No nuclear, no coal

Portugal has made significant strides in integrating renewable energy sources into its electricity generation. The country has taken advantage of solar power, tidal power wind generation, and hydroelectric power plants. Portugal is becoming a World leader in developing every form of energy independence. At the end of 2021, Portugal became coal-free after shutting down its 628MW Pego coal-fired power plant, privately owned by utility Tejo Energia. Pego's closure came just ten months after the shutdown of the 1,250MW Sines coal plant, owned by national utility EDP. No nuclear, no coal-produced power. Sometimes the progress passes our attention, but we should be aware of the significant progress Portugal is making.

Sustainable energy practices have become a key focus for many countries worldwide. With the increasing awareness of climate change, countries are looking for ways to reduce their carbon footprint and transition towards renewable energy sources. Portugal has been a leader in sustainable energy practices, setting ambitious targets and implementing policies to achieve them. I have looked at Portugal's approach to sustainable energy practices, compare it to other EU countries, and look at the challenges faced by these countries in transitioning to sustainable energy.


Significant progress

Portugal has made significant progress towards achieving its renewable energy targets, with renewable energy sources accounting for 54% of its energy consumption in 2019. This is higher than the EU average of 18%. Latest figures claim that the figure is now at 60%. Portugal has also invested more in renewable energy sources than many other EU countries, particularly in wind and solar power. However, Portugal faces challenges in transitioning to sustainable energy practices, including the high cost of renewable energy projects and the need for infrastructure upgrades. Other EU countries face similar challenges, with some countries lagging behind in achieving their renewable energy targets.


More than a trend

Portugal seems to understand that sustainability is more than a trend, it is a vision towards the future. In the last decade, investing in this strategic development path has been seen more like a moral obligation for both entities and companies, as well as a way of achieving a positive advancement for their economy. Portugal has carried out remarkable progress in this field until becoming a country leader in the renewable energy transition. Quite an achievement for a small country.

In January 2022, 4,085 GWh of electricity were generated in mainland Portugal, where 63.64% came from renewable sources being 31.27% wind, 17.78% hydro, 6.99% bioenergy, 3.80% solar and 3.80 pumping. However, Portugal still remains reliant on imported gas, as the remaining 36.36% came mainly from natural gas, which accounted a 31.27%. All of Portugal's natural gas is imported, mainly from Algeria (via a pipeline that transits through Spain) and from Nigeria (LNG). We are not reliant on President Putin!

Portugal has set ambitious targets for renewable energy, aiming to achieve 80% of its energy needs from renewable sources by 2030. To achieve this, Portugal has implemented several policies, including feed-in tariffs, tax incentives, and subsidies for renewable energy projects. Portugal has invested heavily in wind, solar, and hydroelectric power, and now tidal power. In addition, Portugal has implemented energy efficiency measures, such as building codes that require energy-efficient buildings and the use of smart grid technology to manage energy consumption.

Energy-efficient buildings are a major factor for people, many of whom seem to believe that all construction is seriously inadequate in this area. This is simply not true. Older buildings were, and still are, very basic and subject to damp, cold and excess heat in the summer. But go back 100 years or more and look at traditional buildings. These are frequently built with very thick walls, and a minimum of windows, and are quite effective at keeping both warm and cool at the appropriate times of the year. If you are looking at an old farmhouse or country building, then you will need to look very seriously at bringing insulation up to date. Older local buildings do suffer from dampness, not least as they have no efficient ventilation. I live in a property about 15 years old, it has cavity walls filled with foam. We don’t have damp, it has double glazing as standard, although we needed to upgrade this, and is warm in the winter and cold in the summer, aided with efficient air conditioning with heat pumps, which are widely available. The UK is still trying to legislate to get homeowners to install heat pumps, but here in Portugal, these are standard.

Over the last ten years, France, Italy, Spain and Portugal – have seen the highest rate of heat pump installations, with the number of annual installations per household more than doubling over a decade.


Still reliant on imported electricity

Portugal still needs to import electricity, mainly from Spain. However, Portugal also exports electricity. In 2021, Portugal imported $1.47B in electricity, becoming the 18th largest importer of electricity in the world. In the same year, Electricity was the 7th most imported product in Portugal. Portugal imports electricity primarily from Spain ($1.47B). In 2021, Portugal exported $561M in electricity, making it the 32nd largest exporter of electricity in the world. In the same year, electricity was the 26th most exported product in Portugal. The main destination of electricity exports from Portugal are Spain ($561M). At least we sell back almost 50% of what we import.

It is frequently claimed that EDP is owned by the Chinese. This is far from true. On February 4th, 2022, China Three Gorges (Europe), S.A. notified EDP that, in accordance with article 16 of the Portuguese Securities Code, it had reached a qualifying shareholding correspondent to 20.22% of EDP’s share capital and of the respective voting rights. The 20% threshold was crossed by China Three Gorges (Europe), S.A. on February 1st, 2022.


Why is electricity so expensive, blame the tax man

Unfortunately, Portugal has some of the highest prices for electricity in Europe thanks to taxes. According to Eurostat, we pay €0.2246 per kWh here which is 22% higher than in the UK. The “taxes and charges” component in Portugal is one of the highest in Europe and practically doubles the final price of electricity compared to the base value in Portugal according to EDP.

The other question frequently asked is why isn’t power from renewables cheaper? The simple answer to that is that the businesses that install and maintain them are not charities. They survive by making a profit, which seems reasonable. Also consider the capital investment needed to construct and install the units, be they solar, wind or even tide power. The old expression goes that there is no such thing as a free lunch. The sun wind and tides are free, but the equipment needed to harness what they produce isn’t. You may feel that the government should subsidise the equipment, but that would come from our taxes.

Whichever way you look at it, renewables are saving our planet, not our pockets.

Author

Resident in Portugal for 50 years, publishing and writing about Portugal since 1977. Privileged to have seen, firsthand, Portugal progress from a dictatorship (1974) into a stable democracy. 

Paul Luckman