Regulatory changes

Proposed regulatory changes have stalled in recent times as a result of lack of Government buy-in and competing priorities (ie the COVID-19 pandemic).

At the time of writing there are no imminent regulatory changes proposed that would have an adverse impact on Corporate PPAs.

Bahrain’s National Renewable Energy Action Plan (“NREAP”) was finalized in October 2016. The NREAP identifies feasible renewable energy options for Bahrain, sets the targets, and proposes policies and initiatives to achieve these targets. In addition, the NEEAP was also introduced simultaneously, whereby the target is to use less energy for the same output or service. [1]

To achieve the aforementioned targets, the decree No. 87 of 2019 was issued for the establishment of the Sustainable Energy Authority (“SEA”). [2]

The SEA proposes initiatives and projects through which sustainable energy sources are updated and developed to increase the percentage of their contribution to the total energy and achieve Bahrain’s strategies for sustainability, safe supply and ways to implement initiatives and projects and to provide them with the necessary support.

The SEA directs the private sector and encourages the establishment of private or joint ventures with other entities that aim to raise energy efficiency and the use of sustainable energy sources to generate electric power. [3]

[1] ibid.
[2]  Decree No. 87 of 2019 was issued for the establishment of the Sustainable Energy Authority
[3] No. (5).

It is currently not possible to have on-site PPAs covering more than one specific location for offtake, i.e. where a generator supplies electricity through a direct line (bypassing the public grid) that connects various installations offtaking the electricity that have separate connections to the public grid. This is not allowed as it is deemed to detract from the exclusive rights of the transmission system operator or the distribution system operator, whatever is the case.

This prohibition may in the future be relaxed under certain specific conditions, pursuant to the implementation in Belgium (at the federal level and in the three regions with competence for the electricity market) of the EU’s Electricity Market Design Directive and Regulation. The implementing legislation is currently being prepared.

The establishment of BERA promises to bring about a change in the operation and regulation of the energy sector.

Modernization of the Brazilian Power Sector

At the beginning of 2019, the federal government announced its plan to submit a set of measures to modernize the regulation of the power sector and the Ministry of Mines and Energy (MME) formed a work group for this purpose. One of the main results of the discussions held in this working group is Bill of Law No. 414/2021 (PL 414). PL 414, also known as the Bill of Law of Modernization of the Power Sector, which has been in discussion in the Brazilian congress since 2021, is considered a priority of the new Administration (elected in 2022). The main aspects of PL 414 are to:

• complete opening of the power market (further detailed below);
• improve the power market;
• improve rates; and
• reduce charges.

Expansion of the Free Market

In the past years, the Brazilian power market has seen an expansion of the Free Market, increasing the direct participation of corporate consumers in the energy sector. As mentioned above, since January 1, 2023, consumers that have a charge equal or above 500 kW, supplied at any voltage, can enter the Free Market. The next step of such expansion will occur in January 2024, when all high voltage consumers will be able to migrate to the Free Market, which represents approximately 106,000 consumer units in Brazil. A complete opening of the Free Market is under discussion in the federal government and the Congress, with an expectation of a complete opening until 2028.

Review of Incentives

In the last few years, small hydro, solar, wind, biomass, and qualified cogeneration projects received a subsidy in the form of a discount of 50% in transmission and distribution tariffs. These subsidies were reviewed and terminated for new projects, and a transition regime is being put into place by the Federal Government. Please refer to Item 10 for further details.

PPAs in Foreign Currency

The Foreign Exchange Legal Framework (Federal Law No. 14,286/2021), which entered into force in December 2022, enabled the possibility of payments in foreign exchange for obligations performed in Brazil, in agreements entered between exporters and holders of a concession, permission or authorization in the infrastructure sector. This new legal framework enabled the possibility of execution of PPAs in foreign exchange, which, previously, had several restrictions under Brazilian law.

This possibility was highly anticipated by the sector, and it is expected to contribute even further for the development of the power sector in Brazil, facilitating the obtainment of foreign investments and financing, and reducing exchange risk to developers, since most of the supply agreements related to the construction of a power plant are entered with foreign companies, in foreign currency.

No regulatory changes are expected that could significantly alter the current scenario on corporate green energy and corporate PPAs.

