Otis Singleton
Portugal has some of the highest electricity prices in Europe, with households paying an average of €0.2246 per kWh, which is 22% higher than in the UK. In 2017, Portugal had the second most expensive electricity in Europe, with families paying 23 cents per kilowatt-hour. The high cost of electricity in Portugal is largely due to taxes, which make up more than half of the cost. This has led to debates about reducing the tax on electricity. Additionally, the standard electricity supply in Portugal is 220 Volts (V), 50 Hertz (Hz) AC, and the most commonly used provider is EDP (Energias de Portugal).
| Characteristics | Values |
|---|---|
| Household electricity prices | High |
| Comparison with other countries | Third most expensive in Europe |
| Comparison with other countries (in 2017) | Second most expensive in Europe |
| Comparison with other countries (in 2018) | Second most expensive in Europe |
| Comparison with other countries (in 2018 based on PPP) | Second most expensive in Europe |
| Comparison with the UK | 22% higher |
| Comparison with the UK (in 2017) | 23% higher |
| Taxes | Second highest tax burden in Europe |
| Tax as a percentage of the final cost | 52.02% |
| Average monthly income | €1057 |
| Percentage of income spent on electricity bills | 9% |
| Standard electricity supply | 220 Volts, 50 Hertz AC |
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What You'll Learn
High taxes
Portugal has some of the highest electricity prices in Europe, and high taxes are a significant contributing factor. In 2018, Eurostat data revealed that Portugal had the second-highest tax burden in Europe, with 52.02% of the electricity price consisting of taxes, or 12 cents per kilowatt-hour. This is significantly higher than the European average of 28.94%.
A breakdown of electricity prices in Portugal shows that various additional fees, support costs, and top-rate VAT contribute to high electricity bills. In fact, half of the cost shown on invoices is comprised of these fees, which can include charges for EDP, a state-owned electricity company.
The high tax burden on electricity has sparked debates about reducing the tax rate on electricity. In 2018, Portugal's electricity bills were the second most expensive in Europe, and the country had some of the lowest salaries in the EU. This disparity between high electricity prices and low incomes has led to calls for tax reduction to ease the financial burden on households.
While there have been efforts to lower electricity prices in Portugal, such as a predicted 0.4% cut in prices for 2020, the high tax burden remains a significant factor contributing to expensive electricity in the country. The government has claimed to work towards reducing electricity prices, but a significant portion of the fees on electricity bills is a result of government-imposed charges.
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High fees and charges
Portugal has some of the highest electricity prices in Europe, with families paying around 23 to 24 cents per kilowatt-hour. In 2017, only Belgium and Denmark had higher prices. According to Eurostat, half of the electricity unit costs in Portugal are made up of various additional fees and top-rate VAT. This means that Portuguese families have the second-highest tax burden in Europe, with 52.02% of the price being tax-related. This is much higher than the European average of 28.94%.
The high fees and charges on electricity bills in Portugal are also due to the country's geopolitical situation, national energy mix, network costs, and weather conditions. Additionally, the lack of proper insulation in many houses contributes to higher electricity costs, as more energy is required for heating and cooling.
The high cost of electricity in Portugal has been a cause for concern, especially with the EU's push for electric transport. Portugal has some of the lowest salaries in the EU, and the high electricity prices have been attributed to the massive incompetence in EU politics. There have been calls for a reduction in the tax on electricity, and the government has proposed a slight decrease in electricity tariffs for 2020.
Overall, the high fees and charges on electricity bills in Portugal are a result of various factors, including taxes, support costs, and the country's specific circumstances. These high charges have significant implications for households, especially with the increasing reliance on electric power.
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Poor insulation in housing
Poor insulation in Portuguese housing is a significant factor contributing to high electricity costs. The country experiences notable temperature variations between day and night, and many homes struggle to retain warmth due to inadequate insulation. This issue is prevalent in both older and newer properties, with builders often failing to understand or prioritize proper insulation techniques. As a result, residents are forced to spend more on electricity to maintain comfortable indoor temperatures.
Portugal's housing insulation situation is quite different from what individuals from Northern Europe might be accustomed to. While the country's warmer climate may suggest that insulation is unnecessary, the reality is that proper insulation is crucial for maintaining a comfortable indoor environment. The large day-to-night temperature fluctuations can make houses feel cold, even with supplementary heating sources like log burners or electric fires.
