There is no transparent information on the real costs of the RES support. Moreover, some interest groups have spread incorrect information, which the Government and competent authorities have not corrected. In addition, recent policy changes and declarations from members of the Government have supported the idea that RES are expensive and have excessive rents, which has affected public opinion.

The actual costs of the RES support are published and reported annually by the Entity for Energy Services in the report named “Tariffs and Prices for Electricity”. In addition, in Portugal the support for RES (designated as an over-price, which represents a market price surplus) is entirely paid by the final consumer under the heading “Costs of the General Economic Interest" in the electricity bill paid to the electricity trader.

One of the greatest difficulties for new RES-E projects, especially offshore technologies, is the complexity of the authorisation process due to the high number of involved authorities. In fact, the licensing process involves 5 different Ministries, which are not coordinated among them. Administrative procedures have, yet, improved in other aspects like for example the definition of the zones to develop offshore wind projects (See barrier PTE16).

An option would be to create a sectorial cabinet that brings together all ministries and agengies related to the sector. This would simplify procedures and avoid overlaps making the whole process more effective.

Licensing procedures are long, complex and time consuming, involving several entities that are not coordinated and legislation spread over hundreds of documents. The DGEG has a “Service Portal” through which it is possible to proceed with the request and licensing of RES-E plants, called SERUP. However, this portal only adds the conditions and criteria required in the process of allocation of electricity injection capacity, but the licensing process refers to conditions and requirements asked by other entities, and the promoter has to contact and respond to each of them separatly, which is not applicable with the one-stop-shop approach.

In particular, the entities involved in the licensing process are as follows: DGEG, Portuguese Environment Agency, Nature and Forestry Conservation Institute, City Council or Municipalities depending on the location of the power plant, DSO or TSO for connection of the plant, and, in the case of hydropower installations the Hydrographic Region Administration where the installation operates should also be contacted.

This reality often imposes duplication of information, inconsistent response times between entities and inevitably slowness in the processes.

A single access portal for all entities (one-stop-shop approach) is recommended. In this portal, project developers can submit a unique application as a whole, and not segmented applicatons to different entities.

The compatibility of RES-E projects is not assessed a priori, often clashing with Municipal Master Plans and other Land Use Management instruments.

Project developers are subject to bargaining with competent authorities for financial compensations to obtain necessary permits. The Director and Municipal Plans, the Regional Land Management Plan of the Territorial Region, as well as the National Agricultural Reserve and the National Ecological Reserve have specific criteria and restrictions, namely on the parameters of occupation and land use.

Although renewable plants, like wind or solar, are industrial installations, they are typically located on land previously assigned to other purposes. Therefore, there may be difficulties in terms of municipal licensing, unless the project is considered of public interest for the region, and its construction is allowed regardless of the typology of land use. If the City Council does not authorise the project, even if the opinion of the EIA is favorable as well as the production licensing, the project can not proceed. The chances for a RES project to be approved for its installation in an agricultural area or environmental protected area are relatively low.

However, municipalities typically see renewable electricity production as an added value for the region that contribute to development, sustainability and employment. On the other hand, wind power plants that receive FiT, pay municipalities a counterpart of 2.5% of their gross incomes, which is another factor for a good reception of local authorities. That is why the barrier is not that severe but it has rather moderate effects on the further development of the RES plants.

Moreover, the incompatibility of RES-E projects with forest areas is also a strong issue, including the prohibition to build in areas where there have been fires for a period of ten years.

It should be noted that building permits are demanding and time-consuming, requiring the delivery of a set of information that has to be already approved in previous EIA processes and production licensing.

It is required to establish one unique document containing the specific criteria and restrictions on the parameters of occupation and land use for RES installations, especially for solar and wind energy plants. In addition, building permits for the EIA procedure and production licensing should be simpler and more efficient, using an one-stop-shop approach.

