Portugal Electricity Security Policy
This report is part of Electricity Security Policy
Electricity overview and generation portfolio
Portugal’s electricity supply is split between renewables (mostly wind and hydro) and fossil fuels (mostly natural gas and coal). Thanks in part to expanding renewable generation, Portugal became a net electricity exporter for the first time in 2016 and maintained this position until 2019, when it once again became a net importer of electricity.
Portugal’s energy policy places a strong focus on achieving economy-wide decarbonisation through broad electrification combined with rapid expansion of renewable generation, while maintaining affordable electricity prices. In order to enhance its electricity security, the government is fostering greater investment in the transmission and distribution networks, increased interconnection capacity, technical analysis of system security, and more coordination between government and network operators to strengthen emergency responses.
Redes Energeticas Nationais (REN) is the single transmission system operator (TSO) for electricity supply in Portugal, and E-Redes is the principal distribution system operator. In the case of major disruptions, the main emergency response is a load shedding scheme that aims to minimise disruptions while maintaining electricity supply to as many consumers as possible. Demand side schemes such as voluntary reduction of electricity demand and interruptible contracts are also practical response options which would be available for large electricity consumers.
Portugal’s nine cross-border interconnections and its integration with Spain’s electricity market also reinforce security of supply.
Electricity infrastructure
Network: transmission and distribution
In 2020, Portugal’s electricity system consisted of a nationwide transmission system composed of very-high voltage lines connected to Spain with nine cross-border interconnections, and a distribution system composed of high, medium and low voltage lines and cables operated by 13 distribution system operators (DSOs). To deal with the integration of new renewable generation, the transmission network has recently been improved.
At the end of 2020, the national transmission network comprised 9 036 km, of which 2 711 km were at 400 kV, 3 780 km at 220 kV and 2 545 km at 150 kV. The network had an installed transformer capacity of 38 463 megavolt-amperes.
The backbone of the transmission network is the 400 kV line from the Alto Lindoso generation plant in the north to the generation plant at Sines in the south, passing through the most populated section of the country close to the coast. In addition, 400 kV lines also run from Recarei to Aldeadávila, from Rio Maior to Cedillo, from Sines to Brovales, and from Portimão to Puebla de Guzmán (all of the latter locations are interconnections with Spain). These lines are supported by a series of 220 kV and 150 kV lines across the nation. The majority of electricity supplied by the transmission network is delivered to distribution grids to which the vast majority of end-consumer are connected.
Portugal’s high and medium voltage distribution systems consisted of 67 451 km of overhead lines, 14 985 km of underground cables and 423 substations. The low voltage distribution system consisted of 109 725 km of overhead lines, 33 715 km of underground cables, and 69 000 secondary substations. Portugal’s 308 municipalities own the low voltage distribution grid contained within their physical territory. Each municipality can directly operate its section of the low voltage distribution grid or transfer operation to a third party through an exclusive 20-year concession. Historically, municipalities in mainland Portugal have all opted to transfer operations to a private DSO.
In 2020, there were 13 DSOs operating in Portugal, 11 of which are operating in mainland Portugal. E-Redes is the only DSO for high voltage and medium voltage distribution systems and operates the low voltage distributions systems in 278 of Portugal’s 308 municipalities, accounting for 99.5% of consumers connected at low voltage. Ten other small-scale DSOs operate municipal-level low voltage distribution systems, supplying the remaining 0.5% of consumers. In addition, the islands of Azores and Madeira have their own DSOs, which are not unbundled from the rest of the value chain.
Electricity trade in Portugal, 2000-2020
OpenInterconnections
In recent years, as a result of integrating high levels of new renewables generation, the transmission network has been reinforced so that it can transmit more renewable electricity to consumption centres. Also, based on agreements between Portugal and Spain to develop the Iberian electricity market, there has been an increase in interconnection capacity between the two countries. Portuguese export interconnection capacity increased from 1 183 MW in 2010 to 2 925 MW in 2020, and import capacity from 1 112 MW to 2 970 MW.
There are nine interconnections between the two countries, all very-high voltage above ground power lines (six 400 kV, three 220 kV). An additional 400 kV interconnection between the Minho region in Portugal and Galicia in northwest Spain is planned to start operation in 2022/2023 and more interconnection capacity is planned to support achievement of the 2030 EU target for 15% interconnection capacity.
Active electricity suppliers in Portugal, 2022
Source: REN (2020), National Transport Grid Map 2020, www.ren.pt/en-GB/media/publicacoes.
