COMMISSION STAFF WORKING DOCUMENT Energy Union Factsheet Portugal Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK Third Report on the State of the Energy Union
Date: 2017-11-23
Institutions: European Commission, Secretariat-General
Subjects: Portugal, climate change policy, competitiveness, economic and social cohesion, energy cooperation, energy policy, innovation, investment, regional cooperation, single market

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 23.11.2017 SWD(2017) 408 final  COMMISSION STAFF WORKING DOCUMENT Energy Union Factsheet Portugal  Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK  Third Report on the State of the Energy Union  {COM(2017) 688 final} - {SWD(2017) 384 final} - {SWD(2017) 385 final} - {SWD(2017) 386 final} - {SWD(2017) 387 final} - {SWD(2017) 388 final} - {SWD(2017) 389 final} - {SWD(2017) 390 final} - {SWD(2017) 391 final} - {SWD(2017) 392 final} - {SWD(2017) 393 final} - {SWD(2017) 394 final} - {SWD(2017) 395 final} - {SWD(2017) 396 final} - {SWD(2017) 397 final} - {SWD(2017) 398 final} - {SWD(2017) 399 final} - {SWD(2017) 401 final} - {SWD(2017) 402 final} - {SWD(2017) 404 final} - {SWD(2017) 405 final} - {SWD(2017) 406 final} - {SWD(2017) 407 final} - {SWD(2017) 409 final} - {SWD(2017) 411 final} - {SWD(2017) 412 final} - {SWD(2017) 413 final} - {SWD(2017) 414 final}  
 
 
                              Energy Union –Portugal 

  Portugal 

                          Energy Union factsheet1 

1.  Macro-economic implications of energy activities 

Energy and transport are key sectors for the overall functioning of the economy as they provide an 
important input and service to the other sectors of the economy. Together the activity in these two 
sectors2  accounted  for  7.7  %  of  the  total  value  added  of  Portugal  in  2015.  Similarly,  their  share  in 
total employment3 was 3.8 % in 2015, of which 3.6 % in the transport sector and 0.2 % in the energy 
sector. 

(source: Eurostat) 

According  to  EurObserv'ER,  in  2015,  the  share  of  direct  and  indirect  renewable  energy  related 
employment in total employment of the economy in Portugal was at about 0.53 %, slightly below the 
EU average. 

1   The indicators used in this country factsheet largely build on indicators developed for the Commission Staff 
Working  Document  "Monitoring  progress  towards  the  Energy  Union  objectives  –  key  indicators" 
(SWD(2017)  32 
final)  https://ec.europa.eu/commission/sites/beta-political/files/swd-energy-union-key-
indicators_en.pdf  

2   Gross value added and employment in NACE sectors D-Electricity, gas, steam and air conditioning supply 

and H-Transportation and storage. 

3   National Accounts, Eurostat 

1 

 
 
 
 
 
                                                            
 
                              Energy Union –Portugal 

(source: EC based on Eurobserv'Er and Eurostat) 

The  decarbonisation  of  the  energy  and  transport  sectors  will  require  significant  investments  and 
economic  activity  beyond  the  remit  of  these  sectors  themselves.  The  energy  transition  implies  a 
structural  shift  in  economic  activity.  Energy-related  investment  and  jobs  will  in  part  migrate  from 
traditional  fossil  fuel  based  activities  towards  construction,  equipment  manufacturing  and  other 
services related to the deployment of low carbon and clean energy technologies. At the moment, the 
efforts related to the low-carbon and clean energy transition in sectors beyond energy can only be 
partially quantified and are therefore not included in this analysis. 

An indication of the level of efforts and challenges encountered by Portugal in the energy sector is 
given  by  the  Gross  fixed  capital  formation  (GFCF)4.  Investments  in  the  electricity  and  gas  sectors, 
which are taken as reference sectors, have been on an increasing trend from 2006 to 2009 and then 
declined  marginally  and  remained  broadly  constant  until  2014.  In  the  latter  year  they  represented 
around 0.9 % of the country's GDP, lower than in their peak in 2009 (1.4 %).  

(source: Eurostat) 

4 Gross fixed capital formation consists of resident producers´ acquisitions, less disposals, of fixed tangible or 
intangible assets. This covers, in particular, machinery and equipment, vehicles, dwellings and other buildings. It 
also includes foreign direct investment (FDI). Steam and air conditioning supply are also included in the figures 
mentioned above as Eurostat reports electricity, gas, steam and air conditioning supply together. 

2 

 
 
 
 
                                                            
                              Energy Union –Portugal 

In terms of trade, Portugal is a total net importer of fossil fuels. The trade deficit in energy products 
has fallen from about 3.8 % of GDP in 2006 to 2.3 % in 2015, influenced by improvements in energy 
efficiency,  increase  endogenous  renewable  energy  use,  and  by  falling  fossil  fuel  prices.  With  the 
exception  of  natural  gas,  the  trade  deficit  of  the  remaining  energy  commodities  declined  between 
2006 and 2015. The largest decrease as a percentage of GDP is accounted for by petroleum products. 
By contrast the trade deficit of gas increased from 0.6 % to 0.7 % in the above mentioned period. 

 (source: Eurostat) 

2. Energy security, solidarity and trust 

2.1. Energy Mix 

The Portuguese Energy mix of primary energy products has two particularities when compared to the 
European average; a significantly high share of renewable energy (21.8 % vs 13 %) and of oil (45.6 % 
vs 34.4 %). On the other components of its energy mix; the share of natural gas is slightly below EU 
average (17.9 % vs 22 %) as well as for solid fuels (14.1% vs 16.2 %).   

