Feed-in tariff (Tarifas feed-in)

Updated: 29.06.2016

Author: Moïra Jimeno

In Portugal, the generation of electricity from renewable energy sources is mainly promoted through a feed-in tariff. Currently, the FiT regime continues to apply only to existing installations. A new regime for Small Production Units (UPP) and Self-consumption Units (UPAC) has been introduced by DL 153/2014 and replaces the remuneration regime previously applicable to micro and mini generation units, which continues to be applicable only to installations registered until January 2015, date on which DL 153/2014 has come into force through Ordinance 14/2015.

In 2015 a unique regime for Small Production (UPP) and Self-consumption Units (UPAC) came into force. There are common regulations and certain particularities for UPACs and UPPs. UPPs can have an installed capacity of up to 250 kW, whereas UPACs can have an installed capacity between 200 W and more than 1 MW (art. 2 and 4 DL 153/2014). The most important changes are that UPPs are supported through a bidding scheme, while UPACs are able to have more capacity (more than 1 MW) and are also able to connect to the national grid.In addition, Decree-Law 35/2013 provides for alternative remuneration regimes for the electricity produced from wind plants (as defined in Annex II of DL 189/88 before the entry into force of DL 33-A/2005). These plants might choose to accede to an alternative remuneration regime for an additional period of five or seven years after the end of the period of guaranteed remuneration upon the commitment to contribute to the sustainability of the National Electric System (SEN) through the payment of a compensation (Art. 1 DL 35/2013). 

Eligible technologies

In general, all renewable energy generation technologies are eligible for the new support in case of small production and self-consumption units. Existing industrial installations continue to receive the FiT. 

Wind energy

Eligible

Solar energy

Eligible

Geothermal energy

Eligible

Biogas

Eligible 

Hydro-power

Eligible

Biomass

Eligible

Amount

For existing installations, the amount of feed-in tariff depends on the source of energy used. Where statutory law does not specify a feed-in tariff for an individual technology, the amount of payment can be calculated only by using a formula (art. 2 DL 225/2007). With the introduction of the coefficient Z by Decree-Law 339-C/2001, the remuneration system for renewable energy distinguishes between several tariff levels based on the technology used. The formula is rather complex and Z is the coefficient reflecting the specific characteristics of the resource and the technology used in licensed facilities. In case of UPPs, remuneration tariffs are set based on a bidding scheme in which producers offer discounts to the reference tariff, which is established annually by the government through an ordinance issued until the 15 December of each year (art. 31 DL 153/2014). The reference tariff for the year 2015 is € 95/MWh (art. 2 of Ordinance 15/2015). The remuneration tariff is received for a period of 15 years. After that period, the produced electricity is remunerated through the energy market (art. 31 DL 153/2014). In the case of UPACs, they are supposed to meet individual consumption needs. Nevertheless, UPACs that are connected to the grid and have a capacity of up to 1 MW can feed their excess of electricity into the national grid and commercialise it on the electricity market. For their electricity excess they receive a remuneration tariff that is 10% less than the market price (DL 153, 2014). 

Wind energy

Indicative average rate for existing installations is € 74-75 per MWh (DL 225/2007)

With regards to the wind plants covered by the provisions of DL 35/2013 that accede to one of the alternative regimes provided for in the Decree-Law, an annual compensation (from 2013 to 2020) shall be paid to the National Electric System. The calculation of the compensation is based on a reference value for each MW of installed power (Art. 5 of DL 35/2013).

For UPPs the FiT consists of 70% of the reference tariff (art. 3 of Ordinance 15/2015).

Solar energy

For existing photovoltaic installations as defined in DL 132-A/2010, the Indicative average rate of the FiT is € 257 per MWh (DL 132-A/2010).

For existing concentrated photovoltaics (CPV) with Installations with a capacity ≤ 1 MW up to a limit of 5 MW of installed power on the national level the indicative average rate of the FiT is € 380 per MWh (Ordinance 1057/2010).

For existing Concentrated Solar Power (CSP) installations with a capacity ≤ 10 MW the Indicative average rate is € 267-273 per MWh (DL 225/2007).

For UPPs, the FiT consists of 100% of the reference tariff (art. 3 of Ordinance 15/2015). The reference tariff in 2015 is € 95/MWh (Ordinance 15/2015).

Geothermal energy

For existing installations (i.e. plants up to 3 MW), the Indicative average rate is € 270 per MWh (Ordinance 865/2009).

Biogas

Fermentation of solid municipal waste, sewage sludge from waste water treatment, waste water and waste from the agricultural and food industries: Indicative average rate: € 115-117 per MWh (DL 225/2007).

For existing landfill gas plants, the Indicative average rate is € 102-104 per MWh (DL 225/2007).