The Ministry of Energy has recently launched a Mission of energy transformation and modernization of the electricity industry: roadmap for the energy of the future. The Mission has already recommended to the Ministry to enable CPPAs directly negotiated and executed between a corporate buyer and an Independent Power Producer.

In December 2020 the Ministry of Energy will launch the roadmap and will establish If such recommendation will be included in the regulatory agenda for 2020.

The EU Clean Energy Package introduces recast legislation, including the Energy Efficiency Directive (Directive (EU) 2018/2002), the Renewable Energy Directive (Directive (EU) 2018/2001) and Energy Union Governance Regulation (Regulation (EU) 2018/1999), which are designed to cover the electricity and renewables markets from 2021 to 2030. The Energy Efficiency Directive sets an indicative target for energy efficiency of 32.5% by 2030. The Renewable Energy Directive increases the consumption target from renewables to 32% by 2030, and the target to at least 14% of transport fuel originating from renewable sources by 2030.

In mid-July, as part of the biggest ever package of climate action, the EU proposed to increase the existing target of 32%. The proposal would also see the EU as a whole reduce energy consumption by nine per cent by 2030 compared to current levels.

In January 2020, the Czech Republic published its National Energy and Climate Plan. The document contains objectives and key policies in all five dimensions of the Energy Union. Through this document, Member States are obliged, among other things, to inform the European Commission of their national contribution to the agreed European targets for greenhouse gas emissions, renewable energy, energy efficiency and electricity and transmission system interconnectivity.

As previously stated, EgyptERA has been working with DNV to implement new regulations that govern the private-to-private market. The main objective of the new regulations is to pave the way for the implementation of new privately owned renewable projects. These projects are to be connected to the grid and sold using cPPAs to the developers of green hydrogen.

As things stand right now, Ethiopian energy laws do not comprehensively regulate cPPAs, for this reason it is difficult to predict which forms of cPPAs the government may or may not adopt. However, we expect the area to be regulated soon shedding light on forms of cPPA companies may enter into as the government intends to use off-grid electrification as one of the means to meet its national electrification goals.

Finland has very high ambitions for increasing green energy production that supports its climate goals. According to the new Governmental Programme published in June 2023, Finland is committed to the previously defined climate targets. The Governmental Programme also outlines that the operating conditions for wind power and increase of wind energy production will be further developed. There is also a desire to build wind power in different parts of the country (current wind production is mainly located to the west coast area) and, to a significant extent, also offshore.

Anticipated regulatory changes are therefore assumed to be mainly positive with respect to the production of local green energy and demand for cPPAs supporting the targets set in the Governmental Programme.

In 2023 Finland implemented temporal windfall tax legislation (Act on temporary profit taxes for the electricity and fossil fuel sectors) following the EU Emergency Regulation that is applied to the electricity companies. The windfall tax rate is 30% of the firms’ net profits exceeding a 10% return on capital in 2023.

At this stage, no regulatory changes which will alter the regulatory landscape for corporate green energy and corporate PPAs have been identified. 

For new installations which may benefit from financial support under the "market premium" model, there are currently a number of financial obstacles to entering into a corporate PPA in Germany as a result of current regulations. 

However, the German regulatory framework in relation to renewable energy is constantly under review and development. As such, amendments may be brought in to encourage the deployment of corporate PPAs. 

The German Federal Government has commissioned a study to ascertain how the current support schemes may be further developed, and whether, for example, the introduction of Contracts for Differences (CfDs) may be appropriate (especially in order to reduce the need for statutory support). The study also aims to address whether alternative marketing forms (such as corporate PPAs) may be effectively utilised. However, as the results from this study are not expected until autumn 2021 (following which any proposed legislation or regulations would need to be developed), substantial short term changes to the regulatory framework in Germany in relation to renewable energy are unlikely. 

Nevertheless, the introduction of tendering and auction processes and the reduction in financial support payments for the production and sale of renewable energy, together with the growing appetite of corporate buyers for this type of energy, mean that it is likely that Germany will see an increase in the frequency of corporate PPAs. As highlighted above, also a potential loosening of the prohibition of multiple sales (Doppelvermarktungsverbot) under the German Renewable Energy Act could enhance interest in corporate PPAs.

Last June, the Ministry of Environment and Energy pre-notified the Green Pool mechanism as a state aid measure to the European Commission’s Directorate-General for Competition (DG Comp). Given that this is a state aid mechanism, DG Comp’s approval of the Greek proposal is required for any relevant national legislation to come into effect.