 (source: Eurostat) 

3 

2015 EU28: Energy mix*wastenuclearrenewablesnatural gasoilsolid fuels0,8%13,6%13,0%22,0%34,4%16,2%1627,5MtoeGIC -total:GIC -energy mix*1626,2Mtoe2015 PT: Energy mix*wastenuclearrenewablesnatural gasoilsolid fuels0,7%0,0%21,8%17,9%45,6%14,1%23,0MtoeGIC -total:22,8MtoeGIC -energy mix*:*energy mix as share share in GIC-excluding electricity and derivedheat exchanges ,GIC=gross inland consumption 
 
 
 
                              Energy Union –Portugal 

2.2. Import dependency and security of supply 

Overall, Portugal's import dependency was 77.4 %, which is substantially higher than the EU average 
(54.1 %). Nevertheless, there has been a considerable decrease since 2005 (-11.2 %), mostly due to 
the increase of renewables participation in the energy mix (e.g. in 2015, more than 52 % of electricity 
consumption was supplied by RES sources, a new record high).  

Portugal imports all its natural gas, oil and coal consumption. At the same time, it imports gas (and 
oil)  from  a  relatively  well  diversified  range  of  sources  thanks  to  the  LNG  terminal  in  Sines  and  the 
possibility  to  take  advantage  of  the  supply  diversification  in  the  Spanish  market.  Portugal  and  EU 
main  suppliers  of  natural  gas  and  oil  are  rather  different.  Portugal  relies  mainly  on  Algeria  and 
Nigeria  for  its  natural  gas  supply  and  Angola  and  Saudi  Arabia  for  its  oil  supply  while  the  EU  main 
suppliers of natural gas and oil are Russia and Norway.  

 (source: Eurostat) 

The Regulation concerning measures to safeguard security of gas supply requires that, if the single 
largest gas infrastructure fails in one Member State, the capacity of the remaining infrastructure is 
able  to  satisfy  total  gas  demand  during a  day  of  exceptionally  high gas  demand. Portugal  complies 
with this rule.  

4 

54,0%77,4%69,1%99,8%88,4%100,9%64,1%100,0%0%40%80%120%EU28PTEU28PTEU28PTEU28PTtotal energycarriersnatural gascrude oil and NGLhard coalImport dependency200520151,9%-11,2%12,0%-4,0%7,2%0,7%8,4%3,7%absolute change 2005-2015 [pp]PTEU28PTEU28PTEU28AlgeriaRussiaAngolaRussiaColombiaRussia52,0%37,3%23,4%28,8%97,6%29,1%Not specifiedNorwaySaudi ArabiaNorway Colombia20,1%32,8%14,0%12,4% 24,3%NigeriaAlgeriaKazakhstanNigeria United States19,2%10,7%9,7%8,3% 16,0%*share in total imports for the MS and in total non-EU imports for the EU282015: Top non-EU suppliers for main energy carriers* Natural gasCrude oil and NGLHard coal 
 
 
 
 
 
 
                              Energy Union –Portugal 

PT 

N-1 rule for gas 
110,0
% 

2016

threshold 100%

(source: gas coordination group) 

3. Internal market 

3.1. Interconnections and wholesale market functioning 

3.1.1. Electricity 

(source: EC services based on ENTSOE         source: EC services based on Eurostat        source: EC services based on Platts and 
European power exchanges) 

Portugal is part of the MIBEL wholesale electricity market (integrated market for electricity between 
Spain  and  Portugal).  The  Portuguese  electricity  system  is  directly  connected  to  the  Spanish  system 
and  indirectly  to  France.  In  2017,  the  electricity  interconnection  level5  was  8.7%,  below  the  2020 

5 The interconnectivity level is calculated as a ratio between import interconnection and net generation capacities 
of the country (i.e. the 2017 value is the ratio between simultaneous import interconnection capacity [GW] 
and net generating capacity [GW] in the country at 11 January 2017, 19:00 pm as resulted from ENTSO-E 
Winter Outlook 2016/2017) 

5 

 
 
 
                                                            
                              Energy Union –Portugal 

target of 10 %, which should nevertheless be achieved with the finalisation of the ongoing Projects of 
Common Interest (internal line between Pedralva and Sobrado, the internal line between Vieira do 
Minho,  Ribeira  de  Pena  and  Feira  and  new  Portugal  —  Spain  interconnection,  between  Beariz  — 
Fontefría  — Ponte de Lima — Vila Nova de Famalicão). Good progress is underway to complete by 
the end of 2018 the electricity interconnection between the two countries which will allow Portugal 
to attain the 10% level of interconnections by increasing the current interconnection capacity level to 
3.2 GW.  

Since 2005 the concentration level of the power generation market has improved substantially (-44 
%) and is now slightly below the EU average.  

The  evolution  of  the  wholesale  market  in  Portugal  is  intrinsically  related  to  the  integration  of  the 
Iberian  Peninsula  in  the  internal  market  and  the  participation  of  Portuguese  agents  in  the  MIBEL 
increasing competition. The wholesale electricity prices are above the EU average; between 2013 and 
2016 they decreased by 9.6 % (while the EU average was -14.8 %). 

3.1.2. Gas 

The MIBGAS ("Mercado Ibérico do Gas"/ Iberian Gas Market) started operation in December 2015, as 
the operator of Spain's organised gas market and with the aim of achieving in the future one single 
market with Portugal, similarly to the electricity sector (based on bilateral agreements between both 
Member  States).  During  its  first  year  of  operation,  some  progress  has  been  made,  but  MIBGAS 
liquidity is still far below the liquidity levels of the main European gas hubs (only 2 % of the domestic 
demand was negotiated in MIBGAS in 2016). Several measures have been taken to increase market 
liquidity, including the appointment in January 2017 of a market creator (Gunvor International BV).  
MIBGAS’ completion requires further regulation and political efforts.  

The market concentration in the Portuguese gas supply market is high but below the EU average.  
The wholesale gas prices are above the EU average and between 2013 and 2016 decreased 40.2 % 
but less than the EU average price decrease (46.3 %). 

(source: ACER for the left graph and EC services based on Platts, gas hubs, Eurostat for the right graph) 

In  terms  on  Projects  of  Common  Interest,  Portugal  has  a  key  natural  gas  project:  the  3rd 
interconnection point with Spain, which will increase Portugal's security of supply in case of failure of 

6 

 
 
 
 
 
 
 
                              Energy Union –Portugal 

its  biggest  infrastructure.  CEF  co-financed  study  is  ongoing,  notably  on  the  Portuguese  part  of  the 
frontier.  

