European barriers in retail energy markets : Portugal country handbook.
Date: 2021-02-17
Institutions: Directorate-General for Energy
Subjects: Portugal, competition, consumer behaviour, customers, data collection, electricity supply, energy market, energy policy, gas supply, liberalisation of the market, performance measurement, price of energy, report, retail trade, sample survey, supplier, trade restriction

EUROPEAN BARRIERS IN 
RETAIL ENERGY MARKETS 

PORTUGAL 
Country Handbook 

Prepared by  

Energy 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
  
 
 
EUROPEAN BARRIERS IN RETAIL ENERGY MARKETS PROJECT: Portugal Country Handbook 

VaasaETT 
REKK 
MRC 
The Advisory House 

Contact: 
Philip Lewis, VaasaETT, philip.lewis@vaasaett.com 
Balazs Felsmann, REKK, balazs.felsmann@rekk.hu 
Chema Zabala, MRC, jmlopez@mrc-consultants.com 
Florian Hirschbichler, The Advisory House, florian.hirschbichler@advisoryhouse.com  

Manuscript completed in July 2020 

The European Commission is not liable for any consequence stemming from the reuse of this publication.  

Luxembourg: Publications Office of the European Union, 2021 

© European Union, 2021  

The  reuse  policy  of  European  Commission  documents  is  implemented  based  on  Commission  Decision 
2011/833/EU of 12 December 2011 on the reuse of Commission documents (OJ L 330, 14.12.2011, p. 39). 
Except  otherwise  noted,  the  reuse  of  this  document  is  authorised  under  a  Creative  Commons  Attribution  4.0 
International  (CC-BY  4.0)  licence  (https://creativecommons.org/licenses/by/4.0/).  This  means  that  reuse  is 
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For any use or reproduction of elements that are not owned by the European Union, permission may need to be 
sought directly from the respective rightholders. 

PDF ISBN 978-92-76-30261-2  |  doi:10.2833/42883  |  MJ-02-21-191-EN-N 

How to cite this report: Napolitano, L., & Zabala, C. (2021). European Barriers in Retail Energy Markets Project: 
Portugal Country Handbook. Luxembourg: Publications Office of the European Union. ISBN 978-92-76-30261-2, 
doi:10.2833/42883. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

  2 

TABLE OF CONTENTS  

SUMMARY _______________________________________________________________________________ 4 

Project Outline __________________________________________________________________________ 4 

Key barriers in the Portuguese market  ______________________________________________________ 12 

Key recommendations ___________________________________________________________________ 13 

MARKET OVERVIEW  _____________________________________________________________________ 15 

Introduction  ___________________________________________________________________________ 15 

Background  ___________________________________________________________________________ 15 

Market structure ________________________________________________________________________ 16 

Political and regulatory orientation __________________________________________________________ 19 

Regulatory market characteristics __________________________________________________________ 20 

Other market characteristics  ______________________________________________________________ 22 

Context for aggregation/demand response ___________________________________________________ 26 

BARRIERS ______________________________________________________________________________ 28 

1)  Regulatory disincentivisation __________________________________________________________ 30 

2)  Market inequality  ___________________________________________________________________ 38 

3)  Operational and procedural hindrances __________________________________________________ 42 

4)  Customer inertia ____________________________________________________________________ 48 

5)  Other _____________________________________________________________________________ 51 

FINDINGS & RECOMMENDATIONS  _________________________________________________________ 52 
APPENDIX 1: PROCESSES ________________________________________________________________ 56 

1) 

Information gathering before market entry ________________________________________________ 56 

2)  Licenses, registrations and contracts ____________________________________________________ 57 

3)  Balancing _________________________________________________________________________ 59 

4)  Wholesale _________________________________________________________________________ 59 

5)  System landscape  __________________________________________________________________ 60 

6)  DSO-related operations & market communications _________________________________________ 61 

7)  Customer switching & moving  _________________________________________________________ 62 

8)  Operational obligations / duties  ________________________________________________________ 63 

 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

  3 

This  document  has  been  prepared  for  the  European  Commission  however  it  reflects  the  views  only  of  the 

authors, and the Commission cannot be held responsible for any use which may be made of the information 

contained therein. 

Please  note  that  this  and  the  other  country  handbooks  form  just  part  of  the  deliverables  of  the  “European 

Barriers  in  Retail  Energy  Markets”  project.  For  more  detail  on  methodology,  Europe-wide  results  and  the 

Barriers Index, please refer to the following associated reports: “Final Report of the European Barriers in Retail 

Energy Markets Project”; “Report on the European Retail Energy Market Barriers Index” 

 
 
 
 
 
 
 
 
Country handbook - Portugal 

  4 

SUMMARY 

Project Outline                                                  

The following project outline describes the overall European Barriers in Retail Energy Markets Project. It relates 

to all the countries and markets which are the focus of the project. 

The Context 

European  retail  energy  market  liberalization  is  now  well  into  its  third  decade  in  the  most  mature  markets. 

Customers of electricity and gas are now free to choose their electricity and gas suppliers in nearly all markets 

across the EU and in a number of other European markets. At the same time, the European Commission and 

national  European  regulators  have  created  a  basis  for  non-discriminatory  market  access  for  energy  suppliers 

through  a series of regulations and  directives. In  theory at least, the European retail energy market is a place 

where new suppliers and providers of retail services can enter the market and compete relatively freely and on 

equal terms for customers in the market; a place where formerly incumbent electricity suppliers can compete for 

gas customers and where gas suppliers can compete for electricity customers; a place where a supplier from one 

region or jurisdiction can compete in another, without facing unreasonable or excessive barriers; a place where a 

capacity  aggregator  or  other  innovative  business  model  can  compete  to  provide  its  services  to  retail  energy 

customers.  

Objective 

The European Barriers in Retail Energy Markets project was established to research the extent to which the theory 

is the case in practice; the extent to which energy suppliers across Europe face a variety of barriers to enter and 

compete in the market; to identify which barriers exist and to provide some suggested solutions to those barriers. 

The  project  thereby  aims  to  support  the  European  Commission  and  Member  States  in  developing  policy  and 

implementing actions to reduce barriers.  

This project has also designed and calculated a performance index that ranks different countries according to how 

easy it is to do business in the retail energy segment  by combining a selection of measurements into a single 

score. The project is on the other hand, not intended as a measure or indicator of the ‘competitiveness’ of any 

given market, and it does not in this respect judge the effectiveness of regulatory authorities or governments, many 

of which have put great effort into developing their markets. 

It is also important to note that all the markets included in this research are continuously evolving. Changes are 

being  planned  and  improvements  (and  in  some  cases  additional  barriers)  are  possible  as  a  result.  While  this 

project highlights and considers known future changes, it cannot make assumptions as to the effectiveness and 

outcomes of those changes. This project is therefore weighted in the present, based on the actual context in the 

market, whilst accepting that the present context may change, in some cases imminently. 

 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

  5 

Competitor Perspective  

What sets this project apart from previous Europe-wide projects looking at the issue of barriers is above-all that it 

primarily  takes  the  perspective  of  the  competitor  rather  than  any  objective  view  of  regulators,  economists  or 

academics. This is an important distinction since it requires an acceptance that even if the existence of specific 

barriers may not seem logical or rational, and even if they are not permitted or legal, even if they were supposed 

to have been eradicated, those barriers are significant at least in the experience or expectations of competitors in 

the market.  

Notwithstanding this however, the project does not simply accept whatever competitors claim. On the contrary, 

the researchers have gone to great lengths to ensure that claims are challenged and justified. Cooperation with 

regulatory authorities to understand the regulatory context of claims, along with survey and interview feedback 

from competitors (including incumbent suppliers) with alternative perspectives or points of view, have also been 

considered to ascertain a balanced evaluation of the barriers in any given market. This approach may therefore 

be of value to policy makers, and complementary to other studies addressing market outcomes. 

In some cases, claims by respondents have been made which cannot be corroborated. For instance, there have 

been  claims  by  many  respondents  across  Europe  about  integrated  utility  behaviours  that  represent  barriers  to 

independent suppliers in the markets. Barriers apparently resulting from a lack full ownership unbundling. Such 

behaviours may well be regulated against, may even be considered illegal, and authorities may have powers to 

investigate  them  –  and  maybe  do  so.  They  are  impossible  to  prove  given  the  mandate  and  resources  of  the 

researchers  of  this  project,  yet  they  are  widely  reported  by  respondents  and  broadly  documented  in  other 

researches.  Such  barriers  may  be  considered  allegations  by  the  respondents,  but  where  they  appear  to  merit 

further consideration they have been raised since their potential impact on competition is substantial. 

Scope & Scale of Research 

The project focuses on electricity and (in most cases) gas markets in 30 European countries, namely the EU27 

states plus Great Britain, Norway and Switzerland. It was conducted over the course of more than a year with the 

cooperation and assistance of nearly all of the relevant national regulatory authorities (the report does not however 

represent  their  views  and  has  not  been  ratified  by  them),  around  150  suppliers  and  many  other  stakeholder 

organizations, across all focus markets. Great Britain was included in the project and cooperation was received 

from numerous suppliers, the regulator (OFGEM) and other stakeholders. Switzerland and Malta were included 

to a lesser extent since they are not yet open markets for household customers.  

 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

  6 

The project focuses on retail (supply), including also demand aggregation services, other additional offerings and 

new  model  retail,  especially  relating  to  the  household  segment  customers  (in  some  markets  households  and 

smaller SMEs may be difficult to distinguish). The project additionally concentrates primarily on barriers that are 

specific to the energy (electricity and gas) retail market – as opposed to barriers that are true of most markets, 

such  as  basic  business  costs  and  risk  -  and  it  gives priority  to  barriers  for  which  a  potential  solution  might  be 

sought, as opposed to barriers which are a fact of any energy market and which could not realistically be overcome 

(such as the barriers relating to the core price volatility of energy as a commodity). The project does not aim to list 

every possible barrier in the market, however small. 

Sources of Information 

Many sources of information were used as part of the project. These included an extensive literature review of 

over 100 public reports, to assist in the targeting of survey questions; interviews with national regulatory authorities 

(NRAs) to understand the regulatory context in markets; feedback from market participants (suppliers and other 

competitors) and extensive data gathering for the purpose  of collecting market  metrics, market processes  and 

 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

  7 

index values. For the latter the task of identifying sources that could deliver comparable and reliable index values 

was a key challenge of the researchers. The expert knowledge of the project consortium (which has extensive 

experience from the markets and issues concerned was also used to add judgement to the process. Specifically, 

the core project team comprised over a dozen researchers and experts from nine European countries, including 

international experts who have analysed Europe’s energy markets since even before they liberalized. 

Figure 1 – Multiple Information Sources 

Surveys & Interviews 

The primary research mediums used in the project were an extensive questionnaire and in-depth interviews. The 

purpose of the questionnaire, which contained separate questions depending on the type of respondent, was to 

provide a comprehensive and structured identification, weighting and magnitude of the barriers as experienced 

and perceived by suppliers and  other competitors. Questions were categorized and broken down according to 

what was known through the body of existing literature and the experience of the project consortium, ensuring that 

all known barriers were addressed by the questionnaire. The questionnaire additionally facilitated the identification 

of barriers that hitherto had not been revealed by the literature review, or which were country specific. Interviews 

provided additional support and clarification to the findings from the questionnaire as well as allowing respondents 

to focus on top-of-mind barriers and the interviewers to dig deeper into key and / or unclear issues. While some 

respondents provided both questionnaire and interview responses, many provided one or the other.  

The survey was publicly and widely promoted (via web sites, social media and by other direct means) to potential 

respondents  from  17th  June  until  late  October  2019  but  remained  open  until  late  February  2020  so  that 

stakeholders contacted during Country Handbook development had the chance to respond. The dissemination of 

information  on  the  project  was  further  facilitated  by  a  widely  promoted  public  website  through  which  over  300 

people subscribed. 

 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

  8 

The Competitor Sample 

143  questionnaire  and  interview  responses  were  received  representing  120  unique  market-specific  responses 

covering 28 focus markets. 71% of responses were through questionnaires versus 29% through interviews. Malta 

(a closed market for household customers) and Slovakia were the only markets from which responses were not 

received,  although  three  additional  markets  received a  level  of  response  which  was  considered  insufficient  on 

which to conclude barriers based solely or primarily on respondent feedback. In these markets, namely Bulgaria, 

Cyprus,  Czech  Republic,  the  project  consortium  applied  their  expert  insight  and  additional  desk  research  to 

support the analysis of the markets. Switzerland, also a closed market for household customers, also naturally 

received  insufficient  response.  The  responses  from  24  markets  were  therefore  considered  sufficient  for  the 

purpose of interpreting the barriers within those markets primarily based on respondent feedback. It is important 

to note that the response rate in no way impacted the index, which is not dependent on responses. 

Analysis  of 

the  sample  shows 

that 

responses were spread evenly among the 

regions.  66%  of  responses  were  non-

incumbent  competitors  compared  with 

34% which were former incumbents in the 

markets  concerned.  In  many  cases  the 

former 

incumbents  are  only 

former 

incumbents  in  one  region  within  the 

overall  country  they  are  in.  A  large 

proportion  of  the  former  incumbents  are 

furthermore  active  across  multiple 

regions  and  countries,  and  therefore  are 

both incumbents and non-incumbents, defenders and challengers. Among the non-incumbent players were a mix 

of more established competitors and more recent new entrants, along with more traditional supplies, new model 

suppliers and aggregators.  

More information on the nature of the sample and responses can be found in the Final Report for this project. 

