Genaration is the first activity in the electricity sector’s value chain. EDP generates electricity from renewable sources such as water, wind and sun, and from non-renewable sources - mostly coal, natural gas, nuclear and cogeneration.
The company is the largest electricity generator in Portugal, the third in the Iberian Peninsula and the fifth largest private group in Brazil. In the wind energy market, EDP Renováveis is one of the leading global players.
At the end of 2017, EDP had 26,753 MW of installed capacity.
EDP Renováveis, with eolic and solar energy production, operates in Europe, North America and Brazil. with a total of 10,052 MW installed, more 624 MW than in 2016.
In Europe, it has windfarms in Portugal, Spain, France, Poland, Romania, Belgium and Italy and a project in the United kingdom. In North America, EDPR is present in three countries: EUA, Canada and Mexico.
Because of climate change and the global agreements signed to combat such changes, renewable sources have been gaining ground in recent decades and are also the sources most commonly used by EDP.
The strategy defined by EDP for the generation activity goes through the execution of the hydro investment plan currently in progress in Portugal and to seek for growth opportunities either in EDP Renováveis or in other international expansion opportunities. As so, additions in installed capacity over the next years will be primarily focused on renewable sources.
In addition to the categorization of energy generation by energy source, it is also important to distinguish between normal scheme generation and special scheme generation. Broadly speaking, normal scheme generation is based on thermal sources or large hydro plants, while special scheme generation is achieved through mini-hydro plants, other renewable energy sources, or cogeneration.
In terms of the sector’s regulatory framework, there are different specifications depending on the market in question, and different remuneration mechanisms in the different countries where EDP operates.
The energy we produce is delivered to the transmission network and then channeled into the distribution network. This enables the flow of energy into electricity supply points. This is the value chain stage where we focus on energy distribution.
Electricity distribution networks are made up of High, Medium and Low voltage cables and lines. Substations, transformation substations and public lighting facilities are also part and parcel of the distribution networks, as well as the necessary connections to consumer facilities and generation centers.
EDP operates in three electricity distribution markets, Portugal, Spain and Brazil, having distributed, in 2017, 78,788 GWh, through a network with more than 246 thousands km. In Portugal, the company operates throughout the mainland. In Spain, EDP operates in some autonomous communities, especially in the Asturias region. In Brazil, EDP operates in the states of Espírito Santo and São Paulo, through EDP Escelsa and EDP Bandeirante respectively.
EDP’s electricity distribution strategy is focused on the implementation of smart networks and related services, in order to meet future challenges and become an electricity distribution benchmark.
In recent years, the expansion and modernization of systems in the three countries where EDP operates, as well as the expansion of the telemeters network in the distribution network’s transformation substations, have been important strategic factors for EDP. By the end of 2017, the company had more than 2 million smart meters installed in the Iberian Peninsula. Particularly, in Portugal, we had an increase of 83% in the coverage by telemetry of distributed energy.
Once the energy gets to the supply point, it is sold by the supplier. Commercialization is the activity closest to the customer end of the electricity value chain. It is responsible for our relationship with end consumers.
In Iberia, electricity and gas supply is liberalized and consumers have the right to freely choose their supplier. Although the energy market is fully liberalized in both countries, there are last resort suppliers. Currently, in Portugal, these suppliers provide customers whom have not moved to the liberalized suppliers and in the future the aim will be to ensure energy supply to consumers, mainly vulnerable ones.
In Brazil, the electricity market is divided into two segments: the regulated market and the free market. Customers with consumption levels higher than 3000 kWh are considered free, while the remaining are covered by the regulated market.
EDP is present in the electricity supply activity in Portugal, Spain and Brazil, having more than 9.8 million customers in those geographies. In the gas sector, this presence is only in Iberia, where EDP has 1.5 million customers.
The customer relationship management is crucial for EDP, which has given strong relevance to the focus on clients and to improve the quality of services provided. EDP has been building up a position of brand awareness in the energy market, aiming to be an engaging company with which customers relate to.
Decarbonisation continues to mark the global agenda with the stagnation of the carbon emissions of the energy sector. However, stagnation in emissions is not sufficient to meet the targets set in the Paris Agreement (December 2015).
The path of decarbonisation implicates a deep change to the economic model based on fossil fuels, a strong bet in energy efficiency, electrification based in renewables and the promotion of innovation.
EDP Annual Report 2018
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