August 10, 2010
Portugal

Portugal set to cut feed-in tariffs

Branislav Pekic, Windpower Monthly Magazine, 01 August 2010

The Portuguese government has announced that it will review the existing feed-in tariff mechanism following calls that the subsidies are excessive and contribute to the increase of electricity prices to final consumers.

The tariff review is anticipated in Portugal’s National Energy Strategy 2020, published in June. It will consider the contribution of new technologies in the production of renewable energy, as well as the costs associated with their development.

The support mechanism is voluntary and is managed by the Directorate General for Energy and Geology (DGEG), part of the Ministry of Economy. Once a wind project is granted permission to connect to the grid, there is no limit to the annual production that benefits from the tariff.

However, the total production that can benefit from the tariff is limited to an overall value of energy or a defined number of years, whichever is achieved first. Once these limits are achieved, the installations start selling their production under a liberalised regime.

Currently, the average indicative tariff for wind is EUR74-75/MWh, with a validity of 33GWh/MW or 15 years.

High-profile opposition

In April, a group of 33 well-known Portuguese economic, business and academic personalities published a manifesto for a new energy policy warning that subsidies for renewable energy cannot be permanent.