Global Economics

Portugal Makes Waves in Alternative Energy


Portugal's sunny climate and picturesque coastline have long been a magnet for tourists. But now, those natural attractions are drawing a different kind of attention. From solar photovoltaics to electricity generation from wind and ocean waves, some of the world's most ambitious and innovative renewable-energy projects are taking shape in this historically poor country of 10.5 million on Europe's western rim.

In a farming region 125 miles southeast of Lisbon, General Electric's (GE

) GE Energy Financial Services unit is teaming up with PowerLight, a Berkeley (Calif.)-based solar-electric equipment maker, to build the world's largest photovoltaic-generation project. The $75 million project, announced on Apr. 27, calls for construction of an 11-megawatt powerplant that will start operating next January, producing enough energy to light and heat 8,000 homes.

The Portuguese government is expected to award a contract this summer for the construction of more than $1.3 billion worth of wind turbines around the country, enough to provide power for 750,000 homes. And the world's first commercial "wave farm," which will generate electricity from ocean waves, is expected to start operation later this year off Portugal's northern coast.

CREATING RESOURCES. Cylindrical floating generators built by a Scottish company, Ocean Power Delivery, are expected to provide enough power to supply 1,500 households. The facility will be operated by Enersis, a unit of Semapa, a Portuguese developer of hydroelectric and wind-generation projects.

These and other facilities -- including a planned new hydroelectric dam on the Sabor river -- reflect Portugal's push to reduce its dependence on the imports that now supply 86% of the country's energy needs. "Portugal doesn't have the luxury of having conventional resources" such as oil, gas, and coal to generate electricity, says Andrew Scott, an Ocean Power Delivery engineer who's overseeing the wave project. "But it does have some very good renewable resources."

Generating electricity from the sun, wind, and waves also can help Portugal curtail greenhouse-gas emissions. Because of the country's rapid economic development after its 1986 entry into the European Union, emissions increased almost 37% from 1990 to 2003, one of the fastest growth rates in the world. GE and PowerLight estimate that their photovoltaic project will reduce annual greenhouse-gas emissions by 30,000 tons.

NOT ALONE. To encourage such projects, the Portuguese government is providing incentives ranging from R&D grants to preferential tariffs for electricity generated from renewable sources. For example, the operators of the ocean-wave farm will collect more than 25 cents per kilowatt hour for electricity they supply to utility companies -- more than four times the rate for electricity generated from conventional sources.

Many European countries, facing record-high fuel prices and concerns over global warming, are enacting similar measures (see BW Online, 4/6/06, "Europe Opens the Tap for Clean Energy").

For now, few if any of Portugal's alternative energy projects would be economically feasible without government help. But generating costs will come down as new technologies are tested and made more efficient.

A SIGHT TO SEE? And the projects' developers say they're on board for the long haul. "We hope this project clearly demonstrates that solar energy is a promising alternative power source that should be freed from roadblocks," said Sergio Costa, co-CEO of Portuguese alternative-energy group Cataventa, in a statement announcing plans for the photovoltaic plant. Cataventa developed the project and is providing management services.

Sunshine and scenery will remain the big attractions for most people visiting Portugal. But maybe soon they'll consider adding a visit to a state-of-the-art renewable energy plant to their sightseeing itinerary.


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