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A perspective on sustainable environment

Energy changes in Portugal

An Overview of the Last Century
L'énergie et son évolution au Portugal. Un regard sur le siècle dernier
Adélia N. Nunes

Abstracts

The objective of this study is to assess the major changes in energy systems in Portugal during the last century, highlighting the changes that have taken place in recent decades. The relationship between energy production and consumption, the importance of the energy policy framework in reducing fossil fuel dependence, the increase in sustainable energy consumption through the use of renewable energy, and the consequent lowering of greenhouse gas emissions, are also analysed.
Portugal in recent decades has had a high energy dependence, which increased from 60% at the beginning of the 1960s to over 80% during the 1990s and the early years of the 21st century. However the recent focus on renewable energy, mainly hydraulic and wind power generation has enabled the country to slightly reduce the hydrocarbon imports. Portugal is nowadays considered one of the most dynamic European countries in terms of development of renewable energy.

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This work was funded by the CEGOT (Center for Studies in Geography and Spatial Planning), that is financed by National Funds through the FCT - Foundation for Science and Technology- under the project with the reference PEst-OE/SADG/UI4084/2015.

Introduction

1The way in which societies secure and transform energy has a powerful influence on their economic prosperity, geographical structure and international relations (Bridge et al., 2012). Energy is a crucial factor in the development of economies (IEA, 2004 ; WEF, 2012). It has a direct impact on the economic performance of companies and is also a driving force for social welfare. Major shifts in the roles of different fuels and energy conversion technologies in the global energy mix have often underpinned broad social and geographical changes, such as those accompanying the transition from wood and water power to coal in the 19th century, or from coal to oil in the 20th century (Smil, 2010).

2Firewood was almost the only source of energy that provided heat for populations and industries until the discovery of fossil fuels (Henriques, 2011). However, the transition from a vegetable-based low-energy society to a fossil fuel high-energy society is considered by many authors as a necessary condition, although not sufficient in itself, for industrialization (Wrigley, 1988; Malanima, 2006; Wrigley, 2010). For Gales et al., (2007), if energy is a crucial resource for the economy, inasmuch as economic growth cannot take place without more or less proportionate increases in energy, its availability may threaten economic performance in the near future. According to Ferreira (2007), there is a strong link between energy, the environment and sustainable development and it is therefore fundamental to maintain a balance between the use of energy for development and for preservation of the environment, since excessive use may have negative ecological impacts. For Krause et al. (1980) the concept of energy transition means a policy for reducing consumption by improving energy efficiency and replacing fossil fuels, used mainly since the Industrial Revolution, with renewable energy. In this context, renewable energy resources would appear to be one of the most efficient and effective solutions (Dincer, 1999, 2000).

3The energy challenge in the twenty-first century is to secure the transition towards a more sustainable energy system characterized by universal access to energy services, and security and reliability of supply from efficient, low-carbon sources (Bridge et al., 2012). Reducing the use of fossil fuels, increasing energy efficiency and promoting the use of renewable energy sources are therefore fundamental to achieving sustainable energy development. These measures were highlighted in the Kyoto protocol document and reinforced in European Commission (EU) policy documents for the energy sector (Commission of the European Communities, 2007; Ferreira, 2007). More recently, by 2020 the EU energy strategy aims to reduce its greenhouse gas emissions by at least 20%, increase the quota of renewable energy to at least 20% of consumption, and achieve energy savings of 20% or more. All EU countries must also achieve a 10% quota of renewable energy in their transport sector (European Commission, 2010).

4Portugal has few fossil fuel resources and is largely dependent on external sources (Pacheco and Mendes, 2016). Renewable energy sources such as water, wood and wind were, therefore, the alternatives to an industrialization process largely based on fossil fuels. Due to the increasing amount of renewable energy in the generation mix, complete energy dependence has been declining, especially in the last decade.

5Renewable energies have benefited from significant support from the Portuguese government and Portugal is nowadays considered one of the most dynamic European countries in terms of development of renewable energy (Bailoni and Deshaies, 2014).

6The objective of this study is to assess the major changes in energy systems in Portugal during the last century in terms of total and per capita consumption, with a particular focus on the changes that have taken place in recent decades in the relationship between energy consumption and production. The contribution of the energy policy framework in reducing fossil fuel dependence and the increase in sustainable energy consumption, through the use of renewable energy, and the consequent lowering of greenhouse gas emissions is also discussed. To achieve these objectives, national and international sources and energy indicators are analyzed.

Study Area

7The study area consists of the whole of mainland Portugal, which has a surface area of 89 015 km² and is composed by 18 districts (Figure 1). Located in the extreme southwest of continental Europe, Portugal is bounded on the west and south by the Atlantic Ocean.