For UPPs, the 90% of the reference tariff (art. 3 of Ordinance 15/2015).

Hydro-power

For existing traditional hydroplants (up to 10 MW), the indicative average rate is € 91-95 per MWh (DL 126/2010).

For existing wave hydro power plants (pilot-projects) up to 4 MW, the indicative average rate is € 260 per MWh. Plants (pre-commercial) up to 20MW: Indicative average rate: € 191 per MWh. Commercial plants: Indicative average rate: € 131 per MWh for the first 100MW and € 101 per MWh for the subsequent 150MW (DL 225/2007).

For UPPs, the FiT consists of 60% of the reference tariff (art. 3 of Ordinance 15/2015).

Biomass

For existing biomass plants, the indicative average rate is € 119 per MWh for forest Biomass and € 102-104 per MWh (DL 225/2007) for animal biomass. For UPPs, the FiT consists of 90% of the reference tariff (art. 3 of Ordinance 15/2015).

Addressees

Entitled party. The persons entitled are the plant operators. UPPs and UPACs connected to the national grid (art. 5 DL 153/2014)

Obligated party. The plant operator enters a contract with the supplier, which pays for the electricity produced. UPPs and UPACs connected to the national grid (art. 5 DL 153/2014)

Procedure

Process flow

UPPs: In order to access to the remuneration regime and start operation, UPPs should ask for the support during the required prior registration on SERUP (Electronic Registration System) (art. 4 and 13, DL 154/2014).

UPACs: For UPACs with a capacity between 1.5 kW and 1 MW or less than 1.5 kW but connected to the grid, it applies the same rule as of the UPPs. Yet, UPACs that are not to be connected to the grid and are not to receive the remuneration do not require a registration, only a notification (art. 4 and 13, DL 154/2014).

Wind plants covered by the provisions of DL 35/2013 can communicate to the DGEG their decision to accede to one of the alternative regimes (i.e. additional 5 or 7 years of guaranteed remuneration) within 30 days after the entry into force of the DL on 1 March 2013. However, the possibility of requesting the accession to one of the alternative regimes provided for in Article 5 of DL 35/2013 remains for up to 2 years after the entry into force of the above-mentioned DL on 1 March 2013 (Art. 15 of DL 35/2013). 

Competent authority

The Directorate General for Energy and Geology (DGEG) at the Ministry of Economy, Innovation and Development manages the SERUP (Electronic Registration System) for Small Production and Self-consumption Units (art. 10 DL 154/2014).

Degression

The tariffs for UPPs are not subject to degression. 

Cap

  • Wind energy: until 33 GWh is reached (DL 225/2007).
  • Solar energy (solar-thermal): until 21 GWh is reached (Annex II of DL 189/88 as amended by art 2(c) of DL 225/2007). 
  • Solar energy (photovoltaic installations as defined by DL 132-A/2010): until 34 GWh is reached (art. 7 of DL 132-A/2010). 

For Small Production Units (UPP), the generation capacity annually assigned shall not exceed 20 MW (art. 29, DL 153/2014). 

Eligibility period

The duration of payment for existing installations depends on the technology used: 

  • Wind energy: Payment during the first 15 years of operation (art. 2 of DL 33-A/2005) or until 33 GWh of electricity have been generated (DL 225/2007).
  • Solar energy (solar-thermal): The payment ends either after 15 years or when 21 GWh of electricity have been generated (art 2(c) of DL 225/2007). 
  • Solar energy (photovoltaic installations as defined by DL 132-A/2010): The payment ends either after 20 years of operation or when 34 GWh of electricity have been generated (art. 7 of DL 132-A/2010). 
  • Geothermal energy: Payment during the first 12 years of operation (art. 2(i) of DL 225/2007). 
  • Biogas: Payment during the first 15 years of operation (art 2(f) of DL 225/2007). 
  • Biomass: Payment during the first 25 years of operation (art 2(e) of DL 225/2007). 
  • Hydro-electricity: 
    • The payment ends after 25 years of operation (DL 126/2010).
    • Wave power systems receive payments during the first 15 years of operation. (art 2(h) of DL 225/2007).

Tariffs to UPPs are limited to 15 years (art. 31 DL 153/2014).

Distribution of costs

Consumers

The grid operator may pass on the costs of the feed-in tariff to the consumers through the electricity bill (art. 22 par. 2ff. DL 189/88).

Portugal

Further information

  • Ministério da Economia, da Inovação e do Desenvolvimento. Direcção Geral de Energia e Geologia (DGEG) – Directorate General for Energy and Geology at the Ministry of Economy, Innovation and Development
  • +351 217 922 782
  • DGEG website
  • Racionalizacao.Energia(at)dgge.pt