Upon the DG Comp’s approval, it is anticipated that the Green Pool will be introduced in the Greek legal order by an amendment of Greek law 4001/2011.

Section 37 of the Electricity Regulation Act 1999 provides for direct lines/private wires; however, it is generally accepted that the provisions are unworkable for a combination of reasons and, consequently, direct line/private wire structures are not used in Ireland. Pursuant to the Government’s Climate Action Plan, a consultation was published on 18 August 2023 regarding establishment of a new private wires policy which will be launched in 2024.

The Ministerial Decree no. 186/2019 (the “New RES Decree”) refers to a public consultation that GME (Gestore dei Mercati Energetici S.p.A.) (“GME”) initiated on 23 January 2020.

Indeed, GME is entrusted with the creation of a market platform for long-term trading of energy from renewable sources, whilst the ARERA (Autorità di Regolazione per Energia Rete e Ambiente) the electricity & gas regulator ("ARERA"), is required to remove any regulatory barriers.

The public consultation document was aimed at receiving comments by electricity market operators on the structure of the PPA Platform depicted by GME, i.e., inter alia:

• access to the PPA Platform (seller side): electricity market operators producing energy from renewable sources through newly constructed plants, entered into operation after 1 January 2017 and non-benefitting from feed in tariffs on the energy produced. Offers on the platform may also be referred to plants which are not yet built or built whilst not yet operating;
• access to the PPA Platform (buyer side): traders, wholesalers and large consumers may be admitted to the platform, subject to the obtaining of the electricity market operator license;
• negotiable products: in order to facilitate the exchanges on the PPA platform, it is proposed the creation of standard contracts, providing for a baseload loading gauge, a minimum duration of 5 years and a maximum duration of 10 years.
• the role of GME: GME will stand between the seller and the buyer avoiding the parties – in case the financial adequacy assessments of the parties, to be carried out on a yearly basis, have had a positive outcome - to be exposed to insolvency risks;
• guarantees: rolling guarantees on a yearly basis;
• OTC clearing: it is proposed to allow the registration with the PPA Platform of PPA contracts executed over the counter, subject to compliance of the contract terms with the standard PPA negotiated on the platform. Following registration, the GME would guarantee the insolvency risks of the parties.

The New RES Decree also provides for the creation of a standard corporate PPA draft to be used in the above-mentioned market platform where subsidy-free energy may be negotiated. Both the owners of energy plants and offtakers (also associated) may access the platform.

Corporate PPAs are introduced as an alternative to the traditional energy incentive system. Indeed, in order to be admitted to the market platform, the plants must be newly built, entered into operation after 1 January 2017 and not benefit from incentives on the energy produced (with the express prohibition for such plants to participate in the auction and registration procedures). In order to access the platform, it will be necessary to obtain a specific qualification from the GSE (Gestore Servizi Energetici) (“GSE”), based on requirements that will be the subject of a specific determination.

As highlighted in other answers, changes to the Energy Act in 2019 mean that energy generators may now obtain distribution licenses, empowering them to increase their offering and sell electricity directly to consumers. 

While this is expressly permitted under the Energy Act, the regulations necessary to give effect to these provisions have not yet been put in place, and therefore very few generators have taken steps towards expanding their offering. As indicated above, however, KenGen, announced in late 2020 that it plans to sell power directly to large consumers once the required regulations are put in place.  It is not, however, clear when the regulations will be published.

The government is also currently developing an energy auction plan for wind and solar energy. The auction system is supposed to help with price discovery, thus facilitating the procurement of electricity at the lowest possible price.

As mentioned in Challenges, the government has announced the review of the transmission and distribution rates currently available for renewable Self-Supply projects. These special rates are similar to a subsidy, to allow the development of renewable generation. Other that the termination of these special rates, there are no other anticipated regulatory changes.

A new Draft Law No. 40-19 reforming law No. 13-09 aiming to improve the legislative and regulatory framework relating to the renewable energy sector in Morocco was published in December 2019 by the Moroccan General Secretariat of the Government. In this reform, the Moroccan legislator is addressing the current legal and technical difficulties faced by the operators, particularly:

Solar Zoning

Draft Law No. 40-19 removed this zoning requirement for solar energy projects. The zoning remains, however, applicable to wind energy projects.

