2022-09-12

Our Partner João Macedo Vitorino will be a speaker at the 4th edition of the Solarplaza Summit Portugal, on October 13, 2022, at 14h40. He will talk about "The opportunity of self-consumption" in Portugal. If you want to participate, book your ticket here.  

The event will take place at the Altis Grand Hotel, in Lisbon. 

 

Transition

In Portugal, electricity self-consumption is ruled by Decree-Law 15/2022. Self-consumption promotes electricity decentralized production from renewable sources. 

Energy self-consumption is the production of renewable energy by a final consumer through one or more production unit(s) for self-consumption (UPACunidade de produção para autoconsumo) in a facility owned by that individual that can store or sell in-house produced electricity of a renewable source.

Self-consumption can be:  

  • Individual, when the final consumer produces renewable energy for themselves; or
  • Collective, when the energy produced is to be consumed in two or more facilities of different self-consumers.

According to DGEG data: between 2016 and 2021, decentralized installed power increased by 66% and photovoltaic UPAC increased by around 90%. The use of UPAC from non-solar sources was almost non-existent.

 

Prior control

Both individual and collective self-consumption is subject to a prior control procedure which, depending on the installed capacity of UPAC, can be:

  • Production and Operation License: installed capacity greater than 1 MW;
  • Prior Registration and Operating Certificate: installed capacity greater than 30 kW and equal to or less than 1 MW; and
  • Prior Notice: installed capacity greater than 700 kW and equal to or less than 30 kW.

The distribution of spare RESP injection capacity determines if a Production License can be awarded or not. The license award depends on the payment of a security deposit obtained through (i) a general access request (when there is available capacity), (ii) a request-agreement between the interested party and RESP’s operator (the interested party should cover the financial costs of construction or improvement of the grid necessary for the reception of the energy produced by UPAC), or (iii) a competitive procedure.

Spare RESP injection capacity is not necessary where there is:

  • UPAC with surplus injection into RESP of less than 1 MW;
  • Hybridization by adding a new production unit to a UPAC that uses a different primary source of renewable energy, without changing the assigned injection capacity;
  • Over-equipment through the installation of more generating equipment or inverters in UPAC if it means an installed capacity of up to 20% of the assigned connection power; and
  • Retrofit by replacing the generating equipment totally or partially, without changing the deployment polygon, with a maximum increase of 20% of the power initially assigned.

Until April 19, 2024, the award of an Operation License or Operation Certificate is not necessary whenever the network operator verifies the existence of favorable conditions for connection. The exemption must be requested three years after that verification.

 

Energy sharing and trade

Energy sharing

EGAC must inform network operators about the desired sharing method of collective self-consumption, for distributing UPAC production between self-consumers. If EGAC stays silent, the network operator shares proportionally each installation based on measured consumption.

Energy sharing can be based on:

  • Fixed coefficients differentiated by working days, holidays, weekends, and/or seasons;
  • Variable coefficients based on hierarchy or on consumption measured in each period within the time frame established in ERSE regulations;
  • The combination of fixed and variable coefficients; and
  • The use of specific dynamic management systems, through monitoring, control, and dynamic energy management (being necessary to provide network operators with measuring equipment data and sharing coefficient).

Energy Trade

Both in individual or collective self-consumption, the surplus energy from non-consumed production can be sold and paid:

  • In an organized market or through bilateral contracting, for a previously agreed price; 
  • Through the market participant against payment of a freely agreed upon price; and
  • Through a market aggregator, who must purchase the energy produced by the producers.

Until the market facilitator license is granted, the last resort supplier (CUR) ensures the acquisition of the electricity which authorized power for injection into RESP does not exceed 1 MW.

The Government can also create support schemes for production from renewable energy sources, subject to competitive procedures.

 

Collective self-consumption

There are collective self-consumers (ACC), Renewable Energy Communities (CER), and Citizens' Energy Communities (CCE).

ACC is a group of at least two end consumers who share the energy produced by both or by only one of them, as well as RESP access costs. Joining can be possible or not. ACC organization is subject to the approval of internal regulations and the EGAC system manager appointment. ACC should be connected through RESP or the internal grid. In ACC, all self-consumers are jointly responsible for compliance with legal obligations.

DGEG must be informed of any internal regulations until 3 months after the beginning of operation of UPAC, to define, at least, the criteria for the free entry of new members and the withdrawal of participants, rules for sharing energy and payment of tariffs, commercial relations, and what happens to surpluses.

CER and CEE are legal persons, created when their members (natural or legal persons of public or private nature, mainly non-profit) join, open and voluntary. Management rules should be set in articles of association or internal regulations. Participants of CER and CCE must be consumers. CCE can also produce, distribute, trade, consume, aggregate, and store energy regardless of whether the primary source is renewable or non-renewable.

