In short.
- There is no single decommissioning bond for the whole of Spain: it is required by regional rules, each with its own basis of calculation and its own beneficiary. In Catalonia it is set by the decision approving the specific action project according to the actual cost of decommissioning (Decree-Law 16/2019, art. 19); in Andalusia, by the decommissioning project submitted with the planning licence application (Law 2/2007, art. 12.1.a).
- The Catalan and Valencian regimes apply to installations within regional competence: in Catalonia, wind farms and solar PV plants of more than 500 kW and up to 50 MW on non-developable land (Decree-Law 16/2019, art. 6.1); in the Valencian Community, those authorised by the Generalitat, excluding those of more than 50 MW or extending beyond its territory (Decree-Law 14/2020).
- The Valencian Community sets the most precise rule: for solar PV plants, the highest of three amounts —3% of the material execution budget, the budget of the decommissioning plan or €20,000 per MWp—, with a minimum term of five years, renewal two months before expiry and a CPI update every five years (Decree-Law 14/2020, art. 37.2).
- It is cancelled once the holder evidences that it has decommissioned and restored the site (Valencian art. 37.5). Until then it stays with the asset throughout its useful life: how it is provided (bank guarantee, surety bond or another accepted form) shapes the holder's financial capacity for decades.
The decommissioning bond for a solar PV plant is not posted when the installation closes, but before it starts operating. In Catalonia, until it is provided, the specific action project (proyecto de actuación específica) has no effect, and if it is not provided within the deadline, its approval lapses (Decree-Law 16/2019, art. 19.2).
For the finance function of a developer or an independent power producer, that changes the approach. This is not an end-of-life formality to be dealt with in thirty years' time: it is a condition of the authorisation, negotiated during the development phase, sitting alongside the grid access and construction guarantees, and absorbing financial capacity throughout operation.
What is a decommissioning bond and why do Spanish regions require it?
The underlying obligation is simple to state: when the activity ends, the holder must dismantle the installation and return the land to its original condition. This is established, in different wording, by article 19.1 of Catalan Decree-Law 16/2019, article 36.1 of Valencian Decree-Law 14/2020 and article 12.1.a of Andalusian Law 2/2007. The guarantee secures that obligation against default: if the holder does not decommission, the authorities have a sum with which to do so.
Competence over town planning, land-use planning and the authorisation of installations of up to 50 MW lies with the regions (comunidades autónomas), which is why each has built its own regime. This article focuses on three verified regional regimes —Catalonia, the Valencian Community and Andalusia— as examples of how the requirement varies. Plants of more than 50 MW are authorised at national level and fall outside the Catalan and Valencian regimes described here: for them, the decommissioning guarantee must be checked in the conditions of their authorisation and their licence. If your project is in another region, the starting point is that region's planning and energy legislation.
The decommissioning bond belongs to a wider family of mandatory financial guarantees, and has environmental neighbours with which it should not be confused, such as the financial guarantee for waste.
Not to be confused with the grid access and connection guarantee
The guarantee posted to process grid access and connection (Royal Decree 1183/2020) is a different obligation, with a different purpose and a different beneficiary. We cover it on our page on insurance for energy companies.
Nor with the environmental financial guarantee
The financial guarantee under Law 26/2007 on Environmental Liability answers for environmental damage, not for dismantling the plant. We explain how it works in environmental liability insurance.
Catalonia: a guarantee set by the actual cost of decommissioning
Article 19 of Decree-Law 16/2019, as worded by Decree-Law 22/2025, requires the developer of a wind farm or a solar PV plant to restore the land to its original condition at the end of the activity and to provide a sufficient guarantee to secure it. The regime applies to installations of more than 500 kW and up to 50 MW located on non-developable land (suelo no urbanizable) (art. 6.1).
The main features of the Catalan regime are these:
- Accepted forms: those provided for in public procurement legislation. In other words, the same forms accepted in public procurement that are used for guarantees under contracts with public authorities.
- Beneficiary: the guarantee is held at the disposal of the regional department responsible for town planning.
- Amount and term: both are set by the decision approving the specific action project, and the amount is determined according to the actual cost of decommissioning. The guarantee is also recorded in the substantive energy authorisation.
- Added storage: where storage is added to an existing farm, the amount is updated to include the cost of decommissioning that storage as well (art. 19.1, second paragraph). This is a relevant point for battery hybridisation projects.
The consequence of not providing it is set out in paragraph 2: the specific action project does not take effect until the guarantee is provided and, if it is not provided within the set deadline, its approval lapses.
Valencian Community: the highest of three amounts
The Valencian regime applies to solar PV plants and wind farms authorised by the Generalitat: those with installed capacity above 50 MW or extending beyond the territory of the Valencian Community are excluded (Decree-Law 14/2020).
Decree-Law 14/2020 structures the regime in three pieces. The single decision under article 30.1.e approves, among other matters, the decommissioning and restoration plan; article 36 imposes the obligation to decommission and restore; and article 37 governs the guarantee, which is provided for the amount stated in that decision (art. 37.1).
