Analysis: Portugal’s offshore wind plans ‘could help push fossil fuels from grid’ – Aegir Insights

After announcing various targets in recent years, Portugal finally appears to launch its first offshore wind tender. The planned buildout could help to force lingering fossil fuels from the electricity grid, according to an analyst.

Carcavelos beach in Cascais, Portugal. (image credit Horacio Villalobos via Getty Images)

The Portuguese government had announced an ambition for 10GW of offshore wind capacity by 2030, but submitted a more modest proposal in its national energy and climate plan (NECP) to the EU earlier this year. The NECP instead targets 2GW of offshore wind by the end of the decade.

It also recently called for expressions of interest in its first offshore tender, with 3.5GW on offer.

Alba Teodoro Pujol, a market research analyst at offshore wind intelligence company Aegir Insights (right), told Windpower Monthly that Portugal’s offshore wind plans could push fossil fuels from the grid.

Pujol explained: “10GW of offshore wind could cover close to 90% of Portugal’s current electricity consumption, which is around 50TWh. However, 65% of the electricity already comes from renewable sources, mainly onshore wind and hydropower, and the remaining 35% from fossil fuels could be replaced by 4GW offshore wind."

She added that electricity however only accounts for around 20% of Portugal’s total energy consumption, which also includes heating and fossil fuel transportation. Increasing electrification could consequently mean a larger portion of the country’s future energy demands could be met by 10GW of offshore wind. 

“Without electrification and increased electricity consumption Portugal would likely have to export the energy either as electricity or converted into hydrogen or other power-to-x fuels,” Pujol (below) said.

The Portuguese Ministry of Environment and Climate Action recently published details of the tender, which would target three offshore wind zones previously identified along the country’s Atlantic coast.

The three sites up for auction (see below) are Viana do Castelo North (which could support 1GW), Figueira da Foz (2GW) and Lexiões (500MW). The deep waters at all three sites will necessitate floating offshore wind platforms. 

The Viana do Castelo area, with water depths of around 40 metres, already hosts the 25MW Windfloat Atlantic project, which was developed by a joint venture of oil major Repsol, floating specialist Principle Power and offshore wind developer Ocean Winds.

Aegir Insights-produced map of offshore wind zones identified by Portugal

Challenges ahead

Despite the Portuguese government’s ambition to auction and install gigawatts of offshore wind in the coming years, the rollout faces challenging conditions, not least following a corruption probe that this week forced the resignation of prime minister Antonio Costa and also implicated the country's environment and climate action ministry.

The additional technical challenges caused by the need for floating offshore wind also presents difficulties. 

“Supply chain is a central barrier for a large expansion of floating offshore wind in Portugal. All of Portugal’s offshore wind potential requires floating foundations due to the deep Atlantic waters, and Europe does not have an established supply chain for floating foundations yet,” Pujol explained. 

“Another key to achieving floating wind at scale will be the timely awarding of areas and adequate route to market with financial support, which is needed for the supply chain to emerge,” she said. 

A series of developers – including offshore wind developer Corio, Danish developer Copenhagen Infrastructure Partners (CIP), French floating specialist BW Ideol, German company BayWa and a pairing of SSE and Acciona – have expressed interest in bidding in the upcoming auction. 

The design of the auction is not yet known and could also present issues for the success of the tender, amid similar difficulties in securing the development of gigawatt-scale offshore wind projects in other recent offshore wind tenders such as those recently held in the UK and US. 

“Portugal could and should learn from the recent lessons in other markets on how to design support schemes and deal with inflation. Developers have proven that they are not afraid to walk away from unviable projects or boycott auctions,” Pujol said.