In Portugal, Decree-Law No. 99/2024, published on 3 December, introduces significant amendments to the regulatory framework governing renewable energy.

Among the main changes are:

(i) The creation of a bilateral energy registration and contracting system, the regulation of which is expected to be completed by April 2025.

(ii) The streamlining of licensing procedures for renewable energy projects, facilitating the development of energy communities and self-consumption initiatives.

(iii) The mandatory submission of an Environmental Impact Assessment (EIA) by renewable energy production facilities.

(iv) The flexibilization of municipal compensation mechanisms, allowing, in certain cases, for the choice between monetary or in-kind contributions.

(v) The expansion of the concept of hybridization to include energy storage units.

(vi) A revision of the guarantee and compensation scheme applicable to municipalities affected by the installation of energy production facilities.

(vii) Greater flexibility in defining the proximity between Self-Consumption Production Units (UPAC) and the respective consumption installations.

(viii) The waiver of municipal interest declarations for the licensing of certain electrical infrastructure.

(ix) The update of the electro-intensive consumer status, aligning it with European standards for access to reduced tariffs; and

(x) The conditional use of land within the National Agricultural Reserve (RAN) to produce renewable energy.

Based on our in-depth knowledge of the renewable energy sector and continuous advisory work with clients, we consider the simplification and streamlining of licensing procedures to be key to the effective deployment and acceleration of renewable energy projects.

In this context, and fully aware of the direct impact these legislative changes may have on market operators, we outline below the key modifications introduced in comparison to the previous regulatory regime.

Simplification and Streamlining of the Licensing Process for Renewable Energy Projects

Reduction of Deadlines for the Issuance of Production and Operation Licenses

Under the applicable legal framework, the procedures related to the issuance of production and operation licenses must comply, in their entirety, with the following maximum timeframes:

– Two years for projects involving the production of energy from renewable sources located within national territory.

– Three years for offshore renewable energy production projects.

The above deadlines may be extended, by order of the General Director of the DGEG (General Directorate for Energy and Geology), for an additional maximum period of six months, provided that extraordinary circumstances are verified in relation to the projects in question, particularly those that impact the safety and reliability of the Public Electricity Service Grid (RESP).

It is important to note that the above-mentioned deadlines do not cover:

– The period necessary for the construction of renewable energy generation centers, as well as their respective connection infrastructure to the RESP and other related infrastructures essential for ensuring its stability, reliability, and safety.

– The duration of the administrative procedures required for the implementation of significant network upgrades aimed at ensuring its stability, reliability, and safety.

– The timeframes related to administrative or judicial challenges of any decision, act, or omission regarding compliance with the provisions of Decree-Law No. 15/2022, of January 14.

Pre-Registration Procedures

Pre-registration procedures for electricity generation units are subject to the following maximum timeframes for completion:

– One month for generation units using solar sources with an installed capacity equal to or less than 100 kW.

– Three months for other solar-based generation units and energy storage systems, including those integrated into buildings or other artificial structures, except for those installed on the surface of artificial bodies of water.

– Two years for repowering projects of offshore renewable energy installations, which may be extended for a maximum additional period of three months by order of the Director-General of DGEG, provided that extraordinary circumstances related to the project are duly substantiated.

In the absence of an express decision within the applicable timeframe for the pre-registration procedure, the application shall be deemed tacitly approved, provided that the installed capacity does not exceed the existing connection capacity of the distribution network.

Electronic Platform

All licensing procedures shall be conducted through an electronic platform, aimed at expediting and enhancing the transparency of the process.

Scope Definition Proposal (PDA) and Environmental Impact Assessment (EIA) Exemptions

It is now mandatory to submit a Scope Definition Proposal (PDA) for the Environmental Impact Study prior to initiating the Environmental Impact Assessment (EIA) procedure for projects involving renewable energy generation centers and their associated infrastructure.

Exemption from the EIA procedure is granted for generation centers using solar energy as the primary source, including associated energy storage installations, if they are installed on buildings or other artificial structures.

However, this exemption does not apply in the following cases: (i) Installation on the surface of artificial bodies of water; (ii) Implementation in areas, buildings, or structures classified or undergoing classification, including their respective protection zones; (iii) Locations considered relevant for the protection of national defense or security interests.

Energy Storage

The prior control regime applicable to co-located electricity storage installations is now explicitly regulated, and such installations are subject to the same requirements previously applied to standalone storage projects.

Furthermore, electricity storage is subject to a prior verification procedure concerning the charging capacity through the Public Electricity Service Grid (RESP), which must be conducted by the relevant grid operator and the Global Manager of the National Electricity System. For this purpose, the licensing authority must request an opinion from these entities to determine the maximum allowable apparent power for charging from the RESP.

Reduction of Guarantee Amounts

In the context of acquiring reserved grid capacity through a direct agreement between the promoter and the grid operator, the guaranteed amount is reduced to €10,000.00 per MVA.

The guarantee holding period is extended to 30 months, and its extension is mandatory until the respective generation center becomes operational.

Additionally, it is clarified that in this modality, the guarantee shall be returned if the agreement is not executed due to reasons attributable to the grid operator.

Presumption of Public Interest

There is now a legal presumption of public interest, particularly for purposes relating to public health and safety, in relation to the planning, construction, and operation of renewable energy generation centers and/or energy storage installations, including their connection infrastructure to the electricity grid.

This presumption applies in the context of environmental licensing procedures, particularly where there are potential impacts on natural habitats or species with a priority protection status, as well as in cases requiring derogation from environmental objectives applicable to water bodies, pursuant to the applicable environmental legislation.

Additional Energy

All wind energy generation centers are now allowed to inject additional energy into the Public Electricity Service Grid (RESP), regardless of their respective commissioning date.

With this amendment, it is no longer required that power generation centers be operational as of the effective date of Decree-Law No. 15/2022, of January 14, for the purposes of eligibility to inject additional energy into the grid.

The Commercial and Corporate Law Department of Belzuz Abogados, S.L.P. continuously monitors these legislative developments, providing our clients with the technical and legal support necessary to ensure regulatory compliance and the successful implementation of their projects.