Fig. 1- Portuguese districts (administrative regions) and spatial variability in altitude and precipitation

Fig. 1- Portuguese districts (administrative regions) and spatial variability in altitude and precipitation

8The physical environment varies enormously between northern and southern Portugal. This is largely explained by the different physiographic characteristics. Most of the country’s mountains lie north of the River Tagus, where the landscape is more rugged and the slopes are steeper and are intersected by deep valleys (fig. 1). The highest mountain range is the Serra de Estrela, which runs northwest-southeast in central Portugal, reaching a maximum height of 1 993 m. The southern part of continental Portugal consists of two different administrative regions, the Alentejo (the districts of Portalegre, Évora and Beja) and the Algarve (the district of Faro), which have different physiographic characteristics. The Alentejo region is mainly characterized by the vast flat to rolling terrain of the peneplain where the average altitude is approximately 200 m. The São Mamede mountain ridge, the highest in the Alentejo region with an altitude of 1 000 m, lies in the extreme north-east. In contrast, in the far south, the landscape is dominated by the two main Algarve mountain ranges, Monchique in the west, and Caldeirão in the east.

9Portugal has a Mediterranean climate, Csb in the north and Csa in the south, according to the Köppen climate classification. The average annual precipitation varies between more than 2 000 mm and less than 700 mm in the north-eastern and south-eastern areas of the country respectively (fig. 1). This pattern is reversed for average annual temperature, with the highest figures registered in the Alentejo (Beja, Évora and Portalegre) and Algarve (Faro) regions and the lowest in the north-eastern region (the districts of Vila Real, Braga and Viana do Castelo). Despite this variability, the country as a whole reflects the seasonal pattern typical of a Mediterranean climate, characterized by cool, wet winters and hot, dry summers. All the districts therefore have a reasonably long dry season, lasting between one and five to six months, increasing from north to south and from coastal to inland Portugal.

1 - Energy Consumption and Installed Electrical Capacity in the Past Century

10Portuguese energy consumption rose by a factor of 15 in 125 years in two distinct phases (fig. 1). In the first phase, covering around six decades from the end of the previous century to the end of the Second World War, total primary energy consumption in Portugal rose by just over 1% a year. In the second phase, after the end of Second World War, energy consumption rose at a much higher rate of almost 3% a year. This phase was characterized by the universal expansion of modern energy, especially oil, in convergence with the European energy system, which was greatly modified in the post-war years (Henrique & Borowiecki, 2014).

Fig. 2 - Consumption of energy in Portugal and energy use per capita, from 1890

Fig. 2 - Consumption of energy in Portugal and energy use per capita, from 1890

Source: Directorate General for Energy and Geology and Madureira, 2005.

11The trend for energy use per capita was similar to energy consumption (fig. 2). Population growth led to a steady increase in energy consumption per capita, which in the long term grew by a factor of 6. Until the end of the Second World War the annual per capita growth was very low (around 0.2%) and energy consumption per capita remained virtually stable at 100 kg of oil equivalent per capita/year. The enormous increase in per capita energy therefore took place in the post-war period. Since then, per capita energy consumption grew at an annual rate of 2.5%, reaching a peak in 2005. Following this, slight decreases were observed, both in total energy consumption and energy use per capita.

12According to Henriques (2011), the Portuguese energy per capita growth is lower than in other southern European countries, namely Spain and Italy. This may reflect a different pattern of intensity in the process of industrialization. In fact, Portugal only doubled its energy consumption after becoming a member of the European Community in 1986. However, this level of increase was similar to England in 1850, Canada in 1900, and Northern Europe in 1950-1960 (Henriques, 2011).

13The trend for installed electrical capacity in Portugal is presented in figure 3. In addition to the marked increase recorded in the second half of the last century, its structure also changed significantly during this period. The most significant changes occurred in the 1950s and 1960s, when installed electricity increased more than fivefold, from 247 to 1 524 MW. According to Henriques (2011), the 1950s and 1960s were the golden years of hydropower, benefitting from major government investment. Portugal has considerable hydropower potential, based on the southernmost three of the four most powerful rivers in the Iberian Peninsula, namely the Tagus, Douro and Guadiana, which bear half the total volume of the surface water flow in the Peninsula. Added to this is the abundant rainfall, amounting to 1600-2800 mm in the mountains in the northwest of the country, as well as in the Serra da Estrela Mountains (central Portugal). Combined with changes in elevation between the mountain tops and valley bottoms that often exceed 700 to 800 m, Portugal presents a priori good conditions for hydropower generation (Bailoni and Deshaies, 2014).

