On 17 September 2019, the Portuguese Competition Authority fined the electricity company EDP €48 million for abusing its dominant position in the market for secondary electricity reserve services in Portugal between 2009 and 2013 by manipulating its electricity offer from its generating units.

Portugal Competition Authority sanctions Energias de Portugal (EDP) €48m for abuse of its dominant position in the secondary electricity reserve market

The secondary balancing reserve guarantees the permanent balance in the national electric system and can be provided only by the power plants equipped for that purpose. In 1995, to attract investment in the power plants that the country needed, the State launched international tenders, offering investors Energy Acquisition Contracts, known as CAE. When these CAE were signed, return rates were set for the entirety of their duration (8.5% for the 33 EDP plants). Following European legislation changes, Decree-Law No. 240/2004 was approved, which determined the early termination of all long-term CAE signed in 1996. To avoid paying producers the compensation provided for in the CAE, the Portuguese State created the Contractual Equilibrium Maintenance Cost mechanism (CMEC), which determined that the plants whose CAE contracts were terminated before the due date would be paid the difference between the CAE amount and the revenue they might have obtained in an open market.

Between 2009 and 2013, EDP limited the offer from its generating units subject to the CMEC regime, while increasing the offer from its units in the open market, thus being paid twice to the detriment of consumers. The increase in wholesale energy prices during the infringement period was estimated in the decision at €94.8 million, excluding inflation and statutory interest.

This infringement was conducted to the detriment of all consumers who were resident in mainland Portugal while the anti-competitive practices in question took place.

Your contacts:

Meet the Team of experts - Photo of Akos Reger, person in business suit, smiling, male, gallantly, crossed arms
Akos Reger
Meet the Team of experts - Photo of Jakob Rüggeberg, person in business suit, glasses, smiling, male, gallantly, standing upright
Jakob Rüggeberg

Nous aimerions avoir de vos nouvelles !

Reach out to the CDC team

We will soon get back to you.