Energy: Royal Decree 997/2025: urgent measures to strengthen the electricity system

Commercial: The Agency Contract: Fundamental characteristics and regulation in Spain

Corporate: The leadership role of the legal department in contemporary companies

ENERGY

Royal Decree 997/2025: urgent measures to strengthen the electricity system

ALBERTO CHENLO
Associate

Last November, Royal Decree 997/2025 of November 5, approving urgent measures to strengthen the electricity system was approved ("RD 997/2025"). RD 997/2025 largely incorporates provisions that were already included in Royal Decree-law 7/2025, of June 24, approving urgent measures to strengthen the electricity system, a regulation that was not validated by the Congress last July and that can be approved by means of a lower-level provision.

I. Background

The blackout on April 28, 2025, highlighted the structural vulnerability of the Spanish electricity system. Although power was quickly restored, the incident revealed the need to strengthen technical capabilities, oversight mechanisms, and regulatory frameworks to deal with unforeseen situations. In this context, the government has presented RD 997/2025, which aims to improve the supervision and control of the electricity system, promote energy storage, and accelerate the electrification of the economy.

II. Key Aspects

Mandates

The CNMC must specifically monitor compliance with voltage control obligations and carry out an extraordinary inspection plan. These provisions do not introduce new burdens but rather reinforce mechanisms already provided for in sectoral regulations, setting deadlines and minimum content. Likewise, the system operator (REE) will have to review essential technical aspects in accordance with the European Network Code on connection and the System Operation Procedures, which are a fundamental part of the Spanish operational framework.

Definition of installed capacity

A new definition of "installed capacity" is established. This is because sector regulations did not anticipate, among other things, the proliferation of hybrid renewable and storage projects or the coexistence of elements such as common inverters or shared transformers.

The new definition of "installed capacity" provides technical consistency and more clearly regulates the capacity to be considered for authorization purposes, avoiding divergent interpretations by the competent authorities.

Storage

It is intended to simplify the procedure for authorizing hybrid storage projects that fall within the competence of the State and do not require an environmental impact assessment, allowing the prior administrative authorization and the construction authorization to be processed jointly, with the application of reduced deadlines. The developer must submit a single application accompanied by the implementation project and proof that it is exempt from environmental assessment. The procedures for consulting the administrations and bodies concerned are unified, with deadlines reduced by half, and the public information procedure is carried out simultaneously with these consultations, also with reduced deadlines.

Repowering

The strategic importance of repowering renewable plants is recognized, allowing their capacity to be increased without occupying new sites and taking advantage of existing infrastructure.

Fifth milestone

A transitional period of 36 months is established to facilitate the obtaining of definitive operating authorization for generation, production, and storage facilities. During this time, it will be possible to replace the Final Operational Notification with two alternative documents: the Provisional Notification (ION) and the resolution of prior registration in the Administrative Register of Electricity Production Facilities (RAIPEE). The aim is to make the process more flexible and streamline it while the projects complete their final technical documentation.

Likewise, for projects that are close to completing the fifth administrative milestone, an additional acceleration mechanism is enabled. In these cases, the application for final operating authorization may be submitted by providing the provisional authorization for testing, the Provisional Notification of Energization (EON), and a responsible declaration not to feed energy into the grid until the final documentation is submitted. This exceptional regime prevents the expiration of advanced projects and favors their administrative continuity.

Deadlines for the execution of distribution facilities

The deadlines for executing the works necessary to provide service to new electricity supplies are regulated, starting with the payment of the connection fees. The deadlines will vary according to the type of installation and its complexity: in low and high voltage, they will depend on whether it is necessary to expand the grid or build transformer stations and may be increased by 50% or doubled in exceptional cases. The deadlines for reviewing projects, verifying works, and formalizing the transfer of facilities are also established, differentiating between whether the work is carried out directly by the distributor or by an installer contracted by the applicant.

Guarantees

It is clarified how storage facilities should be treated in procedures for access and connection to electricity networks.

