Portuguese energy producer EDP has started to prepare the public and the regulator for price rises, claiming that its hydroelectric power production is running at half normal output due to the continuing drought.
EDP claims that its production costs have risen by 53% as it has maintained overall production by raising output at its coal-fired and gas-fuelled plants.
The use of production methods other than hydropower has been due to the effects of the prolonged drought which has forced the energy company to switch off production at hydro plants to save water, preserving it for public consumption.
Portugal’s reservoirs are at less than 20% capacity nationally and EDP claims that its average cost of producing electricity in the first nine months of the year has risen by slightly more than a half.
The water saving strategy in reservoirs "has had costs, both economically and for the environment," said Vítor Silva, the man responsible for EDP Produção's hydroelectric power plants.
As a result, natural gas plants have doubled production and coal-fired power generation has increased. Up to the end of September, CO2 emissions have increased by 40% in Portugal and Spain.