How the electricity market works in Portugal: a simple guide
In short: the electricity that lights your home goes through five steps. It is generated, transported, distributed, sold and, finally, used by you.
- Generation: places that make energy, such as solar farms, wind farms and dams.
- Transmission: the "motorways" of electricity, for long distances.
- Distribution: the local networks that reach your street and your home.
- Supply: the company that sells you the electricity and sends you the bill.
The journey of electricity, step by step
Think of the water coming out of a tap: it starts at a dam, travels through big pipes, reaches your street and only then enters your home. Electricity is similar. The big difference is that it is hard to store, so it has to be produced at the same time as it is used.
Each step has its own people in charge. Producers make the energy, the transmission network carries it far away, the distribution network delivers it to streets and the supplier sells it to you.
Who can choose a supplier?
In Portugal the market was opened in stages between 1995 and 2006. Since 4 September 2006, every consumer in mainland Portugal can choose who sells them electricity. You can change supplier whenever you like, but the wires and networks stay the same.
What you will learn in this series
In the next parts we explain each step, how the price is formed, what you pay on your bill and how to save. All in simple words, so anyone can follow.