The government recently presented its 2019 Budget Law Proposal, which includes several measures for the energy sector. As per the proposal, energy sector extraordinary contributions will be levied on generators operating renewable energy power plants licensed under the guaranteed remuneration scheme, which to date had been exempted from paying such contributions.
Pursuant to the State Budget 2017, the liquefied petroleum gas, petroleum-derived products and biofuels sectors, which were previously under the National Fuels Market Authority's supervision, are now subject to the Energy Services Regulatory Entity's (ERSE's) supervision. Minor changes have also been made to the ERSE's consulting bodies.
With the increasing number of projects being licensed under market rules, renewable energy generators are now faced with energy trading under organised markets, without a traditional power purchase agreement with the off-taker. The new reality of operating without a feed-in tariff is challenging – particularly as regards meeting bankability requirements. However, stakeholders are exploring alternatives.
The 2018 state budget amended Article 33-F of Decree-Law 172/2006, which establishes the criteria that applicants must fulfil to generate electricity via renewable and non-renewable endogenous resources on a market basis in order for the licensing authority to grant a generation licence or accept a prior notification. The amendment aims to establish new rules for when the relevant network has insufficient capacity to support the additional load that results from requests submitted to the licensing authority.
The government recently approved a decree-law which establishes the legal framework for medium, high and low-voltage private service electrical facilities powered by the public service electric network and temporary and itinerant self-generation facilities. The law will enter into force on January 1 2018 and revoke the Electrical Facilities Licensing Regulation, as amended, but only with regard to the provisions applicable to private service electrical facilities covered by the new framework.
The special and extraordinary legal regime for the construction and operation by municipalities, inter-municipal associations and municipal associations of biomass plants for specific purposes was recently approved by way of a decree-law. However, the regime has not been fully implemented, as the government must decide on the terms of the licensing procedures and the remuneration of energy generated by biomass plants licensed under the new regime.
Decree-Law 38/2017 recently created the Logistics Operator for Switching Electricity and Gas Supplier (OLMC), which will be responsible for ensuring that consumers can switch their electricity and natural gas suppliers in a swift and simple manner using transparent, non-discriminatory, standard and digital procedures. The OLMC will also enable consumers to access information concerning applicable energy tariffs and prices and their rights and obligations in the switching process.
In Portugal, the most contentious energy projects are those that have or may have a social and environmental impact and which involve the construction of large-scale energy infrastructure. Although uncommon, opposition may arise when environmental impact statements are challenged by environmental organisations and local communities and where local communities advocate that the project should be subject to such an assessment.
A recent ministerial order has approved the reimbursement of public funds granted to generation facilities included in the special regime (generally, renewable energy promoters) which are receiving or have cumulatively received guaranteed remuneration (ie, feed-in tariffs) from the last resort supplier of the national electricity system. This measure aims to reduce the tariff deficit and future costs, with the ultimate goal of ensuring the sustainability of the national electricity system.
A recently published ministerial order details the terms and conditions applicable to the attribution of energy injection capacity at certain points of the national electricity grid within the special regime of licensed cogeneration production. The order is part of the strategy to promote high-efficiency cogeneration and encourage the decentralised production of energy in the European Union.
A call for applications for funding under the Promotion of Electric Efficiency Programme (PPEC) was recently announced. The PPEC provides funds for electricity consumption efficiency projects following a competitive tender process. Eligible projects include those which aim to reduce the consumption of electricity in a measurable manner or to encourage more sensible electricity consumption.
MIBGAS – the natural gas exchange which combines the Portuguese and Spanish markets – recently held the first trading session for its spot market. The exchange aims to foster the transparency of natural gas prices and enhance market liquidity. It is an important milestone in the gradual integration of the natural gas markets in Portugal and Spain and the construction of the internal EU natural gas market.
Decree-Law 194/2015 has introduced a number of changes to the legal framework for the energy performance of buildings and the restoration of buildings built over 30 years ago or located in areas of urban renewal that are used mainly for housing. The changes aim to increase the demand for energy efficiency, which may prove crucial in achieving the 2020 national energy efficiency targets.
In line with the liberalisation of the market for charging points for electric vehicles, two recent ministerial orders detail the licensing requirements applicable in this regard. As a result, there is now a legal framework to promote competition among charging point operators which the government hopes will definitively boost electric mobility in Portugal.
Decree-Law 94/2014 set out the rules for licensing the increased capacity of wind farms. It also determined that several aspects of the new legal framework would require further development by ministerial order. Accordingly, a recent ministerial order has established detailed rules regarding the licensing procedure and requirements applicable to increasing the capacity of wind farms.
A new law recently entered into force which has repealed the previous regimes applicable to mini and micro-generation of electricity. The new regime covers the generation of electricity for self-consumption through units which may or may not be connected to the public energy grid, as well as generation through small units whose output is exclusively intended for sale to the public energy grid.
The Council of Ministers recently adopted two decree laws on the implementation of a national natural gas system. The measures revise the corporate structure of the energy sector and its public service concessionaires, introduce new pricing mechanisms and address the issue of security of supply.
The Portuguese government has put in place a series of incentives and measures to encourage investment in renewable energies, and the sector is developing as a result. However, it will be extremely difficult to meet the country's renewable energy targets if the licensing procedure is not made more flexible by dismantling bureaucratic hurdles.
After successive advances and setbacks, Portugal and Spain have signed an agreement setting up the Iberian Electricity Market (MIBEL). Government authorities hope that end consumers will be the greatest beneficiaries of an open market, which should result in better electricity services, lower prices and higher supply guarantees.
Two recent decree-laws recognize that the Portuguese Electricity Regulation Framework must continue to evolve in order to adapt the national electricity system to a market regime which is open to competition. To this end, they set out the conditions for the commercialization, import and export of electricity within a market regime.