E-Redes allocates 20% of investment to make grid more robust
As the days roll on from the ‘great Iberian blackout’, no one is committing to what caused it, albeit ‘investments’ are being announced, and some of the consequences are coming clear.
The Bank of Portugal, for example, has published that the outage at 11.33 on April 28 led to a drop in economic activity of around 15%.
According to a note released yesterday – accompanying the daily economic activity indicator (DEI) – in the week ending May 4, there was “a lower year-on-year rate of change in activity than in the previous week, reflecting, in particular, the drop of around 15% on the day of the blackout”.
This indicator aggregates high-frequency data related to economic activity in Portugal, such as heavy commercial vehicle traffic on motorways, electricity and natural gas consumption, cargo and mail landed at national airports and purchases made with cards in Portugal by residents and non-residents.
On the day of the blackout, activity as measured by these indicators fell by 14.8%, according to the central bank.
But much beyond that, we are all still ‘waiting’: waiting for the results of painstaking investigations as to what caused the most dramatic power failure in decades.
Meantime, E-Redes – part of EDP and responsible for distributing power across the nation, has said that it will be allocating 20% of its planned investment of €1.6 billion by 2030 on strengthening its networks.
EDP CEO Miguel Stillwell d’Andrade told a conference call as part of the company’s first quarter results: “With the increase in the penetration of renewables in the grid, I think there is consensus in the sector that it is necessary to ensure adequate returns for the electricity grids to support these higher investments and reinforce the modernisation of infrastructure.”
EDP only recently decided to increase its investment plan to 2030 by 50% (to €1.6 billion) – and the plan has been overwhelming endorsed by ERSE, the Energy Services Regulatory Authority
“I believe there is a consensus in the sector that additional investment in the networks is necessary, and I think this is good news for investment in our network business,” Stilwell d’Andrade added.
Detailing the figures presented in the plan that E-Redes has to submit to the regulator every two years, the group’s CEO pointed out that “around 45% of the investment will be allocated to modernising the network, 15% to digitisation and around 20% to electrification and decarbonisation”.
Finally, given that the issue has gained importance in the last two weeks due to the blackout, EDP’s CEO stressed that “20% of the investment will be allocated to making the networks more reliable and ensuring a robust and continuous service” to keep pace with the increase in the incorporation of renewable energy.
This could be seen as a diplomatic response to the criticism heaped on government decision-makers on the day of the blackout.
But Stillwell d’Andrade’s focus is that he believes everyone sees the new investment as “absolutely essential to ensure the energy transition.”
Miguel Stilwell d’Andrade also emphasised that “according to the regulator, the impact (of this investment) on consumer tariffs is immaterial.”
“We are talking about a cumulative increase of 0.7% (by 2030) in electricity tariffs,” which constitute part of the total value of electricity bills.
“This is an increase that is irrelevant in the context of the cost of the systems”, he said.
EDP closed the first quarter of 2025 with profits of €428 million, an increase of 21% over the same period last year. ND
Source material: LUSA