National grid reception capacity and contribution to the stability of the grid

One of the main innovations introduced by Draft Law No. 40-19 is the introduction of the national grid carrying capacity (capacité d’acceuil) defined as the maximum quantity of installed capacity from renewable energy sources that the national grid can accommodate without facing management constraints. This carrying capacity will be fixed by the national electricity transport gird operator following the approval of the National Electricity Regulation Authority.

The publication of the grid reception capacity, following the entry into force of Draft Law No. 40-19, will give more visibility to the operators in order to submit or not the authorization pursuant to Law No. 13-09.

Selling electricity to distribution network operators

Draft Law No. 40-19 introduced the possibility for distribution network operators to acquire up to 40% of the total energy supplied from renewable energy sources.
 
In order to develop projects under the self-consumption regime, a draft bill was published on the website of the General Secretariat of the Government on 19 November 2020. This draft bill introduces a new self-consumption regime depending on whether or not the installation is connected to the grid.

This new regime allows for better visibility and greater transparency as to how the installations are operated and, where applicable, connected to the grid.

In October 2017, the government launched the review and amendment of the 1997 electricity law, to modernise it and put it on par with best practices in the sector, including unbundling the value chain as controlled by EDM the national utility company so that generators may sell electricity directly to corporate buyers. This process is still ongoing as of January 2021.

EU Clean Energy Package

The EU Clean Energy Package, effective from 2021 to 2030, plays a vital role in shaping the regulatory landscape. The Energy Efficiency Directive sets a target of 32.5% for energy efficiency by 2030. Meanwhile, the Renewable Energy Directive aims to increase renewable energy consumption to 32% by 2030, with at least 14% of transport fuel coming from renewable sources. These directives will inevitably affect corporate commitments to renewable energy and the structure of cPPAs.

Emergency Ordinance of 2023

An Emergency Ordinance was issued earlier this year, emphasising that projects for planning, construction, and operation of renewable energy plants are of high public interest. The ordinance allows for certain exemptions from European environmental legislation and sets deadlines for permit procedures, offering a more agile regulatory framework to fast-track renewable projects.

Q2 2023 Regulatory Changes for Hydrogen

Specific regulations on hydrogen are coming, with Delegated Acts that set standards for green hydrogen production and certification. These acts will have criteria that significantly impact the green PPA market for hydrogen as a renewable energy carrier.

Anticipated New Energy Act

A new Energy Act is expected to replace the existing Electricity Act 1998 and the Gas Act. This all-encompassing act will merge rules for gas and electricity transmission and supply, incorporating European rules and focusing on the transition to cleaner energy sources. Issues like net-congestion are expected to be addressed more elaborately in this act.

These regulations will significantly alter the corporate green energy landscape in the Netherlands, providing new opportunities and challenges for companies aiming to adopt renewable energy and participate in cPPAs. The regulations are not only setting new standards and targets but are also creating mechanisms to accelerate the transition to renewable energy sources.

We do not anticipate any regulatory changes which will directly impact corporate PPAs, for example, the form or content of PPAs.

The Electricity Code has recently been amended to address the potential for inefficient price discrimination in very large PPAs (among other things, contemplating a net quantity of electricity that equals or exceeds 150 MW consumed at a point in time). The Code amendment prohibits generators giving effect to materially large contracts (MLCs) unless the net value from the contract is positive relative to alternatives or the buyer can onsell unused electricity under the MLC on no worse terms than if they had consumed the electricity themselves. The Electricity Authority has indicated it may make further amendments if the current clauses are imposing unreasonable compliance costs on generators, and the public policy interest can be achieved more efficiently.

In 2023, the government passed legislation making climate-related disclosures mandatory for some large financial market participants (around 200 entities that are large publicly listed companies, insurers, banks, non-bank deposit takers and investment managers). They are required to report on governance, strategy risk management and metrics and targets. The legislation may well be broadened to require climate-related disclosures from more types and sizes of entities. This will in turn enhance the incentives for parties to enter into corporate PPAs.

New Zealand's planning laws are also in the process of being reformed. See the recently passed Natural and Built Environment Act 2023 and the Spatial Planning Act 2023 (which are intended to replace the Resource Management Act 1991).

