he energetic crisis, coinciding with the pandemic relief that has materialised in a sharp increase in natural gas and electricity price in the wholesale market is creating difficulties to companies with higher intensity in energetic use, such as Spinning, Weaving, Dyeing and Trimming. Since the beginning of Summer natural gas prices in the wholesale market – which in 2019/20 were around 15€/MWh and from January to April around 15-20€/MWhn – started a price hike that culminated in 116€/MWh in the beginning of October (more than seven times higher than the average price in 2019/20), having, from that moment onwards, inverted the trend to values around 65-75€/MWh in the beginning of November.

The trend is edging downwards in the rest of the year and in 2022 and the following years. The price of electricity showed a similar behaviour. From an average price of around 40-50€/MWh until April 2021 it reached a peak of 297€/MWh on the 7th October. It has been declining ever since but in the beginning of November it is still around 170€/MWh, although evidencing a declining trend to the rest of the year, to 2022 and the subsequent years.

The energetic transition that has been operating in Europe – and in which Portugal, by the Government’s political option intends to be champion – with guidelines so as to abandon coal plants and implement high C02 emission taxes (in which coal production, being the one that issues the most, is the most penalized) left electricity production very dependent on renewable sources, namely wind power, and made non-renewable productions too expensive.

Portugal has great installed wind power capacity, around 5.500 MW, which is good when it is windy because the variable production costs are null, but, due to its volatility and intermittence the existence of backup centrals that guarantee production when wind fails becomes necessary. As there was little wind over the past months wind energy was very reduced (sometimes less than 20% of the production in normal months), which obliged the intensification of production with natural gas, thus increasing its consumption.

Sines coal-plant, with 1.256 MW power, was shut down on the 15^th January 2021 and Pego plant, with 628 MW, was to be closed on the 30^th November 2021. From the 1^st November 2021 onwards, Argelia closed the Magrebe/Europe gas line which goes through Morocco and was operating since the 1^st November 1996. It exported around 10.000 million m3 of natural gas per year to Spain and Portugal. The supply is intended to be compensated through the other gas line (that doesn’t go through Morocco) that exists since 2011. However, this one is operating in its full capacity of 8.000 million m3 per year. The increase in exports of liquefied natural gas by sea may determine an increase in price.

However, the additional cost of electricity production in special regime has converted into a gain, which alongside other factors will enable a reduction in the high network access fees. The reduction presented to the Government by ERSE is from 94% to MAT, AT and MT and will be enforced from the 1^st January 2022 onwards. As network access fees represent, in MT, around 40% of the invoice (with normal electricity prices), this will have a reduction of around 37% of its value, which will enable the reduction of company costs.