At a European level, the applicable legislation is the following:
In accordance with the foundations of the legal system of the European Union, the general principles on the organisation and functioning of the electricity sector established in these Directives shall be incorporated into the national regulation of the different member countries.
The remuneration of the electricity transmission activity is set administratively, pursuant to the general principles established in Law 24/2013 itself, which have been developed by Royal Decree 1047/2013, which establishes a new model for the calculation of the remuneration of the electricity transmission activity in Spain, based on a clear, stable and transparent methodology, which reinforces and clarifies the principles and criteria for establishing the remuneration of regulated activities in line with other comparable European companies.
The new methodology established in Royal Decree 1047/2013 began to be applied effectively starting in 2016 once the different regulatory provisions that develop it had been published, including Order IET/2659/2015, of 11 December, that fixes the reference unit values of investment and operation and maintenance of transmission facilities.
Law 24/2013 determines that the remuneration of the system operation activity must be set according to a methodology established by the Government based on the actual services provided, which has not yet been published. In this context, the Government approves the annual remuneration of the system operation activity based on information provided by Red Eléctrica on the costs of the activity, without having an objective procedure for its calculation.
Also relevant to Red Eléctrica’s business activities is Law 17/2013, on security of supply and increased competition in the Spanish insular and non-peninsular systems, which establishes that Red Eléctrica, in its capacity as operator of these electricity systems, be the owner of all new pumped-storage facilities, provided that it is determined that said facilities have as a main purpose the guarantee of the electricity supply, the security of the system and the integration of non-manageable renewable energy.
Pursuant to that set out in Law 17/2013, the State published Order IET/728/2014, dated 28 April, which establishes the obligation to transfer to the system operator the 200 MW Soria-Chira pumped-storage hydroelectric power station project in Gran Canaria. In compliance with this provision, Red Eléctrica took ownership of this project since 2015.
Regulations of a technical and instrumental nature
In addition to the general regulations that encompass the activity of Red Eléctrica in the sector, there is a broad regulation of technical and instrumental nature that, as its name suggests, aims to regulate the necessary measures for an adequate technical management of the peninsular and no peninsular electricity systems. Most of this legislation addresses the Operating Procedures, although its scope also covers the following elements of the technical regulation of the electricity sector:
Additionally, the Red Eléctrica Group, through its subsidiary company, Red Eléctrica Internacional (REI), has investments in the electricity sector, internationally, in Peru. This country has liberalised its electricity industry and has defined a regulated tariff model for the transmission activity.