Confidentiality 

The importance of data protection and anonymity within the project cannot be stressed enough. Most respondents 

provided information on condition of anonymity. It was promised by default to questionnaire respondents and was 

in most cases explicitly requested by interviewees. Many participants additionally stated that they were nervous 

to  respond  at  all  since  they  were  active  in  a  market  where  there  were  only  a  handful  of  suppliers  (or  at  least 

independent  suppliers)  which  they  felt  meant  that  their  responses  could  easily  identify  them.  This  risk  was 

perceived as even greater in cases where the participant had made public statements on issues that would be 

contained  in  the  research  (the  risk  of  readers  putting  two  and  two  together  was  a  concern).  In  some  cases, 

 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

  9 

respondents stated that they even feared a backlash from other stakeholders if their identity was revealed, or (for 

e.g. a brand-new entrant in a market with one brand-new entrant) stated that if we revealed that they were a new 

entrant the market authority would instantly know who they were and that they were afraid it might inhibit their 

entry process. 

Under such circumstances, it was decided that not only would all responses be anonymous, but also that the type 

of respondents would not be revealed in connection with given responses on a country level. It has been claimed 

by a handful of market authorities that this policy reduces the value of the research. The researchers feel that it in 

fact increases the value of the research since it has allowed respondents to provide information in an uninhibited 

fashion  in  a  European  market  where,  by  and  large,  independent  suppliers  –  and  especially  independent  new 

entrant suppliers – are few and far between. 

Deliverables 

The project has three key deliverables:  

•  28 country specific handbooks detailing the barriers identified in each country together with suggestions 

for possible solutions. While most of the handbooks cover electricity and gas markets, some only cover 

electricity or cover gas to a lesser extent due to the absence or limited presence of gas. Additionally, two 

countries, Malta and Switzerland do not have country reports due to their closed nature with respect to 

household customers.  

•  A robust, peer-reviewed barriers index of how easy it is to do business in each country. The European 

Retail Energy Market Barriers Index, contained in the separate European Retail Energy Market Barriers 

Index Report, allows the objective comparison of market barriers across the focus markets. The report 

also includes a ranking of the focus markets.  

•  An overall Final Report containing a full project description and bringing together the findings and common 

learnings from all countries.  

 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 10 

The Barrier Index and Ranking 

The purpose of the ‘European Retail Energy Market Barriers Index’ is to enable a degree of comparability between 

the barriers’ context in each of the markets. It is based on metrics that can be collected for all markets, metrics for 

which available data currently exists. As such it provides a simple, best-available proxy benchmark measure for 

each of the categories of barriers identified by the project, for each market, and thereby ranks each market. It is 

intended to be used as an evolving periodical index and ranking on a European and national level. 

The index and ranking should, however, presently be considered more of an approach and an indication than an 

absolute or definitive ranking. It represents the current state of market monitoring data in Europe and will evolve 

over time as data availability improves. Over time we would expect and recommend that governments and NRAs 

advance new metric collection to better enable future editions of the index and ranking. 

A full description of the Index, its methodology and detailed findings and the ranking can be found in the separate 

Index report for this project. Within each country handbook the index values for that given country is presented. 

 
 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

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Country handbook - Portugal 

 12 

Key barriers in the Portuguese market 

The following figure highlights the key barriers in the Portuguese market. Please note, the terms are generic 

across all researched markets. 

 
 
 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 13 

Key recommendations 

Identified barriers, can stifle market development and functioning, hence we set a list of recommendations going 

in the direction of a well-functioning retail energy market, as one where there is a good environment for innovation 

of energy services and products that benefit the consumer. 

•  With the transition to the free market ending at the end of 2025 a penalisation factor is recommended to 

promote the shift but also to eliminate discrepancies as a result of margin squeeze.  

If  cross-subsidisation  is  proven  a  test  should  be  run  to  see  if  they  are  detrimental  to  the  interests  of 

suppliers  and  customers.  Regulator  should  ensure  the  identification,  measurement  and  allocation  of 

supplier costs, not only related to the incumbent’s one, that should be carried out appropriately and in line 

with the economic principles of cost recovery. 

•  Suppliers  concerns  was  focused  on  the  guarantees  requirements  to  protect  suppliers  from  collection 

failure with the claim that this system needed a revaluation. In April of 2020, right before the closing of this 

project,  the  Regulator  informed  that  there  was  an  enforcement  on  regulation  for  guarantees  in  the 

electricity  market  is.  A  new  piece  of  regulation  that  balances  the  need  for  systemic  risk  coverage  and 

flexibility to suppliers to address the retail market (ERSE’s Directive 2-A/2020). 

• 

Implementation  plan  to  provide  all  is  necessary  to  identify  the  operator  to  deploy  smart  meters  in  the 

country. 

•  The issuing of regulation after law 5/2019 enactment is a priority, with the Regulator running consultation. 

However, efficiency and speed of regulation issuance are required. Taking into account the country need 

for innovation and a degree of suppliers’ willingness to invest in this direction. 

•  Forward  market  liquidity  should  be  prioritised.  Among  the  others,  RES  auctions,  SLR  auctions  and 

mandatory market making obligations may help to achieve a certain degree of liquidity. 

•  A data hub could level the playing field with regards to data access, easing the entry of new players and 

boosting market efficiency as well as enabling customers to participate directly in the market. 

•  ERSE has adopted sanctions to market participants, together with a new guarantees regime to foster the 

trust on both, the market and the suppliers. Ad-hoc monitoring and follow up activities are crucial in this 

sense and need to be guaranteed as in the past. This activity helped the regulator to remove suppliers 

from the market with reputational risk. 

• 

Innovation of the retail market can be pursued through the deployment of smart meters, the promotion of 

bill settlement on real-time consumption (already implemented in the intelligent metering regulation), the 

correct implementation of time-of-use tariffs at household level and promotion of innovation in household 

technology;  giving  also  incentives  to  customers  to  play  a  more  active  role  and  better  engage  with  the 

 
 
 
 
 
 
 
 
Country handbook - Portugal 

 14 

market. Besides, activities aimed at raising customers’ awareness and strengthening monitoring activity 

over suppliers’ contractual transparency and customers information obligations are of a great importance. 

 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 15 

MARKET OVERVIEW 

Introduction 

In 2018, Portuguese electricity demand reached the 50.9 TWh level, recording a +2.5% if compared with 2017. In 

the natural gas sector, consumption increased by 5% compared to 2017 in the conventional market and decreased 

by 25% in the electrical power market (power plants). 

The  electricity  residential  sector  is  composed  of  6.1  million  household  customers  with  2,936  kWh  of  average 

annual consumption per household. Meanwhile, the Portuguese gas system has 1.3 million end users, as of 2018, 

with  2,255  kWh  of  average  annual  consumption.  By  the  end  of  2018,  electricity consumption  with  free  market 

contracts represented more than 94% of total consumption, 1% more than in 2017. Regarding natural gas, with 

the exception of electricity power plants, about 97% of consumption was in the liberalised market, representing 

about 1.2 million customers. 

Background 

The liberalisation of the energy market in Portugal followed a process similar to most other European countries 

and as of 2020 is almost fully liberalised. 

The Portuguese electricity and gas markets have been progressively opened. The first move towards the opening 

of  the  generation  in  the  electricity  sector  was  made  in  1981.  However,  regarding  supplying  activities,  the 

liberalisation process for large industrial consumers began in the mid-1990s. Since then, the concept of eligibility 

has been extended to smaller consumers reaching full legal opening of the market in July 2004. However, the 

eligibility of the household consumers was effective only in September 2006. This date anticipates the compliance 

deadline in Directive 2003/54/EC, which established 1 July 2007 for all electricity purchasers to be able to freely 

choose their supplier. Later, in 2010, the gas sector also achieved full retail competition. 

 
 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 16 

Since 2013, regulated retail tariffs were no longer available for the Portuguese electricity customers who needed 

to  change  their  supplier.  The  regulated  retail  rates  ended  in  July  2012  for  normal  low  voltage  consumers  with 

contracted power equal or greater than 10.35 kVA and in January 2013 for normal low voltage consumers with 

contracted power less than 10.35 kVA. Following a decision by the government, ERSE, the national regulatory 

authority,  set  a  transitional  period  for  the  gradual  transfer  from  the  regulated  market  to  the  free  market,  which 

ended in December 2014 for consumers with contracted power equal or greater than 10.35 kVA and in December 

2015  for  consumers  with  contracted  power  less  than  10.35  kVA.  This  transition  period  has  been  periodically 

extended by the government in subsequent years. The current deadline for LV consumers to transition to the free 

market is 2025. 

Stability was the dominant note during the last couple of years for the electricity and natural gas retail markets, 

seen,  for  example,  through  the  market  shares  of  the  main  suppliers.  Besides,  for  the  first  time  ever  in  the 

Portuguese  retail  sector,  in  2017  two  suppliers  seriously  defaulted  on  their  financial  obligations  towards  the 

distribution network operator, relating to the payment of third-party access tariffs. As a result, their contracts for 

using the network were suspended and their customers were transferred to the supplier of last resort, avoiding 

any disruption to electricity supply.1 

Unbundling requirements in Portugal also apply to the distribution activity, which is unbundled from the remaining 

activities  in  the  electricity  sector  (with  the  DSO  being  autonomous)  from  a  legal,  organizational  and  decision-

making perspective. 

The low voltage distribution network in Portugal is a concession given to EDP Distribuição SA, for most of the 

municipal distribution systems. EDP is also the distribution system operator (DSO) of the high and medium voltage 

distribution  grid.  Nevertheless,  the  process  to  renew  the  electricity  distribution  concessions  is  ongoing, 

notwithstanding that the law governing the upcoming tenders was approved in May 2017 (Law 31/2017). The law 

set the principles regarding the organization of public tender procedures and established that all tenders would 

have been launched in 2019. It also established that each tender would have a delimited geographical area, and 

proposed inter-municipality grouping as a reference. The retail sector will benefit from the law’s ultimate goal of 

introducing competition. 

Market structure 

The liberalisation of the energy sector in mainland Portugal has progressed gradually, with the liberalised market 

consolidating its position,  mainly due to the process of extinguishing regulated tariffs that, in January of 2013, 

started to cover all the clients, including household customers. 

1 Annual Report to CEER, year 2017. 
https://www.ceer.eu/documents/104400/6319351/C18_NR_Portugal-EN.pdf/de5f99c7-b514-f893-6fba-22387c474a9f  

 
 
 
 
 
 
 
 
 
 
 
 
                                                        
Country handbook - Portugal 

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The extinction of the regulated tariffs has contributed to the increase of the liberalized market dimension. In the 

liberalized market, the industrial customer segment is the most competitive of all, while the household customer 

segment had the most market concentration, with the number of suppliers in this segment continuing to increase 

throughout 2017 and 2018. 

In 2018, Portugal continued to witness a consolidation of the liberalized retail market, both in terms of the overall 

consumption of electricity and in the number of customers. 

Structural factors, such as the phase-out of regulated tariffs for end-customers and the adoption of transitional 

tariffs; the adoption of regulated risk coverage mechanisms by the suppliers; and enhanced transparency in the 

communication of available offers to end-consumers, facilitated an increase in the number of suppliers that operate 

in the market, leading to greater market robustness. 

Similarly,  in  terms  of  economic  and  market  circumstances,  the  decrease  in  energy  price  differences  between 

Portugal and Spain in the wholesale market encouraged the perception of lower commercial risks among suppliers 

that operate in Portugal and who compete against the other suppliers operating in the Portuguese market. 

Throughout 2018, in Portugal, there were 29 suppliers operating on the market, 26 of which served household 

consumers and small companies (with contracted power up to 41.4 kVA). The main supplier of last resort is EDP 

Serviço Universal which supplies in the continental territory. In the autonomous regions of Azores and Madeira, 

the suppliers of last resort are Electricidade dos Açores and Empresa de Electricidade da Madeira. The following 

Figure reports the customer choice only for capital city. 

 
 
 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 18 

In  2018,  supplier  switching  was  marked  by  a 

significant penetration of suppliers on the liberalized 

market  in  segments  such  as  customers  with  the 

highest consumption, large customers and industrial 

consumers,  but  also  in  the  household  consumers 

segment:  approximately  85%  of  household 

consumers were already in the liberalised market at 

Top  5  suppliers  (energy 
sales  volume  as  of 
2019- 
liberalised 
market) 

in 

Electricity 

Gas 

• EDP  
• Endesa 
• Iberdrola 
• Galp 
• Goldenenergy 

• Galp 
• GNF 
• Endesa 
• EDP 
• Goldenenergy 

the end of 2018 (2 percentage points (p.p.) more compared to the end of 2017).  

The intensity of supplier switching was around 16% in 2017 and 10% in 2018, however. The switches that occurred 

within the liberalized market represented, in number of customers, approximately half of the total supplier switches. 

Portugal  also  continued  to  witness  a  consolidation  of  the  liberalised  market,  in  terms  of  overall  natural  gas 

consumption, and in the number of customers, partly due to the extinction of regulated tariffs for end-customers. 

At  the  end  of  2018,  more  than  97%  of  natural  gas  consumption  within  the  conventional  segment  (excluding 

standard  regime  power  plants)  was  being  supplied  by  suppliers  on  the  liberalised  market.  On  the  liberalised 

market, at the end of 2018, there were 12 suppliers on the market, all of them operating in the household consumer 

segment. By the end of 2018, about 212,000 customers, from approximately 1.3 million, had switched supplier 

through the respective platform, most of them from the household segment. 

Energy component of end-user tariff on average is 36% for electricity and 38% for natural gas, as of 2019. While 

the savings experienced by customers after switching activity, on average was 4.5% and 5.6% respectively for 

electricity and gas in 2018. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 19 

Regarding  wholesale  market  activity,  the  Iberian  power  and  gas  market  is  largely  developed  with  most  of  the 

electricity and gas traded in the market negotiated in bilateral over the counter (OTC) transactions or through the 

organized market managed by Operador del Mercado Ibérico (OMI Group). 

In 2018, the electricity traded in the Iberian market was 276 TWh (including day-ahead, intraday and continuous 

intraday market) down from the 281 TWh level reached in 2017. With more than 1,000 registered agents across 

the market platforms. 