The request for the competent authority to confirm that the financial guarantee is correctly constituted must include, with some exceptions, the node and voltage of the network to which access and connection is requested.

The criteria for determining when a facility is still considered the same for the purposes of retaining its demand access permits (criteria that already existed for generations) are defined. A demand or storage facility will no longer be considered the same if any of the following occurs:

• Its geometric center moves more than 10 km.

• The CNAE code of the activity changes to another Division or Group.

• The demand access capacity is reduced by more than 50% compared to that initially requested and granted.

The financial guarantee required to process the access and connection of demand and storage facilities will be canceled when the applicant signs the access contract with a contracted power in any period representing at least 50% of the access capacity granted (no longer limited to the peak period). It will also be canceled when the guarantee associated with the linked generation facility, if any, is released.

Finally, the refund of the performance bond is expressly regulated when the consumer does not accept the proposed technical conditions.

III.Conclusions

i. RD 997/2025 is not an isolated regulation: it aims to act as a regulatory bridge that updates, clarifies, and harmonizes the Spanish energy framework with European regulations and with the laws and regulations that structure the electricity sector.

ii. Its measures not only respond to the blackout that occurred last April, but also aim to correct detected gaps, simplify procedures, and align the system with the technical and energy requirements of the ecological transition.

iii. By strengthening coordination between the various sectoral regulations and the objectives of the PNIEC, RD 997/2025 aims to establish a more robust, efficient, and coherent framework.

iv. This regulatory integration aims to promote faster deployment of renewable energies—in particular, storage—greater security of supply, and an electricity system that is better prepared for the challenges of decarbonization, digitalization, and electrification in the coming years.

December 2025

COMMERCIAL

The Agency Contract: Fundamental characteristics and regulation in Spain

FLORENCIA ARRÉBOLA
Senior Associate

The agency agreement is, today, one of the most relevant commercial instruments for organizing companies' sales networks. Its importance stems from the ability it offers businesses to penetrate new markets or expand their presence in existing ones without needing to deploy their own sales structure. It is particularly frequently used in sectors where proximity to the customer and knowledge of the local environment are crucial—such as the industrial or consumer goods sectors—as it allows businesses to have an independent professional who, with experience in their geographic and sectoral area, promotes transactions to the benefit of the business owner. In this way, the agency becomes an effective expansion tool, while reducing costs and risks for the business owner, who does not have to directly hire their own sales team. The agency is governed by its own regulations, set out in Law 12/1992 of May 27, which transposes Directive 86/653/EEC (hereinafter the “Agency Law”).

The essence of an agency agreement lies in the fact that the agent continuously promotes commercial acts or transactions on behalf of and for the account of the principal, without assuming the associated risk. The agent does not buy and resell products but rather acts as a professional intermediary who connects the end customer and facilitates the conclusion of contracts, the ownership of which always remains with the principal. This element of representation is the defining characteristic of agency and justifies the existence of a protective legal framework.

The Agency Law establishes a set of reciprocal obligations that limit the autonomy of the parties' will. The agent must act with diligence, loyalty, and good faith (Article 9 of the Agency Law), while the principal must provide the agent with the documentation and information necessary for the proper conduct of the business (Article 10 of the Agency Law). Among the agent's most important rights are the right to receive commissions for the transactions promoted (Articles 15 and 16 of the Agency Law), the right to be informed about business opportunities, and, very significantly, the right to compensation for goodwill upon termination of the relationship, as provided for in Article 28 of the Agency Law, provided that the relationship has generated a stable value that continues to benefit the principal after the termination of the agency agreement. The legislator has also established mechanisms to ensure a degree of stability in agency relationships: Article 23 of the Agency Law sets minimum notice periods for the termination of indefinite-term agency contracts, which vary depending on the duration of the relationship, with a maximum of six months. And, to prevent abuses, Article 3 of the Agency Law declares the rights granted to the agent by law to be inalienable, thereby strengthening the agent's contractual position vis-à-vis the principal.

