In general, all technologies used in renewable electricity generation are eligible for promotion.

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1 Research RES LEGAL Promotion system Country: Portugal 1. Overview of promotion system Overview of promotion system In Portugal, electricity from renewable sources is mainly promoted through price-regulation in terms of a feed-in tariff. Apart from that, the purchase of renewable energy systems is promoted through a reduced VAT. Statutory provisions Promotion system DL 189/88 (Decreto-Lei n. 189/88 de 27 de Maio in conjunction with its amending acts DL 225/2007 (Decreto-Lei n. 225/2007 de 31 de Maio), DL 363/2007 (Decreto-Lei n. 363/2007 de 2 Novembro), DL 33A-2005 (Decreto Lei n. 33A-2005 de 16 de Fevereiro) and DR 71/2007 (Declaração de Rectificação n.º 71/2007) - Decree on renewable electricity generation) DL 312/2001 (Decreto-Lei n. 312/2001 de 10 de Dezembro Decree on the management of the capacity of the public electricity grid, the access to this grid and the entitlement of system operators to purchase agreements) Price regulation. In Portugal, the most important means of promotion is price regulation in terms of a feed-in tariff. Operators of renewable energy systems are contractually entitled against the grid operator to payment for electricity fed in. The grid operator is obliged to enter into a contract on the purchase of electricity at a statutorily set price ("obligation to enter into a contract"). The feed-in tariff consists of two elements: a guaranteed payment rate and an amount calculated by a statutorily set formula. Fiscal regulation mechanisms. Furthermore, in Portugal the purchase of renewable energy systems is promoted through a reduced VAT rate. The reduced VAT rate applies to systems traded within Portugal only. Promoted technologies Area of application Funding In general, all technologies used in renewable electricity generation are eligible for promotion. All promotion instruments apply to the territory of Portugal only. The cost of the feed-in tariffs for electricity generated from renewable energy is first borne by the grid operator. However, he may pass on these costs to the consumers through the electricity bill. The reduced VAT causes lower state revenue, which is compensated for by other state funds. 1

2 2. Basic information on legal sources Name of legal source (original language) Name of legal source (full name) Name of legal source (English) Abbreviated form DL 189/88 DL 312/2001 Decreto-Lei n. 189/88 de 27 de Maio Decree No. 189/1988 of 27 th May DL 189/88 DL 312/2001 Decreto-Lei n. 312/2001 de 10 de Dezembro Decree No. 312/2001 of 10 th December Type of law Document structure Ministerial decree Articles, paragraphs Ministerial decree Articles, paragraphs Entering into force Latest amendment 28/05/ /12/ /06/2007 Future amendments Purpose Relation to renewable energy This decree regulates renewable electricity generation. This decree promotes the generation of renewable electricity only. Decreto-Lei n. 225/2007 de 31 de Maio (DL 225/2007), Decreto Lei n. 33A-2005 de 16 de Fevereiro (DL 33A-2005) and Declaração de Rectificação n.º 71/2007 (DR 71/2007) renew the provisions on the feed-in tariff for electricity from renewable sources. Decreto-Lei n. This decree regulates the intake capacity of the public electricity grid, access to the grid and system operators' entitlement to electricity purchase agreements. The provisions of this decree apply to electricity from CHP and electricity from renewable sources. 2

3 Link to full text of legal source (original language) Link to full text of legal source (English) 363/2007 de 2 Novembro (DL 363/2007) introduces special feed-in tariffs for small-scale renewable energy systems. Links to the amending decrees: DL 225/2007: 03.php?lei=5499 DL 33A-2005: 33A01/ PDF DR 71/2007: 03.php?lei=5711 DL 363/2007: egislacao_files/dl% pdf eral/leg_geral_docs/dl_189_88.htm gisla/pdf_nac/concessoes/dl312_2001.p DF 3

4 Name of legal source (original language) Name of legal source (full name) Name of legal source (English) Abbreviated form Type of law Document structure Entering into force Latest amendment Future amendments Purpose Relation to renewable energy Link to full text of legal source (original language) Link to full text of legal source (English) 4

5 3. Further information Institution (name) Website Name of contact person (optional) Ministério da Economia e da Inovação, Direcção Geral de Energia e Geologia (DGEG) Directorate General for Energy and Geology Agência para a Energia (ADENE) Portuguese energy agency Portal das Energias Renováveis (PER) Information website on renewable energy Telephone number (head office) (optional) Joao Bernardo Racionalizacao.Energia(at)dgge.pt geral@adene.pt João F. Saraiva mail@energiasrenovaveis.com 5

