Meet the Law - Despacho n.º 10835/2020, de 4 de novembro, do Diretor-Geral de Energia e Geologia

Order no. 10835/2020, of November 4, of Director General of Energy an Geology

Curtailment

On November 4, was published on Diário da República, 2nd series, no. 215, the Order no. 10835/2020, of the Director General of Energy and Geology, on the reduction of production – commonly referred to as curtailment – power subject to a special regime that benefits from a guaranteed remuneration regime or other subsidized support scheme, implementing the provisions of sections 3.6.14, 3.6.15 and 3.7.6 of the Transmission Network Regulation (RRT) and in section 4.4.8 of the Distribution Network Regulation (RRD).

The Order is applicable to the following entities in the National Electric System (SEN): (i) the last resort supplier (CUR); (ii) the Global Technical System Manager (GTGS) and Operator of the Electricity Transport Network (ORT); (iii) the Operator of the Nacional Electricity Distribution Network (ORD); (iv) the producer subject to a special regime that benefits from a guaranteed remuneration regime or other subsidized support scheme for the remuneration (PRE-A) and whose installed power of the respective power generation centre is greater than 1 MW.

In exceptional situations of exploration of the SEN, namely, (i) when there are congestions or (ii) when it is concerned the balance between production-consumption and the continuity of electricity supply, a power reduction may be applied, in order to control the production of PRE-A facilities connected to RNT or RND, so that they do not exceed a certain power value.
The power reduction order is mandatory by the PRE-A, under consequence of application of penalties provided for in specific legislation, in the Manual of Procedures of the Global System Management (MPGGS) or in the Specifications pursuant to article 5-B of Decree-Law no. 172/2006 of August 23, in the wording given by Decree-Law no. 76/2019 of June 3, and shall specify the beginning and end of the power reduction period and the maximum power value to be produced by the electroproducer center.

Thus, where safety in the production-consumption balance is at stake, not being possible to mobilise reserves of general remunerated electro-producing centres participating in the system services market without jeopardising security of supply and the reduction in production of general remunerated electro-producing centres that do not participate in the system services market and are able to achieve this, the GTGS determines the reduction of production in PRE-A facilities, following the following successive order of reduction:

• The injection of energy produced by power generation centers that have been awarded through a competitive procedure;
• The injection of additional energy and overpowering under Decree-Law no. 94/2014 of June 24 and the injection of energy produced by cogeneration facilities that benefit from a market premium;
• The injection of energy produced by wind power generation centers that resulted from the public tender procedure of Phases A and B, as long as the reduction is made during the super empty period and up to 50 hours of wind production equivalent to the reception capacity on an annual basis;
• The injection of energy produced by qualified cogenerators connected to the RESP;
• The injection of energy produced by wind power generation centers connected to the RESP, and the reduction should be applied, preferably, on a rotating basis by the referred installations.

In turn, where congestion occurs, the reduction of the production of PRE-A electro-producing centres that have an influence on congestion resolution can be determined, successively in the following order:

• The injection of energy produced by the electro-producing centers that have been awarded through competitive procedure, pursuant to article 5-B of Decree-Law no. 172/2006 of August 23, in the wording given by Decree-Law no. 76/2019 of June 3;
• The energy produced by cogeneration facilities that benefit from a market premium and the injection of additional energy and over equipment under Decree-Law no. 94/2014 of June 24 and that are associated with congestion;
• The injection of energy produced by wind power generation centers that resulted from the public tender procedure of Phases A and B, provided that the reduction is made during the super empty period and up to 50 hours of wind production equivalent to the reception capacity on an annual basis and that are associated with congestion;
• The injection of energy produced by qualified cogenerators associated with congestion;
• The injection of energy produced by PRE-A associated with congestion, giving preference to reducing PRE-A that are not cogenerators.

Except as provided in paragraph 15 of the Order and the provisions of the MPGGS for the regulatory reserve market, the electro-producing centers that are the target of power reduction orders are not entitled to any type of monetary compensation, and in case of non-compliance with the power reduction orders, in addition to the penalties provided for in the MPGGS, the injection of electricity may be interrupted by the RESP operator who issued the reduction order.

The electro-producing centres identified in paragraphs 8(a) and 9(a) of the Order which have been subject to a power reduction order issued by GTGS and which are covered by the guaranteed remuneration scheme, the CUR shall have the obligation of payment or receipt resulting from participation in the organised market and that established in the MPGGS to the electro-producing centre. For this purpose, the CUR must, according to the stipulated in the MPGGS, proceed to the distribution of energy traded through the organized market to each electro-producing.

On the other hand, the electro-producing centres identified in paragraphs 8(d) and (e) and paragraph 9(d) and (e) of the Order which have been subject to a power reduction order shall be entitled to receive the equivalent of the unrealized estimated production adjusted by the ratio between the total production verified and the estimated total production of the PRE-A electroproducer centres to be borne by the producers referred to in the following paragraph.

With the exception of the electro-producing centres identified in paragraphs 8 and 9(a) of the Order, PRE-A that are not subject to power reduction orders shall have the payment obligation equivalent to the difference between the realized production and the adjusted production calculated as defined in no. 3(b) of the Order, which reverts to the PRE-A referred to in the previous paragraph.

This Order shall enter into force within 30 days after its publication, revoking Order no. 8810/2015 of August 10 and can be consulted here.