The Ministry for Ecological Transition and Demographic Challenge (MITERD by its Spanish acronym) has opened a preliminary public consultation on changing the limit on investment in transmission and distribution networks, with a deadline for submitting arguments of July 3, 2024.

In response to this request, the Basque Energy Cluster has submitted arguments proposing a general increase in the maximum amount of investment in distribution and/or transmission networks as a percentage of gross domestic product, up to a value considered sufficient to meet the expected network needs in the current context of the energy transition. The Basque Energy Cluster is also calling for the recognition of certain types of equipment and digital solutions of particular importance in strengthening electricity grids to be recognised in the regulatory framework and for them to be adequately remunerated.

It also underlined the great opportunity that these investments represent for creating economic activity and quality employment in the country by the companies supplying the products, services and technologies required. Spain, and in particular the Basque Country, has a powerful industrial smart grid value chain, with innovative, competitive companies that are well positioned in international markets.

The arguments are based on the work carried out by the working group (WG) set up in 2023 at the initiative of Ariadna Grid, with the participation of Arteche, Ingeteam, Lumiker, Merytronic, Ormazabal, Pronutec and ZIV. Its objectives were to analyse the current remuneration framework for investments in electricity distribution networks, assess its impact on companies in the smart grid value chain and draw up proposals for improving the regulatory framework for regulators and other stakeholders. The proposals focus on the technical characterisation of certain equipment and digital solutions developed by companies in the WG, with the aim of contributing to their proper recognition in the regulatory and remuneration framework.

Royal Decree 1048/2013, of December 27, which sets out the methodology for calculating the remuneration of the electricity distribution activity, states that the annual volume of investment in an electricity distribution network put into service in a given year with the right to remuneration charged to the system may not exceed 0.13% of Spain's gross domestic product (GDP) as estimated by the government for the year in question. In the case of electricity transmission, the limit on the annual amount of investment in the network is set at 0.065% of GDP.

The determination of the amount of investment in transmission and distribution networks was set for a different economic and energy situation than today’s. The MITERD is currently carrying out a consultation on the need to review the regulation that sets the annual investment in electricity grids, with a view to bringing it into line with today's context of energy transition and making it more flexible.