Portugal: Legal Framework of the Portugese Electricity System


published on 15 March 2022 | Reading time approx. 4 minutes

The new decree-law was published establishing the new legal regime of the Portuguese Electricity System. According to the preamble of the Decree-Law in question, the new legal regime aims to adapt the Electricity System to the objectives to be achieved with the National Integrated Energy and Climate Plan (PNEC 2030).

There are three administrative procedures of prior control to be submitted to the Energy and Geology General Direction (DGEG): 
  • production and operation licenses; 
  • prior registration and operation certificate; 
  • prior communication. 
The submission to one of these procedures depends not only on the type of generating center, but also on the amount of energy produced.
There are activities for which this prior control is no longer necessary, namely the exercise of electricity produc­tion for self-consumption with an installed capacity equal to or less than 700 W, as long as the injection of the exceeding amount into the Public Electricity Supply Network (RESP) is not foreseen.
In order to start the aforementioned administrative procedures, it’s required a prior attribution of a capacity reservation certificate (TRC). In this matter there are also excluded activities: production units for self-consump­tion which do not inject more than 1 MVA, hybridization projects, over equipment and retrofitting (article 18º n. º 3). 
In all the other cases, the TRC can be issued through tree different forms: the agreement, the general and the bidding procedure form. The general regime is based on a network availability map to be published by the DGEG on its website within five months.
In this regime, after the capacity request is accepted it’s necessary to deposit 10,000 Euros per MVA within 20 days. In addition, the issue of the TRC requires a prior payment of compensation to the National Electricity System, in the amount equivalent to 1,500.00 Euros per MVA. On the other hand, in the agreement regime the TRC comes from an agreement with a network operator. The basis for the request of the agreement must be the quotas made available by the government by 15 January each year. 
The requests to enter into an agreement are submitted by 15 March to the DGEG. In the time of the submission of this application, the security deposit must be provided:  15,000.00 Euros per MVA of reserve capacity to be allo­cated, subject to a maximum of 10,000,000.00 Euro, for a period of 24 months.
The agreement itself is the proper TRC and it stablishes the rights, obligations, the injection capacity assigned and the payment plan. The relevant criteria in this regime for the attribution of the TRC have been defined in the article 20 º n. º5, however, the DGEG must densify them every year.
With the celebration of the agreement, the payment of the amount corresponding to 5 percent of the budget value presented in the project has to be provided. 95 percent of the budget value will be collaterally secured and therefore released at the time the project is completed.
The requests that already obtained a final classification are safeguarded and just have to respect the deadlines established in the decree-law (for the future). Pending applications cease to have an effect, but may be resub­mitted, article 14º.
The bidding procedure regime depends on the will of the government responsible for the department of energy. Upon its determination, a competitive procedure may be launched for the allocation of the TRC. This title is issued by the operator of the RESP and it’s ruled by the managing authority of the procedure. 
In this case, the scope of the norm is directly applicable to the production of electricity from renewable sources and is open to all the parties that meet the defined requirements. 
It is perhaps important to draw attention to the deadlines for applying for the respective licenses, since the consequences of not complying with them can be quite serious (the TRC expires): When the licensing proce­dure requires an environmental impact assessment the production license must be applied for within a maxi­mum period of one year from the moment the TRC was issued. If this assessment is waived in the adminis­tra­tive procedure for obtaining the license the time limit will be six months from the time the TRC was issued. From the moment the production license is issued, the electricity generation center has one year to apply for the production license.
The possibility of transmission of the TRC is established upon the fulfillment of certain requirements (article 18º n. º 8, 9, 10 e 11): 
  • Until the moment of issuing the production license; 
  • It must be done by an endorsement on the title; 
  • Depends on the reinforcement of the deposit in half of its value. The only exception occurs when the trans­mis­­sion goes to an SPV especially formed for the project and the shareholders are the sole holders of the TRC. 
In this new legal regime, the power stations with a power capacity greater than fifty MVA are required to provide to the municipalities where they are located, once only and free of charge an UPAC with an installed power equi­valent to 0.3 percent of the power connection of the power station – for installation in municipal buildings or equip­ment for collective use or, by indication of the municipality, to the populations living near the center or electric vehicle charging stations located in public spaces.
Power stations with power equal or inferior to fifty MVA and superior to 1 MVA will have to compensate only once, in cash, the value of 1500 Euros per MVA. The compensation does not apply to power units for which the prior control procedure was initiated before this regime entered to force.
All power producers must submit a shutdown plan that explains the measures to be adopted when removing equipment and installations connected to the RESP. With this measure the goal is to minimalize possible environ­mental impacts. Having in mind the mentioned aim, the projects which were already obliged to prepare this plan within the scope of the administrative procedure are excluded from the scope of this norm (article 40º n. º 5). The present information does not dismiss a further analysis of the law and the concrete appli-cation to the given case.
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