The Liberalisation of Portuguese Energy Market

Profession:Macedo Vitorino e Associados


Portuguese Government noticed the approval of the energy market liberalisation legal framework.

On 18 June 2003, Portuguese Government noticed the approval of the legal framework on the energy market liberalisation. This new legal framework sets, among other things, (i) the immediate access of those consumers connected to the National Grid (Grid) in Very High Voltage (VHV), High Voltage (HV) and Medium Voltage (MV); and (ii) the access of Special Low Voltage (SLV) consumers to the Grid beginning as from January 2004, and to the remaining Low Voltage (LV) consumers on July 2004.

1. Generation

The electricity generators currently integrated at the Public Electric System must sell all their production to the Grid under the terms and conditions set forth in the long-term power purchase agreements (Contrato de AquisiÁ„o de Energia - CAE).

This evolution toward a liberalized electricity market will involve the termination of these agreements, along with the relevant compensation to be paid (Costs of Contractual Balance Maintenance) as the expected revenues do not ensure the full coverage of the investments made in this context.

2. Trading

Electricity is currently distributed to final consumers by (i) EDP DistribuiÁ„o using energy supplied by those generators bounded to the Public Electric System; (ii) EDP DistribuiÁ„o using energy generated from renewable sources or in cogeneration installations, supplied by those generators bounded to Public Electric System; and (iii) independent generators, trough bilateral contracting.

The new legal framework creates a...

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