Mibgas 

is  the  wholesale  natural  gas  trading 

platform,  which  traded  24  TWh  in  2018,  almost 

doubling  the  volumes  traded  in  2017  (13  TWh). 

With  82  registered  agents  across  the  market 

platforms.  

•  Natural gas volume traded in 2018: 

o  MIBGAS: 24 TWh 
o  OTC: 498 TWh (51% traded PVB virtual hub) 

•  Number of suppliers active in the gas OTC:  92 
•  Number of suppliers active in the MIBGAS:  42 (82 regist.) 

Finally, the Portuguese electricity system is operated and managed by REN, the transmission network operator. 

With 8,733 km of lines all over the country. The 400 kV grid lines mainly run north to south near the coast from the 

Alto  Lindoso  power  station  in  the  north  to  the  Algarve,  and  west  to  east,  where  they  interconnect  with  the 

Portuguese  grid.  In  Portugal,  imbalances  between  production  and  demand  and  technical  constraints  are  dealt 

within the scope of the ancillary services market, which is also managed by REN in its capacity as Global Technical 

System Manager. 

The Portuguese gas system is managed by REN-Gasodutos that operates the national natural gas transmission 

network  and  manages  the  natural  gas  transmission  system.  The  natural  gas  transmission  network  comprises 

1,375 km of high-pressure gas pipelines, and one regasification unit. 

Political and regulatory orientation 

• 

In  terms  of  economic  and  market  circumstances,  the  decrease  in  energy  price  differences  between 

Portugal  and  Portugal  in  the  wholesale  market  encouraged  the  perception  of  lower  commercial  risks 

 
 
 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 20 

among suppliers that operate in Portugal and who compete against the other suppliers operating in the 

Portuguese market. 

• 

In 2018, the Portuguese retail sector was reformed with the objective of making retail market monitoring 

more  effective,  clarifying  the  rules  requiring  suppliers to  disclose  the  content  of  pre-contractual  and  of 

contractual  information.  Making  it  easier  to  compare  commercial  offers  registered  in  ERSE  through 

standardised contractual sheets. Through this measure ERSE believes to enable effective promotion of 

competition. 

•  As part of the 2018 reform, it became mandatory for electricity suppliers, when in representation of their 

clients, to insert in the switching platform the requests relative to the processes included in the switching 

procedures, with a maximum deadline of 5 working days, in accordance with what was already in place 

for the natural gas sector. 

•  The  revision  also  changed  the  rules  in  relation  to  electricity labelling,  with  the  objective  to  change  the 

allocation of energy under special regimes. The new rules allow for the existence of suppliers with a 100% 

renewable mix and for suppliers to further differentiate their offers. 

•  Finally, the revision introduced changes to promote a better retail market functioning allowing for a more 

effective competition, in the guarantees management process in relation to the contracts for the use of 

networks and for system services between market agents and system operators. Thus, the new framework 

introduced  the  role  of  guarantees  manager,  which  centralises  the  guarantees  management  activity  of 

those  contracts,  with  advantages  for  suppliers  in  having  a  unique  entity  to  interact  with  in  relation  to 

guarantees and on reduction of the default risk. The guarantees manager should apply risk evaluation 

principles that differentiate between entities with a compliance history and entities with a history of delays 

or defaults, the latter being penalised in the calculation of the guarantee to be provided. 

Regulatory market characteristics 

Price regulation 

In Portugal, since 1 January 2013, regulated end-user tariffs are no longer available to Portuguese consumers of 

electricity and natural gas, who must switch to a market supplier. For existing customers with regulated tariffs, a 

transitional period was foreseen and has been extended to allow a smoother move to the liberalized market. These 

regulated tariffs may be adjusted on a quarterly basis. 

Under the terms of Government Ordinance N. 39/2017 of 26 January 2017, consumers who still have regulated 

tariffs have a transitional period until 31 December 2020 to choose an electricity market supplier. While, under the 

terms of Government Ordinance N. 144/2017 of 24 April 2017, consumers who still have regulated tariffs have a 

transitional period until 31 December 2020 to choose a natural gas market supplier. The government announced 

in January 2020 a further 3-year extension to this transitional period, until 2023. 

 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 21 

This  phased  extinction  of  regulated  tariffs  for  domestic  consumers  is  aimed  to  conclude  the  process  of 

liberalisation of the electricity and natural gas markets in Mainland Portugal. The process for switching suppliers 

is free, requires no change of meter, and is driven by the supplier with whom the consumer has entered into a new 

contract for the supply of energy. 

Supplier registration and contracts 

Retail supply activity is only subject to registration with Directorate-General for Energy and Geology (DGEG) the 

Government’s administrative body responsible for awarding suppliers’ rights to operate within the electricity and 

gas sector in Portugal. The registration requires confirmation from DGEG, but it is considered tacitly approved if 

there is no decision in 30 days. 

The supplier of last resort is responsible for: 

•  Buying electricity from generators who benefit from a feed-in-tariff. 

•  Selling electricity to: 

o  certain end-consumers (such as consumers who have not yet moved to the liberalised market in 

the transitory period prior to full liberalisation). 

o  economically vulnerable customers.  
o  customers that were supplied by a supplier that went into bankruptcy; and 
o  customers in places where there are no offers from other suppliers. 

More details on licensing, registration and contracts required to enter and operate in the retail electricity and gas 

system are reported in the following figure. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 22 

Recent regulatory developments  

Early in 2019, the National Assembly published a new law n. 5/2019, which establishes the regime of compliance 

with  the  duty  of  information  of  the  energy  supplier  to  the  consumer.  It  applies  to  suppliers  and/or  provider  of 

services to consumers of electricity, natural gas, GPL and petroleum derived fuels. Under this law, the supplier 

must inform the consumer of the conditions under which the supply and/or provision of services is supposed to be 

performed in a clear and complete manner. In the electricity and natural gas sectors, this is reflected in a greater 

detail  on  the  invoice  information.  However,  this  recent  law  has  raised  uncertainty  among  some  retail  markets 

actors, in a way that is contrary to the law’s objectives. Specifically, suppliers believe that this creates confusion 

among  customers,  mainly  complicating  the  billing  structure  and  worsening  the  understanding  of  the  bill’s 

components.  

In December 2018, ERSE approved the new rules on the participation of consumption in the regulation reserve 

market, as a result of its 67th public consultation where this topic was discussed among stakeholders. 

According to the new rules, participation in the reserve regulation market is open to all consumers recognised by 

the TSO. They must be capable of offering at least 1 MW bids, following technical and operational certification by 

TSO, and be connected to at a voltage level equal or greater than MV. For the purpose of this pilot project, rules 

foresee a limited 1-year duration, starting on 2 April 2019. 

This pilot project is the first step towards full participation of consumption in ancillary services markets. Its ultimate 

goal is to ensure equal treatment for consumers (or their representatives) and producers who currently bid on 

these markets. 

Also, during 2018, ERSE prepared a regulation for the services to be provided to customers by DSOs that hold 

smart  grids,  namely  in  terms  of  consumption  data  availability  and  the  provision  of  grid  services  carried  out 

remotely. 

Recently,  ERSE  has  launched  public  consultations  on    self-consumption,  merger  of  the  electricity  and  gas 

commercial  relations  codes,  provision  of  information  to  consumers  regarding  GPL  bottles,  electric  mobility, 

mechanism for contracting energy for SoLR customers, smart grids. 

Other market characteristics 

Volatility of wholesale & retail prices 

The market’s volatility represents an important aspect considered by market agents, namely regarding the need 

to cover price risks. In 2018, the volatility of the spot market price for Portugal, measured as the coefficient between 

the  standard  deviation  of  prices  in  the  year  and  the  respective  average  price,  was  approximately  21%,  which 

means prices ranged, on average, between €45/MWh and €70/MWh. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 23 

The following Figure2 shows the evolution of the annual volatility of the spot market price, from 2014 to 2018, for 

Portugal and Portugal, with a slight decrease in the spot price volatility between 2017 and 2018. 

ERSE  showed  that  during  2018  there  were  19  suppliers  operating  in  the  retail  household  market  segment.  In 

addition, a total of 109 electricity-only offers and 63 dual offers (electricity and natural gas), totaling 172 commercial 

offers, continued the growth trend in the number of offers. Three of the suppliers also had offers with additional 

energy services, like for example, technical assistance services and energy audits, and prepayment commercial 

offers.  With  the  electricity-only  commercial  offer  with  the  lowest  annual  electricity  bill  (844  €/year)  was  21% 

cheaper than the most expensive one (-227 €/year). The dual (electricity and natural gas) commercial offer with 

the lowest annual electricity bill amounted to 822 €/year and corresponded to a discount of approximately 20% 

compared to the most expensive dual offer (-208€/year). 

The  Figure  below  shows  the  evolution  of  the  prices  of  commercial  market  offers,  as  well  as  the  values  of  the 

transitional tariffs associated with the simple and bi-hourly options, in 2017 and 2018. In 2018, the commercial 

offers showed a decrease in the maximum prices when compared to 2017, as a result of a new commercial offer 

high  above  the  transitional  tariff.  As  regards  the  minimum  prices  of  commercial  offers,  prices  remained  stable 

during 2018, with a slightly increase in the price of only one service offer (electricity). 

2 National Reports of the EU member countries to the CEER, 2018. 

 
 
 
 
 
 
 
 
 
 
 
                                                        
Country handbook - Portugal 

 24 

3 

Regarding retail natural gas market, in December 2018, the commercial offer with the lowest annual bill had a 

value of 198€/year, corresponding to a mono natural gas offer. The difference between this offer and the most 

expensive one is 68€/year (26%). The dual natural gas commercial offer with the lowest value of the natural gas 

supply component amounted to 212€/year, corresponding to a discount of approximately 21% compared to the 

most expensive offer. As showed in the graph below, in 2018, the prices of commercial offers remained stable in 

the period, having slightly decreased when compared to 2017.  

Retail market and customer value 

Between 2013 and 2015, the transitional tariffs were increasing every quarter for residential customers during the 

three-year  transitional  period,  after  the  price  regulation  phasing  out.  This  policy  encouraged  many  residential 

customers  who  were  being  supplied  by  the  energy  supplier  of  the  last  resort  to  choose  a  supplier  from  the 

liberalized market. This helps to explain Portugal’s high switching rate value among other EU countries in those 

years.  However,  most  of  these  customers  chose  EDP  Comercial  as  their  supplier  in  the  free  market.  Hence, 

3 National Reports of the EU member countries to the CEER, 2018. 

 
 
 
 
 
 
 
 
 
 
 
 
                                                        
Country handbook - Portugal 

 25 

customers  knew  they  were  switching  inside  the  well-established  incumbent.  Consequently,  despite  all  the 

improvements  in  the  structure  of  the  Portuguese  electricity  market  and  the  high  switching  rates  that  were 

experienced  in  2013  and  2014,  the  Portuguese  retail  electricity  market  is  still  highly  concentrated  in  Portugal. 

Overall business concentration remained high in 2018. The EDP Group’s high market share as the leading actor 

in the electricity market, mainly in the household customers segment, was the factor that contributed most to this 

situation, as this liberalised market supplier continued to account for approximately 42% of supply in 2018 (44% 

in 2017), as shown in Figure below. 

Gas retail market continues its consolidation of the market  liberalisation phase,  mainly due to the extinction of 

regulated  tariff  for  end-customers.  As  reported  by  CEER,  at  the  end  of  2018,  more  than  97%  of  natural  gas 

consumption within the conventional segment (excluding standard regime power plants) was being supplied by 

suppliers on the liberalised market. With 12 suppliers operating in the household liberalized market. Galp Group 

is the main supplier in the liberalised market with still an important share of the market (61%). Followed by Gas 

Natural Fenosa, Endesa, EDP, Goldenenergy, CEPSA, PH and others. 

4 REN gasodutos data, 2018. 

4 

 
 
 
 
 
 
 
 
 
 
                                                        
Country handbook - Portugal 

 26 

Context for aggregation/demand response 

The Portuguese NRA, ERSE, held a public consultation about the rules of a pilot project addressing the demand 

side participation in reserve market, namely regulation reserve. The results and lessons learned from this pilot are 

intended to contribute for the new legislation and may pave the way for more attractive demand-side management 

(DSM) markets in Portugal. 

Regarding  the  general  situation  in  Portugal,  the  DSO  is  the  responsible  party  for  metering  infrastructure  and 

access  to  data  of  final  customers  and  for  forwarding  it  to  relevant  energy  agents  such  as  suppliers.  The  DSO 

activities are regulated and the investments on the grid, including metering, have to be approved by ERSE. 

Although EDP, the DSO, has an internal plan for the roll-out of smart meters, the engagement with the national 

regulator is pivotal for addressing this issue. Important are the benefits for clients on applying to demand response 

aggregation schemes, justifying a public investment on the grid infrastructure that could enable these business 

models. 

On the other hand, aggregators can also try to explore new solutions which do not rely on DSO investments. In 

that case, they would be responsible to deploy all the necessary systems to proceed with the implementation of 

the business model. 

Also, participation in the reserve regulation market is open to all consumers recognised by the TSO. They must 

be  capable  of  offering  at  least  1  MW  bids,  following  technical  and  operational  certification  by  TSO,  and  be 

connected to  at a voltage level equal or greater than  MV. For the  purpose  of this pilot project, rules foresee  a 

limited 1-year duration, starting on 2 April 2019. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 27 

 
 
 
 
 
 
 
 
Country handbook - Portugal 

 28 

BARRIERS 

The European Barriers to Entry and Competition in Retail Energy Markets project has researched barriers across 

30 European markets. From this research, barriers to entry have been identified and grouped into four over-arching 

pan-European barriers’ blocks. 

