Across Portugal, just under 740 MW of wind is now under construction, according to Porto University's Instituto de Engenharia Mecanica e Gestao Industrial (table). On average, the cost per megawatt installed is EUR 1.18 million, reports the government's Directorate General of Energy and Geology (DGEG). Among turbine suppliers, Germany's Enercon has the largest market share of 44.9%, followed by Denmark's Vestas with 18.3% and Spain's Gamesa with 12.9% (table).
Portugal offers a range of incentives to wind developers, chief among them mandated purchase prices and a requirement that all power output be bought by the electricity company. Wind plant supplying regions of high electricity demand receive a rate of EUR 0.073/kWh, while those with low demand get a higher rate of EUR 0.074/kWh -- a policy designed to encourage development outside urban centres. Both rates are linked to the inflation index and run for 15 years for each new project, after which electricity is sold on the open market together with associated green certificates, for going market rates.
Small projects also receive one-off capital grants, available through 2013, covering 35% of project investment up to EUR 250,000 a project, as well as government loans of up to EUR 75,000 with five-year interest payment holidays, and a reduced sales tax rate on wind turbines of 12%, compared to the normal rate of 20%.
Alongside the market incentives, the Portuguese government has also awarded a series of wind power development concessions in a major competitive tendering process started in 2005, split into three stages. The aims of the complex program have largely been achieved: a wind turbine manufacturing industry has been kick-started in Portugal along with large-scale wind farm construction. Concessions have been awarded for 1800 MW of wind development using turbines made in Portugal, with the last 200 MW awarded to a series of small projects late last year (Windpower Monthly, January 2009). Large winners in the tender receive the mandated purchase prices, while several successful bidders in the third and last stage also benefit from the incentives for small and mid-sized businesses.
A leading source of new wind power capacity is the ENEOP-Eólicas de Portugal consortium, which won the first stage of the government tender and is developing 1.2 GW in 48 wind farms across the country through 2011 at a cost of EUR 1.5 billion. The combined capacity is forecast to annually produce 2.7 TWh, representing 25% of Portuguese wind power next year.
Another consortium, Ventinveste, led by Galp Energia, which won stage two of the concession process, is developing 480 MW of wind, with construction work beginning in 2009 and ending in 2013. The third and final stage of the wind auction awarded 200 MW in 13 lots, with the biggest, 50 MW, going to Unión Fenosa and Enel partnership Eufer. The companies will invest about EUR 70 million in two wind farms in the area of Torre de Moncorvo and commissioning is expected by the end of 2010.
Outside the government concession program, several companies are pursuing major projects. Spanish utility Iberdrola is spending EUR 250 million to expand its portfolio of installed wind power capacity in Portugal to 200 MW. Its Catefica and Alto Monção wind farms, with a combined capacity of 56 MW, are in operation and construction of three further projects is expected to wrap up by the end of the year. At the same time, domestic wind power firm Martifer is developing 18 MW, 12.6 MW of it at the Santa Cruz wind farm slated for completion this month. Iberwind, formerly known as Enersis and until recently owned by Australian asset manager Babcock & Brown, is building 156 MW. And Endesa Portugal, a unit of Spanish utility Endesa, is building more than 880 MW of wind power plant across Portugal due to begin operation by 2012.
Iberwind is currently the lead wind plant owner in Portugal, operating 19.8% of existing wind power capacity, followed by Enernova, a subsidiary of Portuguese national utility EDP with 17.2%; Portuguese renewable energy company Generg with 15.4%; the Empreendimentos Eolicos do Vale do Minho consortium with 9.7%; and EDF EN Portugal, a subsidiary of France's EDF Energies Nouvelles, with 5.8% (table).
The Portuguese districts with the most installed wind power are Viseu, with 653.3 MW, Castelo Branco, with 386.5 MW and Viana do Castelo at 308.8 MW (map). According to DGEG, wind energy production in 2008 was up 42% on the previous year. Small wind plant play a big role in Portugal, with 39% of the installed capacity located in wind farms of 25 MW or less, reports DGEG.