Rua Dom Cristóvão da Gama n.º 1-3.º 1400-113 Lisboa Tel.: 21 303 32 00 Fax: 21 303 32 01 e-mail: [email protected] www.erse.pt ANNUAL REPORT ON THE ELECTRICITY AND NATURAL GAS MARKETS IN 2018 TABLE OF CONTENTS 1 FOREWORD ........................................................................................................................................ 1 2 MAIN DEVELOPMENTS IN THE ELECTRICITY AND NATURAL GAS SECTORS ......................................... 3 3 ELECTRICITY MARKET ......................................................................................................................... 7 3.1 Network regulation ........................................................................................................................ 7 3.1.1 Technical functioning ............................................................................................................ 7 3.1.1.1 Balancing ............................................................................................................................................................. 7 3.1.1.2 Technical quality of supply ................................................................................................................................. 9 3.1.1.3 Connections to networks ................................................................................................................................. 14 3.1.1.4 Safeguard measures ......................................................................................................................................... 15 3.1.1.5 Renewable energy sources .............................................................................................................................. 15 3.1.2 Network tariffs for connection and access .........................................................................19 3.1.3 Cross-border issues ............................................................................................................28 3.1.4 Low Voltage Distribution Concessions ................................................................................39 3.2 Promoting Competition ................................................................................................................40 3.2.1 Wholesale Market ..............................................................................................................40 3.2.1.1 Monitoring the price level, transparency level and the level and effectiveness of market opening and competition ............................................................................................................................................... 41 3.2.2 Retail market ......................................................................................................................59 3.2.2.1 Monitoring the price level, transparency level and the level and effectiveness of market opening and competition ............................................................................................................................................... 60 3.2.2.2 Recommendations on supply prices, investigations and measures to promote effective competition ..... 70 3.3 Security of Supply .........................................................................................................................74 3.3.1 Monitoring the balance between supply and demand .......................................................76 3.3.2 Monitoring investments in generation capacity .................................................................79 3.3.3 Measures to mitigate peaks in demand or disruptions in supply .......................................81 4 NATURAL GAS MARKET .................................................................................................................... 83 4.1 Network regulation ......................................................................................................................83 4.1.1 Technical functioning ..........................................................................................................83 4.1.1.1 Balancing ........................................................................................................................................................... 83 4.1.1.2 Access To Storage Infrastructure, Linepack And Ancillary Services ............................................................... 84 4.1.1.3 Connections to networks ................................................................................................................................. 85 4.1.1.4 Technical Quality Of Supply ............................................................................................................................. 86 4.1.2 Tariffs for connection and access to infrastructure ............................................................89 4.1.3 Cross-border issues ............................................................................................................97 4.2 Promoting Competition ..............................................................................................................101 4.2.1 Wholesale Market ............................................................................................................101 4.2.1.1 Monitoring the price level, transparency level and the level and effectiveness of market opening and competition ............................................................................................................................................. 101 4.2.2 Retail market ....................................................................................................................112 i ANNUAL REPORT ON THE ELECTRICITY AND NATURAL GAS MARKETS IN 2018 4.2.2.1 Monitoring the price level, transparency level and the level and effectiveness of market opening and competition ............................................................................................................................................. 112 4.2.2.2 Recommendations on supply prices, investigations and measures to promote effective competition ... 122 4.3 Security of Supply .......................................................................................................................123 4.3.1 Forecast of Demand and Supply .......................................................................................125 4.3.2 Measures to Cover Peak Demand or Shortfalls of Suppliers.............................................125 5 CONSUMER PROTECTION AND DISPUTE SETTLEMENT ................................................................... 127 5.1 Consumer protection .................................................................................................................127 5.2 Dispute settlement .....................................................................................................................128 6 COMPLIANCE ................................................................................................................................. 131 6.1 Certification of Transmission Network Operators ......................................................................131 6.2 Legislative developments ...........................................................................................................132 6.3 Sanctions regime ........................................................................................................................134 6.4 Electric mobility ..........................................................................................................................135 ANNEXES ............................................................................................................................................... 137 I. List of abbreviations and acronyms ............................................................................................137 II. List of legislation .........................................................................................................................141 A. National legislation ...........................................................................................................141 B. EU legislation ....................................................................................................................148 III. Indicators of Technical Continuity of Supply (Applicable to the Electricity Sector) ....................150 ii ANNUAL REPORT ON THE ELECTRICITY AND NATURAL GAS MARKETS IN 2018 LIST OF FIGURES Figure 3-1 - Impact of daily, intraday and ancillary services markets on the costs allocated to suppliers operating in Portugal, in 2018 ............................................................................. 8 Figure 3-2 - Breakdown of costs of the ancillary services market, 2018 ................................................... 8 Figure 3-3- Evolution of imbalances, 2018 ............................................................................................... 9 Figure 3-4 - SRG installed capacity, 2014 to 2018...................................................................................17 Figure 3-5 – SRG energy production, 2014 to 2018 ................................................................................18 Figure 3-6 – Breakdown per activity of the average price of network access tariffs in 2018 .................23 Figure 3-7 – Structure of the average price of network access tariffs by regulated activity per voltage level in 2018 ......................................................................................................................23