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Portugal: EIRO CAR on the Changing Business Landscape in the Electricity sector and Industrial Relations in Europe

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During the last 5 years, Portugal has made major achievements in promoting RES. The present austerity policy threatens to block further advances in this direction. Simultaneously, the former monopolist in electricity (EDP) has been privatized, the sector has been liberalised and a common Iberian electricity market (MIBEL) has been created. Social partners have not played a relevant role in public energy policies. Traditional players such as the EDP-group and the union organisations SINDEL and FIEQUIMETAL dominate industrial relations in the sector. This may be related to the fact that the volume of jobs in the new energy sectors is small. Despite of profound cuts in personnel EDP still employs the large majority of workers in the sector.

1. General background information on the energy policy in your country and employment trends

1.1. Please explain briefly the main governmental strategies/action in relation to the electricity production and energy source mix. In your answer, please include information on the following aspects, where possible:

Is there an outspoken policy or plan in your country for any kind of change towards an increase or decrease of electricity production with any of the different sources (coal, oil, gas, hydro, eolic, sun, etc.)?

Until recently, the Portuguese government pursued an outspoken policy for a change towards an increase of low carbon electricity production. The path followed has been to improve the energy efficiency of electricity generation, while reducing its environmental impact, by installing combined-cycle natural gas power plants and setting up an ambitious renewable energy programme. Existing coal-fired power plants (1985-1993) were kept as part of the national electricity system for base-load supply, due to their low production costs and as a means to diversify fossil fuel-imported sources, thereby improving security of energy supply. As a consequence, fuel oil-based power plants were phased out and a natural gas pipeline network was built.

During the last years, the share of RES in electricity generation has been consistently increasing. Thus, the share of RES in electricity generation has increased from 30 per cent in 2006 to more than 50 per cent in 2010. According to the recent Portuguese renewable energy programme an even higher penetration of RES in the electricity mix could have been expected in the coming years. Due to the enormous pressure to make drastic cuts in public expenditure the new conservative government elected in summer 2012 seems to intend to stop the extension of RES-capacities.

Which is the targeted energy mix for the future (see material provided)? How, in which subsequent steps, such targets are expected to be met?

Portugal has recently approved the National Renewable Energy Action Plan (PNAER), as set out by European Directive 2009/28/EC on the promotion of the use of energy from renewable sources. The mandatory target for Portugal is to reach 31 per cent of RES share in gross final energy consumption, an increase of more than 10 per cent as compared to 2005 energy figures.

The PNAER sets targets for the evolution of different RES until 2020, according to the three different »sectors«: electricity generation (55, 3 %), heating and cooling (30.6%), and transports (10%).

The steps to achieve these goals are:

Redefine and improve planning and licensing in order to promote the intended change in electricity, create effective incentives for micro- and mini-production, implement the national plan for hydraulic energy (PNBEPH), launch CONCURSOS for CENTRAIS solar energy, implement pilot project in wave energy, prospection of potential for geothermic energy in the national territory, create conditions for insertion of biogas into the natural gas network, promote biomass in heating of buildings, create infrastructures for massification of electric vehicles (pilot-network in 25 municipalities), create legal and administrative conditions for improvement of the use of biomass, elaborate a roadmap for hydrogen, pilot project for a “smart city” (Évora).

Are investments in networks (new connections, upgrade) envisaged? To what extent? With which specific goals?

Besides a general effort to increase the transmission capacity of the national grid, the increase of the “level of new renewable power generation capacity, most of which is located in inland regions of the country … has resulted in the need to reinforce the National Grid so that it can carry that generated power to the consumption centres.” This refers in particular to the installed wind capacity and the several large hydroelectric plants.

In the context of the Iberian energy market, the capacity of the interconnection between Portugal and Spain is expected to be more than doubled until 2014.

What is the Government stance and what are the ongoing/envisaged actions towards generation of electricity from the different broad groups of sources: nuclear /fossil /renewable energy?

