Member Article

A global public health emergency was declared by the World Health Organization on 30 January 2020 as a result of the spread of the new virus COVID-19. The virus was later classified as a pandemic on 11 March 2020. As a result, it is important guard against any negative impact of the events relating to COVID-19 on ongoing energy licensing processes and on the energy market as a whole, particularly in the light of Decree-Law 172/2006 of23 August (“DL 172/2006”).

In response to the current situation resulting from the spread of the new virus COVID 19 in Portugal, on 12 March, the Portuguese Council of Ministers adopted a set of extraordinary measures, provided for in Decree-Law 10-A/2020 of 13 March (“DL 10-A/2020”). To date, there is no new legislation specifically addressing the area of energy law and the possible impacts of events relating to COVID-19.

1. Impacts on ongoing energy licensing processes

A state of alert was declared by the Minister of Internal Administration and the Minister of Health on 13 March. With this declaration and the set of measures adopted, we now need to look at the possible impact of this situation on ongoing energy licensing processes. This includes processes to obtain production and operation licences under DL 172/2006. We would highlight, in particular:

• Deadlines in Env ironmental Incidence Assessment and Environmental Impact Assessment procedures under articles 10-A et seq.of DL172/2006 or Decree-Law 151-B/2013 of 31 October;

• Deadlines for the licensing body (the DGEG) to decide on production licence applications; and,

• The deadline for the production licence holder to begin to operate an electricity generating plant.

Specifically in relation to the deadlines for tacit approval and licensing, article 17 of DL 10-A/2020 provides that (i) the deadlines that give rise to tacit approval by the administration of permits and licences requested by individuals are suspended, and (ii) the deadlines that give rise to tacit approval by the administration of permits and licences in the context of the environmental impact assessment, even if not requested by individuals, are also suspended. The scope of application of this rule will have to be examined on a case-by-case basis to determine whether the expiry of the period will amount to tacit approval, because the above suspension will only occur in this case.

In addition, regarding the deadline to begin operation of an electricity generating plant, article 15(4) of DL 172/2006 has already made it clear that the period to start operation begins to run from the date the licence is granted and it may not exceed: (a) for electricity generating plants under the special rules, two years or, in the case of hydroelectric plants, six years – these periods may be extended by the licensor for half of the period originally set; and (b) for electricity generating plants under the ordinary rules, three years – this period may be extended for successive periods of one year up to a maximum of three years.

In this context, article 15(5) and (6) of DL 172/2006 provides for exceptional possibilities to extend the period to begin operating an electricity generating plant. These exceptional possibilities could end up being applied in the current situation:

• On the one hand, in exceptional circumstances, these deadlines may be extended by order of the member of the government responsible for energy. To date, this has not happened, but it might do at some point in the future;

• On the other hand, the above deadlines to begin the operation of electricity generating plants may also – in exceptional circumstances and at the request of the production license holder – be extended by order of the member of the government responsible for energy. This only happens at the initiative of the licence holder and it must justify the exceptional circumstances (that is, the existence of a pandemic) and the extent to which this situation has impacted the its ability to meet the deadline to begin operation.

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