Posts categorized under Energy

Electricity prices for better yet sustainable economic performance

May 5, 2021
Energy efficiency is considered pivotal for long-term economic growth, especially since much of the energy consumed in Portugal has historically been from non-renewable sources. According to the theory of directed technological change, whether firms are likely to develop and adopt technologies to increase the marginal productivity of energy (controlling for other production inputs) is decided by two counteracting effects: the price effect and the market-size effect. The price effect (often adopted by governments) tries to induce improvements in energy efficiency by imposing (through regulation) a higher energy price.

Residential price premiums for energy efficiency

February 5, 2020
This paper addresses the question of whether increased energy efficiency, as measured by the Energy Performance Certificate (EPC), has an impact on the transaction price of residential properties in Portugal. The investigation of the relationship between the EPC label and residential property prices is carried out through the econometric estimation of an hedonic price model, which has been used as the workhorse model of house prices. Using a dataset of 256,000 residential property sales for Portugal, this paper estimates a price premium for energy efficiency.

A lower VAT rate on electricity in Portugal

June 4, 2018
In late 2011, Portugal increased the statutory VAT rate on electricity from 6% to 23% as part of the austerity plan under the country’s international bailout. Naturally, this austerity measure met with widespread concern for its potentially negative effects on both economic performance and social justice. Seven years after its introduction, the country is facing a brighter economic outlook and a more positive outlook for its public finances. Nevertheless, there is no sign that authorities plan to reinstate the reduced VAT rate.