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Portugal 2021 Energy Policy Review INTERNATIONAL ENERGY AGENCY

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Portugal 2021 Energy Policy Review INTERNATIONAL ENERGY AGENCY Portugal 2021 Energy Policy Review INTERNATIONAL ENERGY AGENCY The IEA examines the IEA member IEA association full spectrum countries: countries: of energy issues including oil, gas and Australia Brazil coal supply and Austria China demand, renewable Belgium India energy technologies, Canada Indonesia electricity markets, Czech Republic Morocco energy efficiency, Denmark Singapore access to energy, Estonia South Africa demand side Finland Thailand management and France much more. Through Germany its work, the IEA Greece advocates policies Hungary that will enhance the reliability, affordability Ireland and sustainability of Italy energy in its Japan 30 member countries, Korea 8 association Luxembourg countries and beyond. Mexico Netherlands New Zealand Norway Poland Portugal Please note that this Slovak Republic publication is subject to Spain specific restrictions that limit Sweden its use and distribution. The terms and conditions are Switzerland available online at Turkey www.iea.org/t&c/ United Kingdom United States This publication and any The European map included herein are without prejudice to the Commission also status of or sovereignty over participates in the any territory, to the work of the IEA delimitation of international frontiers and boundaries and to the name of any territory, city or area. Source: IEA. All rights reserved. International Energy Agency Website: www.iea.org Foreword The International Energy Agency (IEA) has conducted energy policy reviews of its member countries since 1976. This peer review process supports energy policy development and encourages the exchange of international best practices. By seeing what has worked – or not – in the “real world”, these reviews help to identify policies that deliver concrete results. Throughout its 40 years as a member of the IEA, Portugal has been an active contributor to efforts to improve global energy security and sustainability. I particularly appreciate the FOREWORD leadership that João Pedro Matos Fernandes, Minister of Environment and Climate Action, is now bringing in these areas, including through partnership with the IEA. Portugal is an active participant in the IEA Technology Collaboration Programme, specifically, the collaborations on industry-based biorefineries, energy-flexible buildings, renewable energy and hydrogen. Portugal was notably impacted by the Covid-19 pandemic, with GDP dropping by over 8% in 2020, the largest decline since 1936. Portugal’s economic recovery plan places a strong emphasis on accelerating energy transitions with funding for sustainable mobility, energy efficiency, renewables, decarbonisation and the bio-economy. Portugal has demonstrated important leadership in the transition to clean energy, especially in integrating electricity from renewable sources. The combined share of wind and solar PV in electricity generation reached almost 30% in 2019 and will continue to grow. Portugal will also phase out coal-fired generation in 2021. Portugal was among the first countries in the world to set 2050 carbon neutrality goals. Portugal’s energy and climate policies seek to achieve carbon neutrality primarily through broad electrification of energy demand and a rapid expansion of renewable electricity generation, along with increased energy efficiency. There is a strong focus on reducing energy import dependency and maintaining affordable access to energy. In the longer term, Portugal is aiming for hydrogen to play a major role in achieving carbon neutrality. Yet despite this notable progress on decarbonising power generation and electrifying building energy demand, Portugal’s energy mix is still dominated by fossil fuels. The transport, industry and buildings sectors all have considerable work ahead of them to meet Portugal’s targets for increasing the share of renewables, lowering energy demand and reducing emissions. I sincerely hope the recommendations proposed in this report will help Portugal navigate the transformation of its energy systems as it seeks to build momentum towards achieving climate neutrality while maintaining secure supplies of energy. Dr. Fatih Birol Executive Director International Energy Agency 3 IEA. All rights reserved. TABLE OF CONTENTS ENERGY INSIGHTS Foreword ..............................................................................................................................3 1. Executive summary .....................................................................................................11 Overview ............................................................................................................................11 Energy and climate policy .................................................................................................12 Key measures ....................................................................................................................13 Energy poverty ..................................................................................................................15 Energy security ..................................................................................................................16 Key recommendations ......................................................................................................17 2. General energy policy .................................................................................................19 TABLE OF CONTENTS OF TABLE Country overview ...............................................................................................................19 Energy sector overview .....................................................................................................21 Key institutions ..................................................................................................................25 Energy sector targets ........................................................................................................26 Policies and support measures .........................................................................................28 Assessment .......................................................................................................................34 Recommendations .............................................................................................................37 ENERGY SYSTEM TRANSFORMATION 3. Energy and climate change ........................................................................................41 Overview ............................................................................................................................41 Energy-related CO2 emissions ..........................................................................................42 CO2 emissions drivers and carbon intensity .....................................................................45 Greenhouse gas emissions targets ...................................................................................46 Climate policy and emissions reduction measures ...........................................................47 Climate adaptation .............................................................................................................51 Assessment .......................................................................................................................52 Recommendations .............................................................................................................54 4. Energy efficiency .........................................................................................................57 Overview ............................................................................................................................57 Energy intensity .................................................................................................................58 Energy demand by sector .................................................................................................58 Targets ...............................................................................................................................65 Key institutions ..................................................................................................................66 5 IEA. All rights reserved. TABLE OF CONTENTS Policy and support measures ............................................................................................67 Assessment .......................................................................................................................75 Recommendations .............................................................................................................79 5. Renewable energy .......................................................................................................83 Overview ............................................................................................................................83 Renewable energy supply .................................................................................................85 Targets ...............................................................................................................................87 Policies and support measures .........................................................................................88 Assessment .......................................................................................................................95 Recommendations .............................................................................................................98
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