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

Portugal  

The Energy and Climate National Plan 2030 is undergoing a revision to include new ambitious targets for the reduction of greenhouse gas emissions and anticipating targets for the integration of renewable energy in Portugal. The final form should be published by June 2024.

At the same time, the Plan for Offshore Renewable Energy, considered to be a vital contribution towards carbon neutrality goals and the alignment of national policy and targets with the guidelines foreseen in the REPowerEU Plan, was submitted for public consultation until the end of 2023 and is expected to help pave the way towards the upcoming offshore wind public tender in Portugal.

One of the most eagerly awaited developments for 2024 will indeed be the offshore wind public tender, under which the Portuguese government has announced the intention to award 3.5 GW of installed capacity in the upcoming auction, and a total of 10 GW by 2030. A preliminary phase for non-binding expression of interest was launched in October 2023, following which 50 different entities and consortiums from over ten countries formally announced their interest in participating in the upcoming tender. These entities will now be invited for a dialogue and discussion phase set to take place in January 2024.

As interest in the Portuguese renewable energy market continues to rise despite scarcity of grid capacity for the installation of new projects, the last year has shown greater interest in the optimisation of existing power plants, namely through overpowering, repowering and hybridisation solutions, which are expected to continue drawing the attention of the market in the coming year.

In efforts to accelerate the implementation of projects contributing towards the country’s renewable energy targets, Decree Law No 11/2023 of 10 February brought about significant changes to simplify and streamline environmental licensing procedures and requirements applicable to renewable energy projects, in what has been dubbed as “environmental simplex”.

At the same time, increased focus has been put on promoting decentralised energy solutions, namely through the publication of ERSE Regulation No 815/2023 of 27 July, setting forth rules for individual and collective self-consumption.

Added focus has been put on storage as well, and specific regulations are expected which will facilitate the implementation of storage solutions and accelerate decarbonisation.

It is expected that these changes will have a positive impact in the sector and enable a faster and greater deployment of new renewable energy capacity in Portugal in the coming years.

Angola  

The past year saw significant developments in the Angolan energy policy, with the approval of the Guidelines for the Preparation of the National Electrification Plan further to Executive Decree No 78/23 of 30 May, and the National Strategy for Climate Action 2022–2035, which aims at a reduction of greenhouse gas emissions in the country.

The long-term goals for the growth of the sector include an electrification rate of 50% by 2027 and universal access to electricity by 2030, placing particular emphasis on renewable energy solutions, and targets for the diversification of the energy mix and a share of at least 72% of renewable energy generation by 2027. Solar photovoltaic projects are expected to play a significant role in meeting these targets.

And indeed, photovoltaic solar projects continue to make way in Angola, with the entry into operation of the Caraculo solar power plant in the province of Namibe, with an installed capacity of 25 MW, and the first public-private partnership in the renewable energy sector. On 13 December 2023, Presidential Decree 290/23 was published, further to the MoU regarding the public-private partnership with the Abu Dhabi Future Energy Company PJSC-Masdar, approving the draft concession for the construction of the Quipungo solar power plant, with an installed capacity of 150 MW in the province of Huila.

Cabo Verde 

The governments of Cabo Verde and Portugal signed a protocol in June 2023 for the financing of the Climate and Environmental Fund through the conversion of EUR12 million of existing debt of Cabo Verde to be applied towards investments in the climate and energy transition of the country.

Significant foreign investment and international support continues to flow to renewable energy projects in Cabo Verde. The European Union announced on 24 October 2023 a EUR246 million investment package under its Global Gateway strategy, with the goal of supporting the government of Cabo Verde in fostering renewable energy projects, mobility and digital solutions. This investment package is expected to be translated into a framework loan between the European Union, the European Investment Bank and the government of Cabo Verde, prioritising the EUR149 million funding of a reversible hydroelectric power plant with energy storage solutions.

The EIB will also support the Cabeólica wind farm expansion project. The project aims to increase installed capacity in the island of Santiago by 13 MW and integrate energy storage facilities in the islands of Santiago and Sal. The project is expected to start operation in 2024 and increase the renewable energy penetration rate in Cabo Verde from 20% to 30% in 2025.

Another notable event in 2023 was the entry into operation of the electrical infrastructure in Mosquito D’Horta in November 2023, making Ribeira Grande de Santiago the first municipality with a 100% electrification rate.

Mozambique  

Mozambique remains very active and steadfast in its commitment to reform the energy sector and accelerate and promote private investment. The strong presence of Mozambique at COP28 was marked by the announcement of the country’s energy transition strategy through investments in the amount of USD80 billion for the implementation of renewable energy and sustainability projects.

Several MoUs were signed by EDM, including for the development of a 100 MW solar photovoltaic power plant in Montepuez, a 60 MW solar photovoltaic power plant in Angoche and a 100 MW floating solar power plant in Chicamba.

In addition, several projects expected to further solidify Mozambique’s position in the renewable energy market in Africa and bring investment to the region have recently been announced, notably the construction of a 125 to 200 MW solar photovoltaic power plant in Matambo, with an estimated cost of USD150million to USD250million, and the 1,500 MW Mphanda Nkuwa hydropower project under a joint development agreement between the government of Mozambique and a consortium comprising EDF, TotalEnergies and Sumitomo, to be operated under a public-private partnership between these entities and EDM and Hidroelétrica de Cahora Bassa. The Mphanda Nkuwa project has the potential to increase available electricity production in Mozambique by more than 50%.

Other significant events in 2023 include the entry into operation of the 19 MW Tetereane solar plant in Cuamba, province of Niassa, the third largest solar power plant in the country, and with a 7 MW integrated energy storage facility.

São Tomé and Príncipe  

São Tomé and Príncipe continues to promote the development of renewable energy projects in the island country, with the announced goal of diversifying its energy mix and with a penetration of 70% for renewable energy generation by 2030.

During COP28, São Tomé and Príncipe reached an agreement with Portugal for the conversion of EUR3.5 million of existing debt held by Portugal into climate financing to be applied in São Tomé and Príncipe in the coming years, which may accelerate the deployment of renewable energy and sustainable solutions in the country.

An MoU signed on 23 August 2023 between the government, Global OTEC Resources and Enogia provides for the development of a 1.5 MW (with the possibility of an additional 8.5 MW in a second phase) pilot ocean thermal energy conversation (OTEC) platform to be installed in the Gulf of Guinea. The project will encompass a public-private partnership that will also count with SIDS DOCK, a United Nations organisation, as its institutional partner.

Timor-Leste 

In Eastern Asia, the renewable energy potential of Timor-Leste continues to be largely untapped. It is expected that the enactment of a renewable energy legislative regime will help foster the development of renewable energy projects in the country. However, this regime has not yet been approved.

Looking Ahead 

Portugal remains in the spotlight for renewable energy investment, with the much-anticipated offshore wind public tender now expected to take shape and be launched in 2024. The level of interest already demonstrated by the market both at home and abroad is widely regarded as a promising indicator of Portugal’s yet largely untapped offshore energy potential. Nonetheless, the parliamentary elections scheduled for March 2024 may delay the launching of the public tender procedures.

We also continue to observe considerable activity in the optimisation of existing projects in light of grid congestion, either through repowering, overpowering or hybridisation, as well as a growing interest for energy storage solutions and decentralised generation.

In Portuguese-speaking Africa, significant investments have been announced in several regions, and ambitious governmental plans in the wake of COP28 are expected to continue setting the tone for a sustainable energy transition and decarbonisation targets.