Over-arching pan-European barrier blocks 

r
e
i
r
r
a
B

s
k
c
o
B

l

1 

2 

3 

4 

Regulatory disincentivisation 

Market inequality 

Operational and procedural hinderance 

Customer inertia 

Description of the four-over-arching pan-European barrier blocks: 

1.  Regulatory disincentivisation: barriers arising as a consequence of the general regulatory framework of 

the natural gas and electricity retail markets. We address the impact of price regulation, burden (-sharing), 

regulatory unpredictability and access to innovation. All these items may disincentivize competition within 

the natural gas and electricity retail markets, as well as entrance by new suppliers. 

2.  Market  inequality:  barriers  arising  from  an  uneven  playing  field  for  different  types  of  suppliers.  Often, 

certain market players already have a competitive advantage by being very close to the formerly integrated 

DSO (or still being vertically integrated in case the de-minimis rule applies), controlling a large amount of 

generation capacity or having a large market share. If market rules do not prevent this, such players can 

exercise their market power to treat other market players in a discriminatory way, creating market barriers. 

We examine issues related to unbundling, historical roles and access to market mechanisms. 

3.  Operational  and  procedural  hindrances:  barriers  arising  as  a  consequence  of  the  complexity  and 

national/regional differences in standards and procedures in different process areas, affecting how easily 

new  entrants  can  enter  and  operate  in  the  energy  retail  market.  We  look  at  issues  and  differences  in 

licensing,  signing  up  and  operations  compliance,  as  well  as  data  access,  processes  and  data 

management from the suppliers’ point of view. 

4.  Customer inertia: barriers arising due to customer behavior and attitude. For the energy market to function, 

end-users must be willing and able to switch supplier. If customers do not switch supplier, suppliers need 

not worry about losing customers, so there is no incentive for suppliers to improve their services, minimize 

prices  or  innovate  to  compete  for  customers.  We  examine  barriers  related  to  customer  inactivity  or 

disinterest in the energy markets. 

Within  each  of  these  high-level  blocks  are  contained  sub-categories,  which  are  also  mostly  pan-European  in 

nature. Each of these sub-categories contain the specific barriers which relate to individual markets as described 

in the following page. Altogether, we identified 45 barriers, most of which broadly across Europe. Only a selection 

of them apply to the Portuguese case as reported in the following chapters of this handbook. 

 
 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 29 

HOW TO READ AND INTERPRET THE FOLLOWING SECTIONS 

Each of the following four chapters explores one of the four pan-European blocks of barriers and report how each 

sub-category  barrier  apply  to  Portugal.  When  a  barrier  applies  to  Portugal,  it  will  be  highlighted  in  the  table 

following a general description of the barrier itself, as shown in the example below: 

As showed in the above figure, the table lists all the barriers we have identified in Europe within the specific barrier 

category. Only if a sub-category barrier is highlighted in the table, it means that suppliers raised it as a barrier, 

and it is perceived as a prevalent issue in Portugal. 

Highlighted sub-category barriers are then briefly described following a twofold methodology which: 

• 

• 

reports what the suppliers are experiencing in the market as a national issue and  

suggests potential solutions to the problem as depicted in the below figure. 

At the end of each chapter, Portuguese’s performance within the category, according to quantitative indicators, is 

then presented. 

For additional market context, please see Appendix 1: Process Maps, which gives a high-level graphical overview 

of the most critical steps involved in establishing and operating as a supplier in the national market. 

 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 30 

1)  Regulatory disincentivisation 

Within  regulatory  disincentivisation,  barriers  across  Europe  have  been  sub-categorised  into  four  areas 

encompassing 17 specific barriers5, 

1.  Price regulation. Regulated prices usually refer to regulation or control of end-user’s prices by a public 

authority, usually the National Regulatory Authority (NRA). Price regulation can take different forms, such 

as setting or approval of prices, price caps or various elements of these. In Europe, there still exist Member 

States which have maintained end-user regulated prices during the market opening process and after, in 

the  intention  of  protecting  households  or  even  non-household  customers  from  significant  increases  in 

energy  prices,  especially in  a  context  of  limited  competition.  In  some  cases,  this  regulation  has  led  to 

below cost prices and to low margin to cover the supplier activity risk, discouraging investments and the 

emergence of newcomers. 

According  to  CEER 6,  14  European  countries  out  of  27  answering  a  recent  CEER  survey  have  price 

intervention in electricity for household consumers. Where regulated prices remain, NRAs tend to consider 

them as a significant barrier to entry for alternative suppliers. All Member States, where NRAs consider 

regulated  prices  as  a  significant  barrier,  are  planning  to  remove  them,  at  least  for  non-household 

customers. Across Europe, the following specific barriers related to price regulation were detected by this 

study. Those highlighted in blue have been either raised, indicated or identified as barriers in Portugal: 

•  Price regulation discriminates against certain suppliers. 

•  High penetration of price regulation 

•  Low margin of regulated offer (margin squeeze) 

2.  Burden sharing. Energy suppliers across Europe are often required to collect payments for services not 

part  of  their  business,  or  to  provide  other  services  such  as  services  related  to  energy  efficiency,  or  to 

manage  assets  such  as  those  of  the  metering  system.  These  requirements  can  pose  a  barrier  for 

suppliers’  operation  on  the  retail  market  by  raising  their  costs  and  distracting  focus  from  their  core 

business and might deter entry into the retail market by newcomers. Across Europe, the following specific 

barriers related to “burden(-sharing)” were detected by this study. Those highlighted in blue have been 

raised, indicated or identified as barriers in Portugal: 

•  Obligation to collect tariffs unrelated to energy on behalf of others 

•  Obligation to keep a minimum-security stock as a gas reserve 

3.  Regulatory  unpredictability.  The  establishment  of  an  internal  natural  gas  and  electricity  market  in  the 

European Union is an ongoing process. European legislative packages are boosting this process, making 

5 Please note: these definitions are Europe focused, not Sweden specific. Highlighted barriers have been identified as country specific. 
6 Monitoring Report on the Performance of European Retail Markets in 2018. CEER Report 4 November 2019. 

 
 
 
 
 
 
 
 
 
                                                        
Country handbook - Portugal 

 31 

market regulation evolve rapidly. Transposition of regulation into the national regulatory frameworks is not 

always smooth and NRAs’ actions are sometimes unpredictable. This leads to uncertainties for suppliers 

related to unclear and unknown future developments of the regulatory framework, including the attitude of 

the  institutions  that  regulate  the  retail  market  and  oversee  market  operation  and  organization.  This 

uncertainty is a barrier that impacts suppliers’ business, preventing their entrance in the market, making 

strategic business planning difficult or forcing them to adopt different approaches during operation. Across 

Europe, the following specific barriers related to “unpredictability of regulatory framework” were detected 

by this study. Those highlighted in blue have been raised, indicated or identified as barriers in Portugal: 

•  Suppliers face uncertainty because of a newly liberalized regulatory environment or uncertain 

future development of the regulatory framework 

•  Uncertainty caused by industry actors influencing legislation, e.g. incumbent or associations 

shape legislation 

•  Uncertainty regarding future regulatory developments, especially in the field of digitalization and 

new technology 

•  Attitude of authorities hinders development of the market 

•  Uncertainty regarding environmental obligations and non-renewable generation capacity 

4.  Access to innovation. Most European energy market are currently designed based on practices as they 

were during the period of national monopolies by what today are incumbent suppliers. Allowing suppliers 

and new entrants to be innovative depends not only on the opportunity to compete on prices, but also to 

diversify,  welcoming  new  products,  market  actors  and  business  models.  When  national  regulatory 

frameworks  do  not  take  into  account  innovation  in  the  retail  market  (regarding  e.g.  availability  and 

functionality of smart metering, the possibility of flexible contracting and tariffs, or whether the demand 

side can bid in the balancing system), this may pose a barrier for new market entries, particularly more 

modern players. If new entrants are to be enabled in order to increase the level of competition in the retail 

market,  regulations  must  accommodate  future  developments  on  the  energy  markets,  especially 

considering that in the future new entrants may not only be electricity and gas suppliers but also act as 

aggregators or energy service companies (ESCOs). Across Europe, the following specific barriers related 

to  “innovation-friendliness”  were  detected  by  this  study.  Those  highlighted  in  blue  have  been  raised, 

indicated or identified as barriers in Portugal: 

•  Data protection issues 

•  Lack of incentivisation for novel pilot projects or post-pilot market rollout 

•  Lack of data for innovative product development 

•  No fit between new business models and existing regulation/obligations 

•  Missing flexibility in tariff structures 

•  Missing information and incentives for demand-side grid management 

•  Market structures does not incentivize novel products (missing market value) 

 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 32 

1.1  Description of regulatory disincentivisation barriers in Portugal: Price regulation 

Low margin of regulated offer (margin squeeze). In the research this barrier was raised as being still an issue in 

Portugal.  

It is common across Europe that price regulation sets the regulated price to a defined level and allows all market 

participants to serve customers within this regulated segment. However, this can create a barrier in the market if 

the regulated price is set to such a low level that only companies that can benefit of from economies of scale are 

able to generate  a sustainable margin. All other market participants will be confronted  with a margin squeeze, 

making it very difficult to compete.  

Regarding Portugal, regulated end-user tariffs are no longer available to customers of electricity and natural gas 

markets. However, a part of the household customer category is still regulated and a transitional period up to 2023 

has been settled to allow a smooth transition to the liberalised segment. 

Identified national issue and related potential solutions regarding the Portuguese case are reported in the graphic 

below. 

e
u
s
s

i

l

a
n
o
i
t
a
N

Portugal  still  has  approximately  1Million  of 
regulation  segment 
customers  under  price 
(Supplier  of  Last  Resort).  In  this  segment,  some 
suppliers report that prices are not set above cost, 
at  a  level  where  effective  price  competition  can 
occur (in compliance with EU Directive 2019/944). 

l

the  maintenance  of 

  There  should  be  a  factor  of  penalization 
s
n
related  to  the  last  resort  tariff,  in  order  to 
o
i
discourage 
the 
t
u
consumers  in  the  regulated  market    side 
o
(with the SLR) and promote their shift to the 
s
liberalized  market,  and  also  to  correct  the 
discrepancy 
non-
consideration of customer acquisition costs. 

arising 

from 

the 

l

a
i
t
n
e
t
o
P

European markets in which this barrier has also been indicated 

AT  BE  BG  HR  CY  CZ  DE  DK  EE  FI  FR EL HU  IE 

IT  LV  LT  LU  NL NO  PL  PT  RO  SK  SI  ES  SE  UK 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 33 

Best practice example: 

Roadmap for removal of regulated retail prices.  

Portugal removed end-user price regulation for non-household customers and the transitional period ended in 2016. As 
part of the phase-out process, which started in 2010 for gas non-household customers and in 2011 for electricity non-
household customers,  a  transitional  period  was defined  by  the  government  in  Portugal  in order  to enable  customers 
supplied under regulated end-user prices to choose a new market supplier and move to the liberalised market. During 
this period, the NRA (ERSE), sets a tariff (called the ‘transitional tariff’), which may include an additional value, whose 
objective is to promote customers to switch to a market tariff. 

Lastly, under the terms of Government Ordinance N. 39/2017 of 26 January 2017, consumers who still have regulated 
tariffs have a transitional period until 31 December 2020 to choose an electricity market supplier. While, under the terms 
of Government Ordinance N. 144/2017 of 24 April 2017, consumers who still have regulated tariffs have a transitional 
period until 2023 to choose a natural gas market supplier. 

1.2  Description of regulatory disincentivisation barriers in Portugal: Burden (-sharing) 

Obligation to collect tariffs unrelated to energy on behalf of others. 

In the research this barrier was indicated as an issue in Portugal. It shall be noted that this is common across 

suppliers regardless their origin. However, as in any other segment of the economy, ultimately this financial burden 

affects more the smaller companies. 

In general, the obligation to collect non-energy-related charges, with the risk of delayed or non-payment, presents 

a barrier as it can substantially increase the total risk as well as required cash reserves. In other European markets, 

energy suppliers may be tasked with collecting fees for unrelated services, e.g. TV licence fees, or providing other 

services, e.g. energy efficiency measures.  

Identified national issue and related potential solutions regarding the Portuguese case are reported in the graphic 

below. 

e
u
s
s

i

l

a
n
o
i
t
a
N

Responding  suppliers  were  pointing 
out  the  issue  of  bearing  the  risk  of 
the  whole  bill 
cash  collection  of 
(including  network  tax  components 
and TV fees). Some suppliers indicate 
that 
this  generates  a  waste  of 
resources. 

• Charges  unrelated  to  suppliers  business  should be 

collected with different methods. 

• Regulation  should  protect  suppliers  (in  the  free 

market) from collection failure. 
In  Portugal,  the  regulator  is  updating  guarantees 
requirements  to  protect  suppliers  from  collection 
failure.  Which  indicate  progress  already  in  place 
towards valuable solution of this issue. 

s
n
o
i
t
u
o
s

l

l

a
i
t
n
e
t
o
P

European markets in which this barrier has also been indicated 

AT  BE  BG  HR  CY  CZ  DE  DK  EE  FI  FR EL HU  IE 

IT  LV  LT  LU  NL NO  PL  PT  RO  SK  SI  ES  SE  UK 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 34 

1.3. Description  of  regulatory  disincentivisation  barriers  in  Portugal:  Regulatory 

unpredictability 

Attitude of authorities hinders development of the market. In the research this barrier was raised as an issue in 

Portugal. 

In general, the regulator, TSO and/or government do not view a well-functioning competitive energy market as a 

high priority, or are mistrustful towards new products and services, or do not seek or use the cooperation of market 

players. This atmosphere can discourage new entrants and novel developments. Such an attitude may also favour 

the incumbent through involving it directly in regulation or through inertia around regulation to decrease its market 

share. 

In Portugal, suppliers are concerned on the attitude of the legislator and the regulation direction that is holding 

back the energy sector from innovation, not keeping the pace of other EU countries regarding specific topics. 

