Power Sector

On October 6, 2018, the Spanish Official Gazette published the Royal Decree 15/2018 by means of which the government’s decision of adopting additional measures to protect the consumers of electrical energy and to liberalize the power sector.

In connection with the vulnerable consumers of electrical energy, the total annual electrical energy consumed subject to discount through the social tariffs “bono social” has been increased in a 15 %. Also, it has been taken some additional measures to protect vulnerable families from the suspension of the supply, and for example, the homes which receive the social tariffs “bono social” in which there are living minors under 16 years old shall be considered as an essential supply and cannot be object of a suspension of the supply.

In addition, other measures to protect consumers from some excessive practices of the power suppliers have been approved, among them, for power suppliers it is forbidden contracting the electricity supply in the "door to door" mode in relation to domestic consumers “consumidores domésticos”.

Regarding the electric mobility, the electric recharge activity has been liberalized and the figure of the “gestor de carga del sistema” has been removed.

In respect of the electrical energy self-supply, it has been created two new modalities of self-supply: (i) self-supply with surplus; and (ii) self-supply without surplus. The register process for self-supply facilities has been simplified, and the generation facilities with a power under 100 kW associated to self-supply with surplus are exempt to be registered in the Administrative Register for Electrical Power Generating Units.

The aforementioned Royal Decree lays down two remarkable tax measures since the government intends to moderate the increase of the electricity price in Spain where the energy cost is the sixth-highest in all the European Union. Said tax measures are as follows: the temporary suspension of the electricity tax and the suspension of the levy on hydrocarbon use for electricity production. It is considered by the government that this two tax measures should cut average household bills by around 4 percent.

Concerning electricity tax, this is a temporary tax measure covering exclusively the fourth quarter of 2018 and the first of 2019 which means that once the suspension period is over, the electricity tax will be automatically applicable again.

Finally, we would like to point out that since the Royal Decree provides no further information about the way this suspension will be implemented, it will be necessary to follow up this issue and be aware of new developments.