When compared to a distribution agreement, the most significant differences become apparent. In distribution, the distributor acquires the products and resells them in their own name and on their own account, assuming all the business risk. The agent, on the other hand, does not assume this risk: their role is to mediate and promote sales, not to resell. This difference is also reflected in the legal framework: while distribution remains an atypical contract, whose security depends on the terms agreed upon, agency enjoys a precise and clearly defined legal framework, with inalienable rights for the benefit of the agent.

In practice, this means that the business owner who chooses an agency has the advantage of a clear and predictable legal framework, albeit a more rigid one in some aspects; while the distributor enjoys greater autonomy, but at the cost of much weaker legal protection. The agent, therefore, is in a relatively stronger position vis-à-vis the business owner, thanks to the protection afforded by the law, while the distributor is subject to the terms of the contract.

In summary, its practical relevance lies in offering entrepreneurs an effective way to expand their business with lower structural costs, while at the same time protecting the agent, who invests time and resources in building a clientele that does not belong to them.

December 2025

CORPORATE

The leadership role of the legal department in contemporary companies

JUAN GUILLERMO RIANCHO
Of Counsel

In the energy sector, the technical and financial complexity of projects is evident and forms part of the necessary legal analysis. However, there is a less visible but increasingly decisive element: legal leadership. And I am not simply referring to interpreting the law, regulations or drafting contracts, but rather to strategically integrating oneself into the company's projects.

Why the legal role must be strategic

In my experience, for many companies, the legal department has become a fundamental team for business operations. It is true that its real influence can vary depending on the culture of each organisation and the decisive role that the legal department has been able to build over time.

When the legal function remains a 'firefighter' or merely reactive, legal risks can translate into significant delays, cost overruns or even the unfeasibility of projects. Today's cutting-edge companies, in a globalised and challenging world, no longer operate without the daily contribution of a creative, efficient legal department capable of responding quickly to any obstacle or complication.

What does legal leadership mean in the context of a company?

• Mapping regulatory risk from the outset: identifying not only whether the regulations allow a project to be executed, but also when they will allow it, under what conditions and within what actual timeframe.

• Connecting technical, business development, HSSE, financial and regulatory teams: for example, ensuring that the engineering team understands that an administrative delay implies an increase in the interest rate on financing, and that the legal team offers real and viable alternatives to mitigate this (e.g., extension clauses, regulatory guarantees).

• Negotiate contracts with a regulatory vision: ensure that contracts (PPA, EPC, financing) contemplate regulatory changes, long regulated deadlines, possible third-party appeals, regulatory modifications, etc.

• Cultivate the company culture: be part of the decision-making team, anticipate obstacles and embrace the corporate strategy.

• Always seek solutions that facilitate business viability, add value and practise appropriate risk management at all times.

• Integrate and coordinate internal and external legal teams: in the most important, priority or crucial projects, it is essential that both teams work as one to ensure the ultimate success of the project.

An additional key point: synergy between internal legal leadership and external advice

Many small and medium-sized companies in the energy sector do not have large legal teams, but they do face complex projects that require real legal leadership. In these cases, an in-house lawyer with strategic vision can multiply their impact when collaborating with a specialised external firm that acts as a natural extension of the team and provides Legal Project Management services.

The synergy of Legal Project Management provides access to highly specialised technical and regulatory know-how, strengthens the ability to react in critical moments and temporarily covers areas that the company cannot handle internally, thus ensuring the same level of legal sophistication as large energy developers, but with greater flexibility.

The true value of the solicitor in the modern company does not lie solely in knowing and applying the regulations. Today's solicitor and legal advisor must know how to translate those regulations into a viable business model, provide practical solutions that facilitate business activity, and be present in project teams, leading the joint work so that the technical, financial, commercial, and business development areas, together with management, move forward in sync, anticipating challenges and transforming them into proactive decisions.

With a multidisciplinary team and extensive international experience, our firm Bartolome & Briones provides Legal Project Management services to the legal teams of any company, in national and/or international projects, acting precisely as that strategic reinforcement that enhances internal legal leadership.

December 2025