Procedure for managing connections of biomethane plants to the gas grid

The connection of biomethane plants to the gas grid

In accordance with the European decarbonisation strategy and the state of development of many of the biomethane injection plants, prompt and agile regulation is necessary to allow, at least, the systematisation of the management for the connection of these projects to the gas grid.

It is important to highlight the relevance of biomethane as a combustible gas whose degree of purity allows it to be incorporated into the gas grid. This is why there is a growing interest in the development of biomethane generation plants whose ultimate aim is its injection into the gas grid through direct lines. For more details on biomethane and its administrative procedures, see our publication on the administrative procedures for the construction and operation of biomethane projects where these issues are discussed.

In this regard, article 12 bis of Royal Decree 1434/2002 of 27 December 2002, which regulates the activities of transport, distribution, commercialisation, supply and authorisation procedures for natural gas installations ("RD 1434/2002") regulates the connection of renewable gas production plants to the transport or distribution gas grid.

This article provides that the Spanish National Markets and Competition Commission ("CNMC") must approve a procedure for the management of connections of renewable gas generation projects to the transmission or distribution gas grid, which modifies or establishes new deadlines for both transporters and distributors, as well as for producers of renewable gases.

In this regard, on 12 January 2024, the "Proposed resolution of the National Markets and Competition Commission establishing the procedure for managing connections of biomethane generation plants with the transport or distribution gas grid" was sent to the Hydrocarbons Advisory Council; and this proposal was published on the CNMC website in compliance with the public information procedure for interested parties to make any allegations they deem appropriate within 20 working days (access to the procedure published on the CNMC website). That is, until 9 February 2024. This resolution is limited to the logistical and operational aspects of the connection management procedure. 

New connection management procedure for biomethane projects: application and prior deposit

The proposed Resolution defines biomethane generation plants as those installations for the production of renewable gases of biological origin, mainly composed of methane and with the necessary gas quality parameters for injection into the gas system. 

As already foreseen in Article 12 bis of RD 1434/2002, producers of renewable gases wishing to connect to the gas grid shall send a request for connection to the grid to the transmission or distribution system.

In this procedure, the grid operator acts as a single point of contact for the applicant throughout the procedure.

These requests and all other communications by the grid operator shall be made electronically, and the grid operator shall also set up a web platform that allows the status of the processing to be consulted at all times. Connection requests shall be processed according to a time priority criterion. It is important to note that, if the application requires correction, the date and time at which all the required documentation and information has been correctly submitted will be taken into account.

A new feature regarding the development of the connection procedure for biomethane plants with respect to other gas production facilities, is the possibility for grid operators to request a payment for the costs of drawing up the connection budget, up to a maximum of €1,000, which will be deducted from the final execution amount; and in the event of non-acceptance of the connection conditions, it will be returned to the applicant.

It also provides for the possibility that, prior to the connection application, potential interested parties may request information from grid operators on the connection possibilities available. This prior step is not mandatory, so applicants with mature projects may omit this prior step and submit the connection application directly.

Analysis of the request and response by the system operator

The grid operator shall reply to the applicant within a maximum of 5 working days confirming that the connection request has been accepted for processing (or, if not, stating the reasons why it should not be accepted, with the possibility of rectification).

Once the application has been accepted for processing, the maximum admissible flow or injection capacity must be assessed by the grid operator in accordance with the protocols published for this purpose. In the meantime, the provisions of the CNMC Resolution of 10 November 2022, which establishes the technical management regulations of the gas system on scheduling, nominations, allocations, balances, the management and use of international connections and self-consumption, shall apply.

Once the available capacity has been analysed, the grid operator shall reply to the applicant within a maximum of 40 working days from the submission of the application with its connection proposal.

The reply shall contain, inter alia, the injection capacity and pressure; identification of the generation facility; identification of the final connection point; technical and economic conditions, including the economic budget and estimated construction time; and the connection contract.

In any case, the reply shall include possible alternative proposals, or explicit mention of the non-existence of such proposals, both for the requested point and at another point in the network nearby.

Acceptance of the connection and discharge of the injection point

Once the grid operator has received the connection proposal, the applicant shall have a maximum of 60 working days to accept the quotation and, where appropriate, sign the connection contract.

Within the same period, 50% of the proposed connection fee must also be paid. Failure to meet this deadline (both for signing the contract and failure to pay 50% of the proposed fee) will be understood as a waiver of the connection.

Prior to the start-up of the connection, the grid operator must request the Technical Manager of the Gas System (Enagás) to include the new injection point in its logistics system. 

Should you wish to know more about the new regulatory and energy sector rules and their potential implications, please do not hesitate to contact one of our experts listed below or your usual contact at Osborne Clarke.