20040930-IEA-Energy_Policies_of_IEA_Countries_Portugal_2004_118页_2mb

• Energy Policies Overview: Portugal's energy sector faced positive developments since the 2000 review, including energy restructuring, promotion of natural gas, and plans to liberalize markets by July 2004. Key challenges included high oil dependency (62.1% of TPES in 2002), frequent non-compliance with IEA emergency stockholding obligations, and difficulties in developing renewable energy integration strategies. Energy security and environmental protection remained top priorities of the government.

• Security of Supply: Oil dependency was significantly higher than the IEA average, posing risks to energy security. While natural gas imports increased (via pipelines and LNG terminal), the primary energy mix still heavily relied on oil, with issues persisting in maintaining emergency stock reserves (often short by 90 days). To address these challenges, diversifying energy sources, increasing renewable generation, and improving stockholding compliance were deemed essential.

• Energy and the Environment: Policies aimed at addressing climate change, such as the National Climate Change Programme (PNAC), were under development, but emissions targets were criticized for being overly optimistic. Transportation is a major source of growth in energy consumption and GHG emissions, with limited decoupling of energy use from economic growth observed.

• End-Use Efficiency: High energy intensity suggested inefficiencies, leading to the recommendation to create an integrated national energy efficiency strategy with measurable targets and thorough monitoring. Cost-effectiveness of measures should be assessed, particularly as climate policies and the EU ETS evolve.

• Fossil Fuels: Significant challenges persisted in refining capacity and market tension in the gas sector. Liberalization moves have been announced, but market fundamentals demand reforms.

• Renewables: Emissions trading mechanisms (EU ETS) were implemented, but market power concerns among large players, particularly EDP, influenced electricity pricing and market competition. Streamlining licensing procedures for renewables and improving grid integration were recommended.

• Electricity and Co-generation: Regulations on energy consumption and market access were evolving under legal frameworks. Enhancing competition through virtual power plant auctions and improving demand response mechanisms were proposed.

• Research and Development: Public R&D funding for energy was among the lowest in IEA countries; strengthening this area is vital to support policy goals like renewable integration and energy efficiency.

Key Recommendations: The government is urged to establish an integrated national energy efficiency strategy; streamline renewable licensing procedures; phase out distortive subsidies for natural gas; finalize regulatory frameworks for the 2004 market liberalization timeline; promote decentralized renewable resources; and ensure cost-effective climate change mitigation.