Energy Policies of IEA Countries: Portugal 2016
Despite the difficult economic climate, Portugal has continued to develop and reform
its energy policies since the previous International Energy Agency (IEA) in-depth
review in 2009. These changes have resulted in greater economic activity in the energy
sector, increased renewable energy deployment, further market liberalisation and greater
emphasis on energy efficiency in policy making.
A new strategy emphasising renewable energy and energy efficiency has focused efforts
on meeting national and European energy policy objectives, as Portugal seeks also
to lower investment costs and greater national competitiveness. The new strategy includes proposals
to reinforce interconnections with transnational European electricity and natural
gas networks, and measures to promote economic and environmental sustainability. The
strategy should accommodate regular independent reviews and monitoring tools to examine
implementation of energy policy to ensure that it remains relevant and cost-effective.
Following the economic crisis, Portugal was left with a substantial tariff deficit
as retail electricity tariffs were set below costs, including subsidies to renewables.
Portugal’s plan to address the tariff deficit was the outcome of a negotiation process
with industry stakeholders. Eliminating the tariff debt by 2020 is a significant challenge.
The government must ensure swift implementation of all reform proposals and continue
its efforts to identify further potential cost-saving measures in the energy sector.
This review analyses the energy policy challenges facing Portugal and provides recommendations
for further policy improvements. It is intended to help guide the country towards
a more secure and sustainable energy future.
Published on May 24, 2016
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