Spain unveils procedure for obtaining guarantees of origin for renewable gases

The new system promises to identify the origins of all so-called "renewable gases" such as green hydrogen and biogases for GoO certification.
 
A public consultation on the decree, open until 14 October 2021, allowed members of the Spanish public and energy sector to submit views on the proposed procedures.

The decree partially transposes Directive 2018/2001, of the European Parliament and of the Council, on the promotion of the use of energy from renewable sources, with regard to the sustainability criteria and reduction of greenhouse gas emissions from bioenergy and GoOs of gas from renewable sources.

What does Spain's GoO procedure aim to achieve?

Directive 2018/2001 requires EU Member States to ensure that the origins of gas from renewable sources are guaranteed in accordance with objective, transparent and non-discriminatory criteria.

These conditions are also required by the Spanish Integrated Energy and Climate Plan (PNIEC) 2021-2030 (Measure no.1.8), and by the Hydrogen Roadmap, approved by the Spanish government in October 2020.

It is also intended that by identifying and awarding GoOs for renewable gases, this will help meet the objective of promoting the production and use of such energy under Spain's Climate Change Act 7/2021 of 21 May 2021.

What is its scope?

Although gases such as hydrogen and biomethane are generally regarded as low-carbon, in fact they are only truly "green" if they have been produced using renewable sources and/or with low or no carbon emissions.

The development of a GoO system for renewable gases is Spain's first regulatory step towards decarbonising this area of the energy market, and is overseen by Spain's Secretary of State for Energy.

With respect to biomethane, a relevant step has already been taken regarding the regulation of how GoOs are certified through a new UNE 0062:2020, developed by the Spanish Gas Association (SEDIGAS) and the Spanish Association for Standardisation (UNE) in June 2020.

This new UNE specification establishes the requirements for guaranteeing the origin of biomethane before it is injected into the gas network. To do this, it establishes the terminology and definitions relevant to the registration, issuance, transfer and annulment, in line with directives on Renewable Energy, Energy Efficiency and the Domestic Natural Gas Market.
 
How will the system be regulated?

MITECO is the designated Responsible Entity for the development and management of the GoO system for renewable gases in Spain.

However, until it is vested with the necessary means to perform this role, its functions are assumed by ENAGAS, the Spanish energy company and European transmission system operator (TSO), which owns and operates Spain's gas grid.

Within three months of the entry into force of the new system, ENAGAS must draft a management procedure proposal to be approved by the Secretary of State for Energy, following a report from the Spain's competition regulator (CNMC).

This management procedure must include, among other topics:

• Regulation of the registration procedure for renewable gas production facilities;

• Definition of the certificate, rights and obligations of the holders of the GoO, and the requirement of guarantees (if applicable);

• Regulation of the communication procedure with negotiation entities, and with entities responsible for the management of GoO of electricity and third countries (this possibility is relevant given the existence of biogas (Germany), biomethane (France, Austria, Denmark, Italy) already produced in the EU);

• Regulation of the energy measurement procedure; and

• Regulation of claims.

Finally, the Responsible Entity will establish a Committee of Renewable Gas Producers, made up of representatives of the Responsible Entity and the CNMC, which must be aware and informed of the operation and management of the GoO System, as well as prepare and channel proposals that may improve its performance.

Players in the LNG transport and distribution sectors, consumers in market, their associations, and CORES may be invited to this Committee.

How will the GoO system work?

As with GoOs in the electricity sector, which are already managed by the CNMC, there will be an online account entry system in which dispatches, transfers, imports, exports and cancellations of GoOs will be recorded.
GoOs shall:

(a) Be issued at the request of a renewable gas producer, whose installation must be previously registered in the Register of Gas Production Facilities from renewable sources. This register will contain information on the ownership, situation, type and capacity, and start-up dates of the installation, among other details.
The register must be operational two months after the approval of the Management Procedure.

(b) Correspond to a standard volume of 1 MWh, avoiding double counting. Energy from renewable sources, for which the corresponding GoO has been sold separately by the producer, must not be communicated or sold to the end customer as energy produced from renewable sources.
 
(c) Be valid for all renewable gas produced, including both non-network injected renewable gas sold to third parties, and self-consumed gas.

(d) Be established for a maximum period of validity of 18 months.

It is expected that, for accounting purposes for the market value of GoOs, this certificate may not be issued to a producer that receives financial assistance from an existing support system.

Consequently, this provision will likely affect all projects that are beneficiaries of NextGenerationEU funds.
GoOs have the function of demonstrating to the final consumer that a certain quota or quantity of energy has been obtained from renewable sources. They are different from the interchangeable green certificates and from electricity GoOs.

However, the applicable regulation for these types of certificates (in short, the CNMC Circular no.1/2018), must serve as a reference for a new renewable gases GoO regulation, which in its present form contains relatively scarce information and ambition.

This article was written by Ramón Vázquez del Rey Villanueva, a partner specialising in energy and natural resources, infrastructure, environmental, urban planning, public procurement, and administrative litigation at Fieldfisher JAUSAS.