Fig. 3 ‑ Installed electrical capacity in Portugal since 1915

Fig. 3 ‑ Installed electrical capacity in Portugal since 1915

Source: Directorate General for Energy and Geology and Madureira, 2005.

14This important hydropower potential has gradually been exploited to provide an increasing quota of electricity production in the country. Since the beginning of electrification in the interwar period, Portugal has built many dams to meet its domestic, industrial and agricultural needs. This effort continued after the Second World War, so that by the early 1970s hydropower supplied more than three quarters of the electricity consumed in Portugal. Nevertheless, with the modernization of the country in the 1980s and 1990s, consumption has more than doubled and several thermal power plants have been built to meet these new needs.

15The increasing proportion of fossil fuels in power generation has contributed to the rise in coal and especially hydrocarbon imports, making Portugal one of the European countries with the highest energy dependence (about 80% in 2010). In fact, unlike Spain, Portugal is almost completely devoid of fossil fuel deposits, with the exception of a small coal basin located in the hinterland of Porto, which never provided more than 10% of the country's consumption and was closed down in 1994 due to lack of profitability. The country has to import all the coal used in power stations, as well as its entire oil and gas supplies, mainly from Algeria and Nigeria.

16In 2000 combustible fuels accounted for the highest share of installed capacity (57%), followed by hydropower (45%) and other renewable energy sources (3%). By 2015, the installed capacity of combustible fuels and hydropower had fallen to 38% and 33%, respectively. Conversely, the wind power quota increased from less than 1% to 23.7%, whereas solar energy represented around 2%, and other renewable energies (geothermal, tide and wave) only accounted for 3%. In fact, the boom in wind power was the main driving force behind the increase in installed electrical capacity production in Portugal during the first decade of the 21st century (fig. 3).

2 - Energy Consumption in Portugal by Type of Product and per Sector, and Historical Dependence

17Figure 4 shows the evolution of the structure of final energy consumption in Portugal by type of product. In recent decades, oil has been the dominant final energy product consumed in Portugal, with a share fluctuating between a maximum of 88% (in 1982) and around 66% in recent years (2013 and 1014). In fact, this share has been declining since the end of the 1990s, mainly as a consequence of the growing use of gas, which currently represents about 13% of final energy consumption, and the exploitation of renewable resources, representing more than 18% of final energy consumption.

Fig. 4 - Final energy consumption in Portugal by type of product (1971‑2014), in kilotonne of oil equivalent (Ktoe)

Fig. 4 - Final energy consumption in Portugal by type of product (1971‑2014), in kilotonne of oil equivalent (Ktoe)

Source: IEA Statistics © OECD/IEA 2014.

Fig. 5 ‑ Total consumption of energy by major sectors (1971-2014), in kilotonne of oil equivalent (Ktoe)

Fig. 5 ‑ Total consumption of energy by major sectors (1971-2014), in kilotonne of oil equivalent (Ktoe)

Source: IEA Statistics © OECD/IEA 2014.

18As noted by Amador (2010), the structure of final energy consumption by sector is, inter alia, a reflection of the structure of the economy and its level of development. This latter factor is related to the type of technologies used in production and the household consumption profile. Since these are structural aspects of the economy, the sectoral structure of energy consumption has evolved slowly over the decades. Figure 5 shows the evolution of this structure within the Portuguese economy since 1970. In the last four decades the industry and transport sectors each represented around one third of total final energy consumption. Both sectors revealed a more significant increase from the middle of the 1980s and a negative trend at the turn of the century. The importance of the transport sector in final domestic energy consumption not only reflects its weighting in the economy but mainly the fact that the underlying technology is energy-intensive. If energy consumption for this sector is broken down by transport type, further conclusions can be drawn. In fact, within total domestic transport energy consumption the road sector in Portugal has had by far the highest share, totaling over 95% (Amador, 2010).

19The residential sector is the third-largest consumption sector, with a share of around 15%. The weighting of commerce and public services has increased by around 4% and nowadays represents more than 7.5% of total energy consumption. The reverse trend can be observed in agriculture, forestry and fishing, as a consequence of the significant abandonment of these sectors.

20Figure 6 shows the evolution of electricity output from fossil fuels and renewable sources. The fossil fuel share of electricity production has increased considerably in recent decades–from 20% in 1971 to 80% in 2005. After 2005, renewable energy increased significantly to around 60% of the electricity supplied. The decrease recorded in 2015 was mainly due to unfavorable weather conditions (IPMA, 2015).

21The increase in renewable energy was justified by the need to reduce external dependence and greenhouse gas emissions. Moreover, Portugal benefits from favorable climatic and natural conditions, which enables it to take advantage of the hydropower (Bailoni and Deshaies, 2014), wind and solar potential to produce electricity.

