Energy Security, and the Economic Realities Driving Clean Energy Policy in Portugal

by Devin James Benavidez

Leaders in Portugal have taken the initiative to reduce their country’s dependence on fossil fuels and harness its multifarious sources of clean energy. Five years ago, Portugal received only 17 percent of its electricity from renewable sources, but through aggressive national policies, that number has risen dramatically.  According to a report done by Eurostat, close to 45 percent of Portugal’s electricity will come from renewable energy sources in 2010. Lacking domestic reserves of traditional fossil fuels such as oil, coal, and natural gas, leaders in the Portuguese government took advantage of the opportunity to produce energy domestically. Harnessing Portugal’s abundant sunlight, wind, and hydro power, leaders in Portugal have established a paragon of large-scale clean energy production. They have also effectively demonstrated that a clean energy transition can be achieved in a relatively short period of time.

Portugal has focused primarily on expanding their wind and hydro power production, but has also worked to facilitate the growth of solar power and has made strides to promote the development of wave power capacity. Portugal was situated in a strategic position to become a leader in renewable energy policy because it has vast untapped resources of cost-effective sources of clean energy like hydro and wind power. The Portuguese government began this transition toward a more sustainable energy infrastructure in 2001 when it launched a new energy policy called the E4 Program (Energy Efficiency and Endogenous Energies). This program consists of a set of multiple, diversified measures aimed at promoting a consistent, integrated approach to energy supply and demand. Government officials claim that this energy transformation has not led to an increase in taxes or public debt because the new technologies, which require no fuel, have replaced systems that required the purchasing and importing of natural gas and oil.  

Portugal is not the only European country taking great steps forward in fostering the development of clean energy production. According to a recent report done by IHS Emerging Energy Research, an energy consulting firm from Massachusetts, Ireland, Denmark and Britain are also on track to get 40 percent or more of their electricity from clean sources by 2025. The lack of naturally occurring fossil fuels in Europe combined with the European Union’s emissions trading system, which penalizes industries for excessive CO2 emissions, have made renewable energy in Europe a viable and cost-effective option. The energy policy shift in many European countries toward using domestic sources of energy alleviates, at least modestly, the need to import oil and natural gas from abroad. This will ensure a more secure and stable energy supply for Europe in the future.

By 2020, Portugal hopes to reach its goal of obtaining 60 percent of its electricity, and 31 percent of its total energy, from renewable sources. Although the aggressive clean energy policies in Portugal have been driven largely out of economic necessity, the clean energy sector currently provides jobs for tens of thousands of people. In addition, some of Portugal’s largest clean energy companies have become global players, including EDP Renovaveis, the third largest  company producing wind-generated electricity in the world. Portugal’s aspirations for abundant domestically produced clean energy has established an influential framework that can be used to inspire other countries to consider aggressive clean energy policies of their own.  

Devin Benavidez is a Research Intern at Bridging Nations in Washington, D.C.