On 30 December 2025, Decree-Law No. 139-B/2025 was published, determining the extinction of the Competitive Balance Mechanism (the Clawback mechanism or MEC).
With the entry into force of this Decree-Law, Decree-Law No. 74/2013 of 4 June, which had established the said mechanism, is repealed, thereby bringing to an end an instrument that, for over a decade, formed part of the regulatory framework of the national electricity sector. This decision is essentially based on the following grounds:
i. Complexity and unpredictability of the mechanism – Over the years, the Clawback mechanism proved to be an instrument of complex application, limited predictability and residual economic impact, generating context-related costs for operators and increased risks to investments, which invariably translated into negative effects on electricity price formation for final consumers;
ii. Structural evolution of the electricity sector – The evolution of the national and European electricity sector, marked by increasing market integration, the predominance of renewable energy sources and the maturity of the Iberian Electricity Market (MIBEL), now achieved, has significantly reduced the need for national corrective mechanisms, rendering the Clawback mechanism anachronistic in light of current market realities; and
iii. Pro-import bias – The Clawback mechanism introduced a strong pro-import bias, penalising electricity flows from Portugal to Spain and consequently incentivising imports from Spain. Such an effect proved to be contrary to the strategic objectives of national energy policy, in particular those set out in the National Energy and Climate Plan 2030 (PNEC 2030).
The elimination of the Clawback mechanism therefore represents a decisive step towards simplifying the regulatory framework, contributing to the strengthening of stability within the energy sector.
Pursuant to Decree-Law No. 139-B/2025, the Clawback mechanism is deemed extinct as from the 2025 financial year onwards, with no new assessments, studies or compensation being carried out in respect of that year or subsequent years.
Notwithstanding the above, the effects relating to previous financial years are safeguarded, with the assessment and settlement relating, in particular, to the 2024 financial year remaining in force.
For further information, the full text of Decree-Law No. 139-B/2025 of 30 December, may be consulted here (only available in Portuguese).