Fig. 6 ‑ Evolution of electricity output (in %) from fossil fuels and renewable sources (1971-2015)

Fig. 6 ‑ Evolution of electricity output (in %) from fossil fuels and renewable sources (1971-2015)

Source: IEA Statistics © OECD/IEA 2015.

22In recent decades Portugal has had a high energy dependence, which increased from 60% at the beginning of the 1960s to over 80% during the 1990s and the early years of the 21st century (fig. 7). The recent focus on renewable energy and energy efficiency, combined with the economic context, has enabled the country to slightly reduce its dependence to levels below 80%. In 2013, energy dependence stood at 73.5%, representing a decrease of 4.1% compared to 2012 and 13% compared to 2005, a year marked by the highest energy dependence in recent years (86.3%).

Fig. 7- Net energy imports (% of energy used)

Fig. 7- Net energy imports (% of energy used)

Source: IEA Statistics © OECD/IEA 2014.

3 - Renewable Energies (RE) in Portugal: A National “Plan”

23Renewables are now established around the world as mainstream sources of energy (REN21, 2016). Several factors have stimulated the rapid growth of the power sector, including the improved cost-competitiveness of renewable technologies, dedicated policy initiatives, better access to financing, energy security and environmental concerns. Consequently, new markets, both for centralized and distributed renewable energy, are emerging in all regions.

24In Portugal a new cycle of investment in renewable energy sources began at the end of the 1990s (Henriques, 2011) (fig. 8). The reasons were somewhat different from those which had led the state to invest in large dams at the beginning of the 1950s. Both policies aimed to replace fossil fuels and reduce external dependence but whereas the main reason in the 1950s was to boost economic growth through cheap electricity, the main aim of the 21st century renewable energy policy is to reduce the burden on the environment. As stated by Henriques (2011), the Portuguese environmental policy is mainly the product of a common European Energy Policy aiming to mitigate climate change.

25The European Union Directive of 2001 (Directive 2001/77/EC), for example, provides a framework for the development of renewable energies in Europe. In 2005, Resolution 169/2005 established the energy strategy for Portugal, emphasizing the role of renewable energy. The Portuguese government based this policy for the energy sector on three strategic concerns: ensuring a secure supply, stimulating sustainable development, and promoting national competitiveness. In order to achieve these objectives, the government proposed measures focused on: increasing renewable energy quotas, in particular wind energy; reducing the use of fossil fuels and promoting more efficient technologies and liberalization of the electricity and natural gas sectors. Directive 2009/28/EC on promoting the use of energy from renewable sources (also called the “RES Directive”) set a target for using renewable energy sources to supply at least 20% of EU final energy consumption by 2020. Portugal committed itself to a target of supplying 31% of final energy consumption from renewable sources by this date.

26Within this context, Portugal, like other European countries, has launched an ambitious energy transition strategy to achieve this goal. Incentive policies have helped to significantly increase the wind power capacity which, now in 2016, represents around 40% of the installed renewable power in Portugal (fig. 8). In fact, wind power capacity more than doubled between 2004 and 2005 and increased on average more than 10% between 2005 and 2016.

Fig. 8 ‑ Installed capacity from the main renewable sources (in MW)

Fig. 8 ‑ Installed capacity from the main renewable sources (in MW)

Source : [http://e2p.inegi.up.pt/​].

27Although wind power is a very dynamic market, hydropower generated by large dams continued to provide the most of the renewable power capacity and generation (around 50% of the total). At the same time, large dams were retrofitted to increase the possibility of pumped storage for better management of electricity production. Photovoltaic, bioenergy and small-scale hydropower remained insignificant renewable sources (with a share of less than 3%).

28In 2014, the share of energy from renewable sources in gross final energy consumption in Portugal reached 27%, a relatively high figure in comparison to the 16% recorded for the European Union (fig. 9). From 2005, the first year for which data is available, to 2014 Portugal’s total energy increased by 7.5%, a similar figure to the mean increase observed for the European Union (EU).

Fig. 9 - Comparative share of renewable energy in gross final energy consumption in EU countries in 2005 and 2014

Fig. 9 - Comparative share of renewable energy in gross final energy consumption in EU countries in 2005 and 2014

Source: Eurostat.