3.2. Retail electricity and gas market 

3.2.1. Electricity 

Retail  electricity  and  gas  prices  are  above  the  EU  average.  In  the  period  2013-2016,  household 
electricity prices increased in nominal terms by 7.8 %. One of the major drivers of this increase were 
taxes and levies, which in 2016 represented almost half of the total final price of electricity. Portugal 
now  has  one  of  the  highest  annual  supplier  switching  rates  in  Europe  (26.6  %  up  from  1.1  %), 
significantly above the EU average (6.2 %). 

(source: ACER) 

      (source: Eurostat) 

(source: Eurostat) 

3.2.2. Gas 

National gas prices for households are also amongst the highest in the EU, which can be explained 
mainly by lack of competition and a limited development of the MIBGAS. For the period 2013-2016, 
nominal gas prices decreased 12.6 %, while the EU average was 10.0% 

(source: ACER) 

      (source: Eurostat) 

(source: Eurostat) 

7 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                              Energy Union –Portugal 

3.2.3. Market performance indicators 

According to the periodical survey of DG JUST on customer satisfaction on energy retail markets, the 
Portuguese  consumers  are  less  satisfied  than  the  EU  average  about  the  retail  electricity  services, 
despite  a  positive  trend  observed  since  2010.  Conversely,  they  are  more  satisfied  than  the  EU 
average when it comes to retail gas services. 

 (source: DG JUST survey) 

3.3. Energy affordability  

High retail electricity and gas prices have an impact on the affordability of energy services, especially 
for  those  in  the  lower  income  quintile.  In  Portugal,  energy  expenditure  as  a  share  of  total 
consumption expenditure reached 8.2 % for the lowest quintile of the population (a 1.8 % increase as 
from  2005)  and  is  below  EU  average.  About  43.3  %  of  the  population  could  not  keep  its  home 
adequately warm, which is still significantly above the EU average (22.7 %). Having that in mind, since 
1st  July  2016  the  attribution  of  the  so-called  “social  tariffs”  (indexed  to  families’  revenues)  is 
automatic In Portugal. In the gas sector it is cross subsidized by all gas consumers, in proportion to 
the energy consumed. For electricity, it is borne by electricity producers in proportion to the installed 
power in each centre electricity generation.  

 (source: ad-hoc data collection of DG ENER based on HBS with the support of Eurostat and national statistics) 

8 

72,666,275,371,80102030405060708090100EU28PTMarket performance indicator (MPI), retail electricity services2010201572,366,2average 2010-2015 [-]73,674,878,182,90102030405060708090100EU28PTMarket performance indicator (MPI), retail gas services2010201574,675,5average 2010-2015 [-] 
 
 
 
 
 
                              Energy Union –Portugal 

4. Energy efficiency and moderation of demand 

Portugal has set an indicative national energy efficiency target of 25 % reduction of primary energy 
consumption  in  2020.  Portugal  is  on  track  for  meeting  its  national  target.  The  primary  and  final 
energy consumption  has  been decreasing between  2005  and  2015.  However,  the slowdown  of  the 
economic activity might also have contributed to this.  

Since 2005, Portugal decreased its primary energy consumption by 13 % to 21.66 Mtoe in 2015. Over 
the same period, final energy consumption also decreased by 15.6 % to 16.04 Mtoe in 2015.  

Even  if  Portugal  has  already  achieved  levels  of  primary  and  final  energy  consumption  which  are 
below the indicative national 2020 targets, it would need to make an effort to keep these levels until 
2020.  

(source: Eurostat) 

Primary energy intensity in Portugal has decreased in line with EU28, and remains close to average. 
However,  only  a  minor  energy  intensity  reduction  was  recorded  in  the  industrial  sector,  which 
remains above EU average.  

In 2015 in Portugal, transport was the largest energy consuming sector representing a 41.2 % share 
in the total final energy consumption, which is well above than the EU average (33.1 %). The energy 
consumption  of  Portugal's  industry  sector  was  in  2015  at  around  27.8%  in  total  final  energy 
consumption. The energy consumption of the residential sector (15.8 %) is substantially below the EU 
average  (25.4  %)  which  can  be  explained  by  a  conjunction  of  factors  including  mild  climate,  high 
energy prices which impact in affordability and consequently impact the level of the energy poverty. 
On the services sector the consumption is slightly below the EU average, with a share in total final 
energy consumption of 12.2 %.  

9 

 
 
 
 
 
 
                              Energy Union –Portugal 

(source: Eurostat) 

Additional  efforts  could  therefore  be  envisaged  to  improve  energy  intensity  of  the  industry  sector 
and the high energy consumption in the transport sector. A positive development concerns the use 
of European Funds for Strategic Investments (EFSI) funds to finance the construction of nearly-zero-
energy  buildings  in  Portugal.  The  use  of  EU  Cohesion  policy  funds  for  the  renovation  of  buildings, 
including  public  infrastructure,  households  and  SMEs,  is  progressing  in  line  with  its  operational 
programme, and is also expected to deliver important energy savings. 

(source: Eurostat)  

(source: Eurostat)  

  (source: Odyssee database) 

Between  2005  and  2015,  the  final  energy  consumption  in  transport  recorded  an  average  annual 
decrease of 0.8 %, compared to the 0.1% average annual decrease of the GDP. Over the period 2005 
–  2014,  passenger  transport  activity  in  Portugal  was  almost  at  2005  levels,  while  freight  transport 
activity diminished more than the energy consumption in transport. 

10 

2015 EU28: Final energy consumptionwasteservicesagriculture/forestry/fishingresidentialtransportindustry0,4%13,6%2,3%25,4%33,1%25,3%1084,0Mtoe2015 PT: Final energy consumptionother (non-specified)servicesagriculture/forestry/fishingresidentialtransportindustry0,2%12,2%2,7%15,8%41,2%27,8%16,0Mtoe 
 
 
 
 
 
 
 
                              Energy Union –Portugal 

(source: Eurostat)  

        (source: Eurostat and DG MOVE pocketbook) 

The share of collective land transport into total passengers' transport remained stable between 2005 
and 2015 (from 10.7 % to 10.6 %), indicating that the use of private transport means in Portugal has 
not substantially increased.  

