The CNMC approves the procedure for managing the connection of biomethane generation facilities to the transport and distribution grid

On 30 April 2024, the Resolution of 19 April 2024 (the "Resolution") of the Spanish National Commission for Markets and Competition (Comisión Nacional de los Mercados y la Competencia "CNMC") was published in the Spanish Official Gazette, setting out the procedure for the management of connections of biomethane generation facilities to the transport or distribution grid. A summary of this procedure can be found below.

1. What is the subject matter of the procedure?

• The procedure regulates the management of connections of biomethane generation plants to the natural gas transport and distribution grid.
• Biomethane generation facilities are defined as installations for the production of renewable gases of biological origin, mainly composed of methane and with the necessary gas quality parameters for injection into the natural gas grid.
• The connection of a biomethane generation plant to the gas system is understood to be the set of installations whose purpose is the injection of biomethane into the natural gas grid.
• The procedure shall not apply to connection requests submitted prior to 1 May 2024, which shall continue to be processed in accordance with the period and content set out in Article 12 bis of Royal Decree 1434/2002, respecting the chronological order.

2. To which subjects does it apply?

• Applicants for connection of biomethane generation facilities,
• natural gas transport and distribution grid operators, and
• Technical Manager of the Gas System.

3. How is the connection request handled?

• Producers of renewable gases must submit an application to the transport or distribution grid operators.
• The transport or distribution grid operator acts as a single point of contact and must have dedicated web platforms for the management of applications, where applicants may access the information and forms necessary for the processing of applications and the model connection contract and consult the status of their processing. The web platforms will be public and freely accessible via the grid owner's website and will publish diagrams of the location of grids with pressure equal to or greater than 16 bar, by province, and consumption for the previous year, as well as any other information that may be useful for applying for connection. This information must be available within 6 months of the entry into force of the Resolution (from 1 November 2024).

Pending the implementation of the web-based platforms, grid operators shall publish an e-mail address to which requests for connection shall be addressed and shall be dealt with in accordance with this procedure. These requests shall receive an acknowledgement of receipt, which shall be considered as proof of the date and time of submission of the request.

• Communications and procedures must be carried out electronically, ensuring traceability and issuing receipts.
• Applications will be processed according to "first come, first served" criteria based on the date of submission. If the application needs to be corrected, the date and time when all the required documentation and information has been correctly submitted will be the one which shall be taken into account.
• The confidentiality of the information provided in the applications is guaranteed.
• Grid operators may request a payment of up to €3,000 for the costs of drawing up the budget, with this amount being deducted from the final implementation amount if the request is accepted and refunded if the request is rejected. In case of non-acceptance of the connection budget by the applicant, this amount will not be refunded.

4. Can prior requests for information be made?

• Yes, before submitting a connection request, interested parties may file a request for information on the different connection options.
• They must provide data such as identification of the applicant, characteristics of the biomethane generation facility, delivery pressure and maximum and minimum daily biomethane production profile and connection point preferences.
• Grid operators shall respond to requests for prior information within a maximum of one month and the response shall be considered as non-binding.

5. What are the deadlines for handling connection requests?

• The grid owner shall respond within a maximum period of 5 working days confirming that the application has been accepted for processing or indicating the reasons for non-admission, in the latter case indicating the possibility of rectifying the application within 5 working days.
• The grid operator must assess the maximum admissible flow and consult the other upstream and downstream grid operators within 5 working days, who must issue a report within a maximum of 15 working days specifying, where appropriate, the existence of other requests for connection that have temporary preference.
• The grid operator's reply to applicants for connection shall be issued in the chronological order in which the applications were received, within a maximum of 40 working days from the date of their submission.

6. What is included in the reply to the connection request?

• The grid operator shall inform the applicant of the outcome of the analysis of the relevant application, which may be either acceptance or refusal.
• In case of acceptance, detailed information is provided such as (i) the available injection capacity, (ii) injection capacity already granted in the same section of the grid, (iii) the identification of the biomethane installation, (iv) the connection point, (v) date of acceptance of the application, (vi) injection pressure and technical characteristics, (vii) the economic conditions, which shall include at least the financial budget and estimated construction time, (viii) compensation clauses and (ix) the connection contract (which may be modified at the request of either party, provided that there is an explicit agreement between the parties, that it meets the applicable requirements and that it is possible in accordance with the applicable sectoral regulations).
• In the event of refusal, the reasons for said refusal are specified within a memorandum.
• In any case, the reply shall include possible alternative proposals (which shall include the information mentioned for the communication of acceptance), or explicit mention of the non-existence of such proposals.

7. What are the next steps?

• The applicant has 60 working days to accept the quotation of one of the alternatives received and to sign the contract, as well as to pay 10% of the connection fee.
• Failure to sign or pay by the deadline is considered a waiver of the connection.
• Prior to the start-up of the connection, the corresponding grid operator must apply to the Enagás GTS for the inclusion of the new injection point in the SL-ATR logistics system.

8. Can the right of connection be transferred?

• No, the right of connection resulting from the acceptance of an applicant's application is deemed to be granted to the applicant in respect of the biomethane installation with the characteristics stated in the application and may not be transferred to third parties.

9. How are discrepancies/conflicts resolved?

• Before the CNMC, so that it may resolve within a period of two months, when the competence corresponds to the national relevant authorities.
• Before the competent body of the corresponding regional relevant authorities for a decision to be taken within a period of three months.

10. What are the reporting obligations to the CNMC?

• Before 15th February each year, grid operators must send the CNMC a detailed list of all connection requests received, indicating their characteristics and processing status.
• Information should be sent concerning accepted connections and signed contracts; indicating characteristics and budgets in euros.
• The CNMC may develop standardised formats and additional details on the processing of connection requests.