29According to the latest Eurostat data, Portugal already ranks as the European country with the fifth-highest weighting for renewable within total electricity output, with 52.1% of the electricity generated in the country coming from “green” sources in 2014 (fig. 9). In the past decade the electricity derived from RE more than doubled, whilst the share of renewable energy used in heating and cooling did not indicate any sizable changes. Conversely, in the transport sector RE only represented 3.4% of the share in 2014, meaning that oil continues to be the most widely used form of energy in this sector, currently the highest final energy consumer in Portugal (see fig. 10). In fact, during 2014 electric vehicles only accounted for 0.08% of all cars sold: out of a total of 172,357 vehicles (including heavy vehicles), only 135 electric cars were sold. The main reasons for the reduced demand of electric cars are related with their relatively high price. Besides, the electric fueling stations are still in the development stages and electric cars are limited by range and speed.

Fig. 10 - Share of renewable energy in electricity, heating and cooling and transport in Portugal in 2005 and 2014

Fig. 10 - Share of renewable energy in electricity, heating and cooling and transport in Portugal in 2005 and 2014

Source: IEA Statistics © OECD/IEA 2014.

4 - Spatio-Temporal Variability in RE in Portugal: Uncertainties in Power Generation

30Renewable energy sources are characterized by their spatial and temporal variability, which is in contrast to fossil fuels (BLASCHKE et al., 2013). In fact, natural energy flows vary significantly from one location to another, making the techno-economic performance of renewable energy conversion highly site specific (Sim et al., 2003). As can be seen in figure 11, the power plants which generate hydropower and wind power are distributed very irregularly throughout Portugal, mainly due to the availability of natural resources. Thus, the districts located in the north and center of Portugal recorded the highest capacity to produce renewable energy, mostly due to the combination of wind and hydropower plants (fig. 12). Although Beja district is located in the South, its high capacity to produce renewable energy is related with the Alqueva dam, the largest artificial lake in Europe, and the “Amareleja Photovoltaic Solar Power Plant”, with an installed capacity of 46.41 megawatts (MW) built on a plot of 250 hectares, in the “hottest area of Portugal” according to the Portuguese Institute for Sea and Atmosphere (IPMA).

31Moreover, renewable energy sources are characterized by a high temporal variability, mainly due to the inter and intrannual changes in precipitation, wind and insolation. As an example, most of the annual precipitation is accumulated during the period between November and April. On average, 42% of the annual precipitation falls in winter, from December to February, and only 7% in summer, from June to August. Thus, the contribution of hydroelectricity to the energy mix in Portugal is strongly variable due to large climate fluctuations. In 2003 it amounted to 33% of the total energy generation but decreased to 9.7% in 2005 due to an intense drought (Carvalho et al., 2013).

32As Ackermann et al. (1999) refer, intermittent sources such as precipitation and wind, as well as solar, tidal and wave energy, require back-up if not grid connections, whilst high grid penetration may eventually require storage and/or back-up to guarantee a reliable power supply. Thus, it is difficult to generalize about costs and potentials.

Fig. 11 ‑ Location of power plants in operation (left: hydropower; center: wind; right: photovoltaic)

Fig. 11 ‑ Location of power plants in operation (left: hydropower; center: wind; right: photovoltaic)

Source : http://e2p.inegi.up.pt/​.

Fig. 12 ‑ Spatial variability of installed capacity in the districts of Portugal

Fig. 12 ‑ Spatial variability of installed capacity in the districts of Portugal

Source : http://e2p.inegi.up.pt/​.

33Despite the advances recorded in the last decade, both in terms of production and consumption of renewables, investment in the renewables sector has decreased significantly due to the Memorandum of Understanding (MoU) signed in Portugal with the International Monetary Fund (IMF), the European Union and European Central Bank (ECB) on May 3, 2011, as part of the bailout package which committed the Portuguese Government to renegotiating contracts with a view lowering the feed-in tariff and similarly revising new contracts (Pacheco & Mendes, 2016).

5 - Sustainable Energy: A Key Element in Sustainable Development

34Finding solutions for the environmental problems we face today requires potential long-term action for sustainable development. In this regard, renewable energy resources appear to be one of the most efficient and effective solutions, which explains the close link between renewable energy and sustainable development (Dincer, 1999, 2000). Large-scale sustainable energy systems will be necessary in order to substantially reduce CO2 emissions (Lound and Kempton, 2008). According to the United Nations Framework Convention on Climate Change (PEA, 2015), the main greenhouse gas (GHG) in Portugal in 2013 was carbon dioxide (CO2), accounting for 73.2% of total GHG emissions, followed by methane (CH4) at 17.8% and nitrous oxide (N2O) at 6.5%. Portugal’s energy sector accounted for 70% of the total GHG emissions, followed by the waste sector (12%), agriculture (10.5%), industrial processes (7.7%) and solvents (0.3%) (PEA, 2015).

Fig. 13 ‑ CO2 emissions from total fuel combustion

Fig. 13 ‑ CO2 emissions from total fuel combustion

Source : https://www.iea.org/​statistics/​.

