1. BRITO Portugal Session 4 – Block 1 Barcelona 12-15 May 2003 1 EDP Distribuição Energia, S.A. Internalisation of Environmental Benefits Concerning Dispersed Generation in the Portuguese Legislation António Brito Luis Neves

2. BRITO Portugal Session 4 – Block 1 Barcelona 12-15 May 2003 2 Introduction The 1973 oil crisis lead to a global change of the European energy politics in an attempt to reduce external dependence. Some priorities were defined: Diversify the oil supply; Promote the saving and the rational use of energy; Develop the internal sources of energy.

3. BRITO Portugal Session 4 – Block 1 Barcelona 12-15 May 2003 3 Renewable Energy Sources Renewable energy sources achieved greater importance, as a main contribution to the global security in terms of energy supply Some priorities were defined: Research; Development of new technologies; Legal context.

4. BRITO Portugal Session 4 – Block 1 Barcelona 12-15 May 2003 4 Legal Context Technical definition of the plants connection to the grid; Remuneration process assured; Obligation of purchasing the energy emitted to the grid; Support to the investment.

5. BRITO Portugal Session 4 – Block 1 Barcelona 12-15 May 2003 5 Legal Context Decree-Law nº 168 / 99 - Renewable Energies Use of “green tariff” concept; Remuneration process that internalises: –environmental benefits; –reduction of costs in the Public Electric System; Inflation correction by means of the monthly index of consumers price.

6. BRITO Portugal Session 4 – Block 1 Barcelona 12-15 May 2003 6 Legal Context Decree-Law nº 538/99 - Cogeneration Internalisation of environmental benefits; Remuneration of the reduction of costs and losses in the grid; Remuneration related to the dollar and the oil price; Introduction of the equivalent electric efficiency concept. –environmental benefits; –reduction of costs in the Public Electric System; Inflaction correction by means of the monthly index of consumers price.

7. BRITO Portugal Session 4 – Block 1 Barcelona 12-15 May 2003 7 Percentile distribution of production under a special regime in 2002 (Portugal)

8. BRITO Portugal Session 4 – Block 1 Barcelona 12-15 May 2003 8 Weight of production under a special regime (PSR) in terms of the total energy flow in the grid - 2002 (Portugal)

9. BRITO Portugal Session 4 – Block 1 Barcelona 12-15 May 2003 9 7,5 9,1 35,5 15,7 14,4 14,01 4,8 1,34 0,48 7,02 12,23 10,04 0,608 0,072 0,65 5,95 1,852 0,627 2,7 0,731 2,4 0,25 4,4 9,24 10,6 2,46 3,66 15,5 66,9 55,8 14,2 0,3 21,3 5,9 2,1 0,7 0,6 9,3 10,4 62,2 74,4 0,07 11.8 10,3 13 1,6 26,09

10. BRITO Portugal Session 4 – Block 1 Barcelona 12-15 May 2003 10 279,8 1,2 0,018 57,4 86,8 10,7 15,6 33,5 10,2 12,4 0,8 39,7 26 2,57 7,242 11,2 5,4 6,09 38,3 0,34 62 16,24 0,006 22,66 10,6 18,2 3,2 16,4 0,278 29,8 74,4 44,8 5,4 18,678 24,44 20,3 24,6 5,7 16,5 19 35,91,6 4,44 51,4 4,44 26.9 22,6

11. BRITO Portugal Session 4 – Block 1 Barcelona 12-15 May 2003 11 29,6 11 13,365 53 0,9 3 45 72 2,6 1,61 52,8 5,96 9,1 17,96 18,8

12. BRITO Portugal Session 4 – Block 1 Barcelona 12-15 May 2003 12 53 5,925

13. BRITO Portugal Session 4 – Block 1 Barcelona 12-15 May 2003 13 0,011 0,006 0,0227

14. BRITO Portugal Session 4 – Block 1 Barcelona 12-15 May 2003 14 Remuneration process for renewable energies The remuneration is based on the avoided costs: Fixed Remuneration (PF) - represents the avoided investment costs; Variable Remuneration (PV) - represents the avoided operation costs; Environment Remuneration (PA) - valorises the avoided CO 2 emissions.

15. BRITO Portugal Session 4 – Block 1 Barcelona 12-15 May 2003 15 Remuneration process for renewable energies In the remuneration process the following parameters are still considered: LEV - represents the losses prevented in the nets; KMHO - depends on the diagram of energy production; Correction according to the inflation.

16. BRITO Portugal Session 4 – Block 1 Barcelona 12-15 May 2003 16 Wind Plants Environment Remuneration

17. BRITO Portugal Session 4 – Block 1 Barcelona 12-15 May 2003 17

18. BRITO Portugal Session 4 – Block 1 Barcelona 12-15 May 2003 18

19. BRITO Portugal Session 4 – Block 1 Barcelona 12-15 May 2003 19 Remuneration process for cogeneration Fixed Remuneration (PF) - which is proportional to the power emitted to the net; Variable Remuneration (PV) - which is proportional to the energy emitted; represents the avoided operation costs; Environment Remuneration (PA) - which is also proportional to the energy emitted; valorises the avoided CO 2 emissions.

20. BRITO Portugal Session 4 – Block 1 Barcelona 12-15 May 2003 20 Remuneration process for cogeneration In the remuneration process the following parameters are still considered: LEV - represents the losses prevented in the nets; KMHO - depends on the diagram of energy production; Correction according to the inflation, the relation between Euro/Dollar and the price of oil.

21. BRITO Portugal Session 4 – Block 1 Barcelona 12-15 May 2003 21 Cogeneration Environment Remuneration Environment Remuneration

22. BRITO Portugal Session 4 – Block 1 Barcelona 12-15 May 2003 22 Future Perspectives Reduction of the obstacles that can prevent the increase of electricity by means of renewable sources of energy; Simplification of administrative procedures; Establishment of objective rules; Easy access to the grid, maintaining the reliability and safety of the electric system. Introduction of the “green certificates” mechanism.