business plan for 2004 - EDP

1 ENERGY SECTOR
>> 1.1 Iberian Market – Portugal
>> 1.1.1 The National Electricity System
Organisation
The National Electricity System (SEN) is organised as
follows:
ERSE
SEN
SEP SEI
SENV PRE
In the Public Electricity Service System (SEP)
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. The principle
parties involved in the SEP are:
• The Binding Producers, which are on an exclusive basis
with the concessionaire of the National Transport
Network through long-term Energy Acquisition
Contracts (CAEs);
• Rede Eléctrica Nacional S.A. (REN), which is the
concessionaire of the National Transport Network
(RNT);
• The Binding Distributors who, by obtaining a binding
distribution licence, are obliged:
a) to enter into a binding contract with REN under
which they guarantee to acquire from REN the whole of
the contracted energy;
b) to supply customers with the electricity that they
contract, in accordance with tariffs and conditions
established by the Energy Services Regulator; and
• Binding Customers.
There are, in turn, two subsystems in the Independent
Electricity System (SEI):
• On the one hand, the Non-Binding Electricity System
(SENV), which is directed by market logic, in which
access to medium-, high-, and very high voltage
generating and supply activities is unrestricted, and in
which the market agents are entitled to use the SEP
transport and distribution infrastructure for the
physical transaction of energy against payment of the
respective tariffs; and
• On the other hand, there are the Special Regime
Producers (PRE), engaged in production in minihydroelectric
plants (up 10 MW) , in cogeneration and
in the generation of energy using renewable sources.
These producers make deliveries to the SEP network
under specific legislation and are remunerated on the
basis of costs avoided by the SEP, complemented by an
environmental bonus that reflects the benefits
stemming from the use of renewable energies.
Articulation of these System is undertaken by the Energy
Services Regulator (ERSE), in charge with:
• Supervising compliance with the SEP working rules
and of the relations between the SEP and the SENV;
and
• Regulating activities undertaken within the scope of the
SEP, namely fixing tariffs and prices of electricity and
other services provided by REN and by holders of
binding licences distributing to other licence holders or
customers.
Position of the EDP Group
The EDP Group is involved:
• At SEP, in:
a) generation, through CPPE, a company that is part of
EDP Produção, which holds about 82% of the SEP
installed generation capacity and minority investments
in the share capital of producers Tejo Energia and
Turbogás (10% and 20%, respectively);
b) transport, in which it holds 30% of REN; and
c) distribution, in which it holds EDP Distribuição, the
company responsible for medium and high voltage
binding distribution and concessionaire of low voltage
distribution;