However,  it  has  been  found  that  the  regulator  in  Portugal  produces  regulations  to  promote  a  well-functioning 

competitive energy market, using asymmetric regulatory conditions in order to facilitate the small suppliers to enter 

and  operate  in  the  market.  These  actions  are  surely  incentivizing  the  entrance  in  the  market  and  boosting 

competition.7 Plus, ERSE’s regulations are submitted to public consultation, where all agents can give their opinion 

on the shape of the regulation. 

Identified national issue and related potential solutions regarding the Portuguese case are reported in the graphic 

below. 

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feel 

that 

Suppliers  point  out  that  Law  5/2019  should  have 
been  subjected  to  regulation  by  ERSE  within  60 
days after its publication (11 January 2019). Some 
itself  has 
the 
suppliers 
difficulties in regulating the Law 5/2019, revealing 
a  discomfort.  Suppliers  concerns  also  refers  to 
political 
regulation 
enactment.  
Also, 
the 
Guarantee of Origin System creates uncertainties. 

  postponement  of 

the  successive 

influence  on 

laws  and 

regulator 

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ERSE  held  consultation  in  autumn  2019 
aimed  at  issuing  regulation  after  law  5/2019 
enactment.  Measures  are  being  developed 
while writing this report, hopefully overcoming 
the lag between the regulation and what is the 
suppliers experience in the market. 
Political influence over retail market regulation 
remain  only  a  suppliers’  perception.  The 
regulator  follows  all  the  standard  aimed  at 
guaranteeing  profile 
independency  and 
neutrality. 

European markets in which this barrier has also been indicated 

AT  BE  BG  HR  CY  CZ  DE  DK  EE  FI  FR EL HU  IE 

IT  LV  LT  LU  NL NO  PL  PT  RO  SK  SI  ES  SE  UK 

7 Examples are: Diretiva n.º 8/2017 - agentes de mercado elegíveis para integrar a unidade de desvio de comercialização para 
consolidação dos desvios em carteira de pequenos comercializadores a atuarem no mercado retalhista; Diretiva n.º 11/2018 
– regime transitório de riscos e garantias no SEN. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
 
 
 
 
Country handbook - Portugal 

 35 

1.4. Description  of  regulatory  disincentivisation  barriers  in  Portugal:  Access  to 

innovation 

Lack of incentivisation for novel pilot projects or post-pilot market rollout. In our research this barrier was raised 

as an issue in Portugal. 

As a general concept, regulatory frameworks need to provide an environment for not only piloting new business 

models but also allow for further advancements without risking any grid stability, e.g. net-metering schemes and 

self-consumption. Regulatory requirements/obligations designed for traditional suppliers may not make sense for 

innovative  players  who  are  nonetheless  bound  by  them.  Unclear  current  regulation  around  demand  response 

aggregation, such as missing role definitions, makes it challenging for novel services to enter and grow. 

In Portugal, the regulator is putting in place big efforts in gathering results from consultation for the development 

of, for instance, self-consumption and smart grids, among the others. 

Identified national issue and related potential solutions regarding the Portuguese case are reported in the graphic 

below. 

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Suppliers  raised  the  existence  of  barriers  for 
demand response implementation (at the moment 
at pilot stage) as the access to customer data and 
how  this  constitutes  a  requirement  for  its  real 
implementation. 

Inexistence of a legal framework that defines the 
roll-out  of  smart  meters  and,  most  importantly, 
smart grids. 

Recurring  postponement  of  the  Guarantee  of 
Origin system. 

  An  implementation  plan  should  be  elaborated, 
s
n
drafting  all  is  necessary  to  DSO  or  other 
o
identified  operator  to  deploy  smart  meters 
i
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across the country and the tangible benefits for 
o
clients 
this 
regarding  energy  savings. 
s
direction goes the crucial engagement between 
NRA and the DSO for smart meters rollout.  

In 

l

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Also, in 2019, ERSE launched consultations on 
self-consumption and smart grids. 

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European markets in which this barrier has also been indicated 

AT  BE  BG  HR  CY  CZ  DE  DK  EE  FI  FR EL HU  IE 

IT  LV  LT  LU  NL NO  PL  PT  RO  SK  SI  ES  SE  UK 

Missing flexibility in tariff structures. In our research this barrier was raised as an issue in Portugal.  

In general, the potential of tariff structure to be flexible is a main driver of demand flexibility, as it allows the design 

of incentive-based tariffs with several Time-Of-Use tariff zones, encouraging customers to consume  when it is 

cheaper.  This  is  true  for  grid  as  well  as  energy  components.  Rigid  or  flat  structures,  which  are  defined  by 

regulation, hinder new and innovative demand-shifting offerings on the market. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 36 

National issue raised by suppliers and related potential solutions regarding the Portuguese case are reported in 

the graphic below. 

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Suppliers were raising the issue that Portuguese 
SLR energy tariffs are defined ex-ante and for a 
whole year based on spot market expectations, 
spot prices variations, especially upwards, which 
makes it impossible for suppliers to compete. 

Under  the  current  regulated  price  scheme,  all 
consumers of a given capacity band should pay 
the same, even if they opt for different time usage 
options. However, this is not in practice true and 
unveils cross-subsidies. This is leading suppliers 
to focus their offers in simple/flat tariffs. 

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• With smart meters, tariffs can be defined 

ex-post. 

• A  higher  variable  part  of  the  tariff, 
consumers would have strong incentives 
to reduce their consumption, search for 
the best price in the market. 

• Tariff  designs  using  features  such  as 
critical  peak  pricing  or  dynamic  pricing 
may enhance rational use of electricity. 

European markets in which this barrier has also been indicated 

AT  BE  BG  HR  CY  CZ  DE  DK  EE  FI  FR EL HU  IE 

IT  LV  LT  LU  NL NO  PL  PT  RO  SK  SI  ES  SE  UK 

Market  structures  does  not  incentivize  novel  products  (missing  market  value).  In our research this barrier was 

raised as an issue in Portugal. 

In general, without an existing demand and/or mindset for novel services such as DR, new entrants face the barrier 

of establishing the entire market before they can act in it. A low level of perceived value can due to a technology 

lag, customers’ being unaware or not incentivized, or little competition between traditional suppliers resulting in 

little need for suppliers to innovate/differentiate. 

In Portugal, suppliers irrespective of its dimension are free to offer innovative products and significant part of them 

also operates in energy efficiency or other added value services, creating market value. 

National issue raised by suppliers and related potential solutions regarding the Portuguese case are reported in 

the graphic below. 

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The  inexistence  of  a  legal  framework  that 
defines  the  roll-out  of  smart  meters  and,  more 
importantly, smart grids, means there has been 
no 
to  what 
innovation,  as  opposed 
suppliers’ report to have seen in other countries. 

tariff 

  In 2019, ERSE launched consultations on 
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self-consumption and smart grids. 
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European markets in which this barrier has also been indicated 

AT  BE  BG  HR  CY  CZ  DE  DK  EE  FI  FR EL HU  IE 

IT  LV  LT  LU  NL NO  PL  PT  RO  SK  SI  ES  SE  UK 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 37 

1.5. Portugal’s performance in this barrier category 

The following figure shows quantitative indicators of how far regulatory disincentivisation acts as a barrier in this 

market.  The  values  for  Portugal  are  shown  against  the  range  across  all  analyzed  countries.  These  scores 

contribute to the performance index. The performance indicators of regulatory disincentivisation are the following: 

•  Market foreclosure by price regulation: The index consists of two sub-indicators, the penetration of price 

regulation (among residual customers), and the mark-up of the regulated offer. A high score is attributed 

if a high share of customers is supplied at regulated price, and the mark-up is significantly lower than the 

average mark-up in the competitive markets.  

•  Regulatory burdens and unpredictability: The index consists of two sub-indicators. Regulatory burdens 

reflect  the  non-energy  share  of  the  energy  bill  in  an  average  household,  which  are  regulated  (taxes, 

network fees). Regulatory unpredictability was measured via the related question in the supplier survey 

conducted for this project. A high score is attributed if the share of the non-energy elements is high, and 

if survey respondents scored the question highly (as an important barrier). 

Performance indicators 

Portugal was ranked in the middle range for market foreclosure by price regulation as still a part of the electricity and gas 
customers are served under regulated prices and considering the prices mark-ups. While Portugal was ranked in the upper 
bound of middle range of regulatory burdens and unpredictability. 

 
 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 38 

2)  Market inequality 

Within  market  inequality,  barriers  across  Europe  have  been  sub-categorised  into  two  areas  encompassing  8 

specific barriers8: 

1.  Unbundling and market power. In order to facilitate better competition and improve performance of the 

individual parts of the energy companies, the Energy Directives introduced rules for legal, functional and 

accounting unbundling between DSOs and supplier. Although legal unbundling has been implemented 

throughout all EU member states, barriers arising from vertical integration can still be observed in many 

markets, raising the question if the required level of unbundling is sufficient in order to meet the goal of a 

fair and competitive retail market. Companies serving less than 100,000 customers are only obliged to 

implement accounting unbundling. 

In  order  to  avoid  confusion  among  end  customers  between  the  separate  parts  of  integrated  energy 

businesses,  brand  unbundling  has  been  a  focus  area  for  NRAs  over  the  last  years.  Nevertheless,  in 

several  EU  countries,  the  difference  in  the  branding  of  the  supplier  and  the  DSO  is  perceived  as 

insufficient.  Strategic  and  unfair  advantages  for  incumbent  suppliers  around  transparency,  pricing  and 

access to information and data occur in most of the European countries studied. Access to production 

capacities can also be limited for small suppliers if market players with a large generation portfolio can 

withdraw production capacity from the accessible markets. Balancing and ancillary services markets can 

also be distorted as they are often still designed to mainly benefit large-scale generation, discriminating 

against smaller market participants. Below, we describe these barriers related to market power in more 

detail. 

Across Europe, the following specific barriers around “unbundling and market power” were detected by 

this study. Those highlighted in blue have been raised, indicated or identified as barriers in Portugal: 

•  Lack of brand unbundling  

•  Discriminating, strategic behaviour of incumbent, and obstruction by other market players. 

•  Strategic, unfair advantage of vertically integrated market players and lack of transparency. 

•  Limited or biased access to production. 

•  Discrimination against new and small market players in capacity and ancillary services markets. 

2.  Equal  access  to  and  maturity  of  wholesale  market.  The  wholesale  markets  present  one  of  the  most 

important sources for  energy procurement for all market participants.  New and  small suppliers tend to 

have weaker bargaining position in bilateral negotiations, which occurs higher sourcing costs, therefore 

leading  to  a  competitive  disadvantage.  Access  to  a  well-functioning  wholesale  market  (an  energy 

exchange) therefore enables smaller suppliers to buy energy for competitive prices.  

Barriers  related  to  the  wholesale  market  can  arise  by  discriminatory  market  platform  access  and  the 

absence of any viable alternative. Furthermore, a lack of available products and low liquidity can both lead 

8  Please  note:  these  definitions  are  Europe  focused,  not  Portuguese  specific.  Highlighted  barriers  have  been  identified  as 
country specific. 

 
 
 
 
 
 
 
 
                                                        
Country handbook - Portugal 

 39 

to an increase in risk, disadvantaging small market participants substantially more than large, established 

suppliers. Across Europe, the following specific barriers around “equal access to and maturity of wholesale 

market” were detected by this study. Those highlighted in blue have been raised, indicated or identified 

as barriers in Portugal: 

•  Discriminatory market platform access (standards, guarantees, etc.) 

•  Low liquidity in the wholesale market 

•  High price or volume risk in energy procurement 

2.1. Description of market inequality barriers in Portugal: Unbundling & market power 

Best practice example: 

Brand unbundling 

Inefficient brand unbundling between distribution and supply companies, such as similarities in the name 
and logo of the incumbent supplier and the DSO had a negative impact on the Portuguese retail market, 
in terms of competition until early 2019. However, during the second half of 2019, ERSE  approved a new 
image and name for EDP Serviço Universal, which is now called SU Eletricidade. The measure aims to 
avoid  confusion  with  the  other  EDP  group  brands  and  implies  the  complete  distinction  of  the  graphic, 
chromatic, symbolic and communicational elements of that last resort supplier. Finally, the DSO image is 
also changing, for a new image (new designation, new logo and different color). 

Notwithstanding the above measures, the level of consumer awareness and ability to distinguish between 
DSO and suppliers remains low, due to either the recent application of this legal binding decision by the 
regulator  or  due  to  the  scarce  level  of  information  among  customers.  Keeping  high  the  competition 
advantage of incumbent suppliers. 

2.2. Description of market inequality barriers in Portugal: Equal access to & maturity 

of wholesale market 

Discriminatory market platform access (standards, guarantees, etc.). In our research this barrier was identified as 

an issue in Portugal. 

In general terms, across Europe, if the same requirements/treatment for establishing market access are applied 

regardless of company size, small suppliers bear a disproportionate administrative or financial burden for market 

access.  Nonetheless,  it  is  worth  mentioning  that  most  of  these  platforms  are  privately  managed  and  thus  it  is 

unlikely the ability to reverse such barriers. Market arrangements favoring the development of new generation and 

bilateral agreements may partially relief this burden. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 40 

The requirements and administrative burden to become a member in Portugal are minimal, and this had led to 

hundreds of generators, suppliers and traders becoming members in one of the most liquid power exchanges in 

Europe.  However,  more  onerous  requirements  when  entering  a  market  is  embedded  in  the  current  market 

environment and mostly driven by financial institutions’ requirement. An issue that is common with other sectors. 

Portuguese national issue raised by suppliers and related potential solutions regarding the Portuguese case are 

reported in the graphic below. 

  • Small firms have less access to credit or have less favorable financing 
e
u
conditions,  while  financial  guarantees  are  equal  regardless  of  the 
s
amounts traded (i.e. is not a progressive schedule). However, this is 
s
a feature that is common with other businesses/sectors. 

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• Guarantees have been sometimes insufficient: the defaults caused by 
suppliers involved in fraudulent behaviour in the wholesale market are 
not covered by the guarantees they have to deposit, and the costs are 
then borne by other suppliers. 