(source: Eurostat)  

In  Portugal,  several  policy  measures  were  adopted  in  the  latest  years  to  encourage  the  use  of 
sustainable vehicles, including a revision of the circulation tax, which benefits vehicles with less CO2 
emissions and the introduction of Low Emission Zones in the capital, Lisbon.  

To  promote  the  use  of  collective  modes  of  transport  new  urban  public  transport  services  were 
introduced 
in  small  and  medium-sized  cities  and  financial  support  was  provided  for  the 
implementation of Intelligent Transport Systems (ITS) in collective modes (contactless ticket systems 
and real-time passenger information systems). Intermodal integrated services were also introduced 
in the Lisbon and Oporto regions, with a single information service, ticketing scheme and timetable. 
Support was given for the implementation of taxicab centrals, for a more simple and efficient use of 
this mean of transport. 

11 

 
 
 
 
 
 
 
 
 
 
                              Energy Union –Portugal 

Measures to stimulate the energy efficiency in transports included the implementation of an electric 
vehicle recharging network in 25 cities and in the main motorways, eco-driving support services and 
tax reductions for heavy goods public transportation services. 

5. Decarbonisation of economy 

5.1. GHG emissions 

In 2016, GHG emissions in Portugal were 13.9% above their 1990 levels (based on 2016 estimates), 
with an EU average of -22.6%.  

Portugal  non-ETS  emission  decreased  by  17  %  between  2005  and  2016,  and  has  achieved  its  2016 
target (an emissions increase of no less than 3 %) by a 20 pps gap. According to the latest national 
projections based on existing measures, non-ETS emissions will decrease by 17 % between 2005 and 
2020. The 2020 target is consequently expected to be achieved by a 18 pps gap. 

(source: EC and EEA)   

In 2015 in Portugal, the largest sectors in terms of GHG emissions were the energy sector (28.5 % of 
the total GHG emissions) followed by transport (23.5 %), industry (22.4 %) and agriculture & fishery 
(11.3 %).  

The  key  strategies  currently  being  implemented  are  the  Framework  for  Climate  Policy  (QEPiC)  and 
the National Program for Climate Actions for the period 2020-2030 (PNAC 2020/2030).  

12 

 
 
 
 
                              Energy Union –Portugal 

(source: EC and EEA)   

Preliminary accounts under the Kyoto Protocol for Portugal show overall removals of -7.9 Mt CO2-eq. 
as  an  annual  average  in  the  period  2013-2015.  For  comparison,  the  annual  average  of  the  EU-28 
accounted for removals of  -119.0 Mt. CO2-eq. It should be noted that in this  preliminary simulated 
accounting  exercise,  removals  from  Forest  Management  were  capped  to  -2.1  Mt  CO2-eq  per  year, 
due  to  significantly  exceeding  the  limit  of  the  difference  between  the  reported  sink  and  the 
accounting forest management reference level.  

Removals by Afforestation are higher than emissions by Deforestation. The second highest share of 
removals  is  due  to  Cropland  Management,  followed  by  Forest  Management  and  Grassland 
Management;  all  contributing  with  noteworthy  amounts.  Overall,  there  is  no  trend  in  removals;  in 
fact all activities show no particular trend over the course of the three-year period.  

Note: Forest Management credits are capped and presented as yearly averages when the total Forest 
Management credits of the considered period exceed the simulated cap over the same period. 

(source: EC and EEA) 

13 

 
 
 
 
 
 
 
 
                              Energy Union –Portugal 

CO2 emissions in transport and alternative fuelled vehicles 

The average CO2 emissions of new passenger cars in Portugal in 2016 amounted to 104.7 g CO2/km, 
being lower than the EU average.  

(source: European Environment Agency) 

(European Environment Agency)  

       (European Alternative Fuels Observatory) 

National Policy Frameworks under Directive 2014/94/EU on alternative fuels infrastructure have to 
establish targets, objective and measures for the development of the market of alternative fuels in 
the  transport  sector  and  the  deployment  of  the  relevant  infrastructure.  Portugal  has  submitted  its 
National Policy Framework as requested under article 3 of the Directive 2014/94/EU.  

A detailed assessment of the Portuguese National Policy Framework in terms of its compliance with 
the  requirements  of  Directive  2014/94/EU  on  alternative  fuels  infrastructure,  its  contribution  to 
achievement  of  long-term  energy and  climate objectives  of  the  Union  and  coherence of  its  targets 
and objectives in terms of cross-border continuity has been published as part of the Communication 
on  Alternative  Fuels  Action  Plans  (COM(2017)652)  and   the  related  staff  working  document 
SWD(2017)365.  

14 

 
 
 
 
  
 
 
 
 
 
 
                              Energy Union –Portugal 

5.2. Adaptation to climate change 

In  Portugal,  a  First  National  Adaptation  Strategy  (ENAAC)  was  adopted  in  2010  (2010-2015)  and 
revised in 2015 (ENAAC 2020 for 2015-2020). No Adaptation Action Plan is defined at national level; 
instead,  it  is  promoted  in  sectorial,  local  and/or  regional  planning.  Nine  priority  sectors  have  been 
identified:  agriculture,  biodiversity,  economy,  energy,  forests,  health,  safety  of  people  and  assets, 
transport and communications, and coastal areas/sea. Presently the monitoring has been guaranteed 
for reporting purposes through ENAAC’s Coordination Group. A more formal procedure is addressed 
in  ENAAC  2020  in  order  to  establish  a  monitoring  and  review  system  for  the  overall  adaptation 
process,  particularly  with  close  collaboration  with  sectorial  groups  following  a  mainstreaming 
approach. 

