Portugal is on the brink of holding its first solar auctions. Here, Pradeep Chakraborty discusses findings from a recent webinar entitled, ‘Solar Market Parity in Portugal: Status, Challenges & Opportunities.’
In contrast, Germany’s sun hours varies between 1,200 and 1,700 hours. Portugal also ranks high for political stability, regulatory quality and rule of law among the top 30 countries.
However, the electricity prices are one of the most expensive in all Europe.In 2018, Portugal has come out as the second costliest country in the EU. Electricity prices are only beaten for those charged in Germany.
PNEC 2030 is the Portugal national plan for energy and climate in 2030. Forecasts include 47 percent RES rise in energy consumption, 20 percent RES in transportation sector, -45 percent to 55 percent decrease in greenhouse gas emissions (GEE), +15 GW in new RES capacity, among others. By 2030, Portugal electricity sector should reach 28.6-31.7 GW, with solar reaching 8.1-9.9 GW. Solar would grow 22-27 percent by 2030.
Portugal and Spain defined the increase of total installed capacity in interconnection from 8 percent to 15 percent until 2030. The predicted interconnection between Portugal and Morocco is also meant to increase the reliability and the export capacity of the electrical grid.
As of 2018 July, Portugal had 800 MW of solar installed capacity. The utility scale is still close to 600 MW. 31 percent of all power generation is likely to be from renewable sources by 2027. There should be 7 GW of solar energy.
Solar projects in Portugal
Let’s get a general overview about projects that are licensed, submitted, on a waiting list and under-development. As of now, 1,240 MW projects are already licensed. About +5 GW projects are under development. The actual available grid capacity is +3 GW. The expected new grid capacity is +1.7 GW.
Solar PPA market utility scale has been established between IPP and energy traders/retailers. There are new market entrants and players are trying to increase the share. The game is just beginning.
As an example, the Alcoutim solar plant has 218,8 MWp, with WELink being the independent power producer (IPP). The offtaker is Audax. It has 20 years PPA. Evora Solar Plant has 28,8 MWp, with Dynavolt/Mirova/Hiperyon being the IPP. Axpo Iberia is the offtaker. It has 10 years PPA.
As for the commercial and industrial (C&I) loans, an excellent market driver is the high power prices (>100 EUR/MWh). There produce very interesting project returns, but there are also many legal barriers. It is better to be focused ‘behind the meter’.
The market needs new and innovative ideas. The market forces are still tied up to a ‘monopoly mindset’ and subsidy dependency. Liberalization has a long way to go. There is need for more specific regulation to unleash this market. The Green energy certificates will help developing PPA. There is a great opportunity for developing this huge market.