Approval in Spain of the standard regulating a system of Energy Saving Certificates

The Directive on Energy Efficiency, which entered into force in December 2012, required Member States to set certain energy consumption reduction targets with the aim of reducing EU energy consumption by 20 % by 2020. Subsequently, the Directive was revised, setting a new target of reducing primary and final energy consumption by 32.5% by 2030 at EU level. A European Commission proposal to modify the Directive by setting even more ambitious targets is currently under discussion.

In order to achieve the energy consumption reduction target established in the Directive on Energy Efficiency, Member States were urged to establish mechanisms to allocate annual energy saving quotas to gas and electricity marketing companies, wholesale oil product operators and wholesale liquefied petroleum gas operators. In Spain, the mechanism established was the National System of Energy Efficiency Obligations ("NSEEO") through which annual energy saving obligations are established for the obligated subjects, who must make an annual financial contribution to the National Energy Efficiency Fund ("NEEF") in order to comply.

The new system established by RD 36/2023 by means of the so-called Energy Efficiency Certificates ("EEC"), is an alternative for those obliged to comply with the annual energy saving obligations by means of financial contributions to the NEEF, although these financial contributions obligations cannot be totally replaced by the EEC System, given that a minimum percentage of financial contributions is maintained.

Energy Efficiency Certificates System

The EEC System is a mechanism designed for accrediting the achievement of energy savings with the aim of contributing to the fulfilment, by 2030, of the final energy savings targets set, and is applicable to the same obligated subjects as the NSEEO: gas and electricity marketing companies, wholesale petroleum product operators, and wholesale liquefied petroleum gas operators.

This EEC System will allow obligated subjects to substitute a part of their payments to the NEEF with investment actions in energy efficiency that entail verified energy savings, i.e. companies will be able to carry out a series of actions related to the improvement of the envelope, air conditioning, industrial processes, lighting, etc., the execution of which will allow them to obtain the EEC with which they can substitute part of their financial contributions obligations to the NEEF.

This new system is also intended to drive increased investment in energy efficiency technology with a benefit for consumers, while at the same time encouraging actions to improve business competitiveness and productivity.

Subjects participating in the EEC System

Several subjects are involved in the EEC system:

• Obligated subject: gas and electricity marketing companies, wholesale petroleum product operators and wholesale liquefied petroleum gas operators.
• Delegated subject: any legal entity of a public or private nature that can assume, in whole or in part, the delegation of the procurement of energy savings from one or more obligated entities and that has been previously accredited as such by the National Coordinator of the EEC System. This figure is created to facilitate compliance by obligated subjects whose economic activity is not related to the performance of activities that enable the obtaining of EEC, so that they can turn to these delegated subjects to carry out the energy efficiency actions.
• End-user or beneficiary: the natural or legal person who, being the owner, lessee or occupant of the installations on which the energy efficiency action has been implemented, benefits from a positive impact from the final energy savings generated.
• Owner of the final energy savings: natural or legal person of a public or private nature who carries out the investment of the energy efficiency action with the aim of obtaining final energy savings, for himself or for a third party, or to whom the savings generated by the performance have been transferred.
• EEC holder: the obliged or delegated subject to whom a EEC has been issued or who has acquired it through a legal sale and purchase transaction.
• Energy savings verifier: any entity accredited by the National Accreditation Entity (ENAC) that may be freely chosen by the obligated or delegated subject among those that provide this service and that will be in charge of verifying the energy savings obtained by the execution of one or several energy efficiency actions.

There is also a National Coordinator in charge of ensuring the correct functioning of the EEC System at a national level, which is the Directorate General for Energy Policy and Mines of the Ministry for Ecological Transition and the Demographic Challenge, as well as an Autonomous Manager of the EEC to be designated by the Autonomous Communities.

Operation of the EEC System

Obligated subjects have an national annual energy saving obligation that is applicable to the whole territory.

Obligated entities can obtain EEC by carrying out so-called energy efficiency actions, which, as mentioned above, can be carried out by the obligated subjects themselves or through delegated subjects.

RD 36/2023 establishes the mandate for the National Coordinator of the EEC System to propose, in relation to energy efficiency actions, a catalogue of standardised energy efficiency actions to be approved by ministerial order. The EEC will be issued in accordance with the actions included in the catalogue of standardised energy efficiency actions or by means of a regulated procedure for an energy efficiency singular action. In this case, the justification for the implementation of singular energy efficiency action must be approved by ministerial order.

These EEC are electronic documents that recognise the annual savings in final energy consumption resulting from an energy efficiency action carried out, either in accordance with the catalogue or under the consideration of a single action. One EEC is equivalent to 1 kWh saved. In practice, EEC are movable assets subject to business, so they can be held, acquired or transferred by the various relevant subjects, although there is an obligation to report these type of transactions to the National Register of EEC.

In any case, the EEC can be liquidated within three years of the action that generated the energy efficiency certificate has been carried out, provided that the savings have been obtained since the date of entry into force of this Royal Decree and the liquidation takes place before 1 January 2031.

Auctions of energy saving needs

RD 36/2023 provides for an auction mechanism for energy savings needs under the principles of transparency, proportionality, objectivity, effectiveness and efficiency, with the aim of auctioning savings needs that Spain has committed to the European Union and which will be met through EEC.

In this regard, the Secretary of State for Energy may call auctions to which only delegated subjects can participate, and which may not delegate their commitment to settle EEC or their need for energy savings to a third party, not even partially. The purpose of these auctions will be the allocation of a certain amount of energy savings, to be covered by means of EEC only. Therefore, the successful bidders will have to carry out the energy saving actions necessary to achieve the number of EEC they have been awarded.

These auctions, financed by the NEEF as economic support mechanisms to increase energy efficiency in various sectors, seek to progressively adapt efficiency actions to market realities, with the objective of allowing a more efficient allocation of resources and ultimately benefiting the final investors or persons making the investments.

The mechanism regulating the auctions of energy saving needs is pending to be defined by ministerial order.

Should you wish to find out more about the new regulation regarding the Energy Efficiency Certificates and it possible implications, please do not hesitate to contact one of our experts listed below or your usual contact at Osborne Clarke.