The proximity between UPAC and consumption facilities is mandatory for production activities. The distance cannot be greater than:

  • 2 km or for LV networks, they must be connected to the same transformer station; or
  • 4 km for MV connections, 10 km for HV connections, and 20 km for EHV connections.

 

Electro-intensive self-consumption

The Electro-intensive Customer Statute (Estatuto do Cliente Eletrointensivo - ECE) was ruled by Ministerial Order no. 112/2022, establishing obligations and support measures for consumption facilities that stand by this statute through a standard form contract to benefit from:

  • Partial reduction (minimum discount of 75% ) of CIEG levied on the global use of the system tariff, regarding the consumption of energy that comes from RESP
  • Total exemption from charges corresponding to CIEG levied on the global use-of-system tariff, for energy that is self-consumed and supplied through RESP;
  • Access to a risk hedging mechanism, at least 10% of the electricity consumption from renewable sources acquired through long-term contracts, with a minimum duration of five years (still subject to approval by the European Commission); and
  • Exemption from the application of the proximity criteria between UPAC and the location of the consumption installation.

Electricity consumers can subscribe to this statute if they:

  • Belong to one of the business sectors identified in Annex 3 or Annex 5 of the European Commission Communication 2014/C 200/01 on “Guidelines on State Aid for Environmental Protection and Energy 2014-2020”;
  • Have an EHV, HV, or MV connection to the grid;
  • Comply with the requirements established under the EU ETS or the Intensive Energy Consumption Management System;
  • Have an annual electricity consumption equal to or greater than 20 GWh and an annual consumption (in the normal off-peak and peak hours) equal to or greater than 40% of the annual electricity consumption; and
  • Have an annual electro-intensity level equal to or greater than 1 kWh/€ of gross value added (GVA), by the arithmetic average of the last three years.

 

How to join ECE

Requests to join ECE must be submitted to DGEG until June 15. They must include: 

  • Identification of the applicant;
  • Identification of the consumption installation;
  • Indication of the sector or sub-sector and the consumption installation's activity code;  
  • Proof of the electric energy supply contract;
  • Proof of compliance with the requirements for the lawful consumption installation's activity performance, where applicable; and
  • Gross annual added value of the consumption installation in the last three years, duly certified and audited. 

If the request is accepted, DGEG will send the consumer the draft of the ECE standard form contract published through Order no. 5975-B/2022 for signature. The standard contract is valid for a year and is subject to renewal for an equal period if the consumer submits a new request by June 15 of each year. 

By joining ECE, the consumer will have to comply with technical duties, such as (i) subjecting the beneficiary installation's measurement, registration and control equipment to the technical terms to be defined by the overall manager of the National Electricity System, and (ii) observing a minimum availability rate of 90% each year. 

ECE standard form contract can terminate if the activity ends, if ECE eligibility requirements are non-complied with and if contractual terms or the terms of the obligation to install and operate measuring, recording and control equipment are changed and not communicated.

 

What is expected for the future

Solar PV capacity has grown actively in Portugal in the last decade. The country has now a PV capacity of almost 1.8 GW, and it is expected to reach 9 GW by 2030.

Recent statistics from DGEG show that 2021 set a record of 1777 MW of photovoltaic power regarding the installation of new solar photovoltaic capacity in Portugal. According to APREN (Portuguese Renewable Energy Association), in January 2022 Portugal was the 4th country in Europe with the highest renewable incorporation in electricity generation, with 4085 GWh of electricity generated, of which 59.7% had a renewable origin.

Having in mind the targets set by the Paris Agreement and the National Energy and Climate Plan 2021-2030 (PNEC), Portugal committed to achieving a target of 80% electricity production from renewable energy sources by the end of 2030 and electrifying 65% of the economy by 2050. Regarding the decentralized solar photovoltaic energy production, the goals outlined by PNEC are ambitious with a target of 0.8 GW of installed capacity by 2025 and 2 GW by 2030.

The development of self-consumption electricity production is key to meeting Portugal’s production goals as it faces the infrastructural deficit that is the lack of reception capacity in the public network since only the energy produced and not consumed is injected into the network. The new National Electricity System Law reinforced the focus on self-consumption, by simplifying procedures and creating the Statute of the Electro-intensive Customer.

The Statute of the Electro-Intensive Customer is especially important for the democratization of self-consumption since it allows heavy industry to consume electricity produced by UPAC (owned by third parties) located in other regions of the country with easier installation and solar exposure.

With the most favorable perspectives pointing to the maintenance of high electricity prices during 2022, self-consumption is increasingly drawing the interest of companies tired of OMIE prices. 

Self-consumption is expected to grow in the next few years in Portugal. New players and business models capable of satisfying the country's energy needs are also likely to develop.

 

If you want to find out more, please download the PDF down below. 

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