The former government (2009-2011) was explicitly and effectively committed to the European goals 20-20-20 (keeping nuclear at 0, substituting coal by natural gas, increasing RES).

The new government is reviewing all policies under the top priority of bringing public debt down. This implies the increase of taxes and charges for households and companies. This austerity program results in recession, and the government tries to find ways to relieve the burden. This implies the suspension of those measures in energy policy that may increase public spending and/or the financial burden for households and companies.

What are the recent employment trends in the different subsectors of power generation according to the different broad groups of sources: nuclear/fossil/renewable energy? Please indicate development since 2005 with reference to generation, distribution, and sale separately.

According to the national employment statistics (Quadros de Pessoal), the total number of persons employed in the NACE ‘E’ (electricity, gas, steam, water and cold air) has decreased from 13,619 in 2005 to 9,168 in 2009. This decrease was the continuation of a trend that had already begun before. (In 2001, the CENSOS registered almost 27,000 employed persons in production, transport and distribution of electricity).

We could not find data on the evolution of employment in the different groups of sources. The only certain and unchanged figure (for 2005 and 2011) is employment in nuclear energy: 0.

1.2. Government policy for increase of the share of renewable resources according to the RES directive

Are any subsidies being granted for different types of RES for electricity providers? If yes, please provide briefly the details

There is a feed-in tariff scheme going on since 2001 (energy produced by renewable energy sources are paid by distribution companies by a premium price to energy producers; distribution companies recover they expenses by means of including such expenses in the final consumers price, which is done by the Energy Regulator (ERSE)). However, renewable energy projects must have a license and a grid connection. In the last years, the number of licensed projects has decreased as a resulted of increased grid saturation and to avoid a large increase of electricity prices to final consumers.

Have subsidies for RES been cut recently? Was this a result of the crisis, of budget constraints, or the result of a policy revision (following a policy assessment, due to a disproportionate use of subsidies, etc.)? Please provide brief details.

It seems that the new government will stop (or at least drastically reduce) issuing new licences for RES.

Are there any other forms of support foreseen for promoting electricity generation of RES?

No.

Please include any other aspects you consider to be worth mentioning regarding the state of play and the future prospects of RES in your country.

The former government was strongly interested in developing ocean energies (waves, off-shore wind) and to create a cluster of companies in this area. The crisis in public and private finance may impede the realisation of this ambition.

1.3. Are there any studies and documents assessing the employment impact of energy policies and of prospective changes in the energy mix within the electricity sector? This could include, for instance,

  • Employment effects resulting from the unbundling of activities (production from distribution)
  • Employment effects (on quantity and quality of work) resulting from the possible shifts within the electricity production sector from traditional sources to RES
  • Employment effects from investments in infrastructure (renewal of grids, introduction of smart meter technology, district heating)
  • The need for retraining of workers or provision of new qualifications linked to the sector transformations
  • Possible spatial mobility of workers as a result of more decentralised production (linked both to new activities and to restructuring of existing ones)
  • Please include any other aspects you consider to be worth mentioning regarding prospective impacts on employment and industrial relations

It seems that employment has not been focussed in any of the relevant studies in the current changes of the energy mix.

1.4 To what extent are the social partners involved or consulted concerning the governmental energy policy, notably in relation to employment impacts? Has this happened on an ad-hoc basis or on a structural, permanent basis? Is there a special tripartite social dialogue body for such consultations? Did consultation take place at national level, at sector level, or at the initiative of individual companies? Please briefly provide details.

The peak associations of social partners (4 sectoral employers’ confederations and 2 general trade union confederations) are members of the Economic and Social Council (Conselho Económico e Social / CES). This consultative body has a large number of member organisations from different sectors of civil society and from central, regional and local government. One of its functions is to issue statements on the government’s Grand Planning Options and the national budget. Social partners have the possibility to influence the CES’ opinion on government policies, including those regarding energy.

The central tripartite body is the Standing Commission for Social Concertation (CPCS). Tripartite agreements made at the CPCS have not dealt with energy policies.