5.3. Taxes on energy and transport and fossil fuel subsidies 

The overall tax burden on energy and transport in Portugal amounts to 2.2% of GDP, which is 0.2 p.p. 
lower than the EU average. The tax burden on transport vehicles and fuels is slightly above the EU 
average,  while  the  tax  burden  on  heat  and  electricity  is  considerably  lower  than  the  EU  average. 
Since  2007,  the  tax  burden  on  transport  vehicles  and  fuels  declined  slightly  in  Portugal,  while  the 
taxes on heat and electricity have increased. Portugal has a carbon tax as part of their tax framework 
of energy products which is applied to all fuels. It amounts to €6/ton of CO2. The car registration and 
the annual circulation taxes for vehicles have both a CO2 component. 

(source: Eurostat) 

In Portugal, there is a wide array of measures granting either tax exemptions or tax rate reductions 
for specific fuels used for specific purposes. A significant part of these benefits is due to reduced tax 
rates  on  coloured  and  marked  diesel  fuel  used  by  authorised  agricultural  equipment,  whose  tax 
expenditure  is  estimated  at  EUR  71.8  million  in  2013.  In  2014,  this  amount  decreased  to  EUR  71.2 
million.  VAT  rates  are  reduced  for  fuels  used  in  agricultural  inputs  and  machinery  (13%),  and  for 
waste collection and water supplies (6%), from a standard rate of 23%. 

15 

 
 
 
 
 
 
                              Energy Union –Portugal 

(source: OECD Inventory of Support Measures for Fossil Fuels 2015)  

5.4. Renewable energy  

In the renewables' sector, Portugal has high potential and a high target for 2020 (31 %) and so far is 
on track to meet it. 

Considerable  efforts  have  been  made  in  the  past  years  namely  in  Wind  and  Hydro  and  the  high 
potential of Portugal for Solar PV is starting to attract investors in this Renewable technology.   

In  2013/2014  Portugal  was  above  its  anticipated  RES  deployment  and  kept  up  this  trend  in  2015, 
reaching a renewables share in gross final energy consumption of 28.0%. Portugal is on track to meet 
its 2020 renewable energy target.  

2015  was  the  highest  renewable  electricity  producing  year  with  more  than  half  of  consumption 
(52.6%)  coming  from  renewable  sources,  mostly  hydro  and  wind.  In  May  2016,  the  country’s 
electricity demand was met by renewable energy alone for four and a half days straight on.  

In the  heating and  cooling sector,  the  renewables  share  (33.4  %) is  above  the level  planned in  the 
NREAP (30.6 %) but a careful monitoring is required as the penetration of RES in this sector has been 
falling since 2009. The reasons for this decrease can be explained by the lack of a long term RES-H&C 
strategy, lack of certification schemes for installers and equipment in case of biomass technologies. 
In  case  of  heating  there  has  also  been  a  trend  that  consisted  of  replacing  the  usage  of  traditional 
biomass (wood) by air-condition systems. 

On the transport sector, even though levels in 2015 (7.4 %) have shown a significant increase on the 
previous year (+3.7 p.p.), Portugal still has to make an effort to reach the 10% target for biofuels by 
2020. 

16 

 
 
 
 
 
 
 
 
 
 
                              Energy Union –Portugal 

 (source: Eurostat-SHARES) 

(source: Eurostat-SHARES) 

In  Portugal,  electricity  from  renewable  sources  from  existing  plants  is  mainly  promoted  through  a 
feed-in tariff (FiT). Support to new RES plants can be provided through a general regime (i.e. energy 
market) or under the guaranteed remuneration system.  

Portugal has already authorized more than 500 MW of new solar photovoltaic projects, and there are 
shown of interest of more than 1000 MW of new solar photovoltaic projects. All of this new plants 
will have no Feed-in Tariff, their remuneration will be only market based 

A  unique  remuneration  regime  for  electricity  produced  from  small  production  (UPP)  and  self-
consumption  (UPAC)  units  came  into  force  in  January  2015  and  it  is  based  on  a  bidding  model  in 
which producers offer discounts to a reference tariff. UPPs and UPACs have common regulations and 
certain particularities. 

There is  currently  no direct support  mechanism, or fiscal benefits for RES-H in place (as of January 
2017); only indirect support.  

In the transport sector, the main incentives are a biofuel quota system and a tax exemption to small 
producers of biofuels (PPDs). 

17 

 
 
 
 
 
                              Energy Union –Portugal 

Due  to  a  consistent  deployment of  renewables  since  2005,  it is estimated that  Portugal avoided in 
2015 about 11.4 % of the fossil fuel in gross inland consumption and about 10.8 % of GHG emissions 
at national level6. 

 (source: EEA) 

5.5. Contribution of the Energy Union to better air quality 

Air  quality  in  Portugal  continues  to  give  cause  for  concern.  For  the  year  2013,  the  European 
Environment  Agency  estimated  that  about  6,070  premature  deaths  were  attributable  to  fine 
particulate matter (PM2.5) concentrations and 150 to nitrogen dioxide (NO2) concentrations7.  

For both pollutants Portugal reported exceedances of the binding EU air quality standards8. For the 
year  2015, Portugal  reported exceedances  of  the limit  value for  PM10  in 1  out of  the 20  air  quality 
zones in Portugal, while exceedances of the limit value for NO2 were reported in 3 of the 17 zones as 
shown in the figure below9. 

6  Avoided GHG emissions mentioned here have a theoretical character as these contributions do not necessarily 
represent 'net GHG savings per se' nor are they based on life-cycle assessment or full carbon accounting.  
7  European  Environment  Agency,  2016,  Air  Quality  in  Europe  –  2016  Report,  table  10.2.  The  report  also 
includes details as regards the underpinning methodology for calculating premature deaths.    
8 Directive 2008/50/EC of the European Parliament and of the Council of 21 May 2008 on ambient air quality 
and cleaner air for Europe, OJ L 152, 11.6.2008, p.1-44 
9  Compliance  data  as  reported  by  the  Member  States  as  part  of  their  official  annual  air  quality  report  for  the 
calendar year 2015 (available on the European Environment Agency's (EEA) Eionet/Central Data Repository), 
http://cdr.eionet.europa.eu/pt/eu/aqd 

18 

 
 
 
 
                                                            
                              Energy Union –Portugal 

(source: EEA) 

The health-related external costs from air pollution in Portugal have been estimated to be more than 
EUR  4  billion/year  (income  adjusted,  2010),  which  includes  the  intrinsic  value  of  living  a  healthy  life 
without premature death as well as the direct costs to the economy such as healthcare costs and lost 
working days due to sickness caused by air pollution10. 