For solar PV plants, article 37.2 sets the amount as the highest of these three figures:
- 3% of the project's material execution budget (presupuesto de ejecución material).
- The budget of the decommissioning and restoration plan.
- €20,000 per MWp installed.
Illustrative example: for a 40 MWp plant, the MWp criterion produces a floor of €800,000. If 3% of the material execution budget or the plan budget gives a higher figure, that figure applies. The actual amount is set in the decision for each installation.
The same article governs the life of the guarantee:
- Minimum term of five years, with an obligation to renew it at least two months before expiry, throughout the useful life of the installation.
- Update every five years in line with the Spanish national CPI (IPC), and the update may not result in a reduction of the amount.
Wind farms
For wind farms, article 37.3 refers to article 17 of the rules of the Valencian Community Wind Plan (Plan Eólico de la Comunitat Valenciana). The specific conditions must be checked in those rules and in the authorisation decision for each farm.
A word of caution on currency: article 37.2 has changed four times since 2024 (Decree-Law 7/2024, Law 6/2024, Decree-Law 14/2025 and Law 3/2026). The figures quoted are those of the wording in force since 3 July 2026, current at the date of publication of this article; the original 2020 wording was different and no longer applies.
Do you have plants in several regions with different guarantees? We review the conditions of your authorisation.
Andalusia: a guarantee tied to the planning licence
In Andalusia, article 12.1 of Law 2/2007 treats renewable energy projects on rural land (suelo rústico) as ordinary actions of limited, though renewable, duration, no shorter than the investment payback period (art. 12.1.a). When they end, the holder must return the land to its original condition.
The guarantee is provided for the amount of the decommissioning project submitted together with the application for the municipal planning licence, and is intended to cover the costs in the event of default (art. 12.1.a). Under article 12.1.c, it is provided in favour of the municipality where the project is located, its amount is set by the town council, and it falls due when the licence is granted.
It should not be confused with another mechanism in the same article. Article 12.1.b provides for a non-tax public financial charge (prestación patrimonial de carácter público no tributario) for the temporary use of rural land of up to 10% of the planned investment, excluding machinery and equipment; town councils may set lower percentages by by-law (art. 12.1). It is a payment for the use of the land, not a guarantee.
How is the amount calculated? The decommissioning plan as the basis
Under all three regimes, the technical decommissioning document is the reference for the amount, although each region combines it with different criteria. Data verified against the consolidated texts in the Spanish Official State Gazette (BOE) as at 12 October 2026:
| Catalonia | Valencian Community | Andalusia | |
|---|---|---|---|
| Scope | Wind and solar PV of more than 500 kW and up to 50 MW on non-developable land (art. 6.1) | Solar PV and wind authorised by the Generalitat; excludes those above 50 MW or extending beyond the region | Renewable energy projects on rural land (art. 12.1) |
| Basis of calculation | Actual cost of decommissioning (art. 19.1) | Highest of 3% of material execution budget / plan budget / €20,000 per MWp for solar PV (art. 37.2) | Amount of the decommissioning project submitted with the licence (art. 12.1.a) |
| Beneficiary | At the disposal of the department responsible for town planning (art. 19.1) | Energy body that authorised the installation (art. 37.4) | Municipality where the project is located; amount set by the town council (art. 12.1.c) |
| Timing | Set by the decision on the specific action project; no effect without it (art. 19.2) | For the amount in the single decision (arts. 30.1.e and 37.1) | Falls due when the municipal planning licence is granted (art. 12.1.c) |
| Form | Those of public procurement legislation (art. 19.1) | Those accepted under its regulations (art. 37.4) | Not specified in the law: whatever the town council accepts |
| Update | When storage is added (art. 19.1, para. 2) | Five-yearly CPI update, never downwards (art. 37.2) | Not provided for in the law |
A decommissioning plan typically describes, in general terms, the removal of modules or turbines, structures and foundations, cabling and evacuation infrastructure, the management of the resulting waste and the restoration of the land. The cost depends on the design of each plant and the conditions of the site: there is no public reference figure per MW that applies to every project, and the amount can only be estimated from the plan for each installation.
Hybridisation and storage
The Catalan case deserves specific attention. If you add batteries to an existing farm, the guarantee amount is updated to include their decommissioning. In practice, hybridisation opens a new procedure on the guarantee, which should be built into the project's timetable and financing.
Ways to provide it: bank guarantee, surety bond or other accepted forms
As the table shows, each set of rules refers to a different regime of accepted forms. Before choosing, check in the conditions which instruments the beneficiary body accepts.
Common options include a cash deposit, a bank guarantee and a surety bond. The difference is not minor for a developer: the decommissioning bond adds to the access and connection guarantee and to the construction guarantees, and they all tend to accumulate on the same bank facility. We set out the substantive differences between the two instruments in bank guarantee vs surety bond.