There is no special tripartite social dialogue body for the energy sector. Social partners are consulted on an ad-hoc basis and on national level, as for instance in the case of the debate on the revision of the regulation of the electrical energy sector in 2005.

Social partner’s organisations are not represented at the consultative committee of the national regulatory body for the energy sector (ERSE).

2. Composition, structure and employment trends for the different resources used for electricity production

2.1 Please give an overview of the current sectoral composition of electricity production in your country, by giving for each of these seven groups of energy sources, the NAME of the three largest producing, the NUMBER OF EMPLOYEES of these companies, and the public or private STATUS of the EMPLOYMENT RELATIONSHIP with their employees.

For all companies listed, as a summary, please indicate:

  1. Total production and its distribution across different energy sources
  2. Total employment and its distribution across different energy sources
  3. Production plants and their respective energy source(s)
Electricity production

Electricity production with

TOP 3

PRODUCING COMPANIES

(the largest 3 in market share)

NUMBER OF EMPLOYEES

Reference year for the number of employees

Private/Public STATUS of WORKERS

FOSSIL FUELS

EDP

2,172

2010

Private

Tejo Energia

No data

 

Private

ElecGas

No data

 

Private

NUCLEAR

There is no nuclear energy in Portugal.

     
       
       
HYDRO

EDP

833*

2010

Private

GENERG

No data

 

Private

EHATB

No data

 

Private

WIND

IBERWIND

125

2008

Private

EDP Renováveis Portugal

833*

2010

Private

ENEOP 2

No data

 

Private

BIOMASS

EDP

833*

2010

Private

CENTROLIVA

19

2011

Private

       
PHOTO-VOLTAIC

MFS - ACCIONA ENERGY (Moura)

135

2008

Private

GENERG (Ferreira do Alentejo)

No data

2010

Private

GE (Serpa)

No data

2010

Private

* These 833 are the total number of workers at EDP renewable energies (no disaggregated data available)

2.2 Please provide an overview of the current oganisation of electricity distribution in your country. Is there a single distributing company/body? Are there multiple companies? At national or territorial level?

There is one company for transport of electrical energy, the National Electrical Network (REN). Distribution is concentrated at EDP Distribuição, a company that is part of the EDP group. Both, transport and distribution are carried out under concession from the government.

Production and commercialisation are open to the activity of competing private companies.

2.3 Please indicate the NAME of the three largest distributing companies, the NUMBER OF EMPLOYEES of these companies, and the public or private STATUS of the EMPLOYMENT RELATIONSHIP with their employees.

Distribution companies
 

TOP 3

DISTRIBUTING COMPANIES

(the largest 3 in market share)

NUMBER OF EMPLOYEES

Reference year for the number of employees

Private/Public STATUS of WORKERS

Distribution GRID

EDP Distribuição

4,056

2010

Private

       
       

2.4. Where there any significant developments/changes since 2008 for a specific company or source of electricity production in numbers of employees or in their public/private status? Was this due to the current economic crisis? Were there any instances of unbundling or mergers? With what consequences in terms of employment and industrial relations?

As a result of Portugal’s debt crisis the government was forced to give up its golden share at EDP and other companies (government decision in July 2011).

3. Industrial relations in the electricity sector: Actors

3.1 Please provide details on the membership in the electricity sector and membership of the top 3 producing and distributing companies in employer’s organisation (see questions 2.1-2.3 above). Please provide information on the name of the trade unions organising in this subsector and the level of their membership, or otherwise provide overall data but please include indications on differences in membership densities across subsectors.

Trade union representation and Membership to employers’ organisation
FOSSIL FUELS

EDP

CIP (Confederation of Portuguese Industry – Confederação da Indústria Portuguesa)

SINDEL (National Union of Manufacturing and Energy)

FIEQUIMETAL (Federation of Unions in the Metal, Chemical and Electronic Industries and in Energy)

Both, SINDEL and FIEQUIMETAL, at EDP probably with more than 25% of the workforce, each.