The lack of adequate insulation in Portuguese homes can be attributed to several factors. Firstly, there is a history of non-compliance with building regulations, resulting in houses that either lack insulation entirely or have insufficient thickness of insulation. This is a common issue in properties built during the period when building regulations were in force. Additionally, modern homes may suffer from improper insulation installation due to builders' lack of understanding or prioritization of correct techniques.
Cowboy builders, who cut corners to save costs, further exacerbate the problem. They may only place insulation around window and door openings, leaving other areas vulnerable to heat loss. As a result, these "cold bridge points" compromise the overall energy efficiency of the home.
The consequences of poor insulation in Portuguese housing extend beyond discomfort and high electricity bills. The increased reliance on electrical heating contributes to higher energy consumption and may have broader environmental implications. Additionally, the high taxes on electricity further burden families, with Portugal having the second-highest tax burden in Europe, according to an analysis in eco econews.pt.
To address the issue of poor insulation and mitigate its impacts, homeowners in Portugal may need to invest in retrofitting their properties with proper insulation. While this may involve additional costs, it can significantly improve energy efficiency, reduce electricity expenses, and enhance the overall comfort of their homes. It is essential to consult with reputable builders or experts in the field to ensure that any remedial actions are effective and comply with current standards and best practices.
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Low salaries
Portugal has some of the highest electricity prices in Europe, despite low salaries. In 2017, only Belgium and Denmark had higher prices. In Portugal, electricity unit costs average about 24 cents, with fees making up 50% of costs, or 12 cents. This is higher than the European average of 28.94%.
The high electricity prices in Portugal are largely due to high taxes. Taxes make up more than half the cost of electricity, with families in Portugal paying the second-highest tax burden in Europe. This has led to calls for a reduction in the 23% tax on electricity. The high electricity prices are particularly notable given the low salaries in Portugal. The average monthly income in Portugal is 1057 euros, and the high electricity prices mean that a higher proportion of income is spent on electricity bills than in many other European countries. For example, while the Czech Republic has higher electricity prices, their average monthly income is lower, at 745 euros, and their monthly effort rate to pay electricity bills is lower, at eight percent.
The high electricity prices in Portugal have been a source of debate, with some arguing for a reduction in the tax on electricity. The government has claimed to be working to reduce electricity prices, but much of the fee element of each bill is due to government support costs and VAT.
The high cost of electricity in Portugal can be a significant burden for households, especially when combined with other utility costs. Heating and electricity for one person in a 45m2 studio can cost between €80 to €90 per month, while utilities for two people in an 85m2 apartment can be between €120 and €130 per month. While these prices are cheaper than in the UK or Spain, they are still a significant expense, especially for those with low salaries.
Overall, the combination of high electricity prices and low salaries in Portugal can create a challenging situation for many residents, and it remains to be seen if the government will take significant action to reduce electricity taxes and ease the burden on households.
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High gas prices
Portugal has some of the highest electricity prices in Europe, and high gas prices are also an issue for the country. In 2017, Portugal had the third most expensive electricity prices in the EU, behind Belgium and Denmark. In 2018, Portugal's electricity prices were the second most expensive in Europe, with only the Czech Republic having a higher cost per kilowatt-hour.
The high cost of electricity in Portugal is due in large part to taxes. In 2018, an analysis by ECO News found that Portuguese families had the second-highest tax burden in Europe, with 52.02% of their electricity bill being tax-related. This amounted to 12 cents per kilowatt-hour, compared to 17 cents per kilowatt-hour in Denmark, which had the highest rate. The average tax burden across Europe is much lower, at 28.94%.
The high electricity and gas prices in Portugal are notable given the country's low wages and high tax rates. There have been calls for a reduction in the tax on electricity, and the government has claimed to be working to reduce prices. However, much of the fee element of each bill is due to government support costs and VAT charged at the full rate.
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Frequently asked questions
Portugal has some of the highest electricity prices in Europe, with households paying around €0.2246 per kWh, which is 22% higher than in the UK. This is largely due to high taxes, which make up around 52% of electricity bills.
In 2017, Portugal had the third most expensive electricity prices in the EU, behind Belgium and Denmark. In 2018, Portugal's electricity prices were the second most expensive in Europe, according to purchasing power parities (PPP).
The Portuguese government has proposed reducing the tax on electricity, which has been a topic of discussion in the 2019 State Budget. The Energy Services Regulatory Entity (ERSE) has also proposed a 0.4% cut in prices for the regulated market from January 2020.
People in Portugal can try to use their off-peak times for appliances such as washing machines, dishwashers, and heaters in the winter. Additionally, proper insulation can help reduce the cost of heating homes.