6 3. Means of promotion 4.1. Subsidy (name of means of promotion) Abbreviated form of legal source(s) Country-specific promotion system Promoted technologies Wind energy Solar energy Geothermal energy Biogas Biomass Hydro-electricity Area of application Legal basis for a claim/addressees National International ( ) statutory basis ( ) contractual basis Entitled party 6

7 Obligated party Amount Procedure State Consumers Funding System operator Grid operator Distribution mechanism Control mechanisms 7

8 4.2. Loan (name of means of promotion) Abbreviated form of legal source(s) Country-specific promotion system Promoted technologies Wind energy Solar energy Geothermal energy Biogas Biomass Hydro-electricity Area of application National International ( ) statutory basis ( ) contractual basis Legal basis for a claim/addressees Entitled party Obligated party 8

9 Amount Procedure State Consumers Funding Grid operator System operator Distribution mechanism Control mechanisms 9

10 4.3. Price regulation (name of means of promotion) Abbreviated form of legal source(s) Country-specific promotion system Promoted technologies Wind energy Solar energy Geothermal energy Biogas Biomass DL 189/88 DL 312/2001 In Portugal, the generation of electricity from renewable energy sources is mainly promoted through price-regulation in terms of a guaranteed feed-in tariff. Operators of renewable energy systems are contractually entitled against the grid operator to payment for electricity fed in. The grid operator is obliged to enter into a contract on the purchase of electricity at a statutorily set price ("obligation to enter into a contract", art. 1 par. 1, art. 22 DL 189/88). Apart from that, art. 11 DL 363/2007 establishes individual tariffs for electricity generated by so-called small power stations that are combined with heating systems (art. 3 DL 363/2007). Systems whose capacity is < 3.68 kw and that are solar energy systems, wind power stations, hydro-electric power stations or biomass-fuelled CHP systems are eligible for a special tariff ( Regime bonificado ) (art. 9 par. 1 b, art. 11 par. 5 DL 363/2007). Generally, all technologies used in the generation of electricity from renewable energy are eligible (art. 18 Annex II DL 189/1988). Eligible (Annex II par. 18 a DL 189/1988). Eligible; however, the system capacity must not exceed the following amounts (art. 2 DL 225/2007): Building-integrated systems: 50 MW Ground-mounted systems: 150 MW Eligible (Annex II par. 18 e DL 189/1988). Eligible; however, the system capacity must not exceed the following amounts (art. 2 DL 225/2007): Landfill gas: 20 MW Fermentation of solid municipal waste, sewage sludge from waste water treatment, waste water and waste from the agricultural and food industries: 150 MW Eligible (Annex II par. 18 e DL 189/1988); however, the system capacity must not exceed 250 MW (art. 2 DL 225/2007). 10

11 Eligible (Annex II par. 18 b, c DL 189/1988); however, the system capacity must not exceed 10 MW (art. 1 par. 2 DL 189/88). Electricity from wave energy is subject to different regulations. The total generation capacity of systems that are part of a pilot project must not exceed 10 MW per project; for other projects, the maximum total capacity is 100 MW (art. 2 DL 225/2007). Hydro-electricity Area of application Legal basis for a claim/addressees Payment scheme National International ( ) statutory basis ( x ) contractual basis Entitled party Obligated party Bonus Guaranteed payment Criteria for amount of payment Adjustment mechanisms Only electricity generated by systems within Portugal is eligible (introduction DL 189/88). Electricity generated outside Portugal is not eligible. The grid operator is statutorily obligated to conclude a purchase agreement with operators of renewable energy systems (obligation to enter into a contract). On the basis of the agreement concluded, the system operator is contractually entitled to the payment (art. 18 DL 312/2001). The persons entitled are the system operators (art. 18 DL 312/2001). The person obligated is the grid operator (art. 18 DL 312/2001). The guaranteed feed-in tariff, which is calculated by a formula, is the only means of promotion. The calculation is based on various factors like system output and capacity. The formulas and payment rates for some technologies have been revised and laid down in item 2 DL 225/2007. The amount of payment depends, among other things, on the technology used, the source of energy and the environmental benefits of the technology used (DL 189/88). Duration of payment depends on the technology used (art. 2 DL 225/2007): Limitations/deadlines Wind energy: Payment during the first 12 years of operation. Solar energy (roof-mounted solar-thermal and photovoltaic systems): Payment for the first 15 years of operation (DR 71/2007). Geothermal energy: Payment during the first 12 years of operation. Biogas: Payment during the first 15 years of operation. 11