• Continuous trading generates higher staffing costs penalizing small 

suppliers. 

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these 

Other 
procurement 
options  such  as  PPAs 
may reduce the exposure 
platforms. 
to 
Standard 
of 
procurement  alternative 
to  the  market  platform 
could  give  more  options 
to  suppliers  with 
less 
financial strength. 

forms 

European markets in which this barrier has also been indicated 

AT  BE  BG  HR  CY  CZ  DE  DK  EE  FI  FR  EL  HU  IE  IT  LV  LT  LU  NL  NO  PL  PT  RO  SK  SI  ES  SE  UK 

Low liquidity in the wholesale market.  In our research this barrier was raised as an issue in Portugal. 

In general terms, a lack of liquidity in the wholesale market is a barrier to operation as it leads to higher prices and 

risks, and therefore increases sourcing costs. 

The Portuguese electricity spot market is one of the most liquid in Europe. However, the forward market platforms 

are still at incipient level not having the same level of liquidity of the spot market platform. It is worth mentioning 

the notable increase on forward market liquidity outside OMIP. In the last years, other platforms operating at EU 

level have reached a surprisingly high liquidity. Also, that the lack of liquidity impacts suppliers that due to the size 

of their customer base have significant open positions on its procurement.  

Portuguese national issue raised by suppliers and related potential solutions regarding the Portuguese case are 

reported in the graphic below. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 41 

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Suppliers  pointed  out  that  forward 
markets  are 
illiquid  advantaging 
market  actors  with  high  market 
power.  Even  though  they  are  also 
short  in  their  position  and  remain 
heavily exposed to this low liquidity. 

The lack of attractive market due to 
the  low  regulated  tariffs  lead  to 
difficulties  among  supplier  to  find 
alternative procurement options.  

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Measures to promote the liquidity of the wholesale market, 
including the mandatory market making obligations should 
be  deployed 
liquidity 
accelerators  are  deployed  (Renewables  auctions  and 
Supplier of last resort auctions) but are clearly insufficient to 
foster liquidity.  

forward  markets.  Some 

for 

Low liquidity can also be the consequence of too restrictive 
financial regulation for energy forward markets, e.g. capital 
requirements  and  position  limits  rules.  Worth  a  review 
according to the energy market’s needs. 

European markets in which this barrier has also been indicated 

AT  BE  BG  HR  CY  CZ  DE  DK  EE  FI  FR EL HU  IE 

IT  LV  LT  LU  NL NO  PL  PT  RO  SK  SI  ES  SE  UK 

2.3.  Portugal’s performance in this barrier category 

The following figure shows quantitative indicators of how far market inequality acts as a barrier in this market. The 

values for Portugal are shown against the range  across all analyzed countries. These scores contribute to the 

performance index. The performance indicators of market inequality are the following: 

•  Competitive  advantages  of  vertically  integrated  players.  The  index  consists  of  two  sub-indicators,  the 

market  share  of  vertically  integrated  suppliers  (on  the  residential  market),  and  the  strictness  of  DSO 

unbundling. A high score is attributed if the vertically integrated suppliers have a high aggregated market 

share, and the unbundling regime is not very strict (brand unbundling is not in force, high share of local, 

integrated companies). 

•  Access  to  wholesale  market.  The  indicator  measures  the  accessibility  of  the  wholesale  market  by 

quantifying the liquidity of wholesale markets. High score is attributed if the traded volume is relatively low 

compared to the consumption of the country (churn rate). Traded volume includes volumes that are traded 

at  hub  as  recorded  by  brokers  (OTC)  or  exchanges  and  does  not  include  ‘contracted’  (LTC  or  other 

bilateral deals) volumes which are conducted ‘off market’. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 42 

Performance indicators 

Portugal was ranked in the middle range for competitive advantage of VIU. While in for access to wholesale market, Portugal 
scored 1st among EU countries due to its churn ratio, while for gas data were not available. 

3)  Operational and procedural hindrances 

Within operational and procedural hindrances, barriers across Europe have been sub-categorised into two areas 

encompassing 13 specific barriers9: 

1.  Sign-up  &  operations  compliance.  Sign-up,  licensing  or  registration,  along  with  other  administrative 

requirements  or  system  establishment  such  as  arranging  contracts  with  relevant  stakeholders  (TSOs, 

DSOs, BRPs) are among the first steps that a new supplier undergoes to enter and operate in a retail 

energy  market.  To  deliver  natural  gas  or  electricity  to  final  consumers  in  Europe,  an  energy  supplier 

usually  needs  to  be  registered  to  a  certain  institution  list,  or  to  proceed  with  a  notification,  or  follow  a 

process  to  grant  a  licence.  Entrance  processes  for  suppliers  often  requires  commitments  such  as  a 

minimum standard of customer service obligations, requirements on service quality, to provide financial 

guarantees or to have a communication system in place. 

In  most  responding  NRA  countries,  suppliers  need  to  register  and  make  contracts  with  certain 

stakeholders  (mainly  TSOs  and  DSOs)  to  procure  the  access  to  the  energy  grid:  transport  capacity, 

balancing. This procedure can be very different from a country to another. Accessing wholesale markets 

9  Please  note:  these  definitions  are  Europe  focused,  not  Portuguese  specific.  Highlighted  barriers  have  been  identified  as 
country specific. 

 
 
 
 
 
 
 
 
 
 
                                                        
 
Country handbook - Portugal 

 43 

and balancing may also require a license or prior agreement/registration with the market operator. In some 

markets,  business  processes  to  enter  and  operate  in  the  retail  market  can  be  extremely  detailed  and 

burdensome. The lack of a functioning national wholesale market may also hinder the entrance of retail 

companies that are not vertically integrated. 

Across Europe, the following specific barriers around “sign-up & operations compliance” were detected 

by this study. Those highlighted in blue have been raised, indicated or identified as barriers in Portugal. 

•  Poor availability of information for market entrants & active participants 

•  Heavy administrative process for entry (registration / licensing) 

•  High financial requirements (incl. long working capital cycles) and forced risk during operations 

•  Excessive reporting requirements during operations 

•  Excessive information requirements around billing and energy labelling 

•  Highly complex or country-specific systems & processes 

•  Regional differences or differences between DSOs within a country 

•  Cumbersome or biased switching process 

•  Unduly burdensome environmental obligations 

•  Unduly burdensome or insufficiently regulated market exit 

2.  Data  access  &  processes.  Data  access  and  management  refers  to  the  processes  by  which  data  are 

sourced,  validated,  stored,  protected  and  processed  and  by  which  it  can  be  accessed  by  suppliers  or 

customers.  In  a  well-functioning  energy  retail  market,  it  is  important  that  the  information  required  to 

operate in the market is available to newcomers (subject to applicable legislation on data protection). This 

may include information on, for example, individual consumption or more specific meter details. This data 

is  required  in  order  for  suppliers  to  carry  out  their  market  role,  such  as  initiating  a  switch,  or  billing  a 

customer. A standardized approach to the provision and exchange of data creates a level playing field 

among stakeholders and helps to encourage new, challenging market actors to enter the market. In order 

to avoid data management and access processes acting as a significant barrier to entry, Member States’ 

initiatives to standardize data format and processes, including investments in data hub infrastructure, have 

the potential to make a positive impact.  

Across Europe, the following specific barriers around “data access & processes” were detected by this 

study. Those highlighted in blue have been raised, indicated or identified as barriers in Portugal. 

•  Lack of data hub 

•  Complex, heterogenous IT infrastructure and/or low level of digitalisation 

•  Missing access or poor quality of operations-critical data 

. 

3.1. Description of operational and procedural hindrances barriers in Portugal: Sign-

up & operations compliance 

 
 
 
 
 
 
 
 
Country handbook - Portugal 

 44 

Excessive information requirements around billing and energy labelling. In our research this barrier was raised as 

an issue in Portugal. 

In  general,  excessive  billing  and  labelling  information  constitutes  a  barrier  when  the  market  participants  are 

required to disclose a disproportionate amount of information on the customer bill, which may be challenging to 

collect and curate. All information on the bill that does not add any value for the customer can be regarded as 

disproportionate.  

Suppliers  responding  to  the  survey  were  pointing  out  that,  in  Portugal,  the  introduction  of  the  law  5/2019,  has 

increased the required amount  of information to  be provided to the customers, increasing suppliers’ costs and 

reducing customers understanding of the bill.  

Portuguese national issue raised by suppliers and related potential solutions regarding the Portuguese case are 

reported in the graphic below. 

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Law  5/2019  places  greater  demands  on  the 
information  to  be  provided  to  the  customer 
through the bill. Further complicating it, which 
will  tend  to  make  the  information  even  more 
confusing to a normal customer and therefore 
increasing the clarifications and complaints by 
the consumers. 

laws  are  under 
development at ERSE. This activity may 
ease the obligations over bill information. 

  Regulation  and  by 
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European markets in which this barrier has also been indicated 

AT BE  BG HR CY  CZ  DE DK  EE  FI  FR EL HU  IE  IT  LV  LT  LU  NL NO  PL  PT  RO  SK  SI  ES  SE  UK 

Unduly burdensome or insufficiently regulated market exit. In our research this barrier was raised as an issue in 

Portugal. 

In  general,  the  possibility  for  suppliers  to  exit  the  retail  market  very  easily  or  to  be  able  to  act  without 

sufficient/timely sanctions on improper behavior, is not advantageous to market functioning, nor does it transmit 

confidence  to  customers.  Unethical  and  irresponsible  suppliers  may  negatively  affect  the  retail  market  by 

discouraging new suppliers from entering and reducing customer trust and hence willingness to engage with the 

market. At the same time, the exit process should not be unduly burdensome as suppliers deciding on potential 

market entry will take this into consideration. 

From the Portuguese regulator perspective, those market participants whose unethical behavior is detected, the 

sooner are out of market the better. Identifying sanctioning powers and guarantees regime, alongside with the 

supervisory activities as the most proficient way to raise suppliers’ reliability. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 45 

Portuguese national issue raised by suppliers and related potential solutions regarding the Portuguese case are 

reported in the graphic below. 

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High possibility to enter and exit the market with 
great  ease  is  not  advantageous,  nor  does  it 
transmit confidence to customers.  
Suppliers  suggest  that  applying  an  exit  penalty 
is  not  the  best  solution,  however  a  follow-up 
activity in order to understand why the agent is 
not  integrating  can  be  of  great  help  to  market 
reliability.  

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  Enhance sanctioning activities and others 
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that  follow  up  on  supplier’s  behaviour  to 
o
reduce  the  unethical  behaviour  in  the 
market.  
ERSE  has  adopted  several  sanctions  to 
market participants, in situations of market 
new 
misconduct 
guarantees  regime  has  been  adopted  to 
foster the trust in the market and on energy 
suppliers. 

recently 

o
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and 

a

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l

European markets in which this barrier has also been indicated 

AT  BE  BG  HR  CY  CZ  DE  DK  EE  FI  FR EL HU  IE 

IT  LV  LT  LU  NL NO  PL  PT  RO  SK  SI  ES  SE  UK 

3.2. Description of operational and procedural hindrances barriers in Portugal: Data 

access & processes 

Lack of data hub. In this research this barrier was raised as an issue in Portugal. 

In general terms, this barrier may increase the time and effort required by suppliers to access customer or network 

data, e.g. to enact a switch or target potential new customers. 

As of today, there have been a lot of progress in centralize data and process for switching between suppliers. In 

a nutshell current tools and protocols include: i) a platform for switching, managed by the OLMC; ii) and DSO data 

can be accessed via an internet portal – with a login and username, and with consumer consent. In some cases, 

the concern is more related with the lack of complete information which is due to the data protection regulation 

and thus cannot be changed and affect equally all suppliers.  

Portuguese national issue raised by suppliers and related potential solutions regarding the Portuguese case are 

reported in the graphic below. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 46 

A  central  datahub  for  data  exchange, 
to  simplify  and  accelerate  switching 
processes  is  not  in  place.  This  is 
separately  with 
currently 
suppliers  complaining  on  the  data 
access and quality. 

done 

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A  central  platform  for  data  exchange  and  switching 
may help the data standardization and exchange. 
A datahub could level the playing field with regards to 
data  access,  opening  data  of  the  same  quality  to  all 
players  on  equal  terms.  Easing  the  entry  of  new 
players into the market and boosting market efficiency 
as well as enabling customers to participate directly in 
the markets.  

s
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European markets in which this barrier has also been indicated 

AT  BE  BG  HR  CY  CZ  DE  DK  EE  FI  FR EL HU  IE 

IT  LV  LT  LU  NL NO  PL  PT  RO  SK  SI  ES  SE  UK 

DENMARK BEST PRACTICE CASE: Denmark’s DataHub 

The  development  of  the  DataHub  is  held  up  by  market  actors  in  other  countries  as  a  good  example  of 
regulatory development that involved and cooperated with market players. A key aspect of the successful 
development  process  was  that  a  single  organization  (the  TSO)  had  a  clear  system-wide  responsibility  to 
implement  the  changes,  enabling  streamlining  of  the  process.  Market  players  report  the  launch  of  the 
DataHub as the most important recent innovation in Denmark’s energy system.  

NORWAY BEST PRACTICE CASE: A well-designed data hub improved market equality in Norway 

The  Norwegian  market  is  characterized  by  a  large  number  of  small,  local,  currently  vertically integrated 
supplier-DSOs.  Across  Europe,  this  study  has  found  vertical  integration  to  cause  issues  around  data 
access, where the integrated supplier (usually the incumbent) has an advantage in data access through its 
affiliation with the DSO, which collects and controls the information. However, such issues were not raised 
in Norway.  

