Although the Royal Decree that regulates it was approved at the beginning of 2023, the reality is that the market has really started to roll out on a massive scale only recently. Companies, verifiers and Delegated Subjects have spent the last few years adapting to the platform, and it is now that the volume of operations has skyrocketed, consolidating the industry as the main driver of the system (concentrating more than half of the savings generated).

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What is the CAE System?

The CAE System is a market mechanism that allows transforming each kilowatt hour saved into an asset with economic value. The equivalence is direct: 1 CAE = 1 kWh saved in a year.

Unlike traditional public subsidies (often subject to long resolution periods, complex bureaucracy and competitive tendering), the CAE operates under a private market model. Companies that make an investment that reduces their energy consumption can sell those savings (the CAEs) to Obligated Parties (energy marketers, who need to buy them to comply with their legal savings obligations) or to Delegated Subjects (accredited intermediaries), obtaining a direct economic consideration.

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Impact on competitiveness

For industrial companies, where energy represents one of the highest operating costs, the benefit of this system is twofold:

• Immediate cash injection: By negotiating the sale of savings with a Delegated Party, the company recovers a significant portion of the investment made shortly after the start-up of the project, drastically reducing thepayback period.
• Compatibility and tax advantages: In the vast majority of cases, this incentive is perfectly compatible with other lines of aid (unless the specific terms of a subsidy prohibit it). In addition, these investments often open the door to corporate income tax deductions for investments in environmental protection assets or accelerated depreciation of assets.

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What actions generate CAEs in a production plant?

The Ministry’s catalog divides the actions into two large blocks, covering from the most common improvements to customized engineering projects:

• Standardized Actions: These are measures that can be easily replicated and processed by means of pre-established technical sheets. In the factory environment, this includes the replacement of electric motors with high-efficiency equipment, the renewal of compressed air systems, the optimization of industrial boilers or the updating of lighting systems in warehouses.
• Singular Actions: These are larger projects designed to suit the plant. Clear examples are the recovery of waste heat from production processes for reuse in the line itself, or the replacement of process machinery with disruptive low consumption technologies. Although they require a specific measurement and verification methodology, the volume of kWh saved is usually very high, maximizing the economic incentive.

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How to activate a CAE project?

In order for a company to benefit from the system, the recommended procedure follows these steps:

• Pre-planning: Evaluate the potential savings before executing the investment. To ensure ownership of the savings, it is recommended to sign a CAEs agreement with a Delegated Subject prior to the completion of the works or the installation of the equipment.
• Execution and Verification: Once the technological improvement has been made, an independent and industrial verifying entity validates that the kWh savings correspond to reality.
• Monetization: The Delegated Subject processes the CAEs in the system and pays the company the economic consideration agreed in the contract.

The CAE System represents an excellent opportunity to undertake those pending technological renovations in the production plant, reducing long-term fixed manufacturing costs and improving the competitive position in global markets.