Mechanism to compensate municipalities

Decree-Law 18/2024 was published on February 2, 2024, establishing a mechanism to compensate municipalities for high-impact strategic electricity projects that generate negative externalities locally.

Key aspects

• Decree-Law 18/2024 establishes a mechanism to compensate municipalities when public service electric network (“RESP”) infrastructure that is part of the National Electricity System (SEN) is installed on or crosses their territories.
• The compensation amount to be awarded depends on the RESP operator verifying the existence of significant negative effects and quantifying them, considering the substantiated damage.
• The compensation is borne by the RESP operator.
• The compensation amount is validated by the Energy Services Regulatory Authority (ERSE).