The Ministry for Ecological Transition and the Demographic Challenge, through the Institute for Diversification and Saving of Energy (IDAE)The government has launched a new set of incentives aimed at accelerating the deployment of heating and cooling networks based exclusively on renewable energy in Spain. This is the second call for applications for the Renored program, a support line that seeks to transform the way residential buildings and public infrastructure are heated and cooled.
With a staff of 50 million euros from the Recovery, Transformation and Resilience Plan (PRTR) and financed with European funds NextGenerationEUThe call is aimed at projects that allow Cut back on fossil fuel use and reduce greenhouse gas emissions linked to heating and cooling. The Government thus aims to promote more efficient collective thermal networks, aligned with the climate and energy objectives set at the national and EU levels.
A decisive boost to renewable heating and cooling networks
Heating and cooling networks, known internationally as district heating and coolingThey allow us to supply thermal energy from one or more power plants to multiple connected buildingsThis approach, widespread in northern and central European countries, makes it easier to take advantage of local renewable sources and high-efficiency technologies, reducing losses and simplifying energy management compared to individual equipment in each building.
In the Spanish case, the implementation of this type of infrastructure has progressed more slowly, due in part to the high initial investments required and due to the complexity of coordinating multiple stakeholders (municipalities, energy companies, homeowners' associations, public facility managers, etc.). The Renored program's aid aims precisely to address these challenges. lower that economic barrier to entry and to push forward projects that, without public support, would have difficulty moving forward in the short term.
The Ministry frames this second call for proposals within a broader strategy of decarbonization of the thermal sectorThis sector, which often receives less media attention than the electricity sector, accounts for a very significant portion of national energy consumption. Heating and cooling homes, service buildings, and public facilities still represents a large demand for fossil fuels, especially natural gas and petroleum products.
According to information released by the department headed by Sara Aagesen, the goal is for the new heating and cooling networks to be financed operate entirely on renewable energy sourcesso that the use of fossil fuels is not permitted at any point in the network. With this approach, the program is geared towards long-term solutions that contribute to climate neutrality.
Funding and deadline for submitting applications
Renored's second call mobilizes 50 million euros from the PRTRWithin the framework of component 31, which focuses on the deployment of renewable energies and the improvement of energy efficiency, these resources are in addition to those already committed in the first edition of the program and reinforce the role of renewable thermal networks as a tool for energy transition.
El deadline for submitting applications has been set among the 9:00 a.m. on January 21, 2026 and 13:00 p.m. on February 27 of the same yearAll procedures must be carried out electronically, through the online system enabled in the IDAE electronic headquarters aid portalThe management will be directed to both public and private entities interested in developing projects that meet the established criteria.
Aid will be granted in competitive competition regimeThis means that grants will not be awarded on a first-come, first-served basis, but rather based on the score obtained according to the evaluation criteria defined in the call for proposals. This system aims to prioritize initiatives with the greatest energy, environmental, and socioeconomic impact, and to ensure the efficient use of available funds.
Once the call for applications has been resolved, the selected beneficiaries will have a clearly defined schedule, given that the The actions must be fully completed and operational before June 30, 2029This time horizon allows for the planning of fairly large projects, but it also requires good organization from the initial stages.
Eligible actions and minimum power required
The aid is directed towards a wide range of investments linked to heating and cooling networks powered exclusively by renewable energyThe eligible activities include, primarily:
- New thermal power plants that supply heat and/or cold to a distribution network.
- Distribution networks associated with these power plants, including pipelines, exchange substations and other elements necessary to bring energy to the points of consumption.
- Expansions of existing infrastructure, both in terms of generation capacity and network expansion to connect new users.
In all cases, a common requirement is established: projects must have a minimum power of one megawatt (1 MW)This threshold aims to focus funds on actions of sufficient scale to generate a noticeable impact on reducing emissions and improving energy efficiency in their surroundings.
Furthermore, the funded networks must provide service to multiple buildings or facilitiesWhether residential, commercial, or publicly owned, the network design must ensure collective use of the infrastructure. Therefore, the network design must consider a critical mass of thermal demand that justifies the investment and ensures its operational viability over time.
Permitted renewable energy sources and exclusion of fossil fuels
One of the pillars of the call is the obligation to use only renewable energy sources throughout the heating and cooling network. Among the eligible technologies, the following are highlighted:
- Biomass, in its various forms (wood chips, pellets, forest waste, agricultural by-products, etc.), provided that the sustainability and fuel quality standards are met.
