Message from the President - February 2023

We are at the beginning of an year that is expected to be challenging in many of the fundamental dimensions of our lives, not only in our sector, but in general, as the result of the current global geopolitical, economic, and financial context.

I begin by highlighting the data from the last Renewable Electricity Bulletin of 2022, which summarises the figures for the month of December 2022 and the accumulated of the whole of last year. In Mainland Portugal 44,253 GWh of electricity were generated in the period from January to December 2022, of which 57.2% were of renewable origin. In December, specifically, 4,627 GWh of electricity were generated, of which 78.0% were of renewable sources.

In the same period, an average hourly price was recorded in the Iberian Electricity Market.
In Portugal it was €167.9/MWh. The value in December was €96.6/MWh. On the other hand, and according to APREN’s analysis, between January 1 and December 31, Production in Special Regime (PRE) allowed accumulated savings of €8.559 M, of which €708 M were in December alone.

These figures ended 2022, but we know that renewables continue to influence as early as the new year. They have made the average daily price of electricity drop on the wholesale market by 70%, compared to the same period last year. In fact, in January 2022, according to data from the Iberian Market Operator (OMIE), the average daily price was around 200 euros per megawatt hour. In this first month of 2023 the value was at €65,51MWh.

The underlying reason for these results lies mainly in wind and hydro. On January 4, as a result of the high rainfall and increased flow of watercourses, a new peak of hydro production was recorded in the national grid, at a time when there were power plants operating with a total capacity of 6531 MW. The previous maximum had been recorded in 2018. On this day, hydro energy accounted for almost two-thirds of the national electricity consumption.

On January 16, 2023, wind energy production reached a new record of 106.7 gigawatt hours (GWh), surpassing the previous maximum of 104.2 GWh recorded in November 2022. On this day renewables ensured 97% of national consumption, especially wind, which guaranteed 56% of it. As of January 22, renewable production accounted for 89% of national electricity consumption. In Portugal the average price of electricity on the wholesale market was €13.22/MWh and even reached a minimum of €3.

It is important to take these factors into account when the European Commission talks about the redesign of the European electricity market. The changes that are demanded to design the market in the face of a growing incorporation of renewables are in line with what had already been agreed under the “Clean Energy for All Europeans” package.

The aim is the same: to make the electricity market more renewable, consequently more competitive compared to other consumer-centric energy markets, with a growing trend of energy independence, more flexible, with a more active participation of Independent Electricity Producers in system services and in the dynamic balance of NES.

In this sense, it is important that European measures for ETS contribute to the increase in the price of carbon, remaining at a level that continues to increasingly encourage investment in clean technologies, as advised by European regulators. The European Union should avoid adopting models that promote the division of the electricity market by types of technologies, brokers and non-brokers, as this will not necessarily result in better prices.

The market design review process should provide input from all stakeholders. The amendments should not be too disruptive, not even retroactive and must respect the investments made.
The new design of the European electricity market to be applied in the European Union must be anchored in clear rules, allowing specific sectors, such as industry, to adapt. These assumptions are necessary to pass the right messages, so as not to slow down investment, which, as we know, is mostly private.

Therefore, APREN will participate in the public consultation launched by the Commission to ensure that these and other factors are considered in this redesign.

This is the only way to continue to ensure an energy transition that guarantees energy security and independence towards a decarbonised, safer, and fairer system, that enables economically more affordable electricity prices for households and businesses.

Because Portugal (and Europe) needs our Energy!