Exceptional Capacity Allocation Procedure (High-Demand Areas) - Decree-Law No. 120/2025 of 14 November

The Decree-Law reconfigures the phases of the procedure as follows:

• Expression of interest, provision of security deposit, and determination of unused capacity;
• Assessment of demand and of grid reinforcement;
• Convergence of the desired schedule and the schedule for grid reinforcements;
• Auction for capacity allocation;
• Issuance of capacity certificates.

HDAs require that a request be made to the Public Power Grid System (“PPGS”) operator for new consumption facilities and deadlines longer than those arising from the grid investment plans for that area.

If the PPGS operator is unable to fulfil these requests within the required deadlines, it must send a report to both ERSE and the Government, detailing the situation, the investment plan, and the flexibility measures considered for that region.

The allocated capacity is, as a rule, non-transferable, with certain exceptions (corporate restructurings within the same group, subrogation by transfer of industrial or commercial establishment without change of location, and succession by death), subject to approval by the Directorate-General for Energy and Geology (“DGEG”) within 20 days.

In this initial phase, the interested parties express their interest in the allocation of capacity by submitting the elements mentioned in the public consultation, including, at least:

• A timeline for the project to be installed, the respective investment plan, and actual power requirements; and
• The provision of a security deposit, based on the value of the requested connection power.

Failure to provide a security deposit will result in the interested party being excluded from the exceptional procedure.

The security deposit is defined by ministerial order (with prior opinion from ERSE) and may not be less than €13,500/MVA. The PPGS operator shall disclose the formula for calculating the security deposit in the public consultation announcement.

The Decree-Law also establishes specific and objective formulas in the event of changes to the timeline or the partial withdrawal of allocated capacity.

The security deposit shall be deducted from the revenue obtained from tariffs, by the PPGS operator, or accounted for in the investment contribution that meets the demand for the capacity in question.

The deposit shall be returned after connection to the PPGS, proportionally and in accordance with compliance with the schedule set out in the capacity certificate. Definitive non-compliance with the schedule will result in the loss of:

• the right to the allocated unused capacity; and
• the amount paid as security deposit.

If it is found possible to meet the identified demand, the PPGS operator allocates the capacity indicated in the expression of interest, in accordance with the respective schedule, by issuing a capacity certificate for connection to the PPGS of the consumption facility.

However, if the level of demand exceeds the capacity made available in the context of the grid investments, this will trigger the beginning of the phase of provision and transfer of unused capacity, with the following changes being relevant in this regard:

a)     Notification by DGEG: holders of unused capacity are notified to

• Prove the need for capacity and respective scheduling of form and quantity of use;
• Voluntarily make the unused capacity available, with failure to do so potentially resulting in mandatory transfer.

b)     In the event of mandatory transfer, the form and quantity of capacity to be transferred shall comply with a proportionality criterion approved by ERSE.

c)     The availability of the above-mentioned capacity may be permanent or temporary.

d)     Permanent capacity not allocated under this procedure shall be available for reallocation.

e)     When the capacity made available and transferred, in conjunction with the capacity resulting from the grid reinforcements, is insufficient to meet the demand expressed, the procedure will advance to the “Convergence of the desired schedule and the schedule for grid reinforcements” phase, and, if necessary, to the “Auction” phase.

When the demand expressed by the interested parties exceeds the sum of:

a)     the capacity resulting from the grid reinforcements; and

b)     the availability and transfer of unused capacity,

the PPGS operator will consult with the interested parties with a view to converging the desired schedule and the schedule for grid reinforcements.

This mechanism aims to accommodate the requested demand by adjusting the consumption phases to the grid availability milestones, with the goal of allocating the capacity specified in the expressions of interest and issuing the capacity certificate (in accordance with the agreed schedule).

When it is not possible to reach an agreement on the convergence of schedules, the procedure advances to the Auction phase, with the capacity made available or transferred being incorporated therein.

The PPGS operator prepares the procedural documents for the auction, with the help of third parties if necessary. The capacity allocated at auction is recorded in a capacity certificate issued by the PPGS operator.

The procedure is closed, by Government order, when the following conditions have been cumulatively met:

a)     The capacity determined has been allocated, validated, made available or transferred;

b)     The PPGS operator has submitted the reconciliation of the schedules of the allocated capacities with the approved schedule for the PPGS reinforcements.

The closure order shall include mention of at least the allocated capacity and the respective schedule.

All expressions of interest that have not resulted in the issuance of a connection capacity certificate shall expire with the closing order.

Capacity certificate holders may, after closure, submit to the DGEG:

• A change to the schedule defined in the capacity certificate for connection by a consumption facility to the PPGS;
• A partial withdrawal of the connection capacity allocated under the exceptional procedure.

The purpose of the scheduling change is to extend the timeline relating to actual power requirements or to reschedule the phases defined in the respective certificate. These requests may be submitted within 6 years from the date of closure of the procedure and may not imply an extension of more than 2 years in relation to the schedule and phases indicated in the capacity certificate.

The DGEG shall decide on the requests within 10 days.

Approval implies the enforcement of the security deposit in accordance with the legal terms set forth in the Decree-Law.

The capacity subject to extension may be temporarily made available for allocation, under the terms of the capacity availability/transfer regime.