- Geothermal, both low and medium enthalpy, through systems that take advantage of the heat from the subsoil to generate heating and cooling.
- Concentrating solar or solar thermal, in projects that capture solar radiation to produce thermal energy in a centralized manner.
In practice, the range can be expanded to include other renewable solutions, provided they meet the applicable technical and regulatory requirements and are integrated into a collective network. What remains, however, is... The use of fossil fuels is expressly prohibited. at any point in the system, whether as support or backup, both in the generation plant and in the distribution or in the substations.
This restrictive approach reinforces the character fully decarbonized of the subsidized infrastructures. Unlike other programs that allow combinations of renewable and conventional technologies, Renored is committed to networks that are designed from the outset to be climate-neutral, without intermediate phases supported by gas or oil derivatives.
Technical and regulatory requirements of projects
In addition to the conditions regarding power and energy sources, the projects must comply with a series of technical and regulatory requirements which seek to guarantee their efficiency, safety, and environmental traceability. Among the most relevant requirements are the following:
- employment of equipment with energy labelingThis allows us to identify its level of efficiency and ensure adequate performance.
- Application of the best available technology in each case, avoiding obsolete or low-performing solutions.
- Installation of energy and environmental monitoring systems, that facilitate the monitoring of consumption, network performance and its environmental impact.
- Compliance with the requirements of Regulation of Thermal Installations in Buildings (RITE) where applicable, both at the central plant and in the connections to the supplied buildings.
These conditions aim to ensure that the financed infrastructures are not only renewable in terms of the origin of their energy, but also robust from a technical point of view and aligned with current regulationsMonitoring, in particular, will provide objective data on the actual behavior of the networks and their contribution to reducing emissions.
The requirement that the facilities be fully completed before June 30, 2029 It also requires careful planning of the design, administrative processing, construction, and commissioning phases. Any significant delay could jeopardize meeting deadlines and, consequently, access to the granted aid.
Call structure: two separate programs
To tailor support to the nature of the various potential beneficiaries, the Renored call for proposals is structured as follows: two very different programs:
- Program 1: geared towards beneficiaries who develop economic activity, with a staff of 40 millones de euros.
- Program 2: aimed at sectors without economic activity (for example, certain public administrations or non-profit organizations), endowed with 10 millones de euros.
This separation allows for adjusting the intensity of aid and applicable limits according to the type of entity and the current State aid framework. Companies, for example, are usually subject to specific rules on competition and public aidwhile entities without economic activity may have more leeway to receive non-repayable funding.
In both cases, the call for proposals states that the grants will be awarded no-lossThese incentives are conditional upon achieving the objectives and the proper execution of the investments. This approach reduces the initial financial burden on the developers and facilitates the viability of projects with a strong public interest component.
Intensity of aid, economic limits and territorial bonuses
La intensity of aid It varies depending on the program and the type of beneficiary. In general, the expected percentages are as follows:
- For 1 program (economic activity), a basic allowance is set for 35% of the eligible investment.
- For 2 program (sectors without economic activity), the intensity reaches 70% of the eligible costs.
Several things are applied to these percentages. additional increases, aimed at favoring certain beneficiary profiles and locations:
- The small companies They can get an extra 10% on top of the level of assistance they are entitled to.
- The medium businesses They have an additional 5% increase.
- The projects located in municipalities facing demographic challenges and/or undergoing a just transition They can add an additional 5%.
In this way, a project well-suited to program 2 and located in a priority municipality could achieve very high levels of funding, thus facilitating the viability of initiatives in areas with less investment capacity. This approach introduces a territorial and social dimension in the aid policy, linking it with the fight against rural depopulation and the reconversion of areas affected by the closure of fossil fuel facilities.
In parallel, several are established economic limits To ensure a balanced distribution of funds: each project and beneficiary may not exceed 15 million euros in aidand a minimum investment of 450.000 euros in order to participate. These thresholds aim to prevent both projects that are too small and initiatives that, due to their size, could consume a disproportionate share of the available budget.
Project evaluation and selection criteria
The granting of aid will be done through a process of competitive competitionIn this process, only the highest-scoring applications will ultimately be awarded the contract. The evaluation criteria combine economic, business, territorial, and social variables, with the following approximate weighting:
- Economic criteria (70% of the score): aspects such as the cost efficiency of the investment, the relationship between the aid requested and the renewable energy to be supplied, and other indicators of profitability and resource optimization are analyzed.