Duration also matters. The Valencian rule of five-year renewable terms fits instruments of limited duration that are renewed periodically, provided the two-month notice period is respected and the amount is updated when required. Issuing a surety bond depends on the insurer's solvency assessment of the holder: neither acceptance nor cost is guaranteed in advance.
Access, construction and decommissioning guarantees all add up on your facility. Let us discuss how to structure them.
When is it cancelled, and what happens if the plant is not decommissioned?
In the Valencian Community, the guarantee is cancelled when the holder evidences that it has fulfilled the obligation to decommission and restore (art. 37.5). That obligation is incorporated into the decision on the final closure of the installation (art. 36.2). In the other two regions, release is governed by the conditions of the authorisation or the licence.
If the holder defaults, the guarantee answers for the costs: the Andalusian law says so expressly (art. 12.1.a, "in the event of default"). Where the instrument is a surety bond, we explain the procedure by which the authorities call on it in surety bond claims.
One final point, relevant in corporate transactions. In Catalonia, the transfer of authorisations requires prior authorisation, whereas the transfer of shares or holdings in the holding company does not (Decree-Law 16/2019, art. 21.1). If the authorisation is transferred, the acquirer is subrogated and must provide a new restoration guarantee replacing the previous one (art. 21.5), and the transfer only takes effect once it has done so (art. 21.3); if shares or holdings are acquired, the guarantee remains that of the company. In any sale or purchase of a renewable asset, the decommissioning bond —who has provided it, in whose favour, for what amount and until when— should be reviewed in the due diligence.
The role of an independent broker
A renewable project accumulates guarantees by phase: access and connection, construction and decommissioning, each with its own beneficiary, term and renewal regime. As an independent brokerage registered with the Spanish DGSFP under reference J0140, we act on the client's mandate, not the insurer's. We inventory the live guarantees for each installation, review the conditions before authorisation to establish which instruments the authority accepts, place the surety bond in the market and monitor the milestones that leave no room for oversight: the Valencian two-month notice period and the CPI update.
We will review your guarantee programme by project phase without obligation: sizing, placement and monitoring of renewals and cancellations.
Frequently asked questions
How much is the decommissioning bond for a solar PV plant in the Valencian Community? For plants authorised by the Generalitat (up to 50 MW), the highest of three amounts: 3% of the material execution budget, the budget of the decommissioning and restoration plan, or €20,000 per MWp (Decree-Law 14/2020, art. 37.2, in the wording in force since 3 July 2026).
How often must the decommissioning bond be renewed? In the Valencian Community, the guarantee has a minimum term of five years and must be renewed at least two months before expiry, throughout the useful life of the installation. It is also updated every five years in line with the CPI, and the amount may not go down.
What happens if we add batteries to a solar farm that already has a guarantee? In Catalonia, the amount is updated in the report of the Territorial Planning Commission (Comisión Territorial de Urbanismo) to include the cost of decommissioning the storage (Decree-Law 16/2019, art. 19.1).
Is the 10% paid in Andalusia the decommissioning bond? No. It is a public financial charge for the temporary use of rural land, of up to 10% of the investment excluding machinery and equipment, and town councils may set lower percentages (Law 2/2007, art. 12.1). The guarantee is calculated on the amount of the decommissioning project (art. 12.1.a).
When is the decommissioning bond returned? In the Valencian Community, when the holder evidences that it has decommissioned the plant and restored the land (art. 37.5). In Catalonia and Andalusia, according to the conditions of the authorisation or the licence.
Sources and legislation
- Decree-Law 16/2019 (Catalonia), Decreto ley 16/2019, de medidas urgentes para la emergencia climática y el impulso a las energías renovables (urgent measures for the climate emergency and the promotion of renewable energy), articles 6, 19 (as worded by Decree-Law 22/2025) and 21. Consolidated text consulted on 12-10-2026.
- Decree-Law 14/2020 (Valencian Community), scope of the title on solar PV plants and wind farms, and articles 30.1.e, 36 and 37 (art. 37 in the wording in force since 3-7-2026). Consolidated text consulted on 12-10-2026.
- Law 2/2007 (Andalusia), Ley 2/2007, de fomento de las energías renovables y del ahorro y eficiencia energética (promotion of renewable energy and energy saving and efficiency), article 12.1. Consolidated text consulted on 12-10-2026.
- Royal Decree 1183/2020 on access and connection to electricity transmission and distribution networks (cited only to distinguish the access guarantee).
The amount, term and accepted instruments are set by the authorisation decision or the licence for each installation; this guide describes the legal framework of three Spanish regions at the date of publication. The numerical example is illustrative. Issuing a surety bond is subject to the insurer's solvency assessment and to the terms of the policy. This information is for guidance only and does not constitute legal advice. New Brokers Correduría de Seguros, S.L., registered with the DGSFP under reference J0140.
