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Portugal still remains much more a potential wind market than an actual one, despite a recent construction spurt and an impressive accumulation of viable projects. The country will soon have 3000-3500 MW of connection permits lined up, but how much of this goes up, and how soon, depends largely on a shift in attitude from reluctant regional environmental departments.

Portugal's installed wind capacity remains deceptively modest with just 200 MW operating or about to become so. More than a third of that, 66.65 MW -- was built last year alone, however, and a further 54 MW is building. Calls for tender for another 154 MW are also on the table, according to Alvaro Rodrigues of Oporto university's industrial technology department, Insituto da Engenharia Mecanica e Gestao Industrial (INEGI), a project auditor.

The upturn in developer fortunes does not stop there. The recent tenders are all from a backlog of around 1000 MW in mature projects which the national energy department, Direcçao Geral de Energia (DGE), has pledged to fast track. Meanwhile, DGE is soon to finalise grid connection concessions for a further 2500 MW from the 7000 MW applied for under Portugal's "clean-slate" law, enforced in January 2002 and applicable to less mature projects (“uåX˜äŠÊ˜·³Ç, March 2002).

"The market is finally moving and developers are optimistic," says Rodrigues. Last year's grid law put DGE at the helm on connection processing, taking over from Portugal's sole utility and distributor, Electricidade de Portugal (EDP), previously accused of tying applications in reams of red tape. At the same time, the economy ministry's new tariff law has placed Portuguese wind producers among Europe's top three in terms of kilowatt-hour payments, according to the European Renewable Energies Federation.

Political goodwill

The tariff law's sliding scale is an incentive for producers to lower their sights away from the high winds on environmentally sensitive mountain peaks to less windy and less sensitive sites (“uåX˜äŠÊ˜·³Ç, July 2002). The environment department has since stopped being overtly wind sceptical and even paid gushing lip service to more development.

Such injection of political will from above is playing a vital role. "EDP now realises that the wind development process is irreversible," says Rodrigues. He adds that grid operator Rede Eléctrica Nacional (REN) is working enthusiastically in collaboration with INEGI to study ways of absorbing the 3500 MW of wind capacity that could be online before 2010. Some insiders believe that central political decisiveness has come as a relief to both EDP and REN, as it relinquishes them of responsibility for any technical problems arising from injecting such large amounts of unpredictable wind into the grid.

But while optimism reigns, there are enough obstacles to temper developer enthusiasm. "Despite the good prospects the reality is what we have online, which is nothing compared to Spain," says Carlos Pimenta of one of Portugal's largest developers, Siif Energy. "We neither lack good winds nor good sites," he says. Pimenta also says the tariff, averaging EUR 0.081-0.082/kWh, is good. "The biggest constraint is slow processing," he says. Indeed, most of the projects now building date back to the mid-1990s. "In Siif's, case the average processing time is five years," says Pimenta.

The main fear for developers now is the environment department's "fundamentalist" local offices. "The central department's attitude is very positive but this is not filtering down to technicians at regional level," says Pimenta. "Technicians will find 1001 different things wrong with a project if they want to," adds Antonio Sa da Costa of Portugal's renewables association APREN. Regional offices may be forced to toe the line. Last month, an audit on national CO2 emissions confirmed Portugal to be in flagrant breach of its Kyoto Protocol commitment, by as much as twice the agreed amount.

Developers hope the DGE will be calling for more wind projects once it finishes processing the current batch of applications. Such a call will be essential "sooner or later," according to Pimenta. He claims that latest electricity demand forecasts indicate the need for an extra 1000 MW -- on top of the 3000-3500 MW previously targeted for 2010 -- if the country is to comply with 2001's European Union renewables directive. Portugal's commitment under the directive is to produce 39% of its electricity from renewables sources by the end of the decade. "If we add Kyoto, the wind capacity requirement will be even bigger," says Pimenta.

Among the most notable projects from the 154 MW at tender stage is the 30 MW Marao plant from developer Finerge, half controlled by Enercon's Portuguese dealer, Gellweiler. Enersis is also studying offers for five projects totalling 36 MW. Enernova will soon call for two projects, Vila Nova and Açor, each at 20 MW. Small hydro leader, Generg, is also expected to decide on the supplier for a 10 MW project, its first permit from the 500 MW it claims to have in mature projects. Similarly, Siif, with a further 20 MW currently under tender, has a mature portfolio totalling 300 MW, according to Pimenta.

Meanwhile, the sector expects the go-ahead to three other major projects throughout 2003. The largest is 95 MW for the Coimbra region by British developer Renewable Energy Systems. Spanish developers Gamesa and Eyra are also expected to win approval for projects totalling 85 MW and 45 MW, respectively. Gamesa has sold all 85 MW, plus a further 167 MW in the pipeline, to Belgian utility Electrabel (which also owns 45% of Generg).