PORTUGAL: An Introduction to Energy & Natural Resources (International)

2022 was marked by a significant disruption on the global energy market triggered by the geopolitical crisis initiated by Russia's invasion of Ukraine. As a response, the European Commission presented in May 2022 the RePowerEu Plan aiming to accelerate the clean energy transition and increase Europe's energy independence. The RePowerEu Plan has triggered the enactment of several legislation in Portugal aiming to accelerate the renewable targets and simplify administrative licensing procedures.

As regards African countries, the year was also marked by the launch in the context of COP27 (in November 2022) of the Africa Minigrids Program (AMP), an assistance programme that supports countries to rapidly and cost-effectively provide electricity and new development opportunities, including to some of Africa’s poorest communities, with Angola and São Tomé e Principe participating in the programme.

Portugal  

Further to the enactment of Decree-Law no. 15/2022 of 14 January 2022, setting forth the new regime for the electric sector ("New Electric Sector Law"), the sector is expecting that the grid is made available by the grid operators, either by direct attribution, agreement with the grid operators to reinforce grid capacity or through the launch of a public tender by the government.

In this regard, we highlight that the government has announced a much-expected offshore wind public tender during 2023.

On the other hand, considering the scarcity of capacity, interest has been widely shown for the optimisation of existing power plants, through overpowering, repowering and hybridisation of the same.

Decree-Law no. 30-A/2022 of 18 April 2022 and Decree-Law no. 72/2022 of 19 October 2022 are legislative responses for the acceleration of renewable targets as set forth under the RePowerEu Plan, by simplifying certain administrative licensing procedures. More recently, Decree-Law no. 11/2023, of 10 February 2023, approved the “environmental simplex”, a legislation aimed at simplifying (or, in certain cases, waiving) environmental procedures applicable to the development of renewable projects.

While streamlining licensing procedures, it is expected to invest further in the renewable sector in Portugal and accelerate the deployment of new renewable capacity.

Angola  

Further to the enactment of Presidential Decree 76/2021 in 25 March 2021 regulating the activities of generation, transmission, distribution and supply of electricity, and in the context of the “Energia Angola 2025”, the Ministry of Energy and Water of Angola presented a long-term vision for the energy sector until 2025, identifying priority investments and promoting the distribution and expansion of the grid: several solar and hydro projects are eagerly awaited.

In this context, we note the largest solar energy project in Angola – the Biópio Solar Plant with an installed capacity of 188.8 MW – was inaugurated, as well as the Baía Farta Solar Plant, with an installed capacity of 96 megawatts. With a combined capacity of 285 megawatts, these two photovoltaic solar energy projects are expected to benefit more than two million people.

Other photovoltaic projects planned for Huíla (namely, the Quilemba solar power plant) and Namibe are also highly awaited.

Angola was included in the first round of the AMP launched at COP27 with another 20 African countries, aiming to create new development opportunities by providing technical assistance to the electrification of some of the poorest communities in Africa and accelerate the implementation of renewable energy mini-grids by attracting private investment.

Moreover, in 2022 the European Commission concluded negotiations with Angola on a Sustainable Investment Facilitation Agreement (AFIS) which is the first agreement of this type signed by the EU. The AFIS aims to promote sustainable investments in Angola and to provide technical support. In addition, Angola intends to join the Economic Partnership Agreement between the EU and the Southern African Development Community (EU-SADC EPA) in order to guarantee privileged access for Angolan exports to the EU market. The concluding process of this agreement is still ongoing.

Cabo Verde  

Cabo Verde is aiming to increase the percentage of renewable sources with a penetration rate for renewable energy of more than 50% by 2030 and is launching several renewable tenders for the implementation of wind, solar and wave projects. Geothermal energy is also another potential source. Additionally, the restructuring of ELECTRA (the water and energy production company) is expected with privatisation of the generation and distribution activities. Energy storage solutions are also to be pursued.

The Renewable Energy and Improved Utility Performance Project (REIUP) for Cabo Verde, in the amount of USD16.5 million approved in December 2021, is expected to result in the increase of renewable energy generation capacity by 3.9 MW (solar) with the construction of four photovoltaic power plants (namely, in São Nicolau, Santo Antão, Maio and Fogo) - whose public procurement process is currently underway - reduction of the power system losses from 26% to 18% with the privatisation of the electricity utility ELECTRA and the reduction of greenhouse gas emissions. Moreover, the National Program for Energy Sustainability will be analysed and reinforced, as part of the new planning exercise that will shape the new Strategic Plan for Sustainable Development (PEDSII).

In September 2022 the government of Cape Verde signed a Memorandum of Understanding with Cabeólica for the expansion project of the Cabeólica wind farm and the installation of energy storage infrastructure, with an estimated value of EUR33 million. The project aims to install wind turbines with a capacity of 13 megawatts in the Monte São Filipe wind farm in the Santiago island. Additionally, the project aims to install two 5 MW/5 MWh energy storage batteries in the Santiago island and in the Sal island. The project is expected to start operation in 2024.

Equatorial Guinea 

Equatorial Guinea has approved in 2018 the Pander (the renewables plan for 2018-2025) and has been discussing the implementation of a few initiatives, but no projects have been implemented so far, save for the existing hydropower project.

Mozambique  

Mozambique is very active in the energy sector and is going through a very ambitious legislative plan for reforming the energy sector and accelerating and promoting private investment.

Mozambique has enacted a new Electricity Sector law during 2022, while also developing a robust legal framework for the implementation of off-grid projects, published during the year of 2022 and which is expected to be complemented in 2023.

In 2020 Mozambique launched a solar tender programme named PROLER (still ongoing) which is anticipated to boost the implementation of renewable projects in the country. Several auctions were launched, and new auctions are expected to take place in 2023.

The International Finance Corporation and Eletricidade de Mozambique have also announced an Agreement of Cooperation to develop four small-scale PV power plants with storage units.

São Tomé and Principe 

São Tomé and Principe is focusing as well on renewable projects, in particular hydro and solar. The country has started negotiations with the United Kingdom’s Global Otec on a power purchase agreement for the deployment of the first commercial floating ocean thermal energy conversion platform. Principe announced also the implementation of an 8 MW solar plant.

The year of 2022 was marked with the first phase of the installation of the first grid-connected photovoltaic power plant ever in São Tomé and Principe, with an installed capacity of 540 kWp. The project had the support of an investment of circa USD690,000, funded by the United Nations Development Program and the Global Environment Fund.

Moreover, solar photovoltaic plants supplying São Tomé International Airport and Príncipe Airport are expected to enter commercial operation in 2023.

Timor-Leste  

In Eastern Asia, Timor-Leste aims also to focus on renewables which is an area that still needs development and requires a huge increase in renewables investments. The establishment of a renewable energy regime is currently under approval and the legislative programme for 2023 published by the Timor-Leste Government foresees further regulation of this sector.

Looking Ahead  

The energy sector in Portugal and CPLP countries continues to look promising and growing investment in renewables is expected for these markets, considering the international efforts for the energy transition and the increase in sustainable financing. The stabilisation of the renewables legal frameworks recently enacted or currently under ongoing approvals are key for overcoming the challenges ahead and for a successful implementation of the projects.