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This study is a targeted review of some of the major changes in European regulation that guided energy policy decisions in the Iberian Peninsula and how they may have aggravated the problem of lack of flexibility. This study aims to assess some of the proposed short-term solutions to address this issue considering the underlying root causes and suggests a different course of action, that in turn, could help alleviate future market strains.

The evolution of the most important (macro) energy and price-related variables in both Portugal and Spain is assessed using market and grid operator data. In addition, the authors present critical viewpoints on some of the most recent EU and national regulation changes (official document analysis).

The Iberian energy policy and regulatory agenda has successfully promoted a rapid adoption of renewables (main goal), although with insufficient diversification of generation technologies. The compulsory closings of thermal plants and an increased tax (mainly carbon) added pressure toward more environmentally friendly thermal power plants. However, inevitably, this curbed the bidding price competitiveness of these producers in an already challenging market framework. Moving forward, decisions must be based on “a bigger picture” that does not neglect system flexibility and security of supply and understands the specificities of the Iberian market and its generation portfolio.

This work provides an original account of unprecedented spikes in energy prices in 2021, specifically in the Iberian electricity market. This acute situation worries consumers, industry and governments. Underlining the instability of the market prices, for the first time, this study discusses how some of the most important regulatory changes, and their perception and absorption by involved parties, contributed to the current environment. In addition, this study stresses that if flexibility is overlooked, the overall purpose of having an affordable and reliable system is at risk.

The ex-post literature, which evaluates the real impact of renewable generation, is scarce. Most studies are simulations and therefore are not based on real data. This study aims to further this goal using a unique database of the Portuguese spot market, where there are powerful incentives for renewable electricity.

This paper analyses ex-post the impact of energy produced in special regime on the wholesale hourly spot market prices of Portuguese electricity during the period 2009–2016. This paper uses standard, two stage least squares and generalized method of moments multivariate regressions and other energy econometrics techniques.

It is found that special regime generation has a negative impact on the wholesale price. This impact is higher than that found in other markets. This paper also concludes that using special regime generation to supply the future growth of demand will decrease wholesale electricity spot prices more intensively than using other technologies.

This paper uses a unique database based on ex-post for the Portuguese spot market. The Portuguese case is particularly interesting, not only because of its strong incentives policy on renewable energy but also because its spot market is interconnected with the Spanish market. This paper contributes to the debate about the sustainability of current renewable electricity support schemes. The decreasing trend in electricity prices, with the introduction of new renewable capacity, can be incompatible with the required payments for non-renewable producers. This paper also shows that even if the price reduction on spot markets is transferred to final consumers, given that it is relatively small (8% spot price which represents 45% of the final price), compared with the cost of incentives (35% of the final price), consumers probably will not be able to support a new investment pipeline with a similar framework.

The aim of this paper is to assess the state of spot price convergence between several European electricity day‐ahead markets.

The concept of a fully integrated market is developed through the arbitrage relationship in which spot prices at one location should equal spot prices at another location plus the price of transmission. Accordingly, neighbouring markets are analysed to measure the relevance or their respective interconnecting and transmission constraints. Exploratory data approach is used and results are discussed, namely by correlation analysis.

This paper empirically shows that price differences have decreased during the analysed period, suggesting that integration between markets might be rising. The correlation analysis indicates very few relationships between these continental European power exchanges, what makes us to anticipate continuing difficulties in the building of a single electricity market. Nevertheless, there is some evidence for local integration and some price convergence. Only France and Germany appear to be relatively integrated with higher correlation coefficients, compared to the other cases. In respect to the other markets, this correlation analysis demonstrates that price variations in several locations do not affect prices in the neighbouring locations. Spain appears to be poorly integrated with the other locations as might be expected by its peripheral position and limited cross‐border transmission capacity.

The paper assesses electricity market integration in the context of European Union spot prices and industry structure.

This study has used public sources, interview with one of the case protagonists.

This business case portrays the problems that an energy producing company faced in Portugal, in its transition from being a public company to becoming privatized. The Portuguese Government issued EDP with generous subsidies to guarantee its future profits and privatization success, but a few years later, after EDP was fully privatized, there was great political pressure to downsize such subsidies. The case describes the main steps taken by EDP from its creation and privatization, culminating at the end of 2017, where it was heavily criticized by media and political parties due to a high value of subsidies that had been granted to the company by the Portuguese Government in the past, while it was still a public company, and the renegotiation of those same subsidies after it had been privatized. EDP’s President António Mexia was under police investigation due to having led the renegotiation talks in 2007, and it was feared that EDP’s investors could refrain from investing in the company. Should EDP campaign to clear its good name, or would it be better to let the matter fall with the passing of time? Could the share value be affected? Should EDP prepare itself for loss of revenue due to an eventual downsizing of the subsidies?

This study covers energy sector, privatization issues and government support. The relevance of this study is good for use in Business Schools and MBA courses.

Informational efficiency is a fundamental aspect of capital market quality, and therefore, regulators, managers and practitioners attempt to find ways to improve the informational efficiency. Since prior studies primarily focus on the numerical attributes of corporate reporting, it is not yet adequately known whether or not the linguistic attributes of corporate reporting affect informational efficiency. Thus, the purpose of this paper is to examine whether corporate reporting readability (readability), as an important linguistic attribute of corporate reporting, affects informational efficiency.

To measure readability, this paper uses Fog index. Moreover, to measure informational efficiency, the paper uses stock return variance ratios.

The findings reveal a positive and significant association between readability and informational efficiency. Moreover, the findings show that the association of readability and informational efficiency is stronger for firms facing higher information asymmetry. The findings further document the spillover effect of readability, in the sense that the readability of economically related public firms affects a firm’s informational efficiency. Overall, the results support the arguments that readability enhances informational efficiency.

This study contributes to the literature by providing evidence on the internalities and externalities of readability in the context of informational efficiency. Thus, the study will be of interest to regulators, managers and practitioners, especially in emerging capital markets, who tend to find practical and easy ways to improve informational efficiency.