Promotion of energy-efficiency in the electricity sector in restructuring markets-the Portuguese case

This paper analyses demand-side energy efficiency promotion mechanisms compatible with the ongoing electricity market restructuring in the European Union. Three main strategies are presented. The first one is based in the present regulatory framework, the second one consists in the implementation of a public benefit charge, and the third one is related with setting up an energy certificate (white certificates) competitive market. These strategies essentially rely on the definition of financial and market-transformation mechanisms, to promote energy efficiency in the demand side. Environmental externalities, the Kyoto emission targets, and the implementation of a European Union Directive on the promotion of energy efficiency and energy services are also considered during the mechanism design, using Portugal as a case study for its application.