in the last quarter of the year.

 

What requirements are necessary to carry out renewable energy projects in Spain and Portugal?

To develop renewable energy projects in Spain or Portugal, it is necessary to comply with a series of regulatory requirements that vary depending on the type of project and the geographical location. At Gentile Law, expert lawyers in the processing of permits and authorisations for renewable energy projects, we tell you about it. In general, authorizations and permits are required at both the local and state levels, and in some cases at the European level.

In Spain, the processing of permits and authorizations necessary for the development of renewable projects is governed by the Electricity Sector Law and its Regulation, as well as by applicable environmental and urban legislation. In Portugal, the processing of permits and authorizations is governed by Decree-Law number 152-b/2017, of December 11, which establishes the legal regime for the operation of wind farms.

Among the regulatory requirements usually required are environmental impact studies, obtaining construction permits, connection to the electricity grid, and obtaining exploitation permits, among others. In addition, it is necessary to comply with a series of technical, safety, and quality requirements in the construction of the facilities.

The deadlines and procedures for obtaining the necessary authorizations and permits vary depending on the type of project and the geographical location. In general, a careful analysis of the applicable regulations and the necessary procedures is required, as well as the submission of detailed documentation and compliance with deadlines established by regulations.

 

What are the tax obligations and advantages of renewable energy projects in Spain and Portugal?

Renewable energy projects in Spain and Portugal can have significant tax implications for both investors and project developers. Below are some of the most important aspects to consider. What are the tax obligations and advantages of renewable energy projects in Spain and Portugal?

  • Tax obligations: Renewable energy projects are also subject to certain tax obligations in Spain and Portugal. These obligations may include the payment of income and corporate taxes, as well as compliance with certain tax rules and requirements. It is important to ensure compliance with all applicable tax obligations to avoid fines and penalties.
  • Tax incentives: Both Spain and Portugal offer a range of tax incentives to encourage investment in renewable energy projects. In Spain, renewable energy projects can benefit from tax deductions in corporate tax and a special VAT regime. In addition, there are certain special regimes for renewable energy generation and self-consumption. In Portugal, renewable energy projects can benefit from tax deductions in corporate tax and a special VAT regime, as well as certain specific incentives for wind and solar energy.

 

Gentile Law, expert lawyers in the processing of permits and authorisations for renewable energy projects

Taxation is a fundamental aspect to consider in any renewable energy project in Spain or Portugal. Investors and project developers should work with expert tax advisors to maximize the available tax incentives and comply with all applicable tax obligations to avoid potential long-term tax risks and penalties.

In summary, the renewable energy sector in Spain and Portugal offers great opportunities for investors and project developers, especially in offshore wind, solar, and offshore wind.. It is important to mention that there are specific regulatory and tax requirements that must be met in order to carry out renewable energy projects

For this reason, at Gentile Law, lawyers specialising in the processing of permits and authorisations for renewable energy projects, we advise clients and guide them through all the necessary processes. In addition, at Gentile Law, we work to keep abreast of all regulatory updates such as the extension of the "gas cap" in Spain and the simplification of environmental licensing procedures in Portugal, which will accelerate the development of renewable energy projects in both nations.

Marta Batalla Eguidazu

martabatalla@gentile.law

+34 91 435 45 19 


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