The  Energy  Union  can  substantially  contribute  to  addressing  these  air  quality  problems  through 
measures reducing emissions of both GHG and air pollutants such as PM and nitrogen oxides (NOx) 
from major contributing sectors such as (road) transport, energy production, industry and residential 
heating (e.g. stoves and boilers) as shown in the figure below11.  

(Source: EEA. This table reflects only sources of primary PM2,5 emissions.) 

10 See also the EU Environmental Implementation Review Country Report for Portugal, SWD(2017)54 final of 
3.2.2017 
11 National emission data as reported by the Member States to the EEA (available on the EEA's Eionet/Central 
Data Repository), http://cdr.eionet.europa.eu/pt/eu/nec_revised 

19 

0510152025NO2 Annual limit valuePM2.5 Annual limit valuePM10 Daily limit value[number of zones]Air quality zones in exceedance of EU air quality standards number of zones exceedingnumber of zones not exceedingPT 
 
  
 
 
 
                                                            
                              Energy Union –Portugal 

6. Research, innovation and competitiveness  

6.1. Research and innovation policy 

The Science and Technology Foundation (FCT), the key science policy and implementation agency in 
Portugal, has recently launched a process to elaborate a national Research and Innovation Agenda on 
sustainable  energy  systems,  as  part  of  a  wider  effort  to  develop  Agendas  in  fourteen  different 
research fields. The aim of the Agenda is to identify challenges and opportunities, and to articulate a 
long-term  collaborative  perspective for  different  R&I  stakeholders  in the  country.  The  Agendas  are 
also intended to identify strong emergent sectors for the Portuguese R&I community to focus on. FCT 
is  involving  relevant  stakeholders  in  a  public  consultation  process  to  prepare  these  Agendas, 
including  members  of  the  national  scientific  and  industrial  communities  as  well  as  citizens  with 
relevant expertise. 

Portuguese R&I institutions are active in almost all energy technologies, including nuclear fission and 
fusion. Portugal is an active contributor to the ongoing work of the Strategic Energy Technology (SET) 
Plan. It participates in nine (out of fifteen) temporary working groups for the implementation of the 
integrated SET Plan. 

Regarding the Horizon 2020 programme, Portugal has received so far 2.3 % of the EU contribution 
devoted  to  the  'secure,  clean  and  efficient  energy'  part  of  the  programme.  As  of  September  2017, 
113 participations from Portuguese organisations have been awarded EUR 41 million in Horizon 2020 
energy  projects.  This  includes  a  grant  of  EUR  3.6  million  to  A.  Silva  Matos  –  Energia  for  its 
participation in project DEMOGRAVI3 (innovative gravity foundations for offshore wind turbines) and 
eight  grants  totalling  almost  EUR  6.5  million  to  Portuguese  beneficiaries  participating  in  project 
SHAR-LLM (smart cities). 

6.2. Investments and patents in the Energy Union R&I priorities  

In  2015,  public  (national)  investments  in  the  Energy  Union  R&I  priorities  reached  EUR  8  million, 
having  decreased  by  12%  compared  to  2014.  The  Renewables  and  Sustainable  Transport  R&I 
priorities of the Energy Union attracted the largest shares of these investments (31% each), followed 
by the Efficient Systems (22%). In the period 2007-2015, the maximum annual public investment was 
EUR 9.5 million, reported in 201312. In 2014, the most recent year for which data for most Member 
States are available, public investment per GDP in Portugal was lower than the EU average. 

Private investment in the Energy Union R&I priorities in 2013 was estimated at EUR 14 million (0.1% 
of  the  private  R&I  investment  in  Energy  Union  R&I  priorities  in  the  EU).  The  focus  was  on 
Renewables,  which  received  39%  of  these  investments,  followed  by  Smart  System  with  34%  and 
Sustainable Transport with 27%. 

In 2013, the most recent year for which complete patent13 statistics are available, 10 companies and 
research organisations based in Portugal filed 9 patents in low-carbon energy technologies (0.1% of 

12   From  2013  onwards,  the  reported  figures  are  three  times  higher  than  previous  years  due  to  a  change  in 

methodology. 

13   In  the  context  of  this  document,  the  term  'patent'  refers  to  patent  families,  rather  than  applications,  as  a 
measure  of  innovative  activity.  Patent  families  include  all documents  relevant to  a  distinct  invention (e.g. 

20 

 
 
 
 
 
 
 
 
 
 
                                                            
 
                              Energy Union –Portugal 

the EU total). The focus was on Renewables (64%), followed by Smart System (21%) and Sustainable 
transport (14%). 

In 2013, private R&I investments and patents in Energy Union R&I priorities were lower than the EU 
average  when  normalised  by  GDP  and  by  population  respectively.  In  the  period  2007-2013,  both 
private R&I investments  and  number of  patents  indicators  have decreased on  average  by  13%  and 
7%  per  year,  contrary  to  the  same  indicators  at  EU  level  that,  on  average,  increased  by  of  6%  and 
15% respectively. 

Note: The international comparison (right) is shown for 2014 (Portugal had reported EUR 9 million). Reporting 
at EU level is not as complete for 2015, and very few countries have reported for 2016. 

(Data sources: Public investment as available in the International Energy Agency RD&D Statistics database14 for 
codes  relevant  to  Energy  Union  RIC  priorities.  Patent  data  based  on  the  European  Patent  Office  PATSTAT 
database15. Private investment as estimated by JRC SETIS. Detailed methodology available from the JRC16.) 

applications to multiple authorities), thus preventing multiple counting. A fraction of the family is allocated 
to each applicant and relevant technology. 

