Projected Costs of Generating Electricity - OECD Nuclear Energy ...

Portugal
Legislative framework
Current organisation of the electrical system
The national electric system consists of a public electricity system and an independent electricity
system. In the public electricity system generation, transport and distribution activities are undertaken
under a public service regime, which is linked to the obligation of supplying electricity with adequate
service quality standards and with the principle of uniformity of tariffs across the country.
Within the public electricity system, the commercial relationship between generation companies and
the transmission company is based upon Power Purchase Agreements, which oblige the generators to
sell all the electricity to the transmission company. The binding distributors are obliged to enter into a
binding contract with the transmission company under which they guarantee to acquire most 17 of the
energy and to supply customers in accordance with tariffs and conditions established by the energy
services regulator.
Within the independent electricity system is the non-binding system, as well as the special regime
producers. The non-binding system is a market-based system that enables unrestricted access to generating
and supply activities, and in which the market agents are entitled to use the public system transport
and distribution infrastructure against the payment of the respective tariffs. All customers with contracted
capacity demand above 41.4 kW are free to choose their electricity supplier. The regulator is preparing
the necessary regulations to extend, as soon as possible, this ability to all customers.
The special regime includes cogenerators, small hydroelectric producers (under 10 MW of installed
capacity) and producers using other renewable energy sources. These producers sell their energy under
specific legislation and are remunerated on the basis of costs avoided by the Public System, complemented
by an environmental premium that reflects the benefits stemming from the use of renewable energies.
The Iberian market
As a result of the Lisbon Council of Europe held in March 2000, the Portuguese and the Spanish
governments recognised the need for an Iberian electricity market, a regional market that would be a step
towards the creation of the European electricity market. By the end of 2001, the Portuguese and the
Spanish Governments signed a co-operation agreement, which establishes stages and procedures for the
convergence of the two electricity systems.
The Iberian electricity market will be organised in two complementary systems:
● Bilateral contracts freely established between the parties;
● Contracts organised through the Iberian market operator, in which management of the daily and
intraday markets will be in the hands of the Spanish pole and management of the forward markets
will be the responsibility of the Portuguese pole.
The beginning of MIBEL is planned for mid 2005 and implies the modification of the legislative framework,
now in progress, in order to bring the structure and exploitation of the national electric system in
line with a competitive market regime.
17. At present, the binding distributors can buy up to 8% of their electricity needs from other companies.
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