The legislative and regulatory framework for PPAs in Spain

Abstract

Since 2019, Spain has pioneered the Power Purchase Agreement (PPA) in the EU. This chapter introduces and analyses the legislative and regulatory framework of Spanish PPAs. Spain has relaxed regulations and financial barriers for small-scale producers and on-site PPAs, expanded PPA contract limits, and provided funding to incentivise consumers to adopt and use more PPAs. However, these simplified legislative frameworks should become a long-run strategy rather than merely a temporary post-pandemic recovery policy. The chapter recommends further relaxing legal limits, eliminating unnecessary State subsidies, strengthening market price signals, and considering private insurance as an alternative mechanism for compensating energy price fluctuations.