Except for the above, we're currently not aware of any regulatory changes that might affect the regulatory landscape for corporate green energy and cPPAs in Norway.

Almost all political parties are, however, committed to targets implemented by the EU to reduce to greenhouse gas emissions and to enhance the regulatory and financial prerequisites for renewables.

Material amendments to the energy legal framework are expected to be introduced by the government in the next few months. These changes will mainly modify energy pricing and market rules, but none are expected to directly alter the PPA regulatory landscape. Those who qualify as free customers will continue to freely negotiate the terms of their agreements, while PPAs designed to meet the demand of regulated consumers will be subject to stricter regulations and supervision from OSINERGMIN.

Many business models face a variety of barriers in different EU Member States. According to Clean Energy for All Europeans package (the Winter Package), Member States have to identify and remove barriers to PPAs in their National Energy and Climate Action Plans (NECAPs).

The European Commission is currently working on the regulation of PPA contracting mechanisms to make them an alternative to the traditional energy supply contracting model.

In March 2023, the European Commission proposed to reform the design of the EU electricity market to promote renewable energy, better protect consumers, and improve industrial competitiveness. The proposed reform includes amendments to several pieces of EU legislation, including the Electricity Regulation, the Electricity Directive, and the REMIT Regulation. The expected entry into force of the new regulations is 2023/2024.

To improve the competitiveness of EU industry and reduce its exposure to volatile prices, the Commission proposes to facilitate the use of more stable long-term contracts, such as PPAs. Through PPAs, companies can establish their own direct energy supply and benefit from more stable prices for renewable and non-fossil energy production. To address current barriers to the use of PPAs, such as buyer credit risk, the reform requires Member States to ensure the availability of market-based guarantees for PPAs.

The new rules could allow smaller operators to buy green energy (generated directly from renewable sources) through PPAs, rather than black energy with guarantees of origin, as is currently the case. Proposed changes include a reduction in the duration of standard PPAs (currently 5-10-15 years on average), pricing appropriate for end-users of different sizes, and proposals to create a future European PPA trading platform and databases managed by regulators. This will be a very important development for many industries.

The support of cPPAs is also mentioned in the Energy Policy of Poland until 2040, a government document defining the government's energy policy strategy.

The inframarginal windfall tax in 2023

Amid a surge in energy prices across Europe in 2022, the Polish government passed a law requiring energy companies – both generators and traders – to pay a special fee on revenues exceeding a set price cap (windfall tax). This law was introduced to implement Council Regulation (EU) 2022/1854 of 6 October 2022 on emergency intervention to deal with high energy prices (part of a coordinated action with other EU Member States), which remained in force until 30 June 2023. In the new law, the Polish government set the obligation to pay this special charge until the end of 2023 and, based on recent announcements, this deadline may even be extended until mid-2024.

On the other hand, the provisions of EU Regulation 1854/2002, under which Poland introduced the contribution to the special fund (price cap), expired on 30 June 2023. In June 2023, the European Commission published a report on the application of Regulation 2022/1854 in the Member States – on the review of emergency interventions to address high energy prices. The European Commission recommended that the price cap legislation in the EU should not be extended beyond 30 June 2023, not least because of the impact on renewable energy investments and PPAs. Energy market stakeholders, including the European Federation of Energy Traders (EFET), SolarPower Europe and WindEurope, also called on EU Member States to stop using emergency power market interventions and inframarginal revenue caps in national legislation.

The Council decided not to amend EU Regulation 2022/1854, meaning that the Polish price cap should also end on 30 June 2023, which did not happen. Nevertheless, despite press announcements, there is no basis for extending the application of these emergency regulations into 2024.

In addition, as of 1 September 2023, an amendment to the legislation on the calculation of the price cap came into force, which specifically addresses PPAs, in particular hedged PPAs, and could lead to a situation where the generator is penalised for hedging its PPA and could be liable to pay the additional windfall tax.

Renewable energy plays a key role in governmental strategy and regulatory updates are expected. The country’s regulatory landscape is pro-renewable power production. So it is not expected that reforms will negatively affect the corporate green energy and cPPA landscape.

The general legal framework for the national electric system was recently revised with the approval and publication of Decree-Law no. 15/2022, dated January 14, 2022.

