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State Budget for the year 2019: Main changes in Energy

Meet the Law

7/1/2018

On 31 December was published in the Official Journal the Law no. 71/2018, which approves the State Budget for the year 2019. 

Among the main provisions of the Law no. 71/2018 on Energy, the following should be noted: 

Extraordinary contribution on the energy sector (Article 313) 

The State Budget Law stipulates that the extraordinary contribution on the energy sector ("CESE"- Contribuição extraordinária sobre o setor energético) will be maintained during 2019 and that the electricity production by means of power plants using renewable energy sources and subject to a guaranteed remuneration scheme or hydroelectric plants with installed capacity equal or superior to 20 MW will no longer be exempted (and hence will be covered). 

Green certificates and guarantees and certificates of origin (Article 238) 

The State Budget Law provides that the Government will develop the necessary legislative and regulatory amendments to create green certificates from the guarantees and certificates of origin provided for in Decree-Law no. 23/2010, of March 25 and Decree-Law no. 141/2010, of December 31. 

It also provides that REN (as the concessionaire of the National Transmission Network) is responsible for issuing and monitoring the guarantees and certificates of origin (referred to as "EEGO"), eliminating the possibility of such activity being pursued by third parties. 

The Government should also take appropriate measures to ensure (i) the creation and maintenance of a platform to ensure the management of facility certification and issuance of certificates / guarantees; (ii) the preparation of a procedures manual regarding the compliance of EEGO duties after issuance of ENSE's (Entidade Nacional para o Setor Energético) opinion. 

Iberian Electricity Market (Article 237) 

The State Budget Law anticipates that, by the end of the first quarter of 2019, the Government will review the regulatory mechanism to ensure the balance of competition in the wholesale electricity market in Portugal, provided for in Decree-Law no. 74/2013 of June 4, adapting it to the new rules of the Iberian Electricity Market, with the aim of creating harmonized regulatory mechanisms that reinforce the competition and the consumers protection.

Legal framework of subsoil occupation fees (Article 246) 

According to the State Budget Law, the Government will, by the end of the 1st half of 2019, proceed to the revision of legal framework for the subsoil occupancy fee in force, in particular as regards the repercussion of rates on consumer invoices. It is also envisaged that such a legislative amendment should be based on the effect on the actual occupation of the subsoil and ensure the determination of a minimum and maximum limit indicative of the value of subsoil occupancy fees for supplies in BP, taking into account the principles of objectivity, proportionality and non-discrimination. 

Costs with social tariff of natural gas (Article 241) 

The State Budget Law determines that the costs arising from the application of the social tariff to customers of natural gas are borne by natural gas carriers and traders in proportion to the volume of gas traded in the previous year. 

Connection of the pipeline to the Port of Sines (Article 242) 

According to the State Budget Law, the Government will evaluate, during 2019, the impact of the pipeline project of the Sines refinery at the Port of Sines through a cost-benefit analysis carried out by ERSE within a period of 30 days, after consulting the Fuels Council (Conselho para os Combustíveis) and the Competition Authority. 

Incentive to electric mobility (Article 248) 

The State Budget Law also stipulates that in 2019 the Government will continue, through the Environmental Fund, the incentive program for electric mobility, supporting the introduction of 600 electric vehicles exclusively for public administration entities for which vehicles are indispensable to its operational activity. 

Reduced VAT rate (Article 272 no. 5 and 6)   

The State Budget Law also grants legislative authorization for the Government to introduce the application of a reduced VAT rate of the fixed component of electricity and natural gas supplies corresponding, respectively, to a contracted power not exceeding 3,45 KVA and to low pressure consumption which does not exceed 10.000 m3 per year. 

Market aggregators (Article 239) 

At least, the aforementioned Law also envisages that the Government will approve a special regime of electric energy traders, national or local, that are subject to the obligation to acquire energy produced by producers in special regime with market remuneration, denominated market aggregators.

The license for the market aggregator activity is attributed through a competitive procedure, under terms to be defined in said special regime.  This Law entered into force on January 1, 2019 and can be consulted here

Authors

Portrait ofMónica Carneiro Pacheco
Mónica Carneiro Pacheco
Partner
Lisbon
Portrait ofBernardo Cunha Ferreira
Bernardo Cunha Ferreira
Partner
Lisbon
Matilde Silveira