This favourable situation results from the existence since 2019 of a centralized data platform, Elhub, that is 
functioning  near-perfectly  according  to  suppliers  to  even  out  the  playing  field  around  data  access  (see 
section 3.2). Previously, independent suppliers faced delays and obstruction in obtaining customer data 
from  DSOs.  The  impact  on  data  exchange  was  so  great  that  one  supplier  described  their  dealings  with 
DSOs as “different pre- and post-Elhub worlds”. The Elhub moreover allows the regulator to technologically 
control that actors are behaving appropriately. 

Complex, heterogenous IT infrastructure and/or low level of digitalisation. In this research this barrier was raised 

as an issue in Portugal. 

In  general,  heterogenous  and  complex  IT  infrastructure,  required  to  communicate  and  exchange  data  with  all 

relevant market participants, or  a  high level of manual processes in such exchanges, can both increase  costs 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 47 

substantially. Such systems can be financed more easily by large market players via economies of scale, so small 

players are disadvantaged for technical reasons. 

However, in a sector under development like the Portuguese, extra costs and investments for suppliers cannot be 

discarded and actually need to be received as undeniable. The new enactment  of law 5/2019 and the awaited 

regulation that it may originate create concerns among suppliers regarding the resulting costs and obligations.  

Portuguese national issue raised by suppliers and related potential solutions regarding the Portuguese case are 

reported in the graphic below. 

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Suppliers  pointed  out  that  changes  set  forth  in 
the  Law  5/2019  will  enforce  the  suppliers  to 
make  operational  modifications  and  to  further 
develop their IT systems, which will increase the 
cost of the services. 
Entailing  IT  developments  and,  consequently, 
requiring large investments (both resources and 
time),  which  necessarily,  and  at  least  in  the 
liberalized  market,  will  ultimately  fall  on  the 
customers. 

l

l

i
t

u
o
s

  The  energy  sector  is  evolving  rapidly,  and 
s
n
new services need to be in place to welcome 
o
demand 
integrate 
responsiveness  and 
intermittent generation. This transition has a 
cost  that  involves  higher  investments  for 
digitalization, standardization and improved 
data exchange and management. 
Further regulation on las 5/2019 is awaited 
which  may  improve  data  management and 
standardization.  To  follow  this  process, 
supplier’s willingness to invest is crucial. 

a
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European markets in which this barrier has also been indicated 

AT  BE  BG  HR  CY  CZ  DE  DK  EE  FI  FR EL HU  IE 

IT  LV  LT  LU  NL NO  PL  PT  RO  SK  SI  ES  SE  UK 

3.3.  Portugal’s performance in this barrier category 

The following figure shows quantitative indicators of how far operational and procedural hindrances act as a barrier 

in this market. The values for Portugal are shown against the range across all analysed countries. These scores 

contribute to the performance index. The performance indicators of operational and procedural hindrances are the 

following: 

•  Length  of  licensing  procedure.  The  complexity  of  the  licensing  procedure  is  quantified  using  the  legal 

deadline of the licensing procedure. A higher score is attributed the longer the regulator’s authorization 

period, while a score of 0 is attributed if there is no licensing obligation in the country. 

•  Quality  of  data  access.  Barriers  relating  to  the  quality  of  data  access  are  measured  with  a  checklist 

indicator,  which  focuses  on  the  DSO’s  practices  regarding  data  collection  and  access  provision  to 

suppliers.  A  high  score  is  attributed  if  the  format  of  the  data  provision  is  not  standardised,  third  party 

access is not available via website or data hub, and the smart meter rollout is small. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 48 

Performance indicators 

Regarding the time of getting a license, Portugal was ranked in the first 11 position among the EU countries for electricity 
and 10th for gas. While was scoring 8th in electricity and 13th in gas for quality of data access, as although data standards are 
advanced, smart meters are not well developed in the country. 

4)  Customer inertia 

Within operational and procedural hindrances, barriers across Europe have been sub-categorised into one area 

encompassing 6 specific barriers10: 

1.  Customer orientation. Whether customers want to or can engage with the market depends on a broad 

range  of  market  characteristics,  including  how  well  authorities inform  and  support  customers  and  how 

energy companies are viewed by the customer. For example, if there is no trusted central place to compare 

offers  from  different  suppliers,  customers  may  struggle  to  make  an  informed  choice;  or  if  customers 

perceive all energy companies as irresponsibly profit-driven, or providing a poor service, they may feel 

there is nothing to be gained from switching. Moreover, across Europe, most energy markets have been 

liberalized relatively recently (last 20 years, some only a few years ago), so for a considerable portion of 

customers the potential for them to engage may still feel unfamiliar.  

Across Europe, the following specific barriers around “customer orientation” were detected by this study. 

Those highlighted in blue have been raised, indicated or identified as barriers in Portugal. 

•  Lack of information regarding available offers and switching possibilities 

•  Low customer awareness or interest makes it difficult to attract customers 

10 Please note: these definitions are Europe focused, not Portuguese specific. Highlighted barriers have been identified as 
country specific. 

 
 
 
 
 
 
 
 
 
                                                        
 
Country handbook - Portugal 

 49 

• 

Insufficient price signals for end-users 

•  Changing supplier is cumbersome or has little pay-off for the customer 

•  Consumers prefer status quo 

•  Lack of trust in new or foreign suppliers and in new technology 

4.1. Description of customer inertia barriers in Portugal: Customer orientation 

Insufficient price signals for end-users. In this research this barrier was identified as an issue in Portugal. 

In general, many factors can mean that market price signals do not reach end-users, e.g. small energy component 

of bill, low energy prices, simplified/estimated settlement, etc. With limited price signals, there is little incentive for 

customers to engage with the market as they have limited power to bring their costs down, or to see an impact of 

their behavior on their bills. 

In Portugal, the introduction of dynamic tariffs may give an extra push to competition at household level. Hence, 

metering system  needs to  be updated to allow the energy system to improve the responsiveness of electricity 

demand. This comes at a cost usually borne by the fixed part of the bill but however giving to suppliers more room 

for competition. 

The Portuguese national issue raised by suppliers and related potential solutions regarding the Portuguese case 

are reported in the graphic below. 

e
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i

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a
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in 

the 

that, 

issue 

Suppliers  raised 
the 
household segment of the market, customers 
have  a  low  incentive  to  switch  given  their 
limited incentive to engage with the market. 
Suppliers  report  that  the  weight  of  energy 
costs  over  the  total  expenditure  (energy  + 
access  +  taxes  &  levies)  can  be  as  low  as 
30%. And with everyone competing with flat 
prices,  price  differences  between  retailers 
are often discarded. 

installed 

• Smart  meters  must  be 

that  can 
accurately record customers consumption in real-
time and relay the information to the supplier. 
• Promote bill settlement on real-time consumption 
to allow suppliers to provide cost-reflective price. 
tariffs  at 

time  Time-Of-Use 

• Implement  real 
household level. 

• Enhance  promotion  of  innovation  in  household 

technology. 

s
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European markets in which this barrier has also been indicated 

AT  BE  BG  HR  CY  CZ  DE  DK  EE  FI  FR EL HU  IE 

IT  LV  LT  LU  NL NO  PL  PT  RO  SK  SI  ES  SE  UK 

Consumers prefer status quo. In this research this barrier was identified as an issue in Portugal. 

Generally, customers can experience strong incentives to stay on a regulated price (e.g. because it is cheaper, 

and they mistrust new suppliers). 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 50 

This is the case in Portugal, where supplier’s perception is that customers prefer to stay under the regulated price 

regime. 

The Portuguese national issue raised by suppliers and related potential solutions regarding the Portuguese case 

are reported in the graphic below. 

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Suppliers  perception 
that 
in 
customers  have  strong  incentive  to  stay  with  the 
current  company,  usually  the  incumbent.  Main 
reasons are: 

the  market 

is 

• Customers  do  not  fully  distinguish  between 
DSO  and  suppliers  and  the  quality  of  service 
the 
provided.  For  customers  staying  with 
current company is safer. 

• Customers  are  afraid  to  contract  with  another 
company  due  to  the  legacy  of  the  previous 
market  structure  with  only  one  supplier  for 
everibody. 

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• Enhance recommendations to suppliers and 
customers on how to select and make a new 
contract. 

• Strengthen  all 

the  activities  aimed  at 
the 

in 

enhancing  customer  awareness 
domestic sector. 

• Enhance  monitoring  activity  on  suppliers 
precontractual  and 
information  provision 
activity (enhance suppliers quality of service) 
• Customers  associations  to  better  monitor 
suppliers’  behaviour,  and  act  against  unfair 
contractual clauses. 

European markets in which this barrier has also been indicated 

AT  BE  BG  HR  CY  CZ  DE  DK  EE  FI  FR EL HU  IE 

IT  LV  LT  LU  NL NO  PL  PT  RO  SK  SI  ES  SE  UK 

4.2.  Portugal’s performance in this barrier category 

The following figure shows quantitative indicators of how far customer inertia acts as a barrier in this market. The 

values for Portugal are shown against the range  across all analyzed countries. These scores contribute to the 

performance index. The performance indicators of customer inertia are the following: 

•  Comparability of offers. The index consists of two sub-indicators. The first measures consumers’ ability to 

compare offers, based on a survey commissioned by the DG Justice and Consumers. The second is a 

checklist indicator which quantifies the availability of comparison websites, based on their number and 

functionalities. A high score is attributed if the consumers gave low scores for comparability, and there 

are no comparison websites in the country. 

•  Perceived cost of switching. Difficulties around the switching process are also measured based on DG 

Justice’s  survey.  The  indicator  incorporates  the  experience  and  opinions  both  of  customers  who  have 

switched, and also of those who have not because they faced obstacles or thought it might be too difficult. 

A high score is attributed if a high share of consumers reported a bad experience of or poor opinion on 

the switching process, among all customers who considered switching. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 51 

Performance indicators 

Portugal was ranked 1st for the comparability of offers and in the top 5 among the EU countries for the perceived difficulties 
of switching supplier. 

5)  Other 

Other aspects of the market not directly related to its functions, as addressed above, may also impact suppliers’ 

ease to enter and operate in the market. These relate to characteristics of the market that are not necessarily a 

barrier per se, but their impact on the energy retail environment could be minimized to benefit market function.  

No substantial such barriers were identified in Portugal. 

 
 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 52 

FINDINGS & RECOMMENDATIONS 

This handbook provides a high-level framework of relevant barriers to entry and operate for energy suppliers into 

the Portuguese retail electricity and gas markets, as well as examples of actions that relevant institutions as NRAs, 

ministries, etc., have taken, are taking or could take in the future to remove them. 

In particular, the handbook groups the barriers to entry and operate in the energy retail market into four different 

categories as listed below. 

1.  Regulatory disincentivisation. 

2.  Market inequality. 

3.  Operational and procedural hindrances. 

4.  Customer inertia. 

In this section we report the main findings and recommendations for each category. 

Under  the  first  group,  regulatory  disincentivisation,  we  highlight  that  Portugal  has  removed  end-user  price 

regulation  contributing  to  the  increase  of  the  liberalized  market  dimension.  This  is  an  important  step  towards 

market  liberalization  completion,  bringing  the  liberalized  market  at  approximately  94%  and  97%  of  the  total 

consumption  at  the  end  of  2018,  respectively  for  electricity  and  gas.  Within  this  category,  we  reported  the 

Portuguese roadmap for removal of regulated retail prices as a best practice within the framework of activities for 

the completion of the market liberalization. However, suppliers that have been interviewed for this project or that 

have been answering to the survey, report that energy prices are set below cost, at a level where effective price 

competition cannot occur. This apply to that approx. 1 million customers that still are under regulated price regime 

with energy delivered by the so-called Supplier of Last Resort (SLR). To this regard a transition period has been 

settled to force LV customers to switch to the liberalised market before the end of 2025 (31 December). However, 

a penalisation factor is recommended to promote the shift to the liberalised market. Also, there is a perception of 

cross-subsidies within SLR category and it is not clear if it is detrimental to the interests of suppliers and customers. 

Besides, under this category, suppliers were reporting a barrier posed by the task of collecting tariffs unrelated to 

energy on behalf of others. To this regard the Portuguese regulator is updating guarantees requirements to protect 

suppliers from collection failure. Finally, barriers are posed in terms of authorities’ activities that seems to hinder 

market development, especially in the field of billing (law 5/2019), demand response, guarantee of origin and smart 

meters roll-out. On the latter, it is recommended to deploy an implementation plan providing all is necessary to the 

identified operator to deploy smart meters in the country. Consultation aimed at issuing regulation on law 5/2019 

are on the focus of the authority, however efficiency in this procedure is recommended. 

Regarding market inequality, barriers have been identified arising from an uneven playing field for different types 

of suppliers. Similarities in the name and logo of the incumbent supplier and the DSO had a negative impact on 

the Portuguese retail market, in terms of competition until 2018 and early 2019. Functional and brand unbundling 

is now in place for EDP to help prevent confusion with the other EDP group brands. However, inequalities persist, 

sometimes they are common with other sector, strictly related to the company size and capabilities, while other 

 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 53 

times are related to the characteristics of the market itself. Illiquid forward market platforms are perceived as an 

uneven playing field by small suppliers, with low liquidity fostered by too restrictive financial regulation. Creation 

of RES auctions, SLR auctions and mandatory market making obligations may help to solve the problem. Enduring 

market inequality, in this case, seems to be the result of a kind of a regulatory lag, where requested measures are 

deployed but the effects are still awaited. In 2018, the overall retail business concentration remained high with the 

EDP group being the leading operator in the electricity market, in the household customers segment above all. 

Similar situation is observed in the gas sector with the Galp group. 

