Portugal has just run for 6 days on renewable energy. What can the world learn from it?

By: Maria Francisca Moutinho Ricardo da Costa

From: Sciences Po Menton

From October 31st to November 6th, the renewable energy produced in Portugal exceeded the needs of households by 262 GWh. For 131 hours, it exceeded the energy requirements of the National Electric System (1). These records were quickly noticed by the international community and spread across world news. But what exactly do they mean, and why are they so important?

Portugal has made significant progress when it comes to the promotion of renewable energy use in the last years. In 2010, it was one of the countries in the European Union with the highest rates of energy dependency ( the proportion of energy that an economy must import (2), at 80% (3). By the end of 2021, only 10% of the country’s energy consumption corresponded to energy imports (4).Taking advantage of the country’s potential use of hydroelectric and wind power, “Portugal’s energy and climate policies pushed for carbon neutrality primarily through broad electrification of energy demand and a rapid expansion of renewable electricity generation, along with increased energy efficiency” (5). Renewable energy production would meet 59% of the of the country’s energy demand in 2021 (6). Within the main sources of clean energy in Portugal, there are hydroelectric and wind power. Solar energy also seems to be having its momentum in the Portuguese electricity sector - between 2021 and 2022, Portugal had the greatest increase in solar energy capacity in the European Union: at 250% (7). However, despite these achievements, the country’s energy sector still has a degree of fossil fuel reliance (8). The archipelagos of Madeira and the Azores “still heavily rely on oil products, even for electricity generation” (9). On the other hand, these autonomous regions have set up their own climate policy, and their “programmes to support the energy transition appear to be more ambitious than those for mainland Portugal” relying strongly on innovation and environmental technology (10).

Portugal aims at achieving carbon neutrality by 2050 (11). Last year, prime minister António Costa affirmed that the country is “gathering conditions” to anticipate this achievement from 2045 to 2050 (12). In alignment with these goals, a resolution approved by the Portuguese council of ministers in 2020 determined, among others, the reduction of greenhouse gas emissions “between 45% and 55%” and the use of renewable energy at a rate of 47% in the “gross final energy consumption” until 2030 (13).

The REN- Redes Energéticas Nacionais, set, in 2021, its Strategic Plan “the reduction of carbon emissions by 50% by 2030 (compared to 2019), and carbon neutrality in 2040, ten years earlier than defined by the European Union” (14). In order to do this, the company compromised itself with 600-705M € investments in electrical infrastructure (15). The company is preparing to “prepare the infrastructure” to receive hydrogen, and has committed to “reduce methane emissions by at least 20%” by 2025 (16). In 2014, the Portuguese government passed the Green Taxation Law (17). In 2015, the country’s climate policy incorporated a carbon tax, “charged as an additional amount on top of the energy products tax (ISP), which covers most energy demand including fossil fuels, electricity and heat” (18). After that, the exemptions on carbon tax within the generation of electricity were gradually eliminated (19).The International Energy Agency reported that Portugal has in place “several measures to drive the deployment of renewable electricity generation, including feed-in tariffs and a new system for allocating grid connection capacity that includes solar PV auctions” (20). Additionally, the country is investing in “new hydropower capacity and major expansions of electricity infrastructure to support the integration of renewables and better interconnection with Spain” (21). Furthermore, Portugal has established the System for Management of Intensive Energy Demand (SGCIE) that seeks to “promote energy efficiency in industry” (22). The SGCIE includes the regulation of “energy-intensive industrial facilities” (23) and strategies to reduce energy demand. Finally, the Portuguese State Budget for 2023 has introduced an exemption on income tax for the “decentralized production of renewable electricity” (24).

Although a transition from non-renewable to renewable energy has proven to be politically influenced oftentimes (25), in Portugal “it does not seem like a left-right dichotomy since most Portuguese agree on the need to develop renewable energy for environmental and economic reasons” (26). Economic planning seems to be a central element of Portugal’s energy strategy. MIBEL, Mercado Ibérico de Eletricidade, (Iberian Electricity Market) allows for the exchange of electricity within the Iberian Peninsula (27). Indeed, from November 1st to 5th, Portugal exported its excess energy to Spain (28). Yet, the relatively isolated geographical position of the country creates the need for increased “interconnection between the Iberian Peninsula and the rest of Europe” (29). Spector points out that one of the reasons for Portugal’s success is the “diversification of renewable resources”- including solar, wind, hydro and biomass power (30). At the same time, the country invested in hydropower reservoirs to build-in electricity storage, having a “modest capacity of batteries connected to renewable generators” (31).

Primarily, “Portugal showed that it’s possible to ramp down fossil fuel generation, operate for days on end with just renewables and then ramp the fossil plants back up when they’re needed again” (32). However, Portugal’s November record seems to be the result of accumulated efforts that have been implemented in the country’s climate policy from years ago. Firstly, the dynamic and continuing setting of goals aligned with the United Nation’s SDGs (Sustainable Development Goals) (33) throughout the years, have allowed for environmental policy making to adapt to new environmental, economic and political circumstances, namely within REN’s action framework. The indirect incentives to the production of renewable energy, like the introduction of a carbon tax, seem to incentivize an overall shift from fossil fuels to renewable energy in the economy’s industries. The heavy investment in the creation of infrastructure and, especially, in energy storage, seem to be the most crucial in achieving capacity to run fully on renewable energy. Furthermore, the de-politicization of the Portuguese renewable energy transition (34) facilitates the creation of a context where such investments are not hindered by a lack of political or social consensus.

The record set by Portugal has levelled up the expectations for a closer sustainable future. However, it has also shown us that its achievement relies on the coordination between the political, economic and environmental sectors of a country, alongside a mindset that prepares not only a transition, but a readjustment, of the industry, to the use of renewable energy.

1. Green
2. eurostat
3. Nunes
4. Lusa
5. López-Dóriga
6. Lusa
7. Silva
8. López-Dóriga
9. International Energy Agency
10. International Energy Agency
11. Portugal Energia
12. Governo da República Portuguesa
13. Diário da República
14. REN
15. REN
16. REN
17. International Energy Agency
18. International Energy Agency
19. International Energy Agency
20. International Energy Agency
21. International Energy Agency
22. International Energy Agency
23. International Energy Agency
24. International Energy Agency
25. Silva et al.
26. López-Dóriga
27. López-Dóriga
28. Green
29. López-Dóriga
30. Spector
31. Spector
32. Spector
33. REN
34. López-Dóriga

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