Portugal announces phase-out of subsidies

The Portuguese secretary of state for energy has announced that subsidies to renewable energies are to be phased out, once existing contracts expire.

Jorge Seguro Sanches told Reuters that Portugal would differ in its approach from neighbouring Spain, opting for a gradual phase-out and non-interference with existing contracts. Spain had torn up existing contracts when it decided on its phase-out.
Jorge Seguro Sanches Secretary of state for energy - Portugal
"Investors have to feel secure about their investment, so we do not change the rules halfway through the game," he said in an interview, ruling out the cancellation of generous guaranteed prices for producers in existing contracts.

"But when contracts end, they go to the market ... I'm not approving any extensions of subsidies," he said.

Lisbon has decided to go down this route in a bid to tackle high electricity prices that are hampering efforts to bolster its struggling economy.

Also inflating that bill is legacy support to thermal power plants. Data from Portugal's power market regulator ERSE shows that producer overheads that end up being subsidized make up about 25 percent of the final price of electricity.

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