RES projects are subject to environmental studies that have negative impacts in the projects, due to lengthy and expensive environmental process. Moreover, the procedures of the Environmental Impact Assessment committee also impact negatively on the project, as this committee is made up of different entities, according to the nature and location of the project. Thus, the following situations may arise: the presence of a representative of the promoter is not possible to answer immediately all the requests, there is no limit to what can be demanded of the promoter in terms of environmental studies and data, mitigation and compensation measures and their decision is subject to the opinion of different entities that are not necessarily involved according to the environmental impact regulations. During this phase, when additional elements are requested from the project developer, the procedure is suspended for a period of up to 6 months or until the changes are submitted, later the new contents may give rise to a new CA’s statement, as well as repetition of some essential formalities such as for example the public consultation.

Moreover, there is often a lack of analysis on the adaptability of the fauna and flora to the project, using older case studies as reference.

The decision criteria should be more objective and transparent to avoid the subjectivity of the different entities involved in the Environmental Impact Assessment Committees. In addition, fewer entities should be involved in the committees to avoid time consuming decisions and processes.

On the other hand, an analysis of the adaptability of the fauna and flora to each project to be implemented is desired.

There is a very limited interconnection capacity between France, Spain and Portugal preventing the export of renewable electricity from the Iberian Peninsula to central Europe. This fact indirectly limits the development of RES-E projects in Portugal, because if there is over production of renewable electricity that cannot be exported to other countries, there is more risk of electricity blackouts as well as it is more difficult to manage variable renewable power sources like solar and wind. The agreement of cooperation mechanisms within the framework of the Renewables Directive might in addition lead to harder curtailment regimes. However, some progress has been registered in the last years, especially in 2015, when the interconnection capacity between France and Spain has more than doubled, and Spain, Portugal and France have signed an important interconnection agreements to increase the interconnection capacity in the coming years. For the first time in history, in 2016, Portugal exported more eletricity than it consumed. Spain was the recipient of this exported energy. In July 2018, the leaders of France, Portugal and Spain signed the Lisbon Declaration, that builds on the Madrid Declaration from March 2015 which began the grid integration process. A grant agreement for the grid, crossing the Bay of Biscay totalling € 578 million was also signed. It was the largest Connecting Europe Facility investment ever awarded to an energy infrastructure project. In addition to central Europe, the Portuguese Government has plans to start developing interconnection capacity with Morocco on the first semester of 2018. However, these plans have been delayed and the feasibility studies have only been delivered in early 2019 and an invitation for bids is still expected.

In 2015, Portugal, Spain and France signed a tripartite agreement during the Madrid Summit, establishing the agreement’s objectives and investment for the development of electricity and gas interconnections among the three countries. During this summit, it was agreed to establish a High-Level Group of Southwest Europe dealing with the interconnections of these countries to be implemented by the EC. As part of the gas interconnections, the Group will also evaluate the possibility of a bi-directional exchange of gas flows between the grids of the Iberian Peninsula and France, through the eastern axis.

The recommendation now is to comply with these tripartite interconnection agreements signed in 2015.

The Portuguese Fiscal and Custom Authority has placed a heavy financial burden on the RES-E sector in the hope that it will be a tax revenue source.

In particular, concerning the incidence of the Municipal Real Estate Tax (IMI), the Fiscal and Custom Authority is considering RES-E equipment as real estate constructions and, thus, from the perspective of the project developers it is charging a high and inconsistent Municipal Real Estate tax. Promoters already have several processes in court, claiming that they shouldn´t be subject to IMI and that the evaluation methodology is incorrect.

The reform of green tax (Reforma da Fiscalidade Verde, Circular 4/2015, de 25 de fevereiro) has implemented that constructions for RES production pay only 50% of the IMI. Yet, critics argue that this rebate is still not sufficient to realise profitable RES projects.

The discount of 50% on the IMI has been already considered by the project developers as a step forward. However, the discount is offered for a period of 5 years and only upon request by the developer. RES operators claim that RES plants should not be considered real estate constructions and should not be subject to the IMI tax. An alternative is that operators are considered with a progressive tax linked to the revenue.