12 Biomass: Payment during the first 25 years of operation. Hydro-electricity: o The payment ends either after 20 years of operation or when 52 GWh of electricity have been generated. o Wave power systems receive payments during the first 15 years of operation. The individual tariffs for small systems that are combined with heating systems are subject to the following limitations regarding all eligible technologies (art. 11 DL 363/2007): The tariffs are limited to 5 years. The annual maximum production of a solar electricity system amounts to 2.4 MWh per kw installed. The generation capacity of all other technologies shall not exceed 4 MWh/year. In 2008, the annual maximum system output eligible for the tariff amounted to 10 MW. The maximum eligible output increases by 20% every year. The amount of feed-in tariff depends on the source of energy used. In cases where statutory law does not specify a feed-in tariff for an individual technology, the amount of payment can be calculated only by using a formula (art. 2 DL 225/2007). Amount There are special tariffs for small systems whose capacity does not exceed 3.68 kw and that are combined with solar-thermal systems whose panel surface is at least. 2 m² and for small CHP systems using biomass that are integrated in the heating system (art. 9 1b DL 363/2007). The reference tariff for small systems amounts to 65 ct/kwh. This tariff is paid for the first 10 MW of capacity installed, for every further 10 MW the tariff decreases by 5% (art. 11 DL 363/2007). In 2009, the following feed-in tariffs apply: Wind energy: o 4.6 ct/kwh (art. 2 DL 33A-2005) o Small systems combined with solar-thermal systems: 70% of the reference tariff (art. 11 DL 363/2007). Solar power (photovoltaic energy): o ct/kwh, depending on system size and system type (art. 2 12

13 DL 225/2007) o Small systems combined with solar-thermal systems: 100% of the reference tariff (art. 11 DL 363/2007). Solar power (solar-thermal electricity generation): o 29.3 ct/kwh for solar-thermal systems with a capacity of 10 MW o ct/kwh for solar-thermal systems with a capacity >10 MW (art. 2 DL 225/2007). Geothermal power: The tariff is calculated by a formula (Annex II par. 2 DL 189/1988). Biogas: o Fermentation of solid municipal waste, sewage sludge from waste water treatment, waste water and waste from the agricultural and food industries (system sizes up to 150 MW): 9.2 ct/kwh o Landfill gas systems with a capacity of 20 MW or less: 7.5 ct/kwh o For system capacities of more than 20 MW: 3.8 ct/kwh (art. 2 DL 225/2007). Biomass: o ct/kwh, depending on the type of biomass used (art. 2 DL 225/2007). o Small CHP systems: 30% of the reference tariff (art. 11 DL 363/2007). Hydro-electricity: o Maximum of 4.5 ct/kwh, depending on the system size (art. 2 DL 33A-2005). o Small systems combined with solar-thermal systems: 30% of the reference tariff (art. 11 DL 363/2007). o The feed-in tariffs for systems generating more than 30 MW are set by the Ministry of Economy and Innovation (MEI) (art. 2DL 33A- 2005). Funding State Consumers Grid operator The grid operator may pass on the costs of the feed-in tariff to the consumers through the electricity bill (art. 22 par. 2ff. DL 189/88). gelöscht System operator 13

14 Control mechanisms Distribution mechanism The costs of the feed-in tariffs for electricity from renewable sources are first borne by the grid operator, who then passes them on to the consumers. Violations of the contractual terms may carry a penalty. The amount of penalty differs for natural persons and companies (art. 20 DL 312/2001). 1% of registered small systems are monitored to check their output (A 22 DL 363/2007). 14

15 4.4. Quota system (name of means of promotion) Abbreviated form of legal source(s) Country-specific promotion system Promoted technologies Wind energy Solar energy Geothermal energy Biogas Biomass Hydro-electricity National Area of application International Legal basis for a claim/addressees ( ) statutory basis ( ) contractual basis Entitled party 15

16 Obligated party Amount Procedure State Consumers Funding Grid operator System operator Distribution mechanism Control mechanisms 16

17 4.5. Fiscal regulation mechanisms (name of means of promotion) Abbreviated form of legal source(s) Country-specific promotion system Promoted technologies Wind energy Solar energy Geothermal energy Biogas Biomass Hydro-electricity Area of application National International ( ) statutory basis ( ) contractual basis Legal basis for a claim/addressees Entitled party Obligated party Amount 17

18 Procedure State Consumers Funding Grid operator System operator Distribution mechanism Control mechanisms 18

19 5. Criticism (optional) Criticism from lobbies for renewable energy (industry) Criticism RES sector Criticism traditional energy sector Criticism from the lobby for the "conventional" energy sector (monopolists, grid operators etc.) Criticism from the opposition of the respective government Criticism political level Criticism from the scientific community (universities, research institutes) Criticism science and research 19