Tejo Energia

 

ElecGas

 
NUCLEAR

There is no nuclear energy in Portugal.

   
   
   
HYDRO

EDP

CIP (Confederation of Portuguese Industry – Confederação da Indústria Portuguesa)

SINDEL (National Union of Manufacturing and Energy)

FIEQUIMETAL (Federation of Unions in the Metal, Chemical and Electronic Industries and in Energy)

Both, SINDEL and FIEQUIMETAL, at EDP probably with more than 25% of the workforce, each.

GENERG

 
   
WIND

IBERWIND

 

SINDEL (National Union of Manufacturing and Energy)

FIEQUIMETAL (Federation of Unions in the Metal, Chemical and Electronic Industries and in Energy)

EDP Renováveis Portugal

 

ENEOP 2

 
BIOMASS

EDP

CIP (Confederation of Portuguese Industry – Confederação da Indústria Portuguesa)

SINDEL (National Union of Manufacturing and Energy)

FIEQUIMETAL (Federation of Unions in the Metal, Chemical and Electronic Industries and in Energy)

Both, SINDEL and FIEQUIMETAL, at EDP probably with more than 25% of the workforce, each.

CENTROLIVA

 
   
PHOTO-VOLTAIC

MFS - ACCIONA ENERGY (Moura)

135

No data

GENERG (Ferreira do Alentejo)

 

GE (Serpa)

 

There are several trade unions with very few members in the energy sector, some of them with domains that cover large parts of the economy, others focussed on the energy sector. These organisations do not play a relevant role in industrial relations in the sector.

And in the distributing companies

Distribution GRID

companies

EDP Distribuição

 

SINDEL (National Union of Manufacturing and Energy)

FIEQUIMETAL (Federation of Unions in the Metal, Chemical and Electronic Industries and in Energy)

Both, SINDEL and FIEQUIMETAL, probably with more than 25% of the workforce, each.

   
   

See not above.

3.2 To what extent are employees in the different subsectors (fossil/nuclear/RES) covered by trade union representation? Has there been any impact of the crisis on trade union representation?

Union density at the EDP-group is high (probably above 60%), but in the companies that do not belong to the EDP-group it is certainly lower.

The privatisation of the EDP and the liberalisation of the sector have weakened the trade unions’ influence significantly. The crisis may have boosted this medium term trend, but it is not decisive in this relation.

3.3 Have there been major reorganisations/splits/mergers of trade unions or employers organisations in the sector during the last five years?

The largest employer in the energy sector (EDP) is a member of the CIP (see above). The APREN (Association of Renewable Energies) is an entrepreneurial association, not an employer association. No major reorganisations/splits/mergers in this area have occurred during the last years.

In the trade union camp FIEQUIMETAL has implemented a major reorganisation, with the creation of four regional unions for manufacturing and energy that absorbed the members of a large part of its member unions. The largest of the FIEQUIMETAL-unions that did not participate in this reorganisation is SIESI (Union of Electrical Industries of South and Islands),

3.4. Have new actors (trade unions or employers organisations) been founded in recent years, especially in the newly evolving RES industries? Or is the industry covered by established actors?

The industry is covered by established actors, namely SINDEL and FIEQUIMETAL.

3.5. Have the established sectoral actors (both trade unions and employer organisations) started any initiative to extend their representation to the new emerging parts of the sector? Please describe such initiatives and their results so far.

SINDEL and FIEQUIMETAL are trying to recruit members and create organisational structures in the companies outside the EDP-group. In some cases the unions have begun negotiations on specific issues, as for instance between MFS – Acciona Energy and the FIEQUIMETAL member union SIESI. But it seems that unions have not been able yet to create an organisation in these new companies that would be capable of acting.

4. Role of collective bargaining and social dialogue

4.1 Please provide information on the structure of collective bargaining in the electricity sector. Please, briefly mention the main characteristics of collective bargaining:

At what level are collective agreements within the subsectors of the electricity sector (traditional providers, newly emerging providers) concluded (company, sectoral level and/or inter-sectoral level)? Is there a difference between the producers and the distributors?