The main problem of the last tender call (2010) for small hydro power plants (SHP) was the general design of the tender scheme due to the lack of cooperation between the involved entities such as the Ministries of Economy and of Environment, Spatial Planning and Energy as well as Portuguese Agency for the Environment. As they did not exchange information, they did not take into account that the environmental impact assessment (EIA) would be an obstacle to develop SHP plants and, thus, they did not include measures to prevent problems related to EIA licenses. In fact, environmental licensing in relation to hydroelectric power plants are extremely time consuming and very difficult to obtain. In addition, the price of the offer was the only award criteria (disregarding the quality, qualification and experience of promoters and their projects) taken into account for the SHP tender.

As a consequence, no project that won the tender went in operation and some projects could not even obtain the EIA license. Some competitors asked to change the technology from small hydro to solar photovoltaic through the renegotiation of the tariff assigned to a lower value. These projects are currently being developed. Other competitors asked for the refund of the amount paid in the award (the tender fee), and were refunded.

For the next calls for tenders for small hydro plants, it is suggested to strengthen the cooperation between the entities involved in the design of the tender, taking into account all aspects that can hinder the development of the future awarded projects, including the EIA. EIA procedure should be more efficient, clearer and simpler. In addition, it would be more efficient to consider holistic criteria to award the projects, including not only monetary parameters but others like creation of local benefits, promotion of industry and service clusters as well as R&D projects.

In less developed network areas, the connection of RES-E projects will require the construction of aerial line to connect the installation to the nearest network point. Often the line will run through environmentally sensitive areas, requiring for further administrative clearances and negotiations.

The process does not constitute a major barrier but can be a time-consuming procedure, lengthening the development period for the installation owner and thus at times also raising the development costs. The authorities recognise this obstacle and have acted to speed the environmental licensing in cases of need for aerial lines in environmentally sensitive areas, albeit with little tangible results. It is worth mentioning that in Portugal, the promotor of RES projects is the one responsible to making sure the project can be connected to the national grid, and in case reinforcements/alterations are necessary, costs should be borne by the promotor.

It is required to speed the environmental licensing through the creation of a one-stop shop approach in cases that aerial lines in environmentally sensitive areas are required.

RES individual producers, especially solar PV operators, are unequally treated in their income declaration in relation to companies. The main problem is that a company can pay off its investments over the years, as the IRC (Collective Income Tax) translates the tax to the State according to the economic balance sheets. Yet, in the case of a private person, the investment made in the micro production installation is not accounted for and he/she has to pay a IRS (Single Income Tax) that can reach 50% of the billing without being able to deduct the investment and O & M costs. Furthermore, if micro-producers do not declare the income earned from the activity of the sale of electricity, they are subject to a fine. This is mandatory by the national law that foresees the annual declaration of the incomes for all activities, including micro production of RES, to the Ministry of Finance. Previously, there was an exemption for micro-production installations that received an income of less than € 5,000 per year. However, this clause was repealed in 2015.

The exemption to do the income declaration in the case of micro-production installations that receive an income of less than € 5,000 per year should continue to exist. Another alternative could be that both the investment made in the micro production installation and the profits should be declared; not just profits.

In Portugal, it is difficult to develop biomass power projects due to territorial and climate issues. About 89% of the forest areas are owned by small private owners and about 70% of small private owners own forest areas of less than 5 hectares. Forest Producer Organisations (OPFs) are a central element in representing the interests of forest owners and managers. In the last years, the number of OPFs has been increasing, with 172 OPFs currently numbering some 70,000 associated forest owners. Despite the increase in the number of OPFs, the resource exploitation potential has a low rate of utilisation, since forest areas have reduced size and are fragmented, making economies of scale impossible.

On the other hand, there is a lack of interest in the forest due to unfavorable weather conditions: Mediterranean weather has hot and dry summers that favor the spreading of fires. The situation is further aggravated by rural abandonment, neglecting and fuel accumulation. The high risk of fire further alienates forest owners and leads to underutilisation of forest resources.

All these factors harm the biomass sector, not only for energy use, but also for other purposes, contributing to the high logistics costs for collection, treatment and transportation, not allowing a sustainable valuation of the resource.

