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Energy Policies of Portugal 2009

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Energy Policies of Portugal 2009 INTERNATIONAL ENERGY AGENCY Energy Policies of IEA Countries Please note that this PDF is subject to specific restrictions that limit its use and distribution. The terms and conditions are available online at www.iea.org/about/copyright.asp PORTUGAL 2009 Review Energy Policies of IEA Countries PORTUGAL 2009 Review Portugal has made considerable efforts to strengthen its energy policy since the last IEA in-depth review in 2004. A large number of IEA recommendations have been successfully implemented, including greater diversification of the energy mix and increased energy policy co-ordination. A new National Energy Strategy, published in October 2005, identified three principal means for meeting Portugal’s policy goals: the promotion of renewable energy, increased energy efficiency and competition in energy markets. Over a short period of time, Portugal has become a leader in terms of renewable energy development. Well-designed incentive mechanisms and the adoption of ambitious targets ensure hydro, wind and other technologies will continue to grow. The National Action Plan for Energy Efficiency was enacted in 2008, and Portugal aims to implement energy efficiency measures equivalent to 9.8% of total final energy consumption by 2015. This plan complements a well- developed and co-ordinated climate change policy. Further steps have been taken towards the liberalisation of energy markets, including the innovative creation of a single operator for the transport of natural gas and electricity, natural gas storage and operation of the Sines LNG terminal. Still, a number of challenges remain. Energy markets are not as competitive as policy makers may have wished, and energy research and development policy co-ordination needs to be strengthened. This review provides sectoral critiques of existing policy and recommendations for further improvements. It is intended to serve as an indispensable guide for Portuguese policy makers as they travel along the path to a more sustainable energy future. (61 2009 04 1 P1) €75 ISBN 978-92-64-06037-1 -:HSTCQE=U[UX\V: INTERNATIONAL ENERGY AGENCY Energy Policies of IEA Countries PORTUGAL 2009 Review IEA member countries: Australia INTERNATIONAL ENERGY AGENCY Austria The International Energy Agency (IEA) is an autonomous body which was established in Belgium November 1974 within the framework of the Organisation for Economic Co-operation Canada and Development (OECD) to implement an international energy programme. It carries out a comprehensive programme of energy co-operation among twenty-eight Czech Republic of the thirty OECD member countries. The basic aims of the IEA are: Denmark To maintain and improve systems for coping with oil supply disruptions. Finland To promote rational energy policies in a global context through co-operative relations with non-member countries, industry and inter national organisations. France To operate a permanent information system on international oil markets. Germany To provide data on other aspects of international energy markets. To improve the world’s energy supply and demand structure by developing Greece alternative energy sources and increasing the effi ciency of energy use. Hungary To promote international collaboration on energy technology. To assist in the integration of environmental and energy Ireland policies, including relating to climate change. Italy Japan Korea (Republic of) Luxembourg Netherlands New Zealand Norway ORGANISATION FOR Poland ECONOMIC CO-OPERATION AND DEVELOPMENT Portugal Slovak Republic The OECD is a unique forum where the governments of thirty democracies work together to address the Spain economic, social and environmental challenges of globalisation. The OECD is also at the forefront Sweden of efforts to understand and to help governments respond to new developments and concerns, Switzerland such as corporate governance, the information economy and the challenges of an ageing Turkey population. The Organisation provides a setting where governments can compare policy United Kingdom experiences, seek answers to common problems, identify good practice and United States work to co-ordinate domestic and international policies. The European Commission also participates in the work of the IEA. © OECD/IEA, 2009 International Energy Agency (IEA) 9 rue de la Fédération, 75739 Paris Cedex 15, France Please note that this publication is subject to specifi c restrictions that limit its use and distribution. The terms and conditions are available online at www.iea.org/about/copyright.asp TABLE OF CONTENTS 1 EXECUTIVE SUMMARY AND KEY RECOMMENDATIONS ..... 7 Executive Summary ..................................................... 7 Key Recommendations ................................................. 9 PART I: POLICY ANALYSIS 2 GENERAL ENERGY POLICY ................................. 13 Country Overview....................................................... 13 The Economy ........................................................... 13 Energy Supply and Demand ........................................... 14 Key Energy Policies ..................................................... 17 Security of Supply ...................................................... 19 Energy Institutions ..................................................... 20 Energy Market Reform ................................................. 21 Energy Taxes and Subsidies ............................................ 23 Energy Prices ............................................................ 23 Critique .................................................................. 23 Recommendations ...................................................... 27 3 CLIMATE CHANGE .......................................... 29 Overview ................................................................ 29 CO2 Emissions from Fuel Combustion ................................. 31 Policies and Measures .................................................. 33 Critique .................................................................. 38 Recommendations ...................................................... 40 4 ENERGY EFFICIENCY ....................................... 43 Overview ................................................................ 43 Institutional Arrangements ............................................ 44 Policies and Measures .................................................. 45 Sectoral Policies ........................................................ 52 Other Energy Efficiency Measures ..................................... 58 Critique .................................................................. 59 Recommendations ...................................................... 60 PART II: SECTOR ANALYSIS 5 OIL AND COAL ............................................. 67 Overview ................................................................ 67 Oil Demand and Trade ................................................. 67 Oil Supply Infrastructure ............................................... 68 2009 OECD/IEA, 3 © Downstream Market .................................................... 71 Emergency Response Policy and Emergency Organisation ........... 74 Emergency Oil Reserves ................................................ 76 Coal ..................................................................... 80 Critique .................................................................. 82 Recommendations ...................................................... 85 6 NATURAL GAS ............................................. 87 Overview ................................................................ 87 Industry Structure ...................................................... 90 Market Reform .......................................................... 97 Retail Market ........................................................... 99 Critique .................................................................. 103 Recommendations ...................................................... 105 7 ELECTRICITY ............................................... 107 Overview ................................................................ 107 Supply and Demand ................................................... 107 Industry Structure ...................................................... 108 Transmission ............................................................ 112 Distribution ............................................................. 116 Regulatory Framework and Market Design ........................... 118 Rede Eléctrica Nacional, SA ............................................ 122 Retail Market ........................................................... 124 Prices and Taxes ........................................................ 124 Critique .................................................................. 127 Recommendations ...................................................... 129 8 RENEWABLE ENERGY ...................................... 131 Renewable Energy Supply .............................................. 131 Policies .................................................................. 131 Electricity Generation from Renewables ............................... 135 Support Mechanisms ................................................... 136 Hydro and Wind Power ................................................ 138 Wind Power Development in Portugal ................................ 139 Ocean Energy ........................................................... 140 Other Sources ..........................................................
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