Meet the challenges of the energy sector to the Government until the end of the mandate – The Economic Journal

Meet the challenges of the energy sector to the Government until the end of the mandate - The Economic Journal

The new Economy Minister, Pedro Siza Vieira, who holds the position with the former Deputy Minister, remains limited in government functions until the end of the term of this Executive of António Costa, which is expected to last until October 2019.

Since asking António Costa not to comment on energy issues, a request that was accepted by Prime Minister Pedro Siza Vieira has no operational capacity in this area.

This was the reason why, as part of the government remodeling that was known in the country last Sunday, October 14, the new Economy Minister, substitute Manuel Caldeira Cabral, no longer has a Secretary of State for Energy, the which transits to the Ministry of the Environment.

During the day yesterday, October 15, the name of João Galamba was appointed as the future Secretary of State for Energy, but this information has not yet been officially confirmed.

Regardless of this issue, the Ministry of the Environment, led by João Pedro Matos Fernandes, is even more powerful, in addition to realizing that the solution found is an obvious way of responding to requests from Pedro Siza Vieira.

At a time when a takeover of China Three Gorges Chinese shareholders to EDP, owned by the Chinese state, Pedro Siza Vieira is being excused because the law firm to which he belonged before going to the Government, Linklaters, is advising the group in this operation.

But if this excuse could be limiting the scope of action of Pedro Siza Vieira as Deputy Minister, it should be even more, for a reason, as the holder of the portfolio of Economy.

Because the energy is not only EDP and the sector has very sensitive implications with the whole Portuguese business, there are many challenges that the Minister of the Environment and the new Secretary of State for Energy will face in this new costumes.

Moreover, in addition to the outcome of the takeover bid for EDP, the energy sector in Portugal faces several crossroads that it is almost impossible to predict its outcome.

Further to the left, the parties supporting the government want a reduction in the energy bill for consumers, particularly in terms of reducing the VAT rates that burden these invoices.

This is a decision that could advance with the new State Budget proposal for 2019, which should be known in full today.

Another decision that could be poured into this document and promising much controversy is the rise in rates on wind energy.

The controversy has also raised the issue of excessive rent paid to energy companies as a way of compensating for the liberalization of the Iberian electricity market foreseen a few years ago.

They have already been called CAE, now they are called CMEC, but no one understands this subject and the litigious process, worth about 120 million euros, between the Portuguese State and the energy operators, is waiting for a court decision.

And finally, the challenge of the whole globe in the face of climate change is also up to us, particularly with regard to meeting some pollution reduction targets, such as failing to produce coal 2030 in Portugal and the need to replace this source with another in this period of time and with affordable costs for the State and for the consumer.

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