EDP CEO says windfall tax on power profits is unjustified

EDP chief executive Miguel Stilwell said a planned Portuguese windfall tax on energy companies would make no sense for the electricity sector, arguing there are no excess profits and that the utility’s earnings fell in the first quarter. The comments matter for investors because Portugal’s government has said it will move ahead with a new levy on extraordinary profits in energy.

Speaking to ECO/Capital Verde after EDP’s results presentation, Stilwell said: “For the electricity sector it makes no sense, because there are no excess profits.” He added that EDP’s net profit for January to March was €378 million, down 12% from a year earlier.

Stilwell said Portugal and the Iberian market have high renewable penetration, meaning electricity prices are typically set by renewables rather than gas, whose prices have risen after the war in Iran. “In the case of the electricity sector, there is no reason at all” to apply such a tax, he said. Asked whether the company had been in contact with the government on the issue, he said EDP’s position had not been formally heard: “They didn’t ask us.”

On Tuesday, Finance Minister Joaquim Miranda Sarmento said in Brussels that Portugal will go ahead with taxes on extraordinary profits at energy companies, similar to measures adopted in 2022 after that year’s fuel price crisis. He said the government would take the 2022 measures, recalibrate and improve them, and then present a proposal to parliament shortly.

Originally published at Eco.pt