Regulatory context

REN

Electricity, Gas and Telecommunications

REN develops its activity in the Electricity and Gas sectors and, as a complement to this, in the Telecommunications sector.

REN’s activities are carried out under a public service concession, within the framework of the normative and regulatory framework of the energy sector, namely Decree-Law 15/2022 of 14 January, which transposes Directive (EU) 2019/944 and Directive (EU) 2018/2001, and Decree-Law 62/2020 of 28 August, which transposes Directive 2019/692. These Decree-Laws establish, respectively, the organisation and operation of the Portuguese National Electricity System (NES) and of the Portuguese National Gas System (NGS), as well as their applicable legal regimes. 

Electricity

In electricity, REN is responsible for very-high-voltage transmission and for the Global Technical Management of the Portuguese National Electricity System on an exclusive basis under a 50-year public service concession, which REN – Rede Elétrica Nacional, S.A. has held since 2007. 

In November 2010, the Portuguese Government awarded ENONDAS – Energia das Ondas, S.A. a concession for wave energy generation in a pilot area north of São Pedro de Moel. The concession has a term of 45 years and includes the authorisation for the laying of infrastructures to connect to the public electricity grid. ENONDAS has adopted the trading name of Ocean Plug.

Gas

In the Gas sector, REN is exclusively responsible for high-pressure transmission and for the Global Technical Management of the Portuguese National Gas System, and of other high-pressure activities of the NGS.

These include the reception, storage, and regasification of liquefied natural gas and the underground storage of gas, under public service concessions, that REN Gasodutos, S.A., REN Atlântico – Terminal de GNL, S.A., and REN Armazenagem, S.A. (respectively), REN companies, have held since 2006 (and for 40 years).

REN also operates in medium- and low-pressure Gas Distribution through the public service concession, for 40 years, which REN Portgás Distribuição, S.A. has held since 2008.  

Telecommunications

In the telecommunications field, REN has been operating since 2002, through RENTELECOM – Comunicações, S.A., set up with the purpose of exploiting the surplus capacity of the telecommunications networks associated with the transmission of electricity and gas.

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Portuguese energy services regulatory authority (erse)

Economic Regulation

REN’s core activities, given the technical and legal specificities of its operation, are subject to economic regulation by the Portuguese Energy Services Regulatory Authority (ERSE). The assignment of economic regulation to ERSE does not prejudice the competences of the Portuguese Directorate-General for Energy and Geology (DGEG), the Portuguese Competition Authority (AdC), the Portuguese Securities and Exchange Commission (CMVM), the Portuguese National Entity for the Energy Sector (ENSE), and other administrative entities under the terms of the Law. 
  
DGEG is the Portuguese Public Administration body whose mission is to contribute to the design, promotion, and evaluation of policies regarding energy and geological resources, from a perspective of sustainable development and guarantee of security of supply. Without prejudice to the powers assigned to other public entities, DGEG is responsible for exercising its powers to inspect concessions, namely concerning compliance with the applicable legal and regulatory provisions intrinsic to concession contracts.  
 
ERSE has the power to draft and approve the regulations required for the performance of its attributions and which are intended for the application of the legislation that disciplines the organisation and operation of the sectors which are within the scope of its regulation.

ERSE

Regulation

Accordingly, the regulated activities are carried out taking into account the determinations, parameters, and technical and commercial indicators defined by ERSE, framed in the aforementioned regulations, of which we highlight:  
 

  • Quality of Service Regulation – Approved by ERSE for the electricity and gas sectors, it defines the obligations and service quality levels, the compensation to be paid in case of non-compliance, and the monitoring and reporting obligations. The regulation also contains rules for network operators and suppliers on continuity of service (number and duration of power cuts), quality of electricity (amplitude, frequency, wave shape, and symmetry of the three-phase voltage system), and efficient commercial management (customer care, information, complaints, and services provided to customers). 
     