Operational  and  procedural  hinderances  are  regarded  as  barriers  by  some  of  the  suppliers  responding  to  the 

survey. Complexities and differences in standards and procedures may affects suppliers’ entrance and operation 

in the retail market. Suppliers still experience discrepancies in getting metering data. A data hub could level the 

playing field with regards to data access, easing the entry of new players and boosting market efficiency as well 

as  enabling  customers  to  participate  directly  in  the  market.  Besides,  market  reliability  can  be  jeopardised  by 

suppliers’ unethical behaviour. To this regard, ERSE has adopted sanctions to market participants, together with 

a new guarantees regime to foster the trust on both, the market and the suppliers. Finally, suppliers report a greater 

burden on billing and information provided to the customers, originated by the new law 5/2019. If on one side, 

regulation to be issued by the ERSE is awaited and hopefully ease the obligation over bill information, on the other 

hand, progress on digitalization and information related topics are inevitable. The energy sector is evolving, and 

new services need to be in place to welcome demand responsiveness and integrate intermittent generation. It is 

a transition cost that involves higher investments for digitalisation, standardisation and improved data exchange 

and  management.  Hence,  further  regulation  on  law  5/2019  is  awaited  and  may  improve  data  and  information 

management and standardization. However, to follow this process, supplier’s willingness to invest is crucial. 

Customer inertia barriers category group all those issues related to customer behaviour and attitude. Despite the 

downward trend, supplier switching rates in Portugal are still significant and among the highest in Europe. 16% 

and 10% for electricity respectively in 2017 and in 2018. However, following cases of failing suppliers (bankruptcy) 

13,558 electricity customers returned under the SLR regime. Portuguese suppliers report to have a limited action 

range to win customers, mainly due to a low share of the energy charge in the end-user tariff, 30%, with price 

differences withing the retail market often discarded. Limiting also the incentives to customers to engage with the 

market. Notwithstanding the high switching rate that characterises the retail market, there is still a strong incentive 

for customers to stay with the current company, usually the incumbent. Suppliers report that still customers do not 

fully distinguish between DSO and suppliers service and its quality. Discounting the legacy of a previous market 

structure with only one supplier. To this extent, innovation of the retail market through the deployment of smart 

meters,  the  promotion  of  bill  settlement  on  real-time  consumption,  the  implementation  of  time-of-use  tariffs  at 

household level and promotion of innovation in household technology could give incentives to customers to play 

a more active role and better engage with the market. Besides, activities aimed at raising customers awareness 

and  strengthening  monitoring  activity  over  suppliers’  contractual  transparency  and  customers  information 

obligations are of a great importance. In this direction goes the ERSE initiative to require suppliers to disclose the 

content  of  pre-contractual  and  contractual  information  to  electricity  customers  in  Portugal,  harmonising  them 

 
 
 
 
 
 
 
 
Country handbook - Portugal 

 54 

through  a  standardised  contractual  sheet.  Having  in  this  way  a  more  effective  way  to  access  information  and 

raising the comparability between offers. 

 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 55 

 
 
 
 
 
 
 
 
Country handbook - Portugal 

 56 

APPENDIX 1: PROCESSES 

This section describes market processes in energy retail in Portugal. This gives a high-level overview of the most 

important aspects involved in establishing and operating as a supplier in the national market. The stages of market 

entry  and  operation  are  described  in  sequence,  each  with  an  illustration  (“process  map”)  showing  that  stage’s 

various processes together with comments/details on market specifics. 

1)  Information gathering before market entry 

Relevant comments on information gathering 

•  Main route to information: 

o  Retail supply activity is only subject to registration with DGEG (General Directorate of  Energy and 
Geology) as there is a free competitive regime. The registration requires confirmation from DGEG, 

 
 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 57 

but it is considered tacitly approved if there is no decision in 30 days. There are special suppliers, that 

is the last resort supplier and the market facilitator. 

o  To become a market agent  at the OMIE/MIBGAS platform, a guide and market rules are available. 
o  Grid costs are published by each DSO on their website, but no central free database is available. 
o 

Infrastructure and TPA costs are published by ERSE. 

•  List  of  key  players  and  institutions  to  talk  to:  ERSE,  General  Directorate  of  Energy  and  Geology  (DGEG), 

Redes Energéticas Nacionais (TSO/System’s Technical Managers); ADENE/OLMC the switching operator; 

DSOs, OMIE and MIBGAS (market operators). 

•  ERSE:  Monitoring  report  of  the  regulator  gives  a  good  high-level  overview  of  market  structure,  and 

developments (the annual report to the EC and the Market Monitoring Reports to ACER are in English, the 

remaining  reports  made  public  by  ERSE  are  in  Portuguese).  ERSE  incorporates  information  on  electricity 

offers in simulation and decision-making support tools for consumers on its website. Recently, ERSE has also 

started the publication of quarterly newsletters on reference market prices in LV. The price comparison website 

is also available in English. 

•  A central platform for registering tariffs does not exist, but there are two public price comparison websites,  

ERSE PCT (http://www.erse.pt/pt/Simuladores/Paginas/Simuladores.aspx) and poupaenergia.pt; as well as 

a 

trustworthy 

website 

for 

comparison 

provided 

by 

consumer 

association 

DECO 

(https://www.deco.proteste.pt/casa-energia/eletricidade-gas).  There  are  another  2  websites  which  are  not 

official platforms. 

•  Laws and standard contracts (e.g. with DSO) available in Portuguese only (statutory law and regulation might 

be found in English with non-binding translation). 

•  Balancing regime very well described on TSO websites and grid/network code. 

•  Language  of  information:  mainly  in  Portuguese,  although  non-binding  translations  of  market  rules  are 

available. 

2)  Licenses, registrations and contracts 

 
 
 
 
 
 
 
Country handbook - Portugal 

 58 

Dependencies / Contracts for Electricity and Gas 

Further comments 

•  Contracts with end-consumers must also comply with the: 

o  Commercial Relations Regulation 
o  Quality of Service Regulation 
o  General law, including standard terms provided under consumer protection laws 

•  Contract  to  close:  electricity/gas  supply  contracts  with  either  the  market  operator  or  energy  supplier; 

BRP/PVB service contract if any; grid usage contract. 

•  REN (TSO), ERSE and OMIE/MIBGAS ask each candidate to provide several legal/financial documents 

(accounts, certificates of being up to date with payments to fiscal authorities, etc.) and ask for a minimum 

technical capacity (IT systems). 

•  Grid  usage  contract  must  be  concluded  with  each  DSO  (paper  contracts)  and  includes  metering  and 

settlement. 

•  Market access guide (OMIE/MIBGAS) encloses all the details to become a market agent: 

o  http://www.omie.es/files/guia_omie_april2019_en-final.pdf  
o  http://m.mibgas.es/en/gas-markets/participants/how-become-member/access-guide  

•  Foreign energy supply companies - regardless of their place of business – must also register if they supply 

household  customers  in  Portugal.  Portuguese  companies  benefit  from  mutual  recognition  due  to  the 

existence of an agreement between the two countries. 

Any company acting in OMIE/MIBGAS shall be registered. 

 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 59 

3)  Balancing 

Further comments 

• 

Imbalances between production and demand and technical constraints are dealt with in the scope of the 

ancillary services market, which is managed by REN in its capacity as Global Technical System Manager, 

as set out in the Network Operation Code (ROR), revised in 2017, and in the Manual of Procedures for 

Global Technical System Management for the Electrical System (MPGGS). 

•  BRP  are  related  to  forecasting  of  managed  volumes  and  keeping  the  represented  parties  posted  on 

regulatory  changes  and  foreseeable  implications.  Suppliers  usually  perform  subsequent  analysis  to 

improve the quality of their forecasts. 

•  Hence, a typical risk is related to imbalances and forecast errors of both volumes and prices. 

•  The market is open to ESCO services, including offering demand response in balancing markets (currently 

under a pilot project). There is one retailer acting as a demand aggregator for large customers already for 

several years.  

4)  Wholesale 

Electricity 

Gas 

 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 60 

Further comments 

•  A supplier can have access to wholesale market directly or procure the energy by outsourcing this service. 

•  Also, a supplier may own generation power plants. However, most suppliers don’t have generation assets 

in the same economic company portfolio. Portuguese legal framework defines that retailer and generator 

can’t be the same legal entity. 

•  Access rules to the wholesale market follow the EU market rules. 

5)  System landscape 

 
 
 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

 61 

Further comments 

•  To make an accurate supply forecast, it is necessary for the supplier to know and analyse the historical 

consumption of its customers. The supply curve is thus based on historical data or profiles published by 

REN (annually and by customer type). 

•  Data exchange and management can be time consuming and software is available. There are customized 

software solutions provided by IT companies to implement integration with DSO IT systems. If a manual 

process is chosen by the supplier, it also follows standard files under standard software tools (such as 

Excel, csv format, etc.). 

•  Mandatory connections with OMIE, OMIclear and REN. 

6)  DSO-related operations & market communications 

Further comments 

•  To deliver energy to a customer, a supplier needs to have a contract with the relevant DSO. Meaning to 

have an agreement with those DSOs active in the area where suppliers’ customers are located. 

 
 
 
 
 
 
 
 
 
 
 
 
Country handbook - Portugal 

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•  The  supplier  needs  to  be  in  touch  with  OLMC  primarily  to  facilitate  the  switch  and  with  the  DSO  for 

metering and master data information. 

•  Business processes for energy delivery and supplier change are standardized:  

o  Cancellation of supply contract (OLMC) 
o  Master data exchange (OLMC) 
o  Delivery end date / start date (OLMC) 
o  Substitute / Basic supply 
o  Grid fee billing / settlement  

•  Smart meter data and analogue meter data provided by the DSOs. DSO is obliged to provide suppliers 

with data on monthly basis, moreover, to bill them for the use of networks (access tariffs). 

•  The data  exchange  process has some complexity depending  on  the number of  customers served,  but 

there are standards approved by the regulator (following public consultation). Suppliers with large number 

of customers tend to have peer-to-peer integration with DSO IT systems. Small scale retailers can do it 

manually. 

•  The DSO is obliged to report to ERSE and subjected to periodic audits (to assess whether the provisions 

are met or not). 

•  The customer data format is standardized and approved by ERSE. It is available through the switching 

platform most commonly within 1 to 2 days. In any case, customer mandate is needed. 

7)  Customer switching & moving 

Further comments 

Switching process 

•  Switching process at OLMC is standardized; they also include deadlines for each business process and 

market players. 

• 

It is possible to change suppliers during the month on any working day of the week. 

•  Minimum and maximum contract length is not defined. The most common is to have one-year contract 

automatically renewed. 

•  Contracts are in general breakable during contract length, especially for domestic consumers. 

 
 
 
 
 
 
 
 
 
 
 
 
 
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 63 

•  Obviously, it is up to the customer to decide to either stay with the current supplier or switch to a new one. 

Once the new supplier places a request (to register the contract) in the switching platform, the previous 

supplier cannot object to it. Price matching is thus possible during contract negotiation phase and more 

often on the basis of information provided by the customer. ERSE approved strict regulation to prevent 

aggressive win-back actions by previous suppliers. 

Moving process 

•  Moving in case of supplier bankruptcy, its customers are (automatically) moved to the last resort supplier; 

No customer action needed.  

•  Moving in: if no offer to customer, the last resort supplier can be contracted; Customer action needed 

•  Moving out: when contracting with a market supplier; Customer action needed 

8)  Operational obligations / duties 

Further comments 

•  Suppliers  must  have  a  standard  contractual  form  available  for  all  offers,  which  includes  information  to 

customers  regarding  detailed  identification  of  supplier,  price,  payment  methods,  contract  duration,  loyalty 

clauses and information on vulnerable and special needs customers. 

•  Standard  contractual  form  is  presented  prior  to  supply  and  integrates  the  contract  once  in  operation.  This 

obligation is intended to ease comparison between offers. 

 
 
 
 
 
 
 
 
 
 
 
 
 
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 64 

•  Billing activity contains minimum data, related to clear identification of supplier, price (energy and access tariff 

in  detail),  consumption  and  meter  readings,  due  date,  payment  methods,  energy  mix,  taxes  and  levies. 

Nevertheless, no standard bill format is approved by the regulator. 

•  Suppliers  also  present  other  information  to  consumers,  such  as  period  to  present  direct  meter  readings, 

quarterly and annual information on energy mix and CO2 emissions,  

•  Suppliers  have  reporting  obligations  to  regulator  regarding  prices,  offer  details,  QoS  (commercial),  energy 

mix, CO2 emissions and third-party services used in commercial operations. 

•  Reference prices are the set of tariffs, tariff options, and corresponding prices and indexes per billing variable 

offered by suppliers to their customers, as well as the conditions for applying the tariffs, namely consumption 

characteristics, contract duration, and price revision conditions. 

•  Reference prices are the supplier’s basic standard offer, thus not inhibiting the application of differentiated 

contractual conditions such as discounts or other promotional campaigns. This information must be sent on 

an annual basis (end of January) and whenever there is a change in prices or contractual conditions. 

 
 
 
 
 
 
 
 
 
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Getting in touch with the EU 

In person 

All over the European Union there are hundreds of Europe Direct information centres. You can find the address 
of the centre nearest you at: https://europa.eu/european-union/contact_en 

On the phone or by email 

Europe Direct is a service that answers your questions about the European Union. You can contact this service: 
– by freephone: 00 800 6 7 8 9 10 11 (certain operators may charge for these calls), 
– at the following standard number: +32 22999696, or  
– by email via: https://europa.eu/european-union/contact_en 

Finding information about the EU 

Online 

Information about the European Union in all the official languages of the EU is available on the Europa website at: 
https://europa.eu/european-union/index_en 

EU publications  

You can download or order free and priced EU publications from: https://op.europa.eu/en/publications. Multiple 
copies  of  free  publications  may  be  obtained  by  contacting  Europe  Direct  or  your  local information  centre  (see 
https://europa.eu/european-union/contact_en). 

EU law and related documents 

For access to legal information from the EU, including all EU law since 1952 in all the official language versions, 
go to EUR-Lex at: http://eur-lex.europa.eu 

Open data from the EU 

The EU Open Data Portal (http://data.europa.eu/euodp/en) provides access to datasets from the EU. Data can be 
downloaded and reused for free, for both commercial and non-commercial purposes. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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Country handbook - Portugal 

ISBN 978-92-76-30261-2