35CO2 emissions from total fuel combustion increased from 14.4 million tonnes in 1971 to 45 million tonnes in 2013, with an emission peak between 2002 and 2005 of around 60 million tonnes (fig. 13). The decline in emissions since 2005 is the result of a surge in wind power generation as well as a reduction in economic activity (IEA, 2016), particularly after 2009. According to the 2007 Portuguese submission to the UN Framework Convention on Climate Change, in 2005 about 31% of national CO2 emissions were due to public electricity and heat production, highlighting the need to evaluate the use and integration of low carbon emissions technologies within the electricity system.

36In 2008, the National Climate Change Program (PNAC) established and amended the 2006 PNAC, envisaging an increase in renewable sources to 45% of the share of electricity production (previously 39%), the setting up of new natural gas combined cycle power plants (2 160 MW in 2006, boosted to 5 360 MW in 2010), and an increase in the 5.75% biofuel goal to 10% in 2010, amongst other measures. The GHG emissions reduction potential from the new 2007 measures is approximately 1 556 kt CO2 (adopted by CME 1/2008).

37In 2010, Portugal adopted the National Adaptation Climate Change Strategy (ENAAC, 2010), which aims to raise awareness of climate change, update and make available scientific knowledge on climate change and its impacts, and strengthen measures to monitor the effects of climate change.

38The latest National Action Plan for Energy Efficiency (PNAEE, 2015), comprising a number of energy-efficiency programs and measures with a 2015 timeline, was recently replaced by a new National Action Plan for Energy Efficiency (PNAEE, 2016) which was combined with the National Action Plan for Renewable Energy (PNAER) for 2020. It is reinforced by the idea that reducing oil dependency reduces the foreign trade deficit as well as CO2 emissions. Within the framework of the European ’20-20-20’ targets, Portugal established a general target for 2020 to reduce primary energy consumption by 25%, together with a specific target for public administration comprising a reduction of 30%. As part of the plan to use energy from indigenous renewable sources, Portugal aims to generate 31% of the final gross energy consumption and 10% of energy for transport from renewable sources at the lowest possible cost to the economy. It also aims to reduce the nation’s energy dependence and ensure secure supplies by promoting a balanced energy mix.

39Portugal has also demonstrated a significant commitment to address the challenge of climate change and has adopted an ambitious 20% greenhouse gas reduction target, compared to the 1% increase permitted under the EU-Effort Sharing Decision (IEA, 2016).

6 - Energy Sector Policy: A Focal Sector for Portugal

40The structural plans for the energy sector, such as the National Action Plan for Energy Efficiency (PNAEE, 2013-2016) and the Strategic Transport Plan, have played an important role in improving the overall energy performance of the country, whilst also reducing CO2 emissions from fossil fuels (Nachnamy et al., 2015). The PNAEE comprises a number of energy-efficiency programs and measures for the transport, residential and service sectors, industry and the state.

41The new government’s political agenda has established energy efficiency as a priority, providing a new impetus for renewable energy sources, reducing the tariff deficit through the implementation of new measures to cut energy costs, and promoting competition in the energy sector. Pacheco and Mendes (2016) categorize the new political strategy for the Portuguese energy sector under the following six pillars:

  1. The affirmation of Portugal as a relevant energy supplier for Europe. This concerns the physical characteristics of the country, which is already a major producer of wind energy, and its great potential for producing solar energy, as the country with the highest number of sunshine hours in the whole of Europe. Portugal already has periods in which the production of energy from renewable sources surpasses the country’s energy consumption, especially during the night when wind production is higher and consumption is lower.

  2. Resuming the strategy of investing in generation from renewable energy sources. Regarding the resumption of investment in renewable energy, the objective is to achieve the goal of 40% of energy consumed in the country generated from renewable sources by 2030. However, the proposed strategy hinges on the development of renewable energy projects especially designed for certain types of generation, rather than on the wider promotion of any type of renewable energies project. It prioritizes certain types of generation: small hydro generation projects; wind and solar projects producing electricity destined specifically for other Member States; the installation of small generation projects in public buildings; boosting the generation of electricity for self-consumption through the sale of surplus energy to the grid; the pooling of consumers and micro-generators of renewable energy from plants without special remuneration regimes; incentives for the use of forest biomass and solar energy to heat water;

  3. Lowering energy prices and the tariff deficit. The third pillar comprises the production of cheaper energy, thus reducing the tariff deficit, which in 2015 was around € 5bn. In order to lower the tariff deficit, the Government advocates: (i) the end of the revision regime for the above-mentioned CMECs, in order to enhance renewables without the risk of increasing compensation for installed producers; (ii) taking advantage of the closing of certain thermoelectric plants (namely the Sines thermoelectric plant) in reducing the cost of generating electricity; (iii) limiting the remuneration from hydropower energy in drought years; (iv) renegotiating concessions in the energy sector in order to achieve fair sharing of risks between the state and the concessionaires; (v) the gradual transition from the current model of special remuneration for renewables to a remuneration model based on market prices, eventually combined with green certificates.