This barrier is recognised by the authorities, yet it is extraordinarily difficult to act due to the legal issues associated with the private property. As a measure of action, in 2012 the “Land Grant” was created by the Ministry of Agriculture, Sea, Environment and Spatial Planning, which aims to facilitate the access to land by making available areas that are not used under the terms of the Baldies Law (http://www.bolsanacionaldeterras.pt/quem.php). The land grant makes available areas to the state, local authorities and any other public entity, as well as to private entities for agricultural, forestry and silvopastoral ends. In 2015, the “National Strategy for Forests” review was published, highlighting all these problems and foreseeing a set of strategic objectives and measures. Currently, it is still too early to assess the impact that the strategy may have. Due to the devastating fires of 2017, in February 2018 the government made the Decree Law 10/2018, that states that people must clean their own private territory from biomass residues, and if they don't, they can face fines up to € 120,000.

Measures that should be considered as a priority to overcome this barrier are as follows:

• Developing innovation and research on forestry, especially through the establishment of Competence Centers for each of the major forest sectors;

• Stimulating new forms of organization and management of forest areas, including through the creation of cooperatives;

• Creating a Forest Property Inventory.

It is necessary to support emerging offshore technologies to ensure that Portugal can attract technicians and projects for R&D and benefit the most from the developments of these technologies. Currently there is only a remuneration scheme for offshore wind and wave projects in pre-commercial stage, amounting to € 80/MWh. In fact, the Windfloat (2012-2016) project, that finished its first phase (pilot) in 2016 was quite successful and began the pre-commercial phase in 2017 (see barrier 16PTE). This project aims to create conditions for a new exporting industry for Portugal, and in February 2018 the Portuguese Government approved a resolution to further develop the pilot by expanding it to other regions. Yet, it is still lacking a FIT for offshore wind and wave projects in commercial stage. This problem has not been recognised by the public authorities yet.

It is important to enact and maintain this type of support schemes for emerging technologies like offshore wind or waves, otherwise they will never be able to develop and become competitive.

It is also suggested to implement the one stop-shop approach for offshore wind and waves.

Decree-Law 215-B/2012 has set a moratorium for all large RES-E projects introduced by Decree-Law 25/2012. It has changed the existing electricity generation regimes, namely the Ordinary Regime and the Special Regime, promoting a consolidation of the legal regime applicable to large RES-E projects. New RES-E plants should from now on be paid according to the Wholesale Electricity Market price (MIBEL). Support schemes were therefore extinguished, and can only be envisaged via a specific power granting tender to be launched by the competent energy authority. However, an ordinance defining the details of these tenders is still to be published. This represents a severe barrier, considering the fact that RES-E projects are being pushed into a marginal market in which prices has been historically so low that makes impracticable to build any power plant under this general remuneration regime. This Decree-Law stopped the FiT, which not only forced the RES projects to go into the spot market, but also made them unattractive investments for banks (since it's hard to calculate the prices of sales and thus the predicted payback time). This is still an issue in 2019, and one of the main barriers preventing the development of RES in Portugal, but it is expected to change with new legislation to be approved in July 2019 that rules over the new auctions and the correponding support models.

The administrative procedure to obtain the production licenses is highly complex and, therefore, time consuming and financially costly. Licences involve times and deadlines impossible to accomplish, especially in what concerns environmental impact assessment, and discretionary decisions from the member of the government responsible for the energy sector.

In fact, the licensing process begins with the request to connect the plant to the RESP (Public Utility’s Electricity Grid). The DGEG and TSO or DSO should evaluate the required connection point and after favorable evaluation the promoter has up to 3 years to apply for the production license. During this time, the connection point is prohibited to other promoters and there is no monitoring of the evolution of the proces; if at the end of 3 years the production license process did not advance, the connection point was retained, preventing other projects from being developed. With the application for the production license, all the technical information of the project, such as the equipment to be installed, technical conditions of connection, among others, as well as a favorable or conditionally favorable Environmental Impact Assessment (EIA) must be submitted. The problem is that during the EIA a wide and excessive range of measures, actions and demands are required, implying that Environmental impact studies tend to last long time, and it is not always possible to comply with the referred deadline.

