Electricity prices - Portugal

Portugal Electricity Market

Primary electricity sources: Portugal’s power mix is dominated by renewables. In 2024, about 71% of consumption was supplied by renewables (up from 61% in 2023). The remaining generation comes mainly from natural gas. In the first months of 2025 renewables have grown even further (e.g. ~83% of generation in April 2025). Major renewable sources are hydro and wind – together supplying over half of generation – with solar PV (~9–10%) and biomass (~6%) also significant. Fossil fuels (mostly gas turbines) now account for only ~10–20%, and coal has been phased out. Portugal also relies on imports (primarily Spanish hydropower and nuclear) for ~20% of its consumption when domestic renewables are low. By installed capacity, renewables made up 78.3% of total capacity by March 2025 (8,250 MW hydro, 5,963 MW wind, 5,956 MW solar, etc.). In short, Portugal in 2025 is heavily renewable (hydro/wind/solar) with minor gas-fired backup, and significant cross-border trading.

• Renewable share: ~71% of 2024 consumption (hydro ~28%, wind ~27%, solar ~10%, biomass ~6%). Jan–Apr 2025 was ~82.2% renewables; April 2025 alone was 83.3%.
• Fossil generation: Only ~10–19% (mostly gas) in 2024; coal is negligible. Portugal sets new lows for gas use (2024 production was lowest since 1979).
• Imports/exports: In 2024, net imports were record-high (10.5 TWh, ~20% of supply). Portugal often imports nuclear/hydro from Spain when renewables dip, and exports occasional surpluses.

Electricity Price Formation (Customer)

An end-user’s bill in Portugal combines energy costs, network tariffs, and taxes/fees. In the liberalized market each supplier sets the energy price (based on wholesale and contract terms), whereas in the old regulated regime the “tarifa de energia” and “tarifa de comercialização” were fixed by ERSE. All consumers (regulated or liberal) pay the Tarifa de Acesso às Redes, which covers grid charges. This includes the Uso Global do Sistema, Uso da Rede de Transporte and Uso da Rede de Distribuição, all set by ERSE. Essentially, every kWh billed includes a component for energy commodity plus a per-kWh network access fee.

Key components of the final price:

• Energy + Retail supply: The cost of electricity itself (wholesale price ± supplier margin). In the liberalized market, suppliers offer fixed or variable contracts; regulated-market tariffs set energy prices administratively.
• Grid/network tariffs: ERSE-defined charges for transmission and distribution (tarifa de acesso). These recover the grid operators’ allowed revenues. (Regulated-market customers see these in tariffs; liberalized customers pay them as fixed, tariff‐like components.)
• Policy/environmental charges: Minimal in Portugal’s bill. (No large renewable surcharge – feed-in costs are socialized in wholesale.)
• Taxes and levies: Consumers pay VAT (normal rate 23%) on almost all charges. There is an Imposto Especial de Consumo (IEC) on electricity (~€0.001/kWh, exempt for social tariff users). A Contribuição Audiovisual (CAV) of €2.85/month (+6% VAT) is added for public TV/radio. A small DGEG tariff (to fund the energy regulator) is also collected.
• Social tariffs/discounts: Low-income households receive a “tarifa social” discount on their bill (not detailed here).

In summary, a household’s bill = (energy price × consumption) + (network access fees) + (fixed charges), all plus taxes. ERSE publishes breakdowns each year. For example, ERSE notes that network access (UGS+URT+URD) is billed to all customers as a combined tariff, and that VAT and fixed taxes (CAV, IEC, etc.) are set by the State.

Dynamic Electricity Tariffs

Dynamic (index‑linked) tariffs are electricity contracts where the kWh price fluctuates with the wholesale market, instead of being fixed for the year. In practice, the price is tied to the Iberian wholesale market (MIBEL) day-ahead prices. Every day (or hour), operators determine the next day’s hourly prices. A consumer on a dynamic tariff pays the actual hourly market price for each kWh used. (Suppliers typically advertise the formula and may add small fees or a management markup.) The idea is to allow consumers to benefit from periods of low prices (e.g. windy, sunny hours) and to incentivize shifting demand. Unlike fixed-price plans, the monthly bill on a dynamic plan varies and must be tracked by the customer.

Dynamic tariffs require a smart meter (to record hourly usage). If a smart meter is unavailable, some offers use the daily average price instead. By EU law, energy companies must offer such products – national implementation of the 2019 Electricity Directive mandates that large suppliers provide at least one real-time (hourly or day-ahead) contract. In Portugal, ERSE’s new Regulamento de Relações Comerciais (effective May 2024) specifically requires major suppliers to offer hourly-variable tariffs to smart-meter customers. For example, suppliers with >200,000 customers (like EDP, Galp, Iberdrola) must offer an hourly market-based tariff, and those with >50k must offer an indexed tariff.

In summary: dynamic tariffs (tarifas indexadas/dinâmicas) are time‑varying electricity prices pegged to MIBEL. They differ from fixed tariffs by being recalculated (hourly or daily) from wholesale prices. They are regulated by EU law and Portuguese rule: as of 2024, large suppliers must provide such offers to consumers with smart meters.

Major Providers Offering Dynamic Tariffs

Leading Portuguese retailers now offer dynamic (index‑linked) plans for homes and businesses. Examples include:

• EDP Comercial – Oferta Indexada de Eletricidade (100% renewable). Price varies with the Iberian market (OMIE PT); hourly-market price is charged for smart-metered customers.
• Galp Energia – Tarifa Indexada de Eletricidade. A 100%-renewable plan where the kWh rate follows the wholesale market (OMIE). Galp emphasizes potential savings when market prices fall.
• Iberdrola Portugal – Planos Indexados. Includes the Plano Simples Indexado (residential) and Plano Tri-horário Indexado (three-period for varying hours). Both are 100% green and let customers pay market-based prices. (Customers can switch freely without penalty.)
• Goldenergy – Goldenergy Index plan. A fully-renewable tariff indexed to the MIBEL price. The energy cost is the wholesale price plus fixed fees (Goldenergy handles forecasting and imbalance costs).
• Repsol Energia (MyPower) – Tarifa Indexada. The customer pays the actual hourly wholesale price, plus a small management fee. The plan is 100% renewable and customers remain free to switch.

Each of these providers’ websites includes details on their dynamic plans (pricing formulas, index rules, etc.). They all highlight that the energy price component will track MIBEL wholesale rates (OMIE), while network tariffs and taxes are added as usual.

Peak and Off-Peak Hours

Portugal 2024 – Average Hourly Wholesale Electricity Price (OMIE)