Portugal is planning to wind down its subsidies for renewable energy generation in a bid to tackle high electricity prices.

 

The country's Secretary of State for Energy, Jorge Seguro Sanches, told Reuters that subsidies for clean energy generation will gradually end as contracts start expiring from next year. He stressed there would be no sudden changes to legislation or changes to existing contracts.

 

Sanches also said the eight-month-old Portuguese administration would also continue to promote clean energy and back closer power links with the rest of Europe and Morocco. Late last month Portugal and Morocco signed two agreements focused on accelerating the rollout of clean energy in Morocco.

 

Sanches insisted the falling cost of renewables means that market prices are now often much lower than the subsidised power prices paid to developers under long-term contracts. He said subsidies are pushing electricity rates up in major cities such as Lisbon, which has the highest residential electricity prices adjusted to consumer purchasing power parity of any European capital, according to a July 2016 study.

 

It is unclear whether the move will also apply to subsidised fossil fuel generators. Next year a contract supporting energy from 1,200MW coal plant is due to expire, alongside 60MW of wind contracts.

 

The Portuguese government claims some renewables can now exist commercially without subsidy, last month authorising 180MW of new solar capacity under the market system with no government support.

 

However, in a recent interview with PV-Tech magazine José Manuel Medeiros Pinto, general secretary of the Portuguese Renewable Energy Association, said it was "impossible" for solar plants to survive without subsidy under the current market conditions.

 

Portugal has become one of renewable energy's brightest success stories in recent years. In May it garnered headlines around the world for running entirely on renewable energy for four days straight. Last year it produced 48 per cent of its electricity from renewable sources. (businessGreen)