The start of a new era

2020 was a year of progress and opportunities in the renewable electricity sector. It began with the announcement of the Green Deal, a package of measures geared to achieving carbon neutrality in Europe by 2050, in response to the European Parliament's declaration of a climate emergency, demanding greater efforts in reducing greenhouse gas emissions to at least 55% below the 1990 levels by 2030.

The National Energy and Climate Plan for 2030 was also approved, which specifies a target of 80% for the production of electricity from sources of renewable energy by 2030, together with an increase in the installed capacity of all renewable energy technologies, which should reach a minimum total of 28.7 GW based on the current 14.5 GW.

Last but not least, the National Strategy for Green Hydrogen was approved, which foresees the installation of 2 to 2.5 GW of electrolyser capacity (electrolyser power equivalent) by 2030, with the aim of producing hydrogen using electricity generated from sources of renewable energy (green hydrogen).

Another noteworthy occurrence in 2020 was the auctioning of photovoltaic solar capacity, involving the allocation of 670 MW, 483 MW of which were of the new type intended for storage projects, once again at equivalent rates that seem to have surprised the sector. Pursuant to the Government´s clear commitment to an auction system that helps the electricity system to profit, there was, as in 2019, a race for the scarce number of connection points to the electricity grid, which resulted in high levels of competitiveness in order to guarantee a connection point to the RESP (Public Energy Network) and to generate renewable electricity in the country.

In response to the crisis caused by the pandemic, the European Union has created a financing package as a basic condition for economic recovery. This package consists of 1.824 billion euros, 1.074 billion of which is to be allocated to the scope of the Multi-annual Financial Framework for 2021-2027 and 750 billion to the Next Generation EU, 30% of which is destined for decarbonisation, which represents a major opportunity for development in the renewable energy sector in Europe and Portugal.

As for the production of electricity, all the generating plants in mainland Portugal produced a total of 49,324 GWh of electricity in 2020, 61.7% of which came from a renewable source. This total was largely accounted for by hydro and wind technology, which registered 28% and 24% respectively.

The production of electricity from fossil fuels fell by 5.6% compared to 2019, due to a 32% reduction is the use thereof at generating plants, with an emphasis on coal-powered plants, at which the rate of use of these fuels was 15%. There was also a significant improvement in the production of electricity using photovoltaic solar power as a result of the commissioning of new plants, which added 124 MW to the country´s overall installed capacity.

2021 is likely to be the year in which a new era begins, not only for the renewable energy sector, but for the entire economy and society in general. After the total, unimaginable stagnation we have all been undergoing due to the impact of Covid-19, the new year brings with it a new perspective for society and economic recovery, which will require a process of restructuring to make us more independent, but which consolidates the vital role of a united Europe at the same time.

This step places energy transition and climate neutrality at the core, as drivers of transformation for a more sustainable and resilient society, one which requires key structural pillars: reindustrialisation, digitalisation and the direct and indirect renewable electrification of the economy, consistent with the enhancement of the expertise and knowledge of the Portuguese people and of resilience, innovation and research.

“2021 is likely to be the year in which a new era begins, not only for the renewable energy sector, but for the entire economy and society in general”

One of the areas that should see major progress in the near future is that of mobility. The transport sector in the European Union (EU) and Portugal is still largely dependent on fossil fuels. Europe is currently responsible for a quarter of greenhouse gas (GHG) emissions, 71.7% of which arises from road transport, and these figures have shown an upward trend. The scenario is similar in Portugal, where the transport sector ranks second among the worst offenders, registering 25.6% of GHG emissions in 2018.

The European Commission (EC) has been implementing ambitious political agendas, and has set an emission reduction target of 30% for 2030 (in comparison with 2005) for the sectors not covered by the European Union Emission Trading Scheme, which includes transport, and which has an effect on binding national goals to be included in the 2030 Framework for Climate and Energy drawn up by the Member States.

In the likelihood that electric vehicles will, in the short to medium term, be the most cost-effective solution for individual passenger transport, there is still a long way to go to guarantee these plans are fulfilled. Increasing the supply of vehicles in the automobile market, the creation of charging and supply infrastructure, the sustainable production of batteries and the creation of solutions for recycling them in Europe are all of paramount importance. It is estimated that around one million public filling and charging stations will be needed for the approximately 13 million zero or low-emission vehicles on EU roads by 2025.

Despite the tax incentive policies for the purchase of electric vehicles, Portugal´s electric vehicle charging infrastructure is still precarious, which discourages potential users from switching to this mode of transport. There were around 84,615 electric vehicles on the road in Portugal in 2019, with only 2,252 charging stations. Moreover, in addition to the fact that many of these stations are low-power, with long charging times, some of them are often out-of-order due to improper use and poor maintenance. Nevertheless, the number of rapid charging stations has been increasing, with around 250 in operation and a further 80 currently being installed or planned. The slow adaptation of buildings and residential complexes for the implementation of vehicle charging points is also a negative factor in the mind of users, whose only option ends up being the public charging network.

In view of the high cost of an electric vehicle, European countries have launched incentives for the purchase thereof. Portugal is not among the European Top-10, however the 2020 Incentive to promote the Introduction of Low-Emissions Vehicles, within the scope of the Environmental Fund, amounts to 4 million euros, 1 million more than in 2019. 2.7 million euros of this amount are earmarked for passenger car incentives, € 3,000 for individuals and € 2,000 for legal entities. An additional incentive is the fact that parking for electric vehicles is free or significantly discounted in many towns and cities. Vehicle charging was free from 2010, the year in which the Mobi.E network was launched, up to July 2020. Rapid charges have been paid for since 2018, in accordance with the price stipulated by the Electric Mobility Electricity Trader (CEME).