"At an educated guess, it looks like a further 400-500 MW will get full licenses this year and a similar amount should come online annually in the years to come," says Antonio Sa da Costa of renewables group Associação Portuguesa de Produtores Independentes de Energia Eléctrica de Fontes Renováveis (APREN ).
Around 75% of the 460 MW in construction are among the 900 MW of projects well advanced in the permitting process prior to the new law. "These older projects should all be complete within three years," says Sa da Costa. By 2010, newer projects under the clean-slate regulation will also be turning, bringing Portugal's total wind power generation to 3300 MW.
The market is driven by a regulated sliding-scale wind tariff. The rate for the first 2000 hours of generation is EUR 83/MWh, progressively falling for further production. The diminishing returns aim to forestall over-development of the best wind sites, mostly situated in Portugal's environmentally sensitive high grounds. The tariff puts average earnings at EUR 72/MWh, placing Portugal among the best three payers for wind power in Europe, according to the European Renewable Energy Federation.
There is more to come. The government has promised a tender in the first half of 2004 for sites with a potential of 500-1000 MW. APREN believes the concession will be closer to the high end of the scale as more wind power is needed to meet the EU's renewables directive, which sets a target for Portugal of 39% of its power from renewables by 2010.
Sa da Costa says that snowballing political support mainly derives from the government's commitment to the EU directive. The 39% target includes large hydro production, currently the source of about 25.5% of Portugal's electricity. APREN's estimate for other renewables generation is 2.4% from small hydro and 1.1% from wind, leaving a 10% gap to the directive's target. With the electricity growth rate running at 5.9% this is a "huge task" says Sa da Costa. "We will approach the target by 2010 but will remain one or two percentage points short." More wind power would nudge the figure up.
Portugal's wind turbine technology to date has all been imported. The government is now pressing for at least one manufacturing facility to be set up in the country. Following the Spanish model, its next tender will call for joint developer-manufacturer industrial investment plans.
Leading developer Enersis says that three major manufacturers have already knocked on its door with a view to drawing up a strategic investment plan. The company states that it knows of other developers talking to other turbine suppliers too.
This year's government tender aside, Sa da Costa says that recent licensing has put Portugal's wind industry "on track." Until 2002, the developers had been struggling against a tangle of administrative red tape and grid bottlenecks. The clean-slate law got rid of over 4000 MW of projects on the borderline of viability, relieving the administration of much of its processing burden.
Political backing is also helping surmount one major remaining obstacle, namely the fierce resistance to wind from local environmental departments. All wind projects must clear the environmental impact assessment (EIA) stage. Developers have long since accused local environmental officers of dragging out the process with overzealous EIA requirements, especially in nature reserves. "The central government's attitude is very positive but this is not filtering down to technicians at regional level," said Carlos Pimenta of developer Siif last year. Siif is the wind development arm of French utility EDF.
Portuguese president Jorge Sampaio recently countersigned an agreement between APREN and the Instituto da Conservaçao da Natureza (ICN), which controls nature reserves. ICN agrees to co-ordinate EIA assessment and to help developers site turbines for minimum disturbance to the ecology.
Whether the agreement will help or not remains to be seen, says Sa da Costa. "One possible major obstacle could come from the fact that everybody is going nuts over reports abroad regarding bat deaths from turbine activity," (Windpower Monthly, December 2003) he says. "Such fears could impose extensive bat monitoring requirement on developers." But bats aside, Sa da Costa says the overwhelming feeling for Portuguese developers now is one of "doing business, rather than fighting for the right to do business."