Extension of exceptional measures to simplify renewable energy production procedures

In April 2022, we published a legal update on Decree-Law 30-A/2022 of April 18, which simplified renewable energy production procedures through exceptional measures. This legislation was amended by Decree-Law 72/2022 of October 19—on which we also published a legal update—and was to be in force for two years (i.e., until April 19, 2024).

Consequently, Decree-Law 22/2024 of March 19 (“Decree-Law 22/2024”) has been published to extend these exceptional measures until December 31, 2024.

The purpose of the extension provided for in Decree-Law 22/2024, as stated by the lawmakers in the introduction, is to maintain the measures that have contributed to achieving energy transition goals and reducing dependence on fossil fuels. Also, in light of the current political context in Portugal, the new government will evaluate whether these measures should become permanent.

The following measures will remain in force until the end of the year:

·         Exemption—under certain conditions—from having to obtain an operation license for renewable power plants, storage facilities, and self-consumption production units (“UPACs”).

·         Outside sensitive areas, projects that do not exceed the limits established in the Environmental Impact Assessment (“EIA”) Law will only be subject to this assessment if the Directorate-General for Energy and Geology (“DGEG”) considers that there are signs that the project is likely to have a significant impact on the environment.

·         Existing wind power plants will be able to feed all the energy they generate into the Public Service Electricity Grid (RESP).

·         The prior control procedures for deployment of renewable energy power plants and UPACs with an installed capacity of 20MW or more, or wind farms that have at least 10 towers, must be based on proposals to involve local populations.

·         In the case of alterations or extensions to projects for producing hydrogen through water electrolysis, the EIA will only be carried out when the project exceeds certain thresholds, or it is considered that the project is likely to have a significant impact on the environment.

·         The generation of green hydrogen through water electrolysis is not subject to the legal regime on industrial emissions that applies to the integrated prevention and control of pollution.

·         The regime for the urban planning permission of renewable power plants, storage facilities, UPACs, and facilities for hydrogen production through water electrolysis establishes the following terms (regarding urban planning prior control procedures):

a)    Projects with a capacity of less than 1 MW are not subject to urban planning prior control procedures, but the project must be communicated to the municipal council in advance using the appropriate declaration of responsibility, followed by a communication from the municipal council to the DGEG.

b)    Projects with a capacity greater than 1 MW must be communicated to the pertinent municipal council in advance, together with the opinions, authorizations and approvals required by law. The president of the municipal council has eight days to issue an order relating to the submitted communication (which may be either to improve the application or to reject it outright). This communication may be rejected if it does not conform with the applicable legal and regulatory provisions, or if it has a negative impact on the landscape (among other reasons), except when (i) there is a favorable or conditional-favorable environmental impact statement; or (ii) less than 2% of the area in the municipal territory is allocated for renewable projects, including all those that were set up previously or that are exempt from urban planning prior control, or that have valid urban planning prior control titles. If the municipal council does not expressly reject the project, the interested party can start construction work within 30 days after the end of that period.

·       From January 1, 2023, the setting-up of renewable energy production plants and storage facilities that obtain an urban planning prior control title, or that are exempt from having to obtain one, will be subject to a new compensation obligation to the municipalities—amounting to €13,500 per MVA of attributed connection power (paid out of the Environmental Fund), in addition to the compensation (concessions) established in Decree-Law 15/2022 of January 14.