Portugal

Portugal

Portuguese parliament slams excessive payments to generators

The Portuguese parliament has approved a report calling for the government and regulators to curb excessive profits of electricity generators, including a €950 million alleged over-payment to EDP for guaranteeing supply from its Sines coal-fired plant.

Portugal's parliament is calling on the government to make retroactive changes to power deals (pic: Andrés Monroy-Hernández)
Portugal's parliament is calling on the government to make retroactive changes to power deals (pic: Andrés Monroy-Hernández)

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Within the wind sector, the report focused on the cost to consumers of a reform introduced in 2013, which guaranteed operators of older wind farms a price of between €69/MWh and €95/MWh between 2021 and 2027.

In return, the producers agreed to pay a voluntary contribution totalling €222 million up to 2020 to reduce the electricity deficit, built up from the difference between the costs of electricity production and the price paid by consumers.

The parliamentary report called on the government to return the voluntary contribution received plus interest and to scrap the cap and floor price commitment.

The renewables sector lobby group described the recommendation as "illegal and unconstitutional".

Reforming the 2013 legislation would prejudice investor confidence and the achievement of targets in the government’s 2030 energy and climate plan, APREN warned.

Jorge Costa, parliamentarian with the Left Bloc party and lead author of the report, told Windpower Monthly "much tougher reforms in other countries such as Spain have not prevented inward investment in renewables".

"It’s to be expected that private companies profiting from this arrangement would object but there is a question of public interest and social justice," he added.

Regarding the likelihood of the recommendations being implemented, he said the Portuguese government has previously shown "an obvious lack of will to introduce measures which really affect the interests of electricity producers."

However, "public opinion and parliament are now paying much bigger attention to these issues".

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