Electricity emergency response policies
Organisation
Portugal’s electricity emergency response policy is based on the Decree Law No. 114/2001 on Energy Crises (DEC), which specifies that emergency response to an energy crisis requires plans and measures to optimise the use of available energy resources based on decision-making of the government. DEC requires all public and private entities to collaborate at the time of emergency and penalises disobedience. This is also applicable to oil and gas sectors.
Regulation No. 557/2014, amended by Regulation No. 621/2017, on Electricity Network Operation establishes the conditions for the management of electricity flows in the Portuguese transmission network and sets requirements for the TSO’s action plan in case of unavailability of electricity, causing security of supply risks. Article 25 of this Regulation is dedicated to security plans, stating that the Global Technical Manager (the TSO, REN) shall establish the necessary preventive measures to avoid the occurrence of electricity emergencies, and that the Global Management Procedures Manual must define security plans, including safeguard plans, emergency plans and service re-establishment plans. The manual has been updated every year since 2018 and requires approval by the Energy Services Regulatory Authority, ERSE. The most recent manual was approved in 2020.
The Directorate General of Energy in the Ministry of Energy (DGEG) is the Portuguese authority responsible for the coordination and development of risk assessment instruments, prevention plans and emergency plans for the electricity and gas sectors. DGEG also has responsibilities for the planning of energy supply, energy generation and energy use in a crisis situation, in close cooperation with the National Authority for Emergency and Civil Protection (ANEPC), the TSO and DSOs, and ensuring the efficient exchange of information in a crisis situation.
The Portuguese TSO, REN, is responsible for supervision and technical management of the national electricity transmission system, including responding to emergency issues and ensuring continuity and security of electricity supply. Depending on the level of emergency, REN is required to collaborate with DGEG in the decision-making process. There is an operational protocol for emergency procedures between REN and the main Portuguese DSO, E-Redes, which is expected to take the necessary measures to guarantee the supply at distribution level.
Portugal’s electricity transmission and distribution networks have a good performance record thanks to notable investments by the TSO and DSOs to minimise the number, duration and impact of system disruptions and level of losses. In the short-term, decommissioning of coal-fired power plants, including the one in Sines, highlights the importance of some foreseen transmission network reinforcements to overcome risks of insufficient supply at local or regional levels caused by congestion in the transmission network, or lack of instruments to control variable generation sources. Until these network reinforcements are completed and put in service, the system operator may be required to take preventive and corrective measures, which will be indispensable to guarantee operation security. In 2023, with the expected network reinforcements coming online, these limitations will no longer occur.
Generation adequacy
In terms of system adequacy, in the medium term Portugal has sufficient generation capacity to meet demand and has become an exporter of electricity in recent years. There are currently no problems to meet peak demand (19 974 MW of installed generation capacity vis-à-vis 8 794 MW of consumption peak which occurred in February 2018 and was the highest value since 2011). The government has conducted studies showing that existing combined cycle gas turbine and pumped hydro capacity provides more than sufficient generation flexibility to avoid any impact on security of supply. In addition, from 2021 to 2023, 1.16 GW of new hydropower capacity (including 0.88 GW of pumped hydro) will come online, further strengthening system flexibility and security. That said, it will be important to monitor the impact of increasing generation from variable renewable energy sources.
Demand side response
In the case of major disruptions, DGEG, REN and E-Redes cooperate through legislatively established procedures designed to ensure security of supply or restore normal operations. The main emergency measure is a load shedding scheme that aims to minimise overall disruptions while maintaining the supply of electricity to as many consumers as possible. For electricity consumers connected to very high voltage, high voltage and medium voltage networks, demand side schemes are published by Ordinance No. 592/2010, which stipulates the voluntary reduction of electricity demand in response to an order from the TSO, and establishes interruptible contracts providing remuneration for reducing demand. These schemes contain a prompt response to emergency situations, thus contributing to the security of supply. As of 2022, there are 50 interruptible contracts, intended for use only in emergency situations and not on a routine basis, although Portugal never had to activate them in the last 15 years.
Climate resilience
The Portuguese electricity sector is vulnerable to climate-induced disruptions, notably with regard to increased extreme weather events and wildfires, and the subsequent disruption of the distribution and transmission networks. Furthermore, the increasing share of hydropower in the generation mix, with water resources susceptible to variability in climate conditions, may emerge as a significant risk to Portugal over the coming decade. Electricity security monitoring, given the impact of climate change on the hydropower plants and transmission and distribution systems, should be undertaken as part of the Security of Supply Monitoring Report (RMSA) and through the national climate adaptation planning.