The European nation is on route to enormous advancements in its renewable energy resources and far beyond. The country has established an impressive legal framework to reach carbon neutrality by 2050. This framework is encapsulated in its Renewable Energy and Carbon Neutrality (RNC) 2050 plan, which outlines ambitious targets and strategies. Portugal’s National Energy and Climate Plan (NECP) for 2021-2030 lays the groundwork for ambitious energy and emission reductions. These goals will serve as an action-oriented roadmap to steer the nation’s course toward building a sustainable energy future.
Earlier this year, Portugal put out an ENVI Policy Snapshot documenting the many strides the country has taken towards an expanding renewable energy industry. This year’s snapshot showcases the wide range of auctions held from 2019-2022. It highlights the impactful achievements of the First, Second and Floating Solar PV Auctions. These efforts have all played a role in helping Portugal bolster its renewable energy infrastructure and reach its ambitious environmental goals.
National Energy and Climate Plan Targets
With the approval of the NECP for 2021-2030, this plan became the key pillar of Portugal’s energy policy guidelines. It sets ambitious goals to achieve a significant reduction in greenhouse gas emissions and increase the use of renewable energy. One of our primary targets is for 47% of total consumption to go towards renewables. We’re working to meet this ambitious target by 2030.
Additionally, the NECP lays out detailed, measurable milestones for expanding energy efficiency and advancing sustainability in the manufacturing, energy, building, transport, and agriculture sectors. This holistic approach is a win-win which tackles emissions directly and fits neatly with the overall European Union climate goals. By sticking to the NECP, Portugal hopes to dramatically reduce its carbon footprint and move towards a more sustainable economy.
This unified NECP implementation plan is supported strongly by the RNC 2050 plan. This plan establishes even stronger interim and long-term targets. The RNC plan intends to go even further, calling for a decarbonized economy as soon as 2050. This vision includes sectors of energy generation, transportation, and industry.
Renewable Energy Auctions and Their Impact
Portugal has actively participated in several renewable energy auctions since 2019 to increase its renewable energy capacity, including solar. The 2019 First Round Solar PV Auction was a turning point. It pulled in more than $15 billion in private investments and accelerated solar capacity by more than 2500%. Today’s auction set the stage for future offshore wind rounds and sends a clear signal nationwide that we’re all in on growing our renewable energy portfolio.
The Second Round Solar PV Auction, conducted in 2020, reaffirmed this commitment even more. It proved a successful effort, drawing in hundreds of bidders and helping the government award thousands more solar projects nationwide. These auctions have proven very successful in reducing the cost for solar and increasing competition between providers.
In 2022, Portugal’s government announced a Floating Solar PV Auction. This effort completely changed the way we were able to generate renewable energy through our nation’s waterways. The groundbreaking reverse auction brought about remarkable results. It further demonstrated the incredible impact that floating solar technology can have on improving land use efficiency and accelerating clean energy production.
Upcoming Changes in Policy Framework
Portugal is making the market accessible to smaller players by integrating new advance payments. This phased system clawback mechanism will be in effect as of 1/1/24. This development is part of a broader initiative to give developers and other renewable energy stakeholders more financial wiggle room. To encourage wider participation in upcoming auctions, the government provides advance payments to auction participants today. Tucked into this congressional move is a desire to reduce project development timeframes.
The phased clawback mechanism allows for gradual adjustments based on project milestones, ensuring that developers remain accountable while receiving necessary support during early stages of project execution. By removing these barriers, this policy change is expected to bring in more investments and encourage innovation within the renewable energy market.
Portugal’s proactive approach in updating its policies reflects an understanding of the evolving energy landscape and the need for continuous improvement. Portugal has made a strong commitment to carbon neutrality by 2050. It keeps a constant focus on emerging technologies and approaches to making renewable energy production cleaner and more efficient.