After the production license has been applied for, the developer must start construction within two years, except for publicly-operated plants that the term is extended to 3 years, 5 years for plants in maritime areas and 6 years for hydropower plants. After the production license is issued, if the developer wants to change something of the project, such as changing equipment, he must re-start the process from the beginning.

All these phases have huge financial costs and time losses for the RES companies. The licensing process for a wind or solar power plant takes on average about 4 to 5 years, while for hydropower plants it tends to last 10 to 20 years.

The promoter has 3 years to apply for the production license. At this stage, the connection point is prohibited to other promoters without monitoring the evolution of the processes. It is, thus, desirable a monitoring by the DGEG to prevent that the connection point is retained for other potential projects, if the license process does not advance during the 3 year-period. A mile stone approach in which the connection works have to meet certain mile stones in a predefined period of time is advisable. If the installation does not meet the indicated deadline, it is taken out of the application, giving room to other listed installations.

In addition, measures to promote rapid licensing for repowering projects are required. In particular, it should be encoureged not to consider repowering as a new project, being obliged to go through all the phases of a normal licensing process, but rather being considered a mere change.

Energy statistics in Portugal are hard to analyse due to the different approaches chosen by each of the official entities to publish data.

The different strategic planning documents, such as the National Plan for Climate Change (PNAC), the National Action Plan for Renewable Energies (PNAER), the Development and Investment Plan for the Electricity Transport Network (PDIRT) and the Monitoring of Supply Security (RMSA), are in the responsibility of different entities and there is a lack of coordination between them. This often translates into outdating the basic assumptions used, which in turn weakens the model and its validity for application. For example, the Supply Security Monitoring Report (RMSA) published by the DGEG, with the contribution of REN, in 2015 does not present the statistics that were published by the same DGEG in its official documents and the projections do not agree with the PNAC and the PNAER scenarios.

This inconsistency and discrepancy in values and scenarios found in different official strategic documents creates uncertainties in the sector and obstacles to its growth, transmitting instability and insecurity to investors and other stakeholders in the sector.

This situation is not acknowledged by the responsible entities as a barrier, nor there are measures for correction. As of 2018 (last data available) the same inconsistencies between the Supply Security Monitoring Report (RMSA) published by the DGEG and the PNAC and the PNAER scenarios are prevailing.

There should be greater collaboration between the involved entities to avoid the current discrepancy. In addition, the requirement of different documents due to the structure of the national legislation and the European legislation, with different timings of submission, contributes to the duplication and inconsistencies in the statistic data. There should be a broader electricity document, which encompasses the essential areas of the electricity sector and not different uncoordinated documents in charge of different responsible entities.

Decree-Law 35, of 28 February 2013 changed the existing support regime for small hydro power plants (SHP) in order to reduce the electricity deficit, by reducing the period during which SHP could receive FiTs from 35-25 years to 10 years.

This was a retroactive change and did not have the agreement of the promoters. The change was legally contested by the producers before the court, and they won the lawsuit. However, the agreement of the constitutional court stated that a claim for loss or loss of revenue can only be made when it actually occurs, that is, at the end of each year in which there is a breach of the initial contract. Since the agreement of the court is not favorable to neither party, producers are trying to reach an agreement with the ministries to compensate for the reduction of the tariff period. In particular, promoters are requesting a water use license extension for 45 years, as these projects have made huge investments and the return requires a long period of the project life time.

Since the national government is the sole instance able to sign an agreement, the government of Antonio Costa should call for a negotiated agreement between all parties and establish this argreement as the reference to be followed by the competent ministries and the promoters.

The newly established self-consumption regime provides for several benefits for grid management. These benefits include reduction of grid losses, because production is closer to consumption and peak shaving, because most of small scale production comes from solar power plants that produce during the peak hours. Nonetheless, not only these benefits are not remunerated or incentivised, but small scale production is twice penalised: 1) self-consumption units above 1,5 kW are subject to a tax to bear the electricity system costs, and 2) the remuneration of the excess production received by the self-consumption units is 10% less than the market price to compensate the costs of the injection. It is worth mentioning that owners of self-consumption projects only have to pay the tax mentioned in 1) when the total capacity of self-consumption projects reach 1% of the total installed capacity of the SEN (National Electric System), and that's not the case in June 2019. Despite these barriers, the installed capacity of solar PV for self-consumption in residential and services/industry sectors has been increased thanks to this Decree Law 153/2014.

