Our electricity cost rests between Norway, the most expensive, and Bulgaria which has the cheapest power for the consumer. Compare the cost with average income, then Portugal leads the way at 9.8 percent of their annual salary is spent on electricity bills.

The cheapest electricity bill in Europe can be found in Bulgaria, with the average cost per household being just €306 per year – a difference of €2,161 when compared to Norway who has the most expensive energy bills (€2,467)! When comparing this figure to the average salary of a Bulgarian national (€4,224), Bulgarians spend around 7.2 percent of their annual salary on electricity bills – this figure puts them among the top 10 of all European countries considered, but Portugal leads the way at 9.8 percent.

With an average annual cost per household of €983, the UK is slightly less expensive at €934 per household. But, and it’s a big but, in the UK electricity represents just 4.4 percent of average annual income, that’s half of the cost consumers in Portugal pay, 9.6 percent of their average annual income.

On the EDP website (https://www.edp.com/en/edp-stories/electricity-price-portugal-and-europe) they ask the same question, Do we pay more for electricity in Portugal than in other Member States of the European Union?

EDP are clearly quite sensitive to this claim by consumers, they go on to say: “By looking at this data in more detail, we can verify that, if we compare only the energy components (costs of electricity production and commercialisation) and grids (transport and distribution of electricity, from the producers to your home), Portugal is in 16th place among the 27 EU countries”.

What does independent research say?

Independent research looks simply at the cost to the consumer, and doesn’t factor in transport and distribution etc. Let’s face it, we only judge by what we pay, and that’s not a very encouraging figure.

Portugal is clearly making great strides towards solar and other green methods of producing power, we can see solar farms being built everywhere. We need to bear in mind the capital costs of these installations, but the sun is free, and once the plants are operational, they have very low maintenance costs.

Electricity is priced at €/MWh, the cost to the distributer, think of it as the wholesale price. The most expensive power is found in Portugal, Spain, France, Switzerland and Holland. With the exception of Holland and Switzerland, these countries have the best access to ‘free’ power, the sun. Greece is about a third cheaper, strange, it’s the same sun running at about the same strength.

If we look at the various ways of generating electricity, one thing stands out. If its coal fired generators (which Portugal no longer has) you have to factor in the cost of mining coal, that uses a lot of labour. To that add transport to the generator plant, the cost of the labour to keep the furnaces burning day and night. Labour intensive. Nuclear energy is also very capital intensive and high in labour and maintenance costs. Sun and wind are free, and require little maintenance compared with the alternative generating methods.

Portugal is definitely benefiting by its heavy investment in solar and wind power generation. What is clear is that the consumer is not benefiting by the vastly less expensive green energy.

Solar power, the cheapest electricity in history

According to the site CrabonBrief, the world’s best solar power schemes now offer the “cheapest…electricity in history” with the technology cheaper than coal and gas in most major countries. That is according to the International Energy Agency’s World Energy Outlook 2020.

According to the EDP site “2020 was a year of strong operating performance, following the trend of the previous years. Compared to 2019, the net profit had a remarkable increase of 56 percent”.

That’s very nice for EDP and their shareholders, but what about the consumer? EDP are clearly benefiting from the move to green energy, but the consumer in Portugal is still paying ‘through the nose’.

The EDP site continues to say that they are “committed to improve the quality of life of present and future generations”. How will they do that? Apparently by taking 9.6 percent of the average persons income to pay for power while raking in vast profits.

Electricity and gas liberalised

The Portuguese electricity sector is now almost fully liberalised, due to:

Implementation of EU directives (such as Directive 2009/72/EC on the common rules for the internal market in electricity (Electricity Directive)).

Privatisations following the financial assistance plan of 2011 to 2014 and conditions imposed by the International Monetary Fund (IMF), European Central Bank (ECB) and European Commission.

New operators took some time to gain full access to the supply of electricity and gas, but there are now several companies competing to get your business. The best known names, apart from EDP are Goldenergy, ENDESA and Galp, but there are now over thirty companies offering a variety of prices and services. Personally I changed to Goldenergy and have seen savings over my previous EDP account. People seem quite reluctant to move away from EDP, perhaps fearing it will bring no benefit and be problematical. From personal experience I would urge readers to look at the new private sector. People love to hate EDP, so why not do something about it?

There is a good price comparison site, https://www.comparamais.pt/ where you can look at potential saving. Right now, it’s only in Portuguese, but Google will translate for you. When I changed, they did everything for me, cancelled my EDP account, cancelled my EDP direct debit, switched me to the new supplier and dealt with everything.

Perhaps you feel reluctant to make a dent in EDP’s profits, but the new private sector is very happy to do that.

Author

Resident in Portugal for 50 years, publishing and writing about Portugal since 1977. Privileged to have seen, firsthand, Portugal progress from a dictatorship (1974) into a stable democracy. 

Paul Luckman