- Size of the company (10%): the aim is to encourage the participation of SMEs, which often have more difficulty accessing financing for large projects.
- Location in municipalities facing demographic challenges or undergoing a just transition (10%): It is positively valued that the network contributes to the reactivation of these areas.
- Supplying heat to vulnerable neighborhoods (10%): the social impact of the actions and their capacity to alleviate situations of energy poverty are enhanced.
This scoring scheme reflects the desire to reconcile the economic efficiency with objectives of social and territorial cohesionIt is not enough for a project to be energy-efficient; it is also rewarded if it reaches vulnerable groups and territories with special demographic or employment difficulties.
Once the applications have been reviewed and the call for proposals resolved, the beneficiaries will receive the aid definitively. after verifying the execution of the projects and certifying the investments madeThe regulations establish control mechanisms to verify that the actions have been carried out in accordance with the commitments made and the documentation submitted in the application.
Payments, advances and conditions for collecting aid
The financial design of the call for proposals stipulates that the grants will be no-lossHowever, these payments are contingent upon strict compliance with the technical, economic, and deadline conditions. The principal payment will be made once IDAE has verified that the facilities are completed, operational, and compliant with the established requirements.
To facilitate the execution of large-scale projects, the call allows the Request for advances of up to 80% of the amount grantedThese advances can be key for companies and entities that would otherwise have difficulty covering the entire investment until receiving the final aid.
The possibility of advance payments is accompanied, however, by obligations of justification and guarantees in accordance with European fund management regulations. This aims to strike a balance between providing liquidity to projects and ensuring the proper use of public resources, especially when it comes to funding from NextGenerationEU.
In any case, the final charge is conditional upon certification that the network complies with the power requirements, renewable sources, monitoring and deadlinesas well as the proper documentation of eligible costs. Significant non-compliance could result in full or partial repayment of the aid.
Alignment with the 2023-2030 National Integrated Energy and Climate Plan (PNIEC) and climate objectives
The second Renored call for proposals is integrated into the component 31 of the PRTR and it fits directly within the objectives of National Integrated Energy and Climate Plan (PNIEC) 2023-2030This plan sets ambitious goals regarding the penetration of renewables, the reduction of emissions and the improvement of energy efficiency, with special attention to the building sector and public services.
The development of renewable heating and cooling networks contributes to progressively reduce the energy demand of buildingsby optimizing energy use and enabling the incorporation of advanced technologies. These infrastructures also help to reduce dependence on fossil fuels imported, reinforcing the country's security of supply and energy independence.
Another relevant aspect is the promotion of high-efficiency technologies and collective self-consumption solutionsThis is especially true when the networks are integrated with local renewable energy facilities (for example, utilizing locally produced biomass or geothermal resources). This also boosts the local economy related to forest management, energy services, and infrastructure maintenance.
Taken together, the program is configured as one more piece within a broader puzzle of measures aimed at climate neutrality in the medium term, in line with European strategies and international commitments on climate change.
Experience from the first call for proposals and the role of biomass
The current edition of Renored is backed by the accumulated experience in the first call, in which they were granted 34 million euros to 20 projectsThat round of aid was concentrated especially in autonomous communities such as Catalonia, Castile and León and Castile-La Mancha, where several heating networks with a strong renewable component were developed.
In that initial phase, the Biomass became established as the predominant technologyTaking advantage of the availability of forest and agricultural resources in many rural and peri-urban areas, biomass boilers for district heating networks have proven to be a mature and relatively competitive solution, especially when integrated with good fuel supply logistics and ensuring the sustainability of forest stands.
This second call opens the door to consolidate and diversify The model also allows for projects that focus on geothermal energy, large-scale solar thermal energy, or other emerging renewable technologies. Combining different sources and integrating them with thermal storage systems can enable more flexible networks, better adapted to the specific characteristics of each region.
The assessment of the first edition suggests that the aid has acted as lever for projects that would otherwise have taken longer to materializeThe continuation of the program with this new call indicates that the Government considers these infrastructures as a strategic element in the energy transition, especially in areas with sufficient thermal demand density.
With this entire framework of conditions, economic incentives, and results-oriented approach, the second call for proposals for renewable heating and cooling networks under the Renored program is shaping up to be a significant opportunity for municipalities, energy service companies, and public and private entities that want to invest in decarbonized collective thermal infrastructuresThe success of the initiative will depend, to a large extent, on the promoters' ability to design technically sound, socially useful projects that are aligned with the deadlines set by the PRTR and the PNIEC.