The collective agreements that cover by far the largest share of workers in energy (approximately 7 thousand) are the ones signed by the EDP-group and several unions, amongst them SINDEL and FIEQUIMETAL. Furthermore, there are two company agreements for electricity suppliers in the Azores and Madeira regions (covering between 600 and 900 workers, each), one agreement for a group of companies in gas distribution (less than 300 workers) and one ministerial decree regulating work relation for those areas of the sector that are not covered by collective agreements (approx. 300 workers).

Estimate the coverage rate of collective bargaining in terms of companies and employees: are there any differences in coverage across different subsectors of electricity production?

There is no sectoral employers association and subsequently no branch agreement in the energy sector.

The EDP-group as the oldest and largest operator in the sector (production, distribution and commercialisation, conventional sources and RES) is covered by a company agreement that has not been revised during the past 8 years (last revision in 2003).

The companies outside the EDP-group have not signed any collective agreements.

4.2 Please comment on the most recent collective agreements reached at sector level and at company level. Please address the following topics:

Pay and working time: level and trends relative to the national average and significant differences across subsectors of the electricity industry.

According to official data (2009), the monthly salary (basic rates) in the energy sector is more than double of the national average. The advantage of energy workers in terms of effective income is even higher (energy = 2.5 times the average). This gap (in terms of basic rates and effective income) has been widening during the last 5 years.

The average normal working period in energy is 38.2h (2009) that is one hour below the national average of 39,3h. This difference has been largely stable during the last 5 years.

There are no data regarding the differences across subsectors of the electricity industry.

4.3. Cooperation between the social partners and government

Have the government started any social dialogue or social concentration in the electricity sector since 2008? Please illustrate the features and results of any such initiatives.

No major initiatives.

Have bipartite and/or tripartite bodies dealing with specific issues of the electricity industry been created since 2008?

No.

Have there been since 2008 any joint initiatives of cooperation between social partners to influence or steer the energy policy developed by the government in your country? Or have such initiatives been taken separately by certain social partner organisations?

No.

Have the social partners been involved in the making of the national action plan to reach the 2020 target, or in issues aiming to secure the supply of enough electricity?

No.

4.4. Please provide information about the views of the trade unions and employer organisations on the main changes regarding employment and working conditions affecting the sector since 2008 and especially on the impact of the current crisis (for instance on employment trends, quality of jobs, working hours, wages, fixed-term employment, part-time, temporary agency work, participation in training, outsourcing, subcontracting etc.).

Trade unions have strongly criticized the privatisation of EDP and the liberalisation of the energy sector as a whole. FIEQUIMETAL has opposed privatisation and liberalization, while SINDEL did not struggle against the strategy itself, but this union mobilized against the deregulation and segmentation of the work force in the sector (core staff vs. precarious workers).

As referred above, the crisis aggravated the trends triggered by liberalisation, but it did not create them.

With regard to the energy sector, employer associations did not focus on employment or working conditions. CIP’s demands centred on the reduction of energy costs and, during some years, the construction of nuclear energy plants.

5. Commentary

Studies in the energy sector and in energy policies in Portugal focus on other factors than employment, working conditions and industrial relations. This reflects the general attitude of political decision makers towards the sector. Therefore it has not been possible to find basic data on employment in the subsectors.

The position of trade unions has been weakened during the last 20 years, and the government has not shown interest in involving them in the process of policy making in the sector. In this adverse context unions did not intervene significantly in the process of RES-growth.

Reinhard Naumann and Maria da Paz Campos Lima, DINAMIA

Page last updated: 15 November, 2012
About this document
  • ID: PT1202029Q
  • Author: Reinhard Naumann and Maria da Paz Campos Lima
  • Institution: DINAMIA/ISCTE
  • Country: Portugal
  • Language: EN
  • Publication date: 15-11-2012
  • Sector: Energy