14 http://www.iea.org/statistics/RDDonlinedataservice/  
15 https://www.epo.org/searching-for-patents/business/patstat.html#tab1  
16 https://setis.ec.europa.eu/related-jrc-activities/jrc-setis-reports/monitoring-ri-low-carbon-energy-technologies  

21 

 
 
 
 
 
 
 
 
 
 
 
 
 
                                                                                                                                                                                          
                              Energy Union –Portugal 

6.3. Competitiveness 

The  real  unit  energy  costs  in  Portugal  are  slightly  above  the  EU  average,  but  well  above  the  US 
average. No reliable data can be used to break down this trend between energy prices and energy 
intensity factors.  
However,  it  can  be  noted  that  electricity  prices  paid  by  industrial  customers,  although  slightly 
superior are in line with EU average, while gas prices are among the highest, and well above OECD 
average and other main trading partners.  

(source: ECFIN) 

                   (source: Eurostat and IEA) 

Regarding  the  competitiveness  in  wind  and  solar  energy,  Portugal  is  performing  quite  well  in  the 
wind sector due to a comparative advantage in key components of wind turbines such as towers and 
power  electronics.  As  indicated  by  the  revealed  comparative  advantage  indicator17  below  1,  the 
Portuguese  economy  is  overall  not  specialised  in  solar  PV.  Nonetheless,  it  exhibits  a  comparative 
advantage  in  power  electronics  for  solar  PV  panels.  The  relative  trade  balance18  confirms  that 
Portugal  is  a  net  exporter  of  wind  components,  well  above  the  EU  average  in  2015.  In  particular, 
Portugal has recorded a significant increase in the relative trade balance of wind between the period 
2005 and 2015, by turning the relative significant trade deficit into a sizeable trade surplus. 

17 The RCA index for product "i" is defined as follows: RCAi =

Xj,i
∑ Xj,i
i
Xw,i
∑ Xw,i
i

 where X is the value of exports, and j is 

the country and w is the reference group, the World economy. 2005 refers in the text to the indicator average 
over the 2000-2009 period, while 2015 represents the average over the 2010-2016 period. The same applies for 
the RTB indicator - see below. 
18 The RTB indicator for product "i" is defined as follows: 𝑅𝑇𝐵𝑖 =
exports and 𝑀𝑖 imports. 

 where 𝑋𝑖 is the value of product's "i" 

𝑋𝑖−𝑀𝑖
𝑋𝑖+𝑀𝑖

22 

 
 
 
 
 
 
 
 
                                                            
                              Energy Union –Portugal 

(source: UN comtrade) 

7. Regional and local cooperation 

Regional  cooperation  on  infrastructure  development  is  necessary  to  optimize  the  identification  of 
regional infrastructure priorities and to coordinate cross-border investments. Portugal is a member 
of two regional cooperation groups which have been established under the TEN-E Regulation: North-
South  Gas  interconnections  in  Western  Europe  and  North-  South  electricity  interconnection  in 
Western Europe.  

Portugal  is  also  a  member  of  the  High  Level  Group  for  South  West  Europe  on    interconnections  , 
formalized  in  the  Madrid  Summit  in  which  the  a  Declaration,  which  aims  to  tackle  the  existing 
interconnection  issues  both  for  electricity  and  gas  through  the  adoption  of  an  Action  Plan,  was 
adopted. Furthermore, Spain and Portugal are part of the electricity market coupling of regions since 
May  2014.  This  coupling  now  spans  19  countries,  covering  almost  85  %  of  European  power 
consumption.   

European  Territorial  Cooperation  – 
'Interreg'  –  under  EU  cohesion  policy  provides  further 
opportunities for cross-border, transnational and interregional cooperation, including in the Energy 
Union areas.  
Cities and urban areas have a key role in the energy and climate challenge. The Urban Agenda for the 
EU,  established  by  the  Pact  of  Amsterdam  in  May  2016,  better  involves  cities  in  the  design  and 
implementation of policies, including those related to the Energy Union. It is implemented through 
Partnerships, in which the Commission, Member States, cities and stakeholders work together on a 
number  of  important  areas,  including  on  Energy  Transition,  Urban  Mobility,  Air  Quality,  Climate 
Adaptation and Housing. Portugal is participating in the partnerships on Urban Mobility, with the city 
of  Torres  Vedras  as  member,  Climate  Adaptation,  with  the  city  of  Loule  as  member,  and  Housing, 
with the city of Lisbon as member. 

By 2016, in the context of the Covenant of Mayors, the sustainable energy action plans delivered by 
111 Portuguese municipalities had been assessed. Overall, these municipalities cover more than 5.7 
million inhabitants. These municipalities committed to reducing GHG emissions by 23.1% by 2020 (as 
compared to the 1990 baseline), a lower percentage reduction than at EU level, but leading to higher 
emissions per capita.        

23 

 
 
 
 
 
 
                              Energy Union –Portugal 

(Source: JRC 2016. Notes: SEAP=sustainable energy action plan, GHG=greenhouse gas emissions) 

In  Portugal,  by  September  2016,  17  cities  (covering  1.49  million  inhabitants)  have  committed  to 
conduct  vulnerability  and  risk  assessment  and  develop  and  implement  adaptation  plans  in  the 
framework of the Covenant of Mayors for Climate and Energy. 

8. Cohesion policy and EU clean energy investments  

EU  cohesion  policy  makes  a  key  contribution  to  delivering  the  Energy  Union  objectives  on  the 
ground,  including  important  investment  possibilities  to  implement  energy  policy  objectives  in 
Portugal  which  are  complemented  by  national  public  and  private  co-financing,  aiming  at  optimal 
leverage.  It  also  ensures  integrated  territorial  solutions  to  energy  and  climate  challenges,  supports 
capacity building and provides technical assistance. 