We are not aware of any anticipated regulatory changes which will alter the regulatory landscape for corporate green energy and corporate PPAs.

In February 2019, the President of South Africa announced a proposal to unbundle Eskom into three separate businesses, namely generation, transmission and distribution – each of which will be housed in separate legal entities under Eskom Holdings SOC Limited. Since then, the process of unbundling has begun and, at the date of this report, we believe that divisional boards have been established and managing directors appointed for each of the business units. The unbundling is expected to be complete by the end of 2022 and will have a considerable impact on the structure of the energy market. It is likely this will necessitate regulatory changes to cater for, and differentiate between, the roles of each of the separate unbundled Eskom entities in the wider energy market.

Interesting to note is that circa 10,000MW of generation capacity in South Africa is scheduled to be retired in the next 10 years, which creates the need for new generation capacity, much of which we believe (at this stage) will be procured from the private sector and, more specifically, clean or renewable energy sources. Regulatory reform and policy alignment (particularly in policy planning documents such as the integrated resource plan, as above) will be crucial to ensuring that sufficient generation capacity is procured from the private sector.

In recent years, several regulations affecting PPAs have been approved:

• In December 2020, the Statute of electro-intensive consumers was approved, regulated under the Royal Decree 1106/2020, whose purpose is to “maintain and improve the competitiveness of electro-intensive industrial companies at European and international level.” This Statue also develops the Royal Decree-Law 24/2020, which creates the Spanish Reserve Fund for guarantees of electro intensive entities (FERGEI). This Statue promotes long-term bilateral contracts for the supply of energy (PPAs), especially between consumers and renewable generators, by offering guarantee state coverage mechanisms. Electro-intensive consumers see PPAs as a solution to the current volatility of prices and have already indicated their intention to hold a PPA auction at the beginning of 2023.
• NECP (National Energy Climate Plan 2021-2030), approved by the government in March 2020 and submitted to the European Commission, also encourages PPAs. Measure 1.10 of the NECP foresees mechanisms to reduce the risk of these operations.
• As explained above, Royal Decree 244/2019, of April 5, 2019, regulating the administrative, technical, and economic conditions for self-consumption of electricity, has eliminated procedural and economical barriers for Direct PPAs, resulting in a significant increase of this type of contract in Spain.
• As pointed out below, Royal Decree-Law 23/2020 has added a new provision related to the specific remuneration scheme for green energy (see num. 10).
• Following the escalation of gas and electricity prices, the government approved a set of measures to mitigate the impact of this situation with the publication of Royal Decree Law 17/2021, in September 2021. One of the measures consists of a temporary mechanism to reduce the surplus remuneration of renewable energy production facilities. The Ministry of Ecological Transition and Demographic Challenge has clarified that electricity purchased through both Physical and Financial PPAs (see num. 2) is excluded from the application of the reduction mechanism, provided these are not intragroup PPAs.
• Also, following the economic impact of the war in Ukraine, the Royal Decree Law 6/2022, makes some modification of the aforementioned mechanism, and extends its application until June 30, 2022. The same rules and criteria apply with the following modifications:
  • Fixed-price bilateral contracts (PPAs) with a term longer than a year, are not subject to the reduction.
  • Fixed-price energy contracted will only be exempted from the reduction mechanism for hedging prices below EUR67/MWh. Therefore, PPAs subscribed before the Royal Decree Law 6/2022 are subject to this mechanism for the share of the price that exceeds EUR67/MWh.
  • Intragroup PPAs, between the generator and trader, are subjected partially to the reduction mechanism. For these PPAs, the hedging price used in the reduction calculation will correspond to the price passed on to the end consumers by the traders.
• The reduction mechanism has been recently extended until December 31, 2022 by virtue of Royal Decree Law 11/2022.
• Royal Decree Law 6/2022 has also amended remuneration parameters under the specific remuneration scheme (régimen retributivo específico, Royal Decree 413/2014) for the current semi regulatory period (January 1, 2020 to December 31, 2022) which were set out by Order TED/171/2020 and have been amended by Royal Decree-Law 6/2022. Royal Decree Law 6/2022 creates a new regulatory semi-period from January 1, 2022 to December 31, 2022, and foresees the publication of a new order regulating the remuneration parameters for this new regulatory semi period. The order is still under approval.
• Other major amendment implemented by Royal Decree Law 6/200 is article 22 of Royal Decree 413/2014, of June 6, so that the adjustment value for deviation from the market price for energy generated in 2023 and subsequent years is null. This measure will be implemented in 2023 to allow the generators sufficient time to consider their pricing strategies. This measure will affect the updating of remuneration parameters for the semi regulatory period between January 11, 2026, and December 31, 2028. The government will amend RD 413/2014 to adapt it to this forecast. Additionally, article 22.1 of RD 413/2014 has also been amended to provide greater certainty to generators by specifying the period to be considered for estimating the market price based on OMIP futures. This measure may have an impact on PPAs as hedging of energy prices in the derivatives market is incentivized.
• Royal Decree Law 17/2022 has introduced additional amendments to energy sector regulation (i) to the balance system as further explained below, (ii) for co-generation installations which can be now excluded from the specific remuneration scheme (régimen retributivo específico) and be applied the exceptional measures for limiting gas prices regulated under Royal Decree Law 10/2022.