  4. Stimulating competition and competitiveness. In order to promote competition, the government strategy undertakes to stimulate the emergence of new market agents, notably energy suppliers, enhance the comparability of market offers, ensure a single wholesale natural gas market for the Iberian Peninsula (the MIBGAS), and continue with the unbundling of energy markets, notably in the oil sector.

  5. Promoting energy efficiency. The government strategy also has a strong commitment to promoting energy efficiency through the following measures: leveraging the development of smart grids and the installation of smart meters; rewarding energy efficiency gains in intensive energy-consuming installations; promoting fuel-switching between companies; improving efficiency patterns for buildings and fleets; establishing a detailed schedule for the implementation of energy efficiency measures and binding energy efficiency goals in the public administration. It also aims to promote electro-mobility through incentives for the acquisition of electric cars, the introduction of car sharing operators, expansion of the network of charging points, returning the energy supplied to electric cars to the grid, and new incentives for logistics companies to replace conventional cars with electric cars.

  6. Developing a technology cluster in the energy sector. The government undertakes to encourage the establishment of a solar energy and electro-mobility cluster in Portugal, similar to the one which exists for wind energy.

Conclusion

42Portugal made its energy transition from organic to fossil fuels slowly and very late. It was only towards the end of its post-war golden years, with the arrival of cheap oil, that it was finally freed from these shackles. The result was a rapid convergence to advanced levels of energy consumption and intensity, just at the time when more developed countries were beginning to move in the opposite direction and the world was waking up to the urgent need to curb this trend (Reis, 2013). Therefore, in recent decades Portugal’s energy dependence has been high, ranging from 80% to 90%. In 2014 fossil fuels still accounted for 73.3% of the total primary energy supply, including oil (45.1%), natural gas (16.4%) and coal (12.7%). However, the focus on renewable energy, combined with the economic context, has enabled Portugal to make significant improvements in energy efficiency in the past decade. Some of the impacts observed are related to: (i) lower energy dependence, from around 88.6% in 2005 to 73.3% in 2014; (ii) a greater proportion of renewable energy in gross final energy consumption, rising from 19.5% to 27% between 2005 and 2014; (iii) Portugal’s position as a reference in the European context in terms of its quota of renewable energy within final gross energy, having been ranked ninth in 2014 (27%) after Iceland (71.1%), Norway (69.2%), Sweden (52.6%), Finland (38.7), Latvia (38.7%), Austria (33.1%), Denmark (29,2) and Croatia (27.9); (iv) a 30% reduction in CO2 emissions from fossil fuels between 2005 and 2014, meaning 19 Mt less of CO2. In fact, the growing contribution of endogenous renewable sources has produced multiple benefits, including less dependence on imported fossil fuels and declining carbon dioxide emissions in the electricity sector.

43Portugal has continued to develop and reform its energy policy and by the year 2020 intends to generate 60% of its electricity from renewable energy sources in order to satisfy 31% of its final energy consumers. Although the country benefits from favorable climatic and natural conditions, enabling it to take advantage of hydro, wind and solar potential to produce electricity, estimates of uncertainties related to climate change are necessary in order to be able to determine the importance of climate change impacts on the future power generation from renewable energy sources. For Portugal, all the observations are consistent with a tendency towards more intense and frequent extreme weather and climate events, in particular heat waves and droughts.

44In view of this state, our country should invest in other natural resources. With a long tradition associated with the sea, as it has almost 1,000 km of coastline on the mainland alone, the potential available on the coastline to explore ocean and wind energy is a high resource. A pilot area has been created to pursue this concept and develop offshore wind energy projects.

45On the other hand, as biomass resources include agricultural and forestry residues, landfill gas, municipal solid waste and energy crops which are widely distributed, it has good potential to provide rural areas with a renewable source of energy. Moreover, the intensive exploitation of biomass can be very important in controlling wildfires, the main environmental problem that regularly affects the country.

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Bibliography

Ackermann T., Garner K., Gardiner A., (1999), Wind power generation in weak grids-economic optimisation and power quality simulation, Proceedings of the World Renewable Energy Congress, Murdoch University, Perth, Australia, p. 527‑532.

Amador J., (2010), Energy production and consumption in Portugal : Stylized facts, Economic Bulletin, Banco de Portugal, 15 p.

