Renewable Energy in Portugal

Promising opportunities await providers of Renewable Energy (RE) technology and expertise in other sources, as well, like hydro, ocean, geothermal and biomass. Portugal is somewhat unique in that it has considerable access to all types of resources.

The development and use of RE sources is gaining ground in Portugal. The Government of Portugal (GOP) is now pushing into the area of renewable energy, particularly wind and solar, to diversify its energy supply and reduce its fuel dependency. In addition, the European Union (EU) has set a goal of creating 22 percent of their energy production from renewable sources by the year 2010. In order for the GOP to reach this goal it must increase its current share of renewable energy production by 39 percent. To achieve this, the Government will shift its focus away from large-scale hydropower generation and focus on wind-generated power, as well as solar.

Portugal is currently about 85 percent dependent on imported fossil fuels (oil, natural gas and coal). By 2013 Portugal is expected to be the third largest producer of alternative energy, following Denmark and Sweden.

The bulk of RE production in Portugal is supplied by hydropower, biomass/waste sources and recently a steadily growing capacity of wind power. In view of the country’s very high dependence on imported fuels, the Government has implemented a number of policies to increase the level of RE development. The Resolution of the Council of Ministries (RCM) 169/2005 established that Portugal must reduce its external energy dependency. It established new RE goals for 2013 for electricity produced mainly by wind and solar. A full 27 percent of the capacity goals for 2010 were achieved by the end of 2005. This growth rate is expected to continue for the next few years.

On the other hand, The National Strategy for Climate Change (PNAC), approved by the Government in July 2004 is the first national program developed with the specific objective to control and reduce the Greenhouse Gases (GHG) emissions. It is a way to comply with Portugal’s commitment to the Kyoto Protocol and its share of responsibilities in the EU.

An overview of the main RE proposals and targets for the next few years are as follows:


Over the last years, wind energy has taken off in Portugal. The installed capacity had huge growth, from 20 MW in 1996 to 616 MW in 2005. The government commissioned several studies and as a result , a goal of 5,100 MW of wind capacity by 2013 set. The goal for 2010 is 3,750 MW of wind capacity. Several consortiums are preparing industrial clusters to produce 1500 MW of wind capacity. By 2010, the Portuguese government plans to invest 3.7 billion to create a new wind farm cluster in the north of Portugal. Wind generated electricity in Portugal will be the largest source of renewable energy in the near future.

As of now, there is no industrial production of wind turbines in Portugal. A few Portuguese manufacturers have tower technology. The limited production capacity of wind turbines may affect the full achievement of the Portuguese goals.


Portugal’s sunny climate is the main driver for solar energy development. The goal for photovoltaics is 150 MW capacity by 2012 and there are now significant developments in photovoltaics. Demand for PV modules has dramatically increased in the European Union in response to global warming concerns and aggressive Government incentives to stimulate solar energy usage. Portugal has one of the highest levels of solar potential in Europe. One very significant project on the way is “the Serpa Solar Power Project”. This is considered the world’s largest solar photovoltaic power project. The 11 MW solar power plant, comprising 52,000 photovoltaic modules, is already under construction in Serpa, 124 miles southeast of Lisbon, in one of Europe’s sunniest areas. This is an excellent example of a joint venture with a U.S. financial institution and a Portuguese project developer (Catavento), which will also provide services and liaison with the government for licenses and permits. This high-tech plant will produce enough electricity to power over 8,000 homes and is estimated to cost USD 75 million.


Biomass is also very important in terms of renewable electricity generation, it has the potential to be used as a heat source directly for industrial processes. As of now, there’s one power plant of 10 MW (wood) and several installations of Biogas, mostly related to Municipalities. There are also some pilot projects with bus fleets running on bio fuels and industries engaged in the production of bio fuels, both from energy crops and used cooking oils. Conversion of waste products from the agricultural and forestry sectors into replacement products for coal and oil is another segment in the biomass generating area. The Government’s target for 2012 is 225 MW.


A 400 KW Oscillating Water Column (OWC) has been installed in the island of Pico (Azores). Two OWC devices will also be installed at the new breakwater of the Douro river in Porto, as well as 750 KW Pellamis devices, also in the north of Portugal. When complete, this project is expected to meet the electricity demand of more than 15,000 homes and displacing more than 60,000 tons per year of carbon dioxide emissions from conventional generating plants. The target for 2012 is 80 MW.

Market Potential

The renewable energy industry covers companies that operate as developers, equipment manufacturers, operators, utility and maintenance companies. Some companies are active in more than one area and may develop, operate and maintain the sites. Equipment manufacturers tend to be specialized in supplying equipment, but due to the size and shipping costs of components, manufacturing facilities tend to be located near the sites.

U.S. firms should enter the Portuguese market with partnerships, services and equipment supply. RE is increasingly used in new building construction. Solar thermal, photovoltaic and small wind turbines can be incorporated in new buildings. All new buildings approved in 2006 and on, are obliged to have Solar Thermal Hot Water installations. In the last two years the government has trained designers and installers of RE equipment.

Best prospects for Canadian companies are:

  • Photovoltaic modules
  • Inverters
  • Wind turbines
  • Wind park cabling
  • Power transformers
  • Biomass generating technology including waste to energy

    Material excerpted from “Portugal: Renewable Energy Services”, US Commercial Service, July 2006.

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