Over  2014-2020,  cohesion  policy  is  investing  some  EUR  1,102  million  in  energy  efficiency 
improvements in public and residential buildings and in enterprises, as well as in renewable energy 
and  smart  energy  infrastructure  (energy  storage  pilot-projects  and  natural  gas  supply  stations  to 
urban collective public transport vehicles) in Portugal. Cohesion policy is also investing significantly in 
R&I  and  in  SME  competitiveness  in  Portugal  based  on  the  national  strategy  as  well  as  regional 
strategies  for  smart  specialisation.  For  Portugal,  the  strategies  include  a  focus  on  innovative 
technologies for the production of renewable energy, more efficient industrial processes in terms of 
use of energy and promoting R&I applications for low-carbon urban mobility. At this stage, at least 
EUR  383  million  is  foreseen  for  investments  in  R&I  and  adoption  of  low-carbon  technologies  in 
Portugal, but this might increase further in line with the evolving content of the smart specialisation 
strategy.  A  further  estimated  EUR  1,317  million  is  invested  in  supporting  the  move  towards  an 
energy-efficient, decarbonised transport sector. 

 (source: DG REGIO) 

24 

02004006008001.0001.2001.4001.600Energy and Low-carbon R&ILow-carbon transport[Million EUR]PTERDF and Cohesion Funds allocation on energy, low-carbon transport and low-carbon R&I 2014-2020 1.4851.317Total alocation [mn EUR] 
 
 
 
 
                              Energy Union –Portugal 

These  investments  are  expected to  contribute  to  around 28,000  households  with improved energy 
consumption classification and a decrease of around 830,463,000 kWh per year of decreased primary 
energy consumption of public buildings, around 80 MW of additional capacity of renewable energy 
production, around 1,200,000 additional users connected to smart grids, as well as to around 260 km 
of reconstructed or upgraded railway lines. Overall, the cohesion policy investments in Portugal over 
2014-2020 are expected to contribute to an estimated annual decrease of GHG emissions of around 
215,000 tonnes of CO2eq. 

For  example,  the  "Centro  Bio:  Bio-Industries,  Biorefineries  and  Bioproducts"  project,  inspired  by 
agricultural  and  forestry  waste  and  residues  that  were  a  local  hazard  but  have  the  potential  to 
interact  into  different  value-chains,  worked  with  researchers  and  local  farmers,  foresters  and 
entrepreneurs to develop new industries from by-products, improve businesses efficiency and train 
future  scientists  and  entrepreneurs.  The  project  was  working  towards  a  sustainable  'circular 
economy' for the area – one where businesses interact and share resources to avoid waste, with a 
cutting-edge  bio-refinery  able  to  produce  biofuels  from  leftover  plant  matter,  for  a  reliable  local 
source  of  low-carbon  energy.  The  project  also  prevented  forest  fires  in  the  area  by  providing  a 
market for flammable biomass residues and reducing inhabitants’ need to harvest plants for fuel. The 
total  investment  was  EUR  3,159,000,  with  the  European  Regional  Development  Fund  (ERDF) 
contributing EUR 2,640,000 through the “Centro” Operational Programme for the 2007-2013 period; 
the project duration was from April 2014 to September 2015. This project was awarded a "RegioStars 
Award".  

As another example, the "Energy and environmental efficiency in Dão-Lafões urban centers" project 
aimed  to  improve  energy  and  environmental  efficiency  in  the  urban  centers  Dão-Lafões,  including 
implemented  actions  went  from,  among  others,  the 
Viseu,  Tondela  and  Mangualde.  The 
development of promotional and outreach activities to spread the use of electric vehicles in urban 
centres and awakening of ecological awareness of the citizens, and also the creation of pilot plants 
for supply points to electric or hybrid vehicles in public spaces of the three urban centres, with these 
points  being  fed  primarily  from  photovoltaic  installations.  The  total  investment  was  EUR  564,520, 
with  the  European  Regional  Development  Fund  (ERDF)  contributing  EUR  364,896  through  the 
national thematic OP “Territorial Enhancement" for the 2007-2013 period; the project was concluded 
in July 2013. 

Through  its  support  to  sustainable  transport  systems,  the  Connecting  Europe  Facility  (CEF)  also 
contributes  to  the  goals  of  the  Energy  Union.  Following  Portuguese  participation  in  the  CEF  – 
Transport  2014-2015  Calls,  the  Portuguese  action  portfolio  comprises  33  signed  grant  agreements, 
allocating  EUR  572.9  million  of  actual  CEF  Transport  Funding  to  Portuguese  beneficiaries  (state-of-
play February 2017)19. The transport mode which receives the highest share of funding is rail (89.5 % 
of  actual  funding).  Portugal  participates  in  four  rail  actions  covering  studies  and  works,  both  for 
national  and  cross-border  rail  infrastructure.  Portugal  expects  to  finalise  an  upgrade  of  the 
Pampilhosa-Vilar  Formoso  section  in  the  Beira  Alta  rail  line  by  2020,  which  will  reinforce  the 
Portuguese sea ports’ competitive position by benefiting from an interoperable and effective railway 
connection with the Spanish border that will improve the infrastructure and speed for freight trains 
as well as passenger transport. 

Portugal is also active in several multi-beneficiary maritime actions. The objectives of the maritime 
portfolio  are to  support the  development of  LNG  bunkering  facilities and  services,  to  contribute to 
the  development  of  sea  traffic  management  and  improved  services,  a  better  integration  of  the 
maritime transport in the logistics chain and design of innovative incentive schemes to promote the 

19 Note that European Economic Interest Groups and International Organisations are excluded from the analysis. 

25 

 
 
                                                            
                              Energy Union –Portugal 

use of Motorways of the Sea. The Portuguese action portfolio also includes  CEF investments in the 
field  of  inland  waterways  (IWW),  which  are  mainly  addressing  the  severe  safety  constraints  of  the 
core  inland  port  of  Oporto.  The  objective  is  to  design  solutions  to  improve  the  port  accessibility, 
modernise its infrastructures, better respond to emergency situations and increase the use of clean 
energies and ICT tools.20.  

20 Source: INEA 

26