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Portuguese Legislation

Council of Ministers Resolutions 104/2006 and 1/2008, establishes and amends the National Climate Change Program (PNAC), 23 August 2006 and 4 January 2008.

Resolution of the Council of Ministers 24/2010, adopts the National Strategy for Adaptation to Climate Change (ENAAC), 1st April 2010.

Resolution of Council of Ministers 93/2010, established the National Program for Climate Change (PNAC 2020), 26 November 2010.

Resolution of Council of Ministers 20/2013, established the National Action Plan for Energy Efficiency (PNAEE 2016) and a National Action Plan for Renewable Energy (PNAER 2020), 10 April 2013.

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List of illustrations

Title Fig. 1- Portuguese districts (administrative regions) and spatial variability in altitude and precipitation
URL http://journals.openedition.org/mediterranee/docannexe/image/10113/img-1.jpg
File image/jpeg, 1.2M
Title Fig. 2 - Consumption of energy in Portugal and energy use per capita, from 1890
Credits Source: Directorate General for Energy and Geology and Madureira, 2005.
URL http://journals.openedition.org/mediterranee/docannexe/image/10113/img-2.jpg
File image/jpeg, 76k
Title Fig. 3 ‑ Installed electrical capacity in Portugal since 1915
Credits Source: Directorate General for Energy and Geology and Madureira, 2005.
URL http://journals.openedition.org/mediterranee/docannexe/image/10113/img-3.png
File image/png, 95k
Title Fig. 4 - Final energy consumption in Portugal by type of product (1971‑2014), in kilotonne of oil equivalent (Ktoe)
Credits Source: IEA Statistics © OECD/IEA 2014.
URL http://journals.openedition.org/mediterranee/docannexe/image/10113/img-4.png
File image/png, 12k
Title Fig. 5 ‑ Total consumption of energy by major sectors (1971-2014), in kilotonne of oil equivalent (Ktoe)
Credits Source: IEA Statistics © OECD/IEA 2014.
URL http://journals.openedition.org/mediterranee/docannexe/image/10113/img-5.png
File image/png, 118k
Title Fig. 6 ‑ Evolution of electricity output (in %) from fossil fuels and renewable sources (1971-2015)
Credits Source: IEA Statistics © OECD/IEA 2015.
URL http://journals.openedition.org/mediterranee/docannexe/image/10113/img-6.jpg
File image/jpeg, 60k
Title Fig. 7- Net energy imports (% of energy used)
Credits Source: IEA Statistics © OECD/IEA 2014.
URL http://journals.openedition.org/mediterranee/docannexe/image/10113/img-7.png
File image/png, 7.6k
Title Fig. 8 ‑ Installed capacity from the main renewable sources (in MW)
Credits Source : [http://e2p.inegi.up.pt/​].
URL http://journals.openedition.org/mediterranee/docannexe/image/10113/img-8.png
File image/png, 20k
Title Fig. 9 - Comparative share of renewable energy in gross final energy consumption in EU countries in 2005 and 2014
Credits Source: Eurostat.
URL http://journals.openedition.org/mediterranee/docannexe/image/10113/img-9.png
File image/png, 127k
Title Fig. 10 - Share of renewable energy in electricity, heating and cooling and transport in Portugal in 2005 and 2014
Credits Source: IEA Statistics © OECD/IEA 2014.
URL http://journals.openedition.org/mediterranee/docannexe/image/10113/img-10.png
File image/png, 36k
Title Fig. 11 ‑ Location of power plants in operation (left: hydropower; center: wind; right: photovoltaic)
Credits Source : http://e2p.inegi.up.pt/​.
URL http://journals.openedition.org/mediterranee/docannexe/image/10113/img-11.jpg
File image/jpeg, 704k
Title Fig. 12 ‑ Spatial variability of installed capacity in the districts of Portugal
Credits Source : http://e2p.inegi.up.pt/​.
URL http://journals.openedition.org/mediterranee/docannexe/image/10113/img-12.png
File image/png, 33k
Title Fig. 13 ‑ CO2 emissions from total fuel combustion
Credits Source : https://www.iea.org/​statistics/​.
URL http://journals.openedition.org/mediterranee/docannexe/image/10113/img-13.png
File image/png, 19k
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References

Electronic reference

Adélia N. Nunes, « Energy changes in Portugal », Méditerranée [Online], 130 | 2018, Online since 08 November 2018, connection on 11 December 2018. URL : http://journals.openedition.org/mediterranee/10113 ; DOI : 10.4000/mediterranee.10113

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About the author

Adélia N. Nunes

Department of Geography and Tourism, CEGOT, University of Coimbra, Coimbra, Portugal, adelia.nunes@fl.uc.pt

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Copyright

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