Portugal ”risks losing billions in offshore wind investment”

Portugal could lose billions in offshore wind investment to competing markets if it continues to delay its long-awaited offshore wind auction, APREN, the country’s renewable energy association has said today.

Speaking on World Wind Day, APREN stresses that developers remain interested in investing in Portugal’s offshore wind sector, but that uncertainty and slow decision-making are pushing them towards countries that move faster.

The warning accompanies the publication of APREN’s latest report, Wind Farms in Portugal, produced in partnership with INEGI – the Institute of Science and Innovation in Mechanical and Industrial Engineering.

According to the study, wind energy was expected to generate 13.5 terawatt-hours (TWh) of electricity last year – enough to meet 25.4% of mainland Portugal’s power consumption. But despite the sector’s ‘growing importance’, progress on offshore wind remains stalled.

Susana Serôdio, APREN’s Market Intelligence and Policy Coordinator, said the association continues to receive strong interest from international developers who have been monitoring Portugal’s offshore wind plans for years. However, she acknowledged that even if the auction process were accelerated immediately, the country’s first commercial offshore wind projects would still be unlikely to enter operation before the early 2030s.

“If everything moved quickly and a clear timetable was put in place, we would probably only see the first projects after 2030,” she said.

According to Serôdio, the biggest risk is that Portugal could miss a crucial investment window while rival markets move ahead.

“By delaying this decision while other markets are positioning themselves, we may be losing investment that could come to national projects and that will end up going elsewhere, as well as part of the value chain linked to offshore wind,” she said.

Spain, in particular, has emerged as a growing competitor.

“What we are seeing is that Spain is effectively always managing to stay one step ahead of us,” Serôdio concedes.

Portugal Urged to Follow European Models

APREN argues that Portugal should adopt successful financing mechanisms already being used (by Spain, and other countries) to encourage new wind developments.

Among options highlighted are Contracts for Difference (CfDs) – widely used in countries such as Germany – and long-term Power Purchase Agreements (PPAs), signed directly between renewable energy producers and electricity consumers.

“Germany and other markets are making a very strong commitment to CfDs for both new projects and repowering projects,” said Susana Serôdio .

Spain has also made significant use of PPAs, helping support the installation of around one gigawatt of wind capacity annually over the past three years.

In Portugal, however, the predominance of small and medium-sized enterprises creates challenges for developers seeking long-term contractual certainty.

Serôdio insists that APREN has repeatedly urged the government to introduce guarantee mechanisms that would make PPAs more secure and attractive to investors.

“We have discussed extensively with the government that some form of guarantee for these PPAs would be necessary, so that if something happened to that company there would be some security in place until another consumer could be found,” she explains.

Bottom line: if Portugal is really serious about expanding renewable electricity generation, it must wake up to the offshore potential, or risk seeing potential investment, jobs and industrial development choose competing European markets.

Sources: LUSA/ noticiasaominuto