Portugal

Overall assessment

Updated December 2022

The REC definition was introduced in Law on renewables collective self-consumption. A CEC definition was then introduced in the Law organizing the electricity system in early 2022. In terms of framing, the original law on renewables and self-consumption causes confusion regarding what potential activities a REC can engage in. Almost all provisions on RECs, including the definition, are copy-pasted. Therefore, without any specificity, this legislation does little to establish legal clarity around the concept of RECs and their role in the energy system. In terms of the principles covered by the Renewables Directive, the Portuguese definition does not address autonomy. The legislation also allows installations to be owned by third parties, ignoring one of the core bedrock concepts of energy communities, which is ownership. As such, the REC definition has not been property transposed and is not compliant with the Renewables Directive. The Electricity Law does not really fix this problem as it does not provide any further specificity on governance principles for RECs or distinguishing characteristics from collective self-consumption.

The CEC definition is also very basic and does not provide any specificity. Interestingly, it contains mostly similar participation and governance principles as RECs. For instance, it limits participation to SMEs, going further than the Electricity Directive. The CEC definition does not mention control and as such enterprises that are larger than a small enterprise. As such, the CEC definition has not been properly transposed and is not compliant with the Electricity Directive.

In terms of geographic proximity for RECs, this is used not just for effective control but for eligibility. As such it is more strict than the Renewables Directive. This could place significant limitations on participation outside the community. It may be that this was because RECs were intended as small local projects. However, given that RECs may undertake other activities that have a broader impact, this could limit the development of RECs over time. While the ability for RECs to assume any legal form provides flexibility for their development, because there is no authority to oversee RECs or their compliance with the definitions, there is a high risk of abuse. Furthermore, RECs are not required to own their own production installations and they may be owned by third parties. This could result in members of RECs having a passive relationship with their projects, as primary responsibility could lie with a professional market actor. This goes against the intent of acknowledging energy communities in EU legislation and distinguishing them from other market actors.

Detailed assessment

Criteria of EU definition reflected in national definition

REC

  • Members or shareholders must be natural persons, SMEs or local authorities through public legal persons
  • Openness and voluntariness are reflected in the definition
  • Effective control is covered (see below)
  • Autonomy is not mentioned

CEC

  • Open and voluntary participation is covered
  • Control is not mentioned

Level of detail in the elaboration of principles contained in EU criteria

REC

  • For the most part, the definition is a copy-paste of the EU level definition.
  • Effective control & Eligibility - The definition goes beyond the Directive. Not only must effective control reside with natural persons, SMEs or local authorities that are located in close proximity to its renewable energy projects, members MUST also be located in close proximity, equating proximity to an eligibility requirement to be able to participate in a REC. In this sense, collective self-consumption is specifically mentioned.
  • Projects must be owned by the community, but they may also be owned by third parties, as long as it is for the benefit and at the service of the REC. This will facilitate passive RECs that are mainly driven by professional market actors, which is not consistent with empowering citizens to take ownership and responsibility through the creation of RECs. It could lead to a watering down of the concept, and it contravenes a bedrock assumption that RECs are about ownership.

CEC

  • Eligibility – natural persons, SMEs and local authorities (public legal persons). Large enterprises seem to be prohibited from participating, which goes beyond the Electricity Directive
  • Control – control is not mentioned, meaning that medium-sized enterprises, which are eligible to participate, may control the CEC. This contravenes the Electricity Directive

Clearly defined purpose

The definition copy-pastes the EU level definition and does not go any further.

ICA cooperative governance principles reflected

Both definitions essentially copy-paste of EU definition, although autonomy is excluded for RECs.

Legal entities allowed

All legal persons.

Citizen participation is ensured

No.

Designated authority to oversee

No.

Number of definitions

2

Coherency between both definitions

The provisions on CECs mention rules governing RECs, and most of the criteria between RECs and CECs are similar. However, there is still a lack of distinction between RECs and collective self-consumption. Furthermore, as both REC and CEC definitions have not been properly transposed, it is hard to say they are coherent with each other as further work is still needed on both definitions.