Renewable energy and carbon capture in Portugal

Renewable energy and carbon capture

Give details of the production and consumption of renewable energy in your country. What is the policy on renewable energy? Describe any obligations on the state and private parties for renewable energy production or use. Describe the main provisions of any scheme for registration of renewable energy production and use and for trade of related accounting units or credits.

According to the 2018 data from the Portuguese energy network operator REN, renewable energy accounted for 52 per cent of energy production in Portugal, distributed across the following sources:

• wind: 23 per cent;
• hydro: 22 per cent;
• biomass: 5 per cent; and
• solar energy: 2 per cent.

Renewable energy sources benefit from an offtake right. Hence all energy produced by these facilities is output to the grid. This system is also behind the increasing relevance of energy in Portugal’s generation mix.

In addition, Portuguese law provides for the issuance of tradeable certificates attesting that the energy is generated by renewable sources. However, to date no such certificates have been issued and a market for these certificates does not yet exist.

Describe, in general terms, any regulation of wind energy.

Wind energy has been on the rise in Portugal since mid-2000, with several public tenders for the awarding of injection capacity taking place.

The Portuguese regulations on wind energy are contained in the following statutes:

• Ministerial Order 243/2013, of 2 August sets forth the injection capacity attribution rules and the licensing regime for electric facilities;
• Decree-Law No. 172/2006, of 23 August (as recently amended by Decree-Law No. 76/2019, of 3 June, sets forth the public service electric grid organisation and functioning framework;
• Decree-Law No. 94/2014, of 24 June sets out the rules on the over-equipment electric facilities; and
• Decree-Law No. 189/88, of 27 May, as amended, among others, by Decree-Law No. 168/99, of 19 May, Decree-Law No. 339-C/2001, of 29 December, Decree-Law No. 33-A/2005, of 16 February and Decree-Law No. 225/2007, of 31 May, outlines the rules applicable to licensing and tariffs of renewable energy facilities.

Wind energy is currently remunerated though a market pool scheme (without prejudice to wind farms licensed in the past potentially benefiting from a feed-in tariff).

Wind farms must be awarded production and operation licences by the Directorate-General for Energy and Geology following either a public tender or legally established administrative procedures. In addition, wind farms may also have to be subject to environmental licensing procedures.

Describe, in general terms, any regulation of solar energy.

Solar energy is a field of recent development in Portugal, notably further to the 2019 auction for the awarding of 1,400MVA of injection capacity in different predetermined areas of Portugal, through remuneration at a fixed fee or at market prices.

The statutes referred to in question 20 also apply to solar projects. In addition to these, Order No. 5532-B/2019, of 6 June, regulating the awarding of 1,400MVA of injection capacity in the public grid is also noteworthy.

Solar plants do not currently benefit from feed-in tariffs (without prejudice to solar plants licensed in the past potentially benefiting from a feed-in tariff).

Describe, in general terms, any regulation of hydropower, geothermal, wave or tidal energy.

In addition to the statutes set out in question 20, the following diplomas apply to hydropower, geothermal, wave and tidal energy:

• Decree-Law No. 110/2010, of 14 October sets out the hydraulicity accounting and indexes;
• Decree-Law No. 226-A/2007, of 31 May sets out the water resources use framework; and
• Decree-Law No. 23/2010, of 25 March sets out the remuneration regime applicable to cogeneration (as amended by Decree-Law No. 68-A/2015, of 30 April).

Further to these rules of direct application, there are several governmental plans on the use of hydropower and this has long been the most relevant non-fossil power source in Portugal.

In addition to the electric and environmental licensing procedures applicable to hydro plants, their operation requires a water use title, to be issued by the APA IP.

Describe, in general terms, any regulation of production of energy based on waste.

The general rules on the power generation industry referred to in questions 20-22 apply to the waste-to-energy sector, as well as the specific legislation on urban waste treatment and disposal.

Describe, in general terms, any regulation of biofuel for transport uses and any regulation of biomass for generation of heat and power.

In addition to the statues set out in question 20, Decree-Law No. 64/2017, of 12 June, as amended by Decree-Law No. 120/2019, of 22 August, regulating a special and extraordinary regime for the installation and operation of biomass plants by municipalities or associations of municipalities, is also relevant.

Describe, in general terms, any policy on and regulation of carbon capture and storage.

Decree-Law No. 60/2012, of 14 March establishes the legislation and requirements for the storage of carbon in Portuguese soil, which is an activity subject to licensing and environmental licensing procedures.