  • Commercial Relations Regulation – It establishes the commercial relationship between stakeholders in the electricity and gas sectors. It sets out the way in which the various players relate to each other and to customers and consumers, and it defines the commercial conditions for connection to public networks, the rules regarding measurement, reading, and availability of consumption data, and the rules applicable to the choice of supplier and the operation of the markets. 
     
  • Rate Regulation – it defines the allowed revenues of the regulated companies in the gas and electricity sectors to be recovered through the rates, the rate structure, the procedures for setting, changing, and publishing the rates, and the obligations and procedures for providing information to ERSE.   
     
  • Access to Grids, Infrastructures, and Interconnections Regulation – applicable to the gas sector, it establishes, with objective, transparent, and non-discriminatory criteria, the technical and commercial conditions for access to transmission and distribution networks, gas storage facilities, Liquefied Natural Gas terminals, and interconnections. It includes the rules for access to the gas grid by producers of gases of renewable and low-carbon origin.  
     
  • Access to Grids and Interconnections Regulation – applicable to the electricity sector, it establishes the technical and commercial conditions under which access to the grids and interconnections of the electricity sector takes place, the conditions under which entities must provide (or restrict) access to their networks, as well as the remuneration due, and the conditions for using the interconnections. The Regulation also defines the obligations for operators to provide information to ERSE and the disclosure of information to the public for the purposes of access.  
     
  • Network Operation Regulation – applicable to the electricity sector, it establishes the conditions allowing the management of electricity flows in the Portuguese National Transmission Grid, ensuring its interoperability with the networks to which it is connected, as well as the procedures to ensure its implementation and verification. The regulation also sets out the conditions under which the transmission system operator monitors the availability of the power generating facilities and, in cases where the guarantee of supply is at stake, may change the unavailability plans of the power generating plants. This regulation also defines the conditions for the technical verification of operation and the adaptation, in real time, of generation to consumption, through the contracting and mobilisation of system services. This regulation has specific influence on the Global Technical Management of the Portuguese National Electricity System, which ensures the coordination of the operation of the facilities of the Portuguese National Electricity System. It is responsible for managing interconnections, namely determining the interconnection capacity available for commercial purposes and identifying the needs and managing the system services required to balance generation and consumption, as well as the safe operation of the electricity system. Additionally, it is responsible for forecasting the use of production equipment and the level of hydroelectric reserves necessary to guarantee security of supply in the short and medium term.  
     
  • Infrastructure Operation Regulation – regulates the operation of the Portuguese National Gas System, focusing on the coordinated operation of the grids and infrastructures of the public gas grid, in accordance with article 112 of Decree-Law 62/2020 of 28 August. This Decree-Law enables the production of gases of renewable or low-carbon origin and their injection into the natural gas networks. The Regulation also covers the coordination of events of unavailability and operation in contingency situations. 
REN Activities

Activities with economic regulation

Activities in Electricity 

The transmission of Electricity in very-high voltage and the Global Management of the System, both carried out by REN – Rede Elétrica Nacional, S.A., are subject to economic regulation by ERSE.   

Regulation of the electricity sector is defined in four-year periods, with a new period beginning in January 2022 and ending at the end of 2025.  

ERSE sets the rates each year, based on financial information from previous years and forecast data about demand, costs, revenues, and investments. 

Activities in Gas 

High-pressure gas transmission and the overall technical management of the system, both carried out by REN Gasodutos, S.A., the reception, storage, and re-gasification of LNG, carried out by REN Atlântico Terminal de GNL, S.A., the underground storage of gas, carried out by REN Armazenagem, S.A., and the distribution of gas, carried out by REN Portgás Distribuição, S.A., are subject to economic regulation by ERSE.  

Regulation of the gas sector is defined in four-year periods, with a new period beginning in January 2020 and ending at the end of 2023.  

ERSE sets the rates each year, based on financial information from previous years and forecast data about demand, costs, revenues, and investments, which consider the return on assets, the recovery of the value of amortisations, and operating costs established for each activity.  


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