INTRODUCTION

In Portugal, in 2019, renewable energy sources contribute to 51.9 per cent of the electricity generation mix. Of this 51.9 per cent, 17.5 per cent was hydroelectric power.

This chapter aims to analyse the evolution and the current legal framework applicable to the hydroelectric sector, and the impact of the process of liberalisation of the electricity market on it.

Considering that hydroelectric energy was always been an important source of energy for the Portuguese territory, some relevant measures have been adopted in the past and continue to be taken in order to ensure the sustainability of the hydroelectric sector. In view of this, this chapter also contains an analysis of the capacity mechanisms responsible for ensuring continuous hydroelectric power plant availability and, consequently, for securing the supply of hydroelectric power.

FROM THE EARLY DAYS TO THE MONOPOLY OF EDP

The Organisation of Postal, Telegraph, Telephone and Electricity Industries Inspection Law of 24 May 1911 was the first Portuguese official law related to the production and supply of energy – mainly hydroelectric production.

More than 30 years later, the Electrification of the Country Law (Law no. 2002, 26 December 1944) created the legal framework for electrification in Portugal. It established a set of private concessions related to the production and transportation of electricity which were assured by the State. In addition, the activity of electricity distribution was carried out by the municipalities.

In 1975, with the nationalisation of the electric power companies, all the services facilities in the national territory were transferred to the Portuguese State, which brought to an end to the model of public service concessions. In fact, the operation companies responsible for the production, transmission and distribution of electricity were nationalised. This led to the creation of the Electricidade de Portugal (‘Electricity of Portugal State Corporation – EDP’ by Decree Law No. 502/756, 30 June. EDP became responsible, exclusively and for an indefinite period, for the establishment and operation of the public services of electricity production, transportation and distribution in Portugal.

In 1988, the electricity sector was opened to the private sector, through an amendment to the Sector Delimitation Law, approved by Decree-Law no. 449/88, 10 December.