The DGE requires developers to finalise all projects processed under the new regulation and to submit them by November 15, together with deposits of EUR 2500 for each MW planned. "There's now a sense that things are finally moving," says Antonio Sa da Costa of the national renewables association, Asociaçao Portugesa de Productores Independentes de Energia Eléctrica (APREN). He believes building on the 2100 MW could begin by 2004 and that much of the 1000 MW processed by the old law should be well on the way to completion by then.
But APREN questions DGE's decision regarding grid capacity. "The 2100 MW is supposed to be what the DGE estimates as the limit if wind power is not to destabilise the grid," says Sa da Costa. But if a technical report exists to back the estimate, the DGE has so far kept it under wraps. APREN has now commissioned its own grid evaluation report. "We think the technically viable figure will be closer to 4000 MW," says Sa da Costa.
Portugal's grid has around 9500 MW of generating capacity today. By 2010 the figure is expected to be close to 12,000 MW. Sa da Costa says new technology could allow installed wind capacity to reach around 30% of the generating mix, instead of the 16% proposed by the DGE.
Meantime, it is not certain how much of the 2100 MW will turn into solid projects by the November deadline. "It's all a case of negotiations among developers," says Sa da Costa. "If I have three projects in different locations each totalling 30 MW and the DGE grants me connections for only 10 MW at each site, I would prefer to push for one large 30 MW development instead, by exchanging connection rights with neighbouring developers. A lot now rests on these negotiations, especially among the six main developers."
One danger is that large developers could end up with a series of cut-down projects in remote locations, with diminished returns not justifying long and costly grid connection lines. A solution to this problem is already appearing, however. Some developers with no land-lease agreements were granted connection points. Given that many of them have little chance of eventually clinching land leases, they have begun selling connection rights to other developers within the same connection catchment area.
The DGE's concession lists have also confirmed who the main players are. Six out of Portugal's seven largest developers have received connection rights of 1550 MW for projects of 300-350 MW each. The key developers are: Enersis, Portugal's largest wind operator with 65 MW online; Enernova, the renewables wing of state utility Electricidade de Portugal; Siif, the renewables developer of French utility Electricité de France, Generg and two Spanish companies, Gamesa and Energias Ambientales SA, the latter via its Portuguese branch, Tecneira.
The only big surprise was for British based Renewable Energy Systems (RES), widely expected to get one of the biggest slices. Instead, the company obtained less than 50 MW. "Simply a case of bad luck," says Sa da Costa, explaining that RES's development areas had attracted a hoard of smaller developers thus spreading the final connection concession thinly. RES, however, has around 150 MW at an advanced stage preceding the new law, which gives it greater bargaining power to clinch connection rights from neighbouring developers. Just how much RES and other developers will put forward for approval will be revealed after November.