business plan for 2004 - EDP

The involvement of the EDP Group in supply on the
SENV is managed through its subsidiary EDP Energia.
During 2003 the climate surrounding the business of EDP
Energia was not particularly propitious. On the one hand,
the market system’s competitiveness fell against that of
the public system, as a result of the prices charged on the
wholesale electricity markets and of the moderate growth
of the tariffs, established by ERSE, applied to the public
system. On the other hand, another competitor came into
the market.
Against this background, and taking into account the
opportunities and threats of the present stage of growth
of the Portuguese market and the future evolution
towards an Iberian market, EDP Energia concentrated its
activity on three areas:
• In the organisational area, stabilising and consolidating
the structure that had been prepared, particularly with
regard to Human Resources and Information Systems,
ensuring efficient management of available resources;
• In the supply area, developing a number of services
complementary to the supply of energy, so as to provide
the various market segments with a wide-ranging
service of excellence contributing to greater customer
loyalty and differentiated offer; and
• Abroad, setting up an electricity supply company based
in Spain (EDP Energia Ibérica), harmonising its
commercial position in certain market segments with
that of HidroCantábrico.
At the end of 2003, of a total of 2 620 customers with the
standing of non-tied customers, 1 919 were SENV
customers and 1 404 were EDP Energia customers.
Customers
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EDP Customers Customers in the SENV Customers with CNV Status
Both in generation and in supply the business increased
significantly in 2003 as a result of the increase of
hydroelectric production, of the growth of the number
of customers and of Trading business with the other
companies of SENV, of EDP Group and of
HidroCantábrico.
2003 - Annual Report - EDP
Electricity Sales
EDP Energia GWh
During 2003 EDP Energia consolidated its leadership as
electricity supplier in the SENV, achieving a market share
of 73% at the end of the year in terms of customers and
67% in terms of sales. This performance helped the EDP
Group to supply approximately 13% of the consumption
associated with eligible customers during 2003.
>> 1.2 Iberian Market – Spain
>> 1.2.1 Organisation and Regulation
Electricity Sector
2003 2002 Var. %
Electricity Generation (SENV + PRE) 296 111 167.0%
Electricity Supply (SENV) 2 724 644 323.2%
Very High Voltage 0 0 -
High voltage 45 78 (41.6%)
Medium voltage 2 679 566 373.3%
Market Share
EDP Energia
2003 2002
Sales GWh - SENV 4 048 100.0% 958 100.0%
EDP Energia 2 724 67.3% 644 67.2%
Other suppliers 1 324 32.7% 314 32.8%
Number of Customers - SENV 1 919 100.0% 493 100.0%
EDP Energia 1 404 73.2% 350 71.0%
Other suppliers 515 26.8% 143 29.0%
Directive 96/92/EC of the European Parliament and of
the Council was transposed ahead of schedule to the
Spanish electrical sector. This directive establishes
common rules for the internal electricity market as a
result of the publication of Law 54/1997 of November 27,
which is still in force and establishes, among other things,
the following basic principles:
• Introduction of competition in generation activity
through the following measures:
a) as from January 1, 1998 electricity generation in
Spain began to operate on the basis of free
competition in a system of offer of electricity by
producers and a system of demand by eligible
consumers, distributors and sellers. Electricity is
sold at the system’s marginal price plus a
complementary power and services component
required to ensure adequate supplies;
b) the setting up of new generation units was
liberalised, though they still have to secure the
necessary authorisations;