In Sweden, government support for renewable energy is provided by way of electricity certificate system instead of a feed-in tariff system or other similar systems. The certificate system requires certain producers and large consumers of electricity to purchase electricity certificates on the open market. Ultimately the costs for the system are passed on to the consumers via the electricity bill.

The electricity certificates system is currently being phased out. Production facilities being taken into operations after December 31, 2021, are no longer entitled to allocation of electricity certificates and the electricity certificates system will be completely cancelled in 2035. The Swedish Energy Agency has also recently proposed to look into whether the system should be cancelled even earlier than 2035. The move comes due to the fact that the goal of increasing the renewable energy production with 46.4 TWh before 2030 was reached in March 2021, and that the Swedish government believes that onshore wind projects are profitable enough without a subsidy. Instead the government has outlined that investment will be encouraged by other means.

To our knowledge, there are no regulatory changes that will alter the regulatory landscape for corporate green energy and cPPAs.

Not at the moment.

Net metering regulations for rooftop solar were prepared by the Saudi Arabian electricity regulator in 2018. To our knowledge there were never commercially utilised.  A new set of regulations have been prepared, including provisions for wheeling of power. However, until they are published and adopted by the national utility we do not expect to see material changes there.

Elsewhere in the GCC, net metering concepts have generally been adopted and their application is growing.  Jordan has perhaps the longest running and most flexible regulatory regime for corporate PPAs.

The EU Clean Energy Package introduces recast legislation, including the Energy Efficiency Directive (Directive (EU) 2018/2002), the Renewable Energy Directive (Directive (EU) 2018/2001) and Energy Union Governance Regulation (Regulation (EU) 2018/1999), which are designed to cover the electricity and renewables markets from 2021 to 2030. The Energy Efficiency Directive sets an indicative target for energy efficiency of 32.5% by 2030. The Renewable Energy Directive increases the consumption target from renewables to 32% by 2030, and the target to at least 14% of transport fuel originating from renewable sources by 2030. GB has not yet consulted on the implementation of this, and it remains unclear whether GB will voluntary adopt the Renewable Energy Directive.

In January 2019, BEIS published GB's draft National Energy and Climate Plan (NECP) for 2021 to 2030. This does not contain new policy announcements, however, it acknowledges that despite GB's plans to leave the EU, it is still seeking cooperation with the EU to support the delivery of clean, cost-efficient and secure energy supplies.

Whilst the EU is a party to the Paris Agreement, the UK (as other EU member states) is itself a signatory and as such will continue to be bound by its own decarbonization commitments under its Nationally Determined Constributions post-Brexit. Material changes to the UK's commitment to addressing climate change are, therefore, not expected.

With the election of a new President in the US in 2020, there is an expectation that legislation in support of the development of renewable generation projects and related technologies like energy storage may be forthcoming. This could be in the form of extended or expanded federal tax credits or policy or new legislation, directives to federal agencies or executive orders. This is in addition to the requirements and regulation of the energy industry that applies at the state level based on the location of the project.  

As stated above, a National Renewable Energy Policy was published in August 2019 to signify the possible change in law that is contemplated with particular reference to renewable energy. The report can be accessed here.

It’s under consideration that the Utility and the IPPs will be able to enter into wheeling agreements based on agreed models. This is seen as a nod to cPPAs in their many varieties.