• 09
    Mar, 2020
  • The new rules of compensation in collective self-consumption

It’s official! From March 1, according to the resolution approving the operating procedures published by the CNMC, Spanish prosumers may be compensated by their retailers (aka. electricity providers) for the excess electricity they inject into the network.

This newest development in the Spanish market was brought by a new resolution which was approved by the energy market regulator CNMC.

The regulation focuses on two key aspects of the compensation of collective self-consumption installations – which until now were unclear:

1The format of communication and energy data that needs to be exchanged between various stakeholders (energy players). It highlights the necessity for an efficient and fast exchange of data through a digital communication protocol among various stakeholders, throughout the lifetime of a self-consumption installation (licensing, setup & operation).

2aThe roles, duties, responsibilities and restrictions of these stakeholders in regards to the energy trading of self-consumed electricity.

2b – One particular player is on the focus: the electricity retailer (aka. electricity supplier). Retailers are called to become more pro-active. A new playing field with a lot of potential and opportunities, both for them and for the consumers.

SO WHAT CHANGES DO THE REGULATIONS BRING?

It is great news for attracting more investments and financial interest in the renewable industry.
By improving the payback of the investment and by offering a more stable & secure financial landscape for self-consumption

It is also a great opportunity for the retailers (aka. retailers, suppliers) – but are they ready? The market has enormous potential (100 PV installations per day) and the regulation leaves enough room for innovative (and competitive) business models.
This could benefit the consumers and get better offers and personalized services for becoming a prosumer.

However, this comes with a great responsibility for the marketers who play a very central role throughout the setup and operational stages of self-consumption installations (licensing, billing, remuneration of distribution and transmission tariffs, guarantees of origin).
It is a big question whether they are able to keep up with the technical expertise and make changes in their operational model and customer acquisition strategy in the era of digitalization.

Last but not least, it highlights the importance of energy data for the energy transition and comes to validate the value that data neutrality has to offer in the transformation of our energy systems and in making our grids smarter and more efficient.

A GAME-CHANGING POTENTIAL FOR THE SPANISH ENERGY MARKET

These (regulatory) steps taken, find us in a complete alignment with how we envision the energy sector, where our commercial focus is and how self-consumption can accelerate the energy transition with positive social impact.
In particular, we are happy to see that the regulation:

1 – INTRODUCES THE COMMUNICATION PROTOCOL AMONG MULTIPLE ACTORS IS A VERY CLEAR VALIDATION OF OUR VALUE PROPOSITION with Pylon’s NDH. It becomes more pressing for the marketers to become more proactive, more consumer-focused and more digitalized. The regulations open opportunities for more innovative and flexible business models and offering more personalized services to customers will be a customer acquisition cornerstone for them.
2 – HIGHLIGHTS THE ROLE OF MUNICIPALITIES TO PLAY A CATALYTIC ROLE IN THE ENERGY TRANSITION. Municipalities have a neuralgic role to play in the implementation of efficiency programs, the deployment of collective self.consumption schemes and the increased engagement of energy citizens.

The arena is now open and the ball will be in court of the retailers. They will need to begin putting their customer acquisition strategies in test, within this new market. It will be interesting to see how their strategies play out and how prepared they are to play with the new rules of digitalization and personalized services.

* Many thanks to Jose Alvarez for his contribution

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