Self-consumption units that produce more electricity than they consume, should be able to be remunerated with the wholesale market price for their excess production without having a 10% less of the market price.

The Portuguese Tax Administration has applied high financial burden on the RES-E sector to generate a tax revenue source. Concerning the tax depreciation for RES-E equipment, the Tax Administration asked first for a period between 20 and 40 years, which was unrelated to the lifetime of the project and would have negative fiscal impact on the RES projects. Thus, wind and solar power promoters asked to reduce the period to between 12,5 and 25 years. The Tax Administration agreed with the claims and introduced a tax for a period of 12,5 years for solar and wind in the green fiscal reform published in 2015. After approval of the new regime, the new legislation began to be applied for new RES projects, but the Tax Administration does not accept the application of this regime to previous RES projects, which were constructed prior to the new legal framework. This has generated different situations of conflict.

The most indicated resolution would be the permission for the use of the current tax rate, foreseen in the revision of the regime, for those projects commissioned prior to the new legal framework. This is, in fact, the most adequate rate to the useful life time of the equipment.

Each region in Portugal has a different inspection company. Depending on where the project is installed, the inspection date might be set without contacting the installer. And if the technician comes when the installer is not present, the inspection is not made and must be requested again to the General Directorate for Energy and Geology (DGEG). The fact that there are various certifying companies in Portugal also means that there are lots of interpretations of technical rules, meaning that a technical solution can be accepted in one region and refused elsewhere.

The General Directorate for Energy and Geology (DGEG) should standardise procedures and make them valid and mandatory for all the regions in Portugal. This would reduce costs and would speed up and make the process of inspection and certification more effective.

Portugal has still a large unexploited biomass potential, as some sources such as residues from forests and from the paper and cork industries as well as dedicated crops are still underexploited. In addition, competitive biomass availability is threatened by the following issues: Inadequate supply due to the lack of agents that are exclusively dedicated to the biomass production within the forestry sector; absence of a competitive forest residues market, as the tradition of large-scale waste collection has not been established; and high logistics costs for collection, treatment and transportation. Decree Law 166/2015 and its follow up Decree Law 48/2019 explicitely enhance and reinforce the government's incentives to promote biomass from forests, but concrete plans regarding other sources such as residues from paper and cork industries have not been outlined yet.

Additional efforts should be undertaken regarding other potential biomass sources, for instance: residues from the paper and cork industries.

In Portugal Decree-Law 231/2012 allows the injection of gas from unconventional sources (biogas and gas from biomass or other gases) in the natural gas grid if the quality and safety standards as well as licencing procedures are guaranteed. However, the standards as well as the licencing procedures have not yet been published in the Portuguese legislation, so it is still not possible the injection of biogas and gas from biomass in the natural gas grid, which is considered an important barrier to the development of the biogas sector in Portugal. The reason is that biogas is not a priority for the national government in Portugal.

A legal Ordinance including the standards as well as the licencing procedures for the injection of biogas/biomethane in the natural gas networks should be published as soon as possible

There is a lack of awareness about the RES-H&C technologies and their benefits for policy makers, the general public, urban planners as well as installers. In addition, resistance to implement widely these technologies can be detected. The barrier especially affects the biomass technology because it is a new source for a large share of the general population and there is a lack of diffusion of this sort of renewable energy technology.

The government, especially through ADENE and the Secretary of State for Energy, should execute more diffusion campaigns to promote the use of RES-H sources, especially biomass that is the most unknown RES-H technology in Portugal until now.

Currently, the certification for installers of biomass equipment is not mandatory, which creates a barrier in the diffusion of the respective equipment. It should be noted that ADENE -Energy Agency- regularly promotes free training dedicated to this issue and accessible to all interested stakeholders.

Trainings and certification programmes should be mandatory for all biomass installers in order to ensure higher level of quality that promotes compliance and confidence of consumers.