Portugal’s
clean-power problem
Lisbon
was once a renewable energy champion, but now it has fallen off the
map.
By
Sara Stefanini
8/22/16, 3:59 PM CET
Energy generated by
Portugal’s abundant wind, water and sunshine could fuel the
country’s much-needed economic recovery — if the government
becomes more enthused about tying its energy market to the rest of
the world.
Portugal’s
Socialist government isn’t doing much to foster investment, critics
say, as it scales back subsidies, and plans to build a power link
from the Iberian Peninsula to France sputter. The French connection
in particular was a priority for the previous Social Democratic
administration, which was replaced last November.
The European
Commission could help. Later this fall it is expected to propose two
key pieces of its project to build an open-border, interconnected
energy union. Those are the new rules for meeting the EU’s
renewable energy target of 27 percent by 2030, and an overhaul of the
bloc’s electricity market.
But Portugal has to
indicate it wants the help.
“There’s a
whole renewable discussion to be done and Portugal is nowhere to be
seen” — EU source
So far Socialist
Prime Minister António Costa has done little to lobby on his
country’s behalf, according to an EU source familiar with
Portugal’s energy sector and policies.
“Portugal went
from being a small country that was really ambitious and fantastic in
renewables — with policy proposals that the Germans were calling
‘the Portuguese option’ — to being a desert,” said the
source, who asked not to be named. “There’s a whole renewable
discussion to be done and Portugal is nowhere to be seen.”
Lisbon agreed in
2012 to roll back generous investment perks to the renewables
industry as part of a broad bailout plan to cut spending and keep the
country out of bankruptcy. Portugal’s then-burgeoning renewable
sector took a hit. Now it risks facing penalties as other EU
countries race to meet their binding targets for adding renewable
energy by 2020.
Portugal is now a
dead market for an industry eager to piggyback on the EU’s targets
to boost renewable energy generation.
“They are killing
the business,” António Sá da Costa, managing director of the
Portuguese renewable energy association APREN, said of the austerity
measures. “Portugal, sooner or later, will come to a stall.”
Hydro, wind, solar
and other renewables produced an average 52 percent of Portugal’s
electricity as of 2015, which is just 8 percentage points shy of the
country’s target of 60 percent by 2020. Renewables also accounted
for 25 percent of Portugal’s total energy use (including transport,
heating and cooling) — the goal is 31 percent.
Despite its strong
start, the changed incentives mean Portugal may fall short of its
2020 targets, warned Sá da Costa. “Maybe, on this track, we can
reach a 54-55 percent share of renewable electricity by 2020,” he
said.
The government says
it continues to support investment in renewable energy by focusing on
emerging technologies, such as concentrated solar and photovoltaic or
wave energy.
Even after the end
of some subsidies, “there is interest on investments in solar
projects in Portugal,” the economy ministry said.
Not everyone is as
critical of the government’s decision to gradually end renewable
energy subsidies and expose the projects to the free market. Mature
technologies such as onshore wind need to be able to stand on their
own. Onshore wind received €628 million out of the €978 million
in incentives in 2013, according to the International Energy Agency.
The broader Portugal
2020 plan Lisbon and Brussels agreed on to stimulate jobs and
economic development, in exchange for €25 billion from the EU,
includes €130 million in funding for new types of renewable energy.
Under the program, the government announced a competition in late
July for €25 million in funding for emerging technologies.
“We have to
separate the mature renewable technologies such as wind energy, which
is no longer in need of public support because it is already financed
by the market,” Secretary of State for Energy Jorge Seguro Sanches
said in June. “We must have support for the test phase of pilot
projects.”
In another show of
support, the government is looking into an underwater power line to
Morocco and the two governments agreed in June to spend €400
million on a feasibility study. The Commission is happy for EU states
to link up with countries outside the bloc, but says connections
between members remains the priority.
Stranded Portuguese
Without
interconnectors, Portugal remains an energy island tied only to
Spain.
“Imagine a BMW
factory in Germany that produces a lot of very nice, very good cars,
but then doesn’t have the roads it needs to sell the cars to other
countries,” Sá da Costa said. “It’s a bottleneck.”
Portugal, Spain,
and the European Commission have long pushed the French link as an
integral part of the EU’s energy union.
That means the
generation of renewable energy is restricted by what Portugal and the
small interconnectors to Spain can handle. Too much rain, wind or sun
causes a surge in power output that drags down prices and overloads
the grid; not enough causes price spikes and supply shortages.
The favorite option
has been in talks for years: a line across the Pyrenees into France,
which is already connected to the U.K., Belgium, Germany,
Switzerland, Italy and Spain. Another plan, calling for a cable from
Portugal under the Bay of Biscay to Britain, would be too expensive.
Portugal, Spain, and
the European Commission have long pushed the French link as an
integral part of the EU’s energy union.
France is more
cautious, pointing to the high cost and construction challenges —
an argument that echoes its position on a proposed gas pipeline from
Spain to France. Portugal and Spain say France’s resistance is more
about protecting its fleet of 58 nuclear power stations from
renewable energy competition.
“The lack of
interconnection capacity is just between France and Spain, which is
clearly insufficient given the capacity of the Iberian Peninsula to
provide renewable electricity to Europe,” the Portuguese ministry
said, noting delays and “small steps,” despite commitments from
Portugal, Spain and the Commission.
Lisbon strong-armed
Paris into agreeing on the need for more cross-border interconnectors
in 2014, in the run up to last year’s COP21 Paris climate summit.
Portugal threatened to veto the EU’s climate and energy targets for
2030 unless countries agreed to also set a goal for connecting
national electricity grids.
“Energy is not
the Portuguese government’s main concern nowadays” — António
Sá da Costa, renewable energy association
“Portugal said ‘We
are not Poland, because we actually want the 2030 goals to be
achieved,’” the EU source said. “Because without the 2030
goals, France could not have a successful COP21.”
The blackmail worked
— for a time. The EU set a goal of linking 10 percent of its
electricity production capacity across national borders by 2020, and
France, Portugal and Spain agreed to look into the power line
project, as well as the gas pipeline.
But momentum has
since stalled, and time is running out to build the line by 2020.
“Energy is not the
Portuguese government’s main concern nowadays,” Sá da Costa
said. “I hope the European Commission will help. But are my hopes
nowadays very high? No they are not.”
This article has
been corrected to note that the comment about renewable technologies
was made by Secretary of State for Energy Jorge Seguro Sanches, not
Secretary of State for Environment and Energy Jorge Moreira da Silva.
Authors:
Sara Stefanini
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