The Government is preparing a deep reform of the Energy Savings Certificates Market (CAE) after three years of operation.
Ecological Transition released a draft decree for public consultation last week that maintains the ordinary buying and selling of certificates as the main mechanism, but incorporates new rules to organize a market that has grown rapidly and opens a second avenue to mobilize investments: energy savings auctions.
The participation process will be open until September 23.
Convert savings into certificates
The system allows converting the savings achieved with an energy efficiency action into certificates that can subsequently be acquired by companies required to meet annual savings targets.
Since its launch, more than 9,400 applications have been submitted, about 7,000 have been resolved favorably, and the certified savings exceed 7,700 GWh, according to data from Ecological Transition. The growth has led the Ministry to review the rules regarding intermediaries, contracts, certificate transmission, deadlines, inspections, and the operation of the registry.
Two auction modalities
The main novelty is the creation of two auction modalities, which will coexist with the ordinary CAE market and in which obligated subjects and delegated subjects can participate.
The first will be the energy savings commitment auctions. The awardee will receive an additional economic premium for executing the committed actions and, once the savings are certified, will retain the generated CAEs, so they will be able to market them later in the ordinary market until their settlement.
The second modality will be the energy savings needs auctions. In this case, an economic amount will be awarded for carrying out a specific action, and the generated certificates will be settled directly, so they cannot be marketed later.
The difference allows the Government to use the auctions to direct investments towards projects that may be less attractive under normal market conditions. Ecological Transition cites as examples actions with long payback periods, electric mobility projects, comprehensive rehabilitation of housing blocks, investments aimed at SMEs or vulnerable populations, and actions that significantly reduce emissions as long as they generate energy savings.
The calls may define which product is auctioned and will use a "pay as bid" allocation system, by which each awardee receives the amount corresponding to their own bid. There will also be reserve and risk prices to limit, respectively, excessively high costs and reckless bids. OMIE will organize the auctions and the CNMC will act as supervisor.
Mobilizing investments that the market does not activate
The reform thus introduces a tool with which the Administration can direct resources towards certain types of savings without replacing the ordinary market.
The auctions may be financed from the National Energy Efficiency Fund (FNEE) and the General State Budgets. Precisely because of the possibility of using public resources, the Ministry plans to request the European Commission to confirm the compatibility of the model with community regulations on state aid.
In the needs auctions, the savings obtained will also be additional to the volume that is distributed annually among the obligated subjects. This allows the new mechanism to be used to increase the savings achieved without deducting it from the ordinary obligations assigned to the companies.
Fewer links between those who save and those who buy the savings
The project also seeks to organize the intermediation that has developed around the CAE. To this end, it expressly incorporates the figure of the savings aggregator, who may acquire ownership of the savings generated by an action and then transfer it to an obligated or delegated subject.
The reform, however, limits to one the number of aggregators that can exist between the original owner of the savings and the obligated or delegated subject that requests the issuance of the CAE. With this restriction, the Government aims to reinforce the traceability of the ownership of the savings before it ends up being converted into a certificate.
The draft also regulates the contract for the assignment of savings, which will serve to document the transmission. The regulation defines final energy savings as an intangible, transferable good with economic value, reinforcing the regulation of a market in which the savings obtained by a company, a community of property owners, or another holder can end up being acquired by agents who need to meet their efficiency obligations.
More requirements for delegated subjects
The reform also raises the requirements to operate as a delegated subject, one of the central figures of the system because it can assume the commitment to obtain and liquidate CAE in front of the obligated subjects.
The project specifies requirements for legal, technical, and economic-financial capacity and expressly prohibits sub-delegation. In this way, a delegated subject will not be able to transfer to another delegated subject the responsibility it has assumed to liquidate certificates.
The minimum content of delegation contracts and the communication obligations to the National Coordinator when modifications or early resolutions occur is also developed. The objective is to identify more clearly who is responsible for the committed savings in each operation.
Operations will leave more trace
Traceability extends to the very buying and selling of certificates. When a transmission of CAE occurs, it must be communicated to the National Coordinator within five business days.
The National Register of Energy Savings Certificates will reinforce its role as a public register and will allow tracking the operations carried out during the life cycle of the certificate. The draft also sets a three-year limit from the completion of an action to be able to register it in the system.
The reform will be accompanied by a comprehensive electronic platform to manage the National Register and the different procedures of the system. OMIE and MIBGAS are authorized to develop and implement this tool and, temporarily, to exercise the functions of operator until the National Coordinator has the necessary means.
More control over an expanding market
The growth of the system will be accompanied by a strengthening of supervision. The project incorporates a specific chapter on inspection, control, and sanctioning procedure, with powers to check files and verify compliance with the obligations of the participants.
Administrative procedures are also modified. The regional managers will have 25 business days to validate standardized actions and 40 days for singular ones, while the deadlines for national resolution and registration will be 30 and 45 business days, respectively. The project also incorporates estimatory administrative silence in the certification and registration procedure.
The result will be a more regulated market than that which emerged with the implementation of the system in 2023: there will still be negotiation of CAE between operators, but it will coexist with publicly funded auctions, greater requirements for certain participants, limits on intermediation, and new tools for traceability and supervision.