Portuguese DNDP — PDIRD-E 2024

Portugal’s PDIRD-E (Plano de Desenvolvimento e Investimento das Redes de Distribuição de Energia Elétrica) is the Portuguese equivalent of Sweden’s DNDP — same EU directive basis (Directive 2019/944 Art. 32(3)), produced by E-Redes (Portugal’s sole DSO) and reviewed by ERSE (the NRA). The PDIRD-E 2024 covers the quinquennium 2026–2030 with an investment total of €1,607.6M (€1,512.2M net), averaging €321.5M/year — nearly double the prior 2021–2025 quinquennium.

Portugal is cited in ACER/CEER guidance (2025) as the most advanced EU country for DNDP flexibility quantification, using probabilistic analysis and cost-benefit comparison of flexibility vs. reinforcement — a model Sweden could follow. The PDIRD-E is also the EU reference case for the FIRMe reserve price methodology, providing the most intellectually honest published account of why “flexibility first” is harder to operationalize than it sounds.

How PDIRD-E differs from Swedish DNDPs

Flexibility and conventional investment — the reserve price methodology

E-Redes’ FIRMe programme (Flexibilidade Integrada em Regime de Mercado, launched late 2022) is the operational implementation of the Art. 32 “flexibility first” planning requirement. The proposta inicial presents its full methodology — the most detailed published account of how a DSO operationalizes flexibility vs. reinforcement comparison within a DNDP. (Source - E-Redes PDIRD-E 2024 Proposta Inicial)

Reserve price (preço de reserva): E-Redes calculates the maximum price it would pay for contracted flexibility before conventional investment becomes economically preferable:

Reserve price = Flexibility-specific benefits − Benefits lost vs. conventional investment

Where flexibility-specific benefits = deferred investment NPV + higher residual value; benefits lost = technical loss reduction (conventional investments reduce network resistance and losses permanently; flexibility alternatives do not).

Key structural finding: for efficient development-of-network projects (B/C > 1), the reserve price is typically negative. The more economically justified a conventional investment is, the broader its co-benefits (loss reduction, quality improvement in adjacent areas), and the less competitive flexibility becomes. This is the empirical underpinning for why “flexibility first” is harder than it sounds: the projects where investment is most clearly warranted are precisely those where flexibility is least competitive.

Workaround — probabilistic planning: E-Redes proposes planning to the 95th percentile of consumption (not 100%) and contracting flexibility to manage the remaining 5% of operating states. This carves out a small but definable window where flexibility competes on fair terms. If the market does not respond to published flexibility requirements, conventional investment proceeds.

7 projects with flexibility alternatives identified:

• 4 supply-security substations (Fichas 51, 52, 55, 57) + 1 MT reinforcement (Ficha 56): flexibility viable; all scheduled for 2028 start to allow market contracting first
• Fichas 53, 54 (new substations in Beja and Bragança): flexibility requirements actually published in market — no adequate proposals received; conventional investment required
• Ficha 140 (SE Valença substation renovation): the only case where flexibility changed the timeline — deferred from 2026 to 2029 by contracted load flexibility

Why MQS/PRA projects are largely unsuitable: Most quality-of-service degradation is “type I” (fault in an unhealthy block that cannot be re-energized without feeding the fault). Flexibility can only substitute for “type III” cases (overloaded healthy block with isolation possible) — rare in the current portfolio because such constraints are typically resolved earlier via development-of-network investment.

ERSE’s PDIRD-E opinion (Source - ERSE Parecer PDIRD-E 2024) positively assessed the 7-project approach but recommended E-Redes go further: broader probabilistic scenario analysis, explicit per-project CBA across the full Network Development programme, and results published in each project sheet. The proposta’s candid explanation of why the reserve price is negative is the most intellectually honest documented response to the “flexibility first” principle in a European DSO DNDP.

NRA role — stronger than Ei

ERSE runs a mandatory 30-day public consultation, issues a formal binding opinion (which can require amendments to E-Redes’ proposal), and the final PDIRD-E is approved by Council of Ministers resolution. This makes ERSE’s role substantially stronger than Ei‘s ex-post supervisory role — providing a reference point for what a more assertive NRA DNDP scrutiny process could look like if Sweden moves toward ex-ante approval (as proposed in Ei’s 2026 hemställan for förhandsprövning). (Source - ERSE Parecer PDIRD-E 2024, Source - EC Study Distribution Grid NDP Tariffs and Connections 2025)

TOTEX ahead of Sweden

Portugal’s TOTEX revenue cap has been in force since 2022 for all voltage levels. The reform explicitly broke the direct CAPEX→revenue link that creates the investment bias problem documented in Sweden. Portugal’s five years of operational TOTEX experience (2022–2026) provides an evidence base for Sweden’s RP5 reform. (Source - ERSE Parecer PDIRD-E 2024)

Related pages

• Distribution Network Development Plan — EU framework and Swedish DNDP obligations; PDIRD-E is the European reference case cited in ACER/CEER guidance
• Ei — Swedish NRA; ex-post role contrasts with ERSE’s binding opinion authority
• Flexibility Market — “flexibility first” principle and why cost-effectiveness thresholds matter for market development
• Congestion